Brown v. Guaranty Estates Corp.

80 S.E.2d 645 (1954) 239 N.C. 595

BROWN et al.
v.
GUARANTY ESTATES CORP. et al.

No. 20.

Supreme Court of North Carolina.

March 17, 1954.

J. T. Reece, Yadkinville, and Allen, Henderson & Williams, Elkin, for plaintiffs.

Earl C. James, Elkin, for defendant Guaranty Estates Corp., trustee.

Brooks, McLendon, Brim & Holderness, Greensboro, for defendant National Surety Corp.

James J. Randleman, Elkin, for defendant Gus G. Mitchell, Adm'r.

ERVIN, Justice.

The appeal of the plaintiffs presents the question whether their pleadings state a cause of action against the defendants or any of them. The rules of law bearing on this question are set forth in the seven ensuing paragraphs.

1. Where an order of attachment is improperly obtained or tortiously employed, the attachment defendant may have several modes of obtaining redress for injuries caused by its levy on his property. He may proceed on the attachment bond if either of the two conditions specified in the statute now codified as G.S. § 1-440.10 exists. Whitaker v. Wade, 229 N.C. 327, 49 S.E.2d 627; Smith v. American Bonding Co., 160 N.C. 574, 76 S.E. 481; Wright v. Harris, 160 N.C. 542, 76 S.E. 489. He may sue for malicious and wrongful attachment if the essential elements of that tort are present. Tyler v. Mahoney, 168 N.C. 237, 84 S.E. 362; Id., 166 N.C. 509, 82 S.E. 870; Wright v. Harris, supra; Pittsburg, J. E. & E. Railroad Co. v. Wakefield Hardware Co., 143 N.C. 54, 55 S.E. 422; Id., 138 N.C. 174, 50 S.E. 571, 3 Ann.Cas. 720; Id., 135 N.C. 73, 47 S.E. 234. He may even maintain an action for abuse of process if the attachment plaintiff maliciously perverts and employs a regularly issued order of attachment to accomplish a result not lawfully or properly obtainable under it. Wright v. Harris, supra; Pittsburg, J. E. & E. Railroad Co. v. Wakefield Hardware Co., 143 N.C. 54, 55 S.E. 422; Id., 138 N.C. 174, 50 S.E. 571, 3 Ann.Cas. 720.

2. A proceeding on an attachment bond differs greatly from an action for malicious and wrongful attachment. The former is a statutory proceeding based on the contractual obligations of the attachment plaintiff and his surety embodied in the attachment bond and the statute under which it is given; whereas, the latter is an independent common law action founded on the tort of the attachment plaintiff in maliciously suing out an order of attachment without probable cause and procuring its levy on the property of the attachment defendant. Martin v. Rexford, 170 N.C. 540, 87 S.E. 352; Pittsburg, J. E. & E. Railroad Co. v. Wakefield Hardware Co., 138 N.C. 174, 50 S.E. 571, 3 Ann.Cas. 720; Id., 135 N.C. 73, 47 S.E. 234; 7 C.J.S., Attachment, § 163. The statutory proceeding on the attachment bond may be prosecuted by either a motion in the original cause or by an independent action. G.S. § 1-440.45(c); Whitaker v. Wade, supra. In enforcing liability on the attachment bond, the attachment defendant may proceed against the attachment plaintiff and his surety jointly or separately. Smith v. American Bonding Co., supra; McIntosh: North Carolina Practice and Procedure in Civil Cases, section 235; 5 Am.Jur., Attachment and Garnishment, section 1029. It is otherwise with respect to an action for malicious and wrongful attachment. Since his liability arises out of the contract embodied in the attachment bond and the statute under which it is given, the surety is not liable to the attachment defendant for the tort of the attachment plaintiff in maliciously suing out the order of attachment without probable cause and procuring its levy on the property of the attachment defendant. As a consequence, the attachment defendant cannot properly unite in one suit an action against the attachment plaintiff for malicious and wrongful attachment, and a proceeding against the surety for enforcement of liability on the attachment bond. Martin v. Rexford, supra; Pittsburg, J. E. & E. Railroad Co. v. Wakefield Hardware Co., 135 N.C. 73, 47 S.E. 234.

3. The right of the attachment defendant to proceed on the attachment bond does not depend on a showing of malice and want of probable cause. 7 C.J.S., Attachment, § 163. See in this connection the observations of Justice Platt D. Walker in Mahoney v. Tyler, 136 N.C. 40, 48 S.E. 549. Since the attachment bond is conditioned that if the order of attachment is dissolved, dismissed or set aside by the court, or if the attachment plaintiff fails to obtain judgment against the attachment defendant, the attachment plaintiff will pay all costs that may be awarded to the attachment defendant and all damages that the attachment defendant may sustain by reason of the attachment, the attachment defendant may bring the statutory proceeding to enforce liability on the bond under two conditions, namely, where the order of attachment is dissolved, dismissed or set aside by the court, or where the attachment plaintiff fails to obtain judgment against him. G.S. § 1-440.10; Frick Co. v. Deiter, 168 S.C. 289, 167 S.E. 499; 7 C.J.S., Attachment, § 163. When he proceeds on the bond under either of these conditions, the attachment defendant is entitled to recover the actual damages sustained by him by reason of the levy of the order of attachment on his property. Martin v. Rexford, supra; Tyler v. Mahoney, 168 N.C. 237, 84 S.E. 362; Pittsburg, J. E. & E. Railroad Co. v. Wakefield Hardware Co., 135 N.C. 73, 47 S.E. 234. The liability of the surety, however, is limited to the amount of the attachment bond. G.S. § 1-440.10; McIntosh: North Carolina Practice and Procedure in Civil Cases, section 827.

4. Where the attachment defendant sues the attachment plaintiff for malicious and wrongful attachment, it is incumbent upon him to establish these essential elements of the tort: (1) That the attachment plaintiff sued out an order of attachment against the property of the attachment defendant without probable cause for believing that the alleged ground for attachment existed, Tyler v. Mahoney, 166 N.C. 509, 82 S.E. 870; Pittsburg, J. E. & E. Railroad Co. v. Wakefield Hardware Co., 143 N.C. 54, 55 S.E. 422; Id., 138 N.C. 174, 50 S.E. 571, 3 Ann.Cas. 720; Mahoney v. Tyler, supra; Abrams v. Pender, 44 N.C. 260; Davis v. Gully, 19 N.C. 360; Williams v. Hunter, 10 N.C. 545, 14 Am.Dec. 597; (2) that the attachment plaintiff sued out such order of attachment maliciously, Wright v. Harris, supra; Pittsburg, J. E. & E. Railroad Co. v. Wakefield Hardware Co., 143 N.C. 54, 55 S.E. 422; Id., 138 N. C. 174, 50 S.E. 571, 3 Ann.Cas. 720; Id., 135 N.C. 73, 47 S.E. 234; Davis v. Gully, supra, Williams v. Hunter, supra; (3) that the order of attachment was actually levied on the property of the attachment defendant, who was thereby deprived of his right to use his property for any legitimate purpose, Pittsburg, J. E. & E. Railroad Co. v. Wakefield Hardware Co., 138 N.C. 174, 50 S.E. 571, 3 Ann.Cas. 720; Terry v. Davis, 114 N.C. 31, 18 S.E. 943; Ely v. Davis, 111 N.C. 24, 15 S.E. 878; American Law Institute's Restatement of the Law of Torts, section 677; (4) that the attachment proceeding has legally terminated in favor of the attachment defendant, Whitaker v. Wade, supra; Wright v. Harris, supra; Pittsburg, J. E. & E. Railroad Co. v. Wakefield Hardware Co., 143 N.C. 54, 55 S.E. 422; Id., 138 N.C. 174, 50 S.E. 571, 3 Ann.Cas. 720; Kramer v. Thomson-Houston Electric Light Co., 95 N.C. 277; and (5) that the attachment defendant suffered damage as the result of the levy of the order of attachment upon his property. 7 C.J.S., Attachment, § 520. The malice essential to support an action for malicious and wrongful attachment may be either actual malice or legal malice. Wright v. Harris, supra; 5 Am.Jur., Attachment and Garnishment, section 986. Legal malice "consists in a wrongful act intentionally done, without just and lawful cause or excuse." Wright v. Harris, supra. It is well to note at this juncture that the statement of Judge Pearson in Kirkham v. Coe, 46 N.C. 423, and the statement of Judge Clark in Tyler v. Mahoney, 168 N. C. 237, 84 S.E. 362, to the effect that it is not necessary to prove malice in an action for malicious and wrongful attachment are not good law. Although Judge Pearson's erroneous statement is apparently accepted as valid in some parts of the somewhat inconsistent opinion in Pittsburg, J. E. & E. Railroad Co. v. Wakefield Hardware Co., 138 N.C. 174, 50 N.C. 571, 3 Ann. Cas. 720, it is rejected in express terms by a unanimous court in Wright v. Harris, supra. Judge Clark's erroneous statement is avowedly based on Tyler v. Mahoney, 166 N.C. 509, 82 S.E. 870, which merely holds, in essence, that legal malice, as distinguished from actual malice, is sufficient to sustain an award of actual damages in an action for malicious and wrongful attachment. Moreover, Judge Clark's erroneous statement is contradicted by his own positive assertion in Pittsburg, J. E. & E. Railroad Co. v. Wakefield Hardware Co., 143 N.C. 54, 55 S.E. 422, 424, that an action for this tort "cannot be maintained * * * if * * * there was no malice." Where the attachment defendant successfully prosecutes an action for malicious and wrongful attachment against the attachment plaintiff, he is entitled to recover the actual damages suffered by him by reason of the attachment plaintiff's tortious act. Tyler v. Mahoney, 168 N.C. 237, 84 S.E. 362. The actual damages may include compensation "for every injury to his credit, business, or feelings." Pittsburg, J. E. & E. Railroad Co. v. Wakefield Hardware Co., 135 N.C. 73, 47 S.E. 234, 236. He may even be awarded exemplary or punitive damages by the jury if he alleges and proves that the attachment plaintiff was actuated by actual malice, as distinguished from legal malice, in suing out the order of attachment. Martin v. Rexford, supra; Tyler v. Mahoney, 168 N.C. 237, 84 S.E. 362; Id., 166 N.C. 509, 82 S.E. 870; Wright v. Harris, supra; Pittsburg, J. E. & E. Railroad Co. v. Wakefield Hardware Co., 138 N.C. 174, 50 S.E. 541, 3 Ann.Cas. 720.

5. As a general rule, the estate of a decedent cannot be held liable for torts which an administrator or an executor commits in administering the estate. In consequence, an action will not ordinarily lie against an administrator or an executor in his representative capacity for such torts. Hood ex rel. Citizens Bank & Trust Co. v. Stewart, 209 N.C. 424, 184 S.E. 36; Hall v. Durham Loan & Trust Co., 200 N.C. 734, 158 S.E. 388; Allen v. Armfield, 190 N.C. 870, 129 S.E. 801; Whisnant v. Price, 175 N.C. 611, 96 S.E. 27; Mobley v. Runnels, 14 N.C. 303; Owens v. Lackey, 234 Ala. 144, 174 So. 231; Digby v. Cook, 200 Ark. 1004, 142 S.W.2d 228; Rapaport v. Forer, 20 Cal. App. 2d 271, 66 P.2d 1242; Evans v. Dickey, 50 Ga.App. 127, 177 S.E. 87; Christensen v. Frankland, 324 Ill.App. 391, 58 N.E.2d 289; Ostheimer v. McNutt, 116 Ind.App. 649, 66 N.E.2d 142; Kirchner v. Muller, 280 N.Y. 23, 19 N.E.2d 665, 127 A. L.R. 681; Boyle v. Nolan, 123 N.J.L. 365, 8 A.2d 358; 21 Am.Jur., Executors and Administrators, section 303; 33 C.J.S., Executors and Administrators, § 250. "The rule has * * * been applied to actions based on the institution of wrongful legal proceedings by a personal representative." 21 Am.Jur., Executors and Administrators, section 303. See in this connection Gilmer v. Wier, 8 Ala. 72, and the other cases collected in the annotation in 44 A.L.R. 674. The rule is subject to this exception: Where the estate of a decedent actually receives assets acquired by an administrator or an executor by a tortious act, the party wronged thereby and entitled to such assets may hold the estate responsible to the extent of the value of such assets. McKinnie's Executors v. Oliphant's Executors, 2 N.C. 3; 21 Am.Jur., Executors and Administrators, section 306; 33 C.J.S., Executors and Administrators, § 250. An administrator or an executor is personally liable for his own torts even though they are committed in the administration of the estate. Pettijohn v. Williams, 46 N.C. 145; 21 Am.Jur., Executors and Administrators, section 303; 33 C.J.S., Executors and Administrators, § 250.

6. Under G.S. § 35-2, the clerk of the superior court may appoint either a guardian or a trustee to manage the estate of a person who is found by an inquisition of lunacy to be mentally incompetent to manage his own affairs. A trustee appointed under this statute is "subject to the laws * * * enacted for the control and handling of estates by guardians."

7. As a general rule, the estate of an insane person cannot be held liable for torts which a guardian or a trustee commits in managing the estate. For this reason, an action will not ordinarily lie against a guardian or a trustee of an insane person in his representative capacity for such torts. But a guardian or a trustee of an insane person is personally liable for his own torts, even though they are committed in the management of the estate of his ward. Gillet v. Shaw, 117 Md. 508, 83 A. 394, 42 L.R.A.,N.S., 87; Rooney v. People's Trust Co., 61 Misc. 159, 114 N.Y.S. 612; Ward v. Rogers, 51 Misc. 299, 100 N.Y.S. 1058, 19 N.Y.Ann.Cas. 56; Reams v. Taylor, 31 Utah 288, 87 P. 1089, 8 L.R.A.,N.S., 436, 120 Am. St. Rep. 930, 11 Ann.Cas. 51; 44 C.J.S., Insane Persons, § 87.

When the pleadings of the plaintiffs are analyzed in the light of these rules of law, these things are manifest:

This is a common law action for malicious and wrongful attachment, and not a statutory proceeding on an attachment bond. The plaintiffs seek to recover damages of the defendant Guaranty Estates Corporation in its representative capacity as trustee of its insane ward Louis Mitchell upon pleadings alleging that in its management of the estate of its ward it maliciously sued out an order of attachment without probable cause, and procured the levy of the order of attachment upon the property of the plaintiffs. These pleadings state no cause of action against the defendant Guaranty Estates Corporation as trustee because their allegations bring the case within the general rule that the estate of an insane person cannot be subjected to liability for the tort of his guardian or his trustee, even though his guardian or his trustee commits the tort in the management of his estate. The plaintiffs seek to recover damages of the defendant Gus G. Mitchell in his representative capacity as administrator of the decedent Louis Mitchell upon pleadings alleging that in his administration of the estate of the decedent he maliciously continued an attachment proceeding against the property of the plaintiffs without probable cause, and in that way tortiously deprived the plaintiffs of their right to use their property for any legitimate purpose. These pleadings state no cause of action against the defendant Gus G. Mitchell as administrator because their allegations bring the case within the general rule that the estate of a decedent cannot be subjected to liability for the tort of an administrator or an executor, even though the administrator or the executor commits the tort in the administration of the estate. Moreover, the pleadings of the plaintiffs state no cause of action against the defendant National Surety Corporation for the very simple reason that a surety on an attachment bond is not liable for the tortious act of the attachment plaintiff in maliciously and wrongfully attaching the property of the attachment defendant.

What has been said shows that the presiding judge rightly ruled on the oral demurrers.

This brings us to the appeal of the defendants, which challenges the validity of the portion of the order allowing the plaintiffs "thirty days to amend and/or make new parties."

The presiding judge murdered the King's, the Queen's, and everybody's English by using the monstrous linguistic abomination "and/or" in this portion of the order. We are constrained to adjudge, however, that the judge's law is better than his grammar, and that this portion of the order finds sanction in G.S. § 1-163, which vests in the judge of the superior court discretionary authority to permit an amendment "when the amendment does not change substantially the claim or defense". McIntosh: North Carolina Practice and Procedure in Civil Cases, section 487. This portion of the order contemplates that any amendment made by the plaintiffs will not offend the restrictive provision of G.S. § 1-163. Whether such an amendment can be made is something for their able counsel to ponder.

Affirmed on the plaintiffs' appeal.

Affirmed on the defendants' appeal.