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FRENCH v. UNITED STATES FLDELITY & GUAR. CO.

January 13, 1950

FRENCH et al.
v.
UNITED STATES FIDELITY & GUARANTY CO. et al.



The opinion of the court was delivered by: FORMAN

These are motions by the defendants herein the general objectives of which are to dismiss certain counts of an amended and consolidated complaint, or in the alternative, to strike certain portions of the complaint and to compel more definite statement of its allegations or for a bill of particulars. *fn1" The plaintiffs for their part move to enjoin the defendants from pleading the statute of limitations.

The complaint, as amended and consolidated, is in eighteen counts. It alleges that the sixty-six defendant insurance companies *fn2" were or are members of the following unincorporated organizations: The Association of Casualty and Surety Companies, New York; National Bureau of Casualty and Surety Underwriters, now known as the National Bureau of Casualty Underwriters, of New York; and the American Mutual Alliance, of Chicago, Illinois.

 Jurisdiction is founded upon diversity of citizenship and the amount in controversy exceeds $ 3,000, exclusive of interest and costs.

 Count 1 further alleges that plaintiff, Samuel T. French, Senior (hereinafter called French, Sr.) has been a member of the bar of New Jersey since 1905, has maintained offices in the City of Camden, New Jersey, and that he developed a large and lucrative practice. That in and about the year 1934, the defendants conspired to cause him to be falsely indicted and convicted of crime; ruin him; disbar him; drive him from the practice of law; cause his clients to cancel retainers; cause prospective clients to refrain from retaining him; cause wrongful indictment of witnesses in legal actions of clients represented by him; cause such witnesses to refrain from testifying truthfully in such actions; induce such witnesses to swear falsely that they had testified untruthfully; injure his reputation; interfere with the administration of justice in the courts of New Jersey and of the United States; deny to his clients judgments to which they were entitled; falsely charge with crime lawyers employed by him, including his son, the plaintiff Samuel T. French, Jr. (hereinafter called French, Jr.); and otherwise impede, hinder, obstruct and defeat his advocacy of his clients' claims, with the intent to defeat and deny the constitutional and legal rights of him and his clients.

 That in pursuance of the said scheme and conspiracy, defendants and their agents wilfully, maliciously, and without probable or justifiable cause committed the following acts: In 1934 organized the New Jersey Claim Investigation, a New Jersey corporation, as a shield to conceal the defendants from those injured by the conspiracy; bribed Thomas Morris and others, then employed by French, Sr., to act in a particular manner with respect to the professional business of French, Sr., and caused Morris to make a false affidavit and to testify falsely at the trial of the plaintiffs; caused Morris to be released from jail in the custody of one or more of the defendants, their agents, employees and attorneys and, by gifts, plying of liquor and the furnishing of a 'lewd woman' induced Morris to make a false affidavit and to testify falsely at the trial of the plaintiffs; illegally intimidated, falsely arrested, confined, and interrogated witnesses, including plaintiffs herein, to various suits instituted by French, Sr. 'by arrogating the functions of the Prosecutor of the Pleas of Camden County, by inducing a County Prosecutor's detective to act as their agent and servant to illegally take said witnesses from their homes and beds, sometimes after midnight and at divers other times, and to bring them to a private hotel suite occupied by Herbert H. Hargraves, president of the New Jersey Claim Investigation, causing said witnesses to believe that said action was in all respects legal and proper and, under false color of authority, process and right, then and there to permit said Hargraves to interrogate said witnesses, under threats of prosecution, before a public stenographer and prosecutor's detective, in an attempt to have them make false affidavits concerning the plaintiffs', to testify falsely concerning the plaintiffs, and 'to illegally afford said Hargraves free and easy access to said witnesses and to interrogate them while they were confined in the County Jail, and to further intimidate and coerce the said witnesses and attempt to injure Samuel T. French and the other plaintiffs herein by promising said witnesses freedom from criminal prosecution or their release from jail if they would make such false affidavits and give such false testimony'; induced Eugene Murphy, a witness on behalf of the plaintiffs in civil cases then the subject of inquiry, to make a false affidavit and to testify falsely at the trial of the plaintiffs; through the said Hargraves, attempted to influence the Grand Jury of Camden County in its vote on indictments of the plaintiffs; and on or about May 5, 1938, with intent to injure French, Sr. and French, Jr. in their profession and other plaintiffs in their businesses, falsely, maliciously, wilfully, wickedly and without probable cause, charged the plaintiffs before the said Grand Jury with a conspiracy to cheat and defraud certain parties by instituting actions at law for damages and charged certain witnesses with falsely testifying. As a result, an indictment was returned against the plaintiffs and others on May 6, 1938.

 That pursuant to the scheme and conspiracy defendants illegally obtained copies of 'rogues gallery' photographs of French, Sr. and French, Jr. and exhibited them to clients of French, Sr. Trial of the plaintiffs was held in April 1939 and after a three weeks' trial the jury was discharged having failed to agree. After the trial the defendants urged the Prosecutor of the Pleas to retry the plaintiffs on the indictment. On September 25, 1941, the indictment against the plaintiffs was nolle prossed.

 That pursuant to the conspiracy and scheme of the defendants, they filed charges against French, Sr. and French, Jr. with the Ethics Committee of the Camden County Bar Association and participated in the prosecution of these charges. After conducting an investigation of the charges, the Bar Association on February 27, 1942, dismissed them.

 That pursuant to the scheme and conspiracy, the defendants originated the charges resulting in the indictment and those filed with the Bar Association, and actively participated in the prosecution of them. As a result the plaintiffs suffered physically and in their reputations and French, Sr., and French, Jr. were damaged in their profession. In defending himself against all the acts of the defendants, French, Sr. expended $ 5,000 and in this action seeks damages to the sum of $ 1,005,000.

 Count 2 incorporates the allegations of Count 1 except for one paragraph and alleges that French, Jr. has been a member of the bar of New Jersey since 1935, that he had been employed by French, Sr. since then and that this plaintiff was damaged by the acts of the defendants for which he seeks damages totalling $ 1,000,000.

 Count 3 incorporates portions of Count 1 and alleges that the aforesaid acts of the defendants resulted in the discharge of plaintiff Charles Haus from employment and that he was unable to secure re-employment 'for a long time'. This plaintiff seeks damages in the sum of $ 100,000.

 Count 5 repeats the allegations of Count 3 and applies to plaintiff John Grogan who seeks $ 100,000 damages.

 Count 6 repeats the allegations of Count 3 and applies to plaintiff Harry Smith who seeks $ 100,000 damages.

 Count 7 repeats the allegations of Count 3 and applies to plaintiff Ralph Smith who seeks $ 100,000 damages.

 Count 8 repeats the allegations of Count 3 and applies to plaintiff Allan Hubbs who seeks $ 300,000 damages.

 Count 9 incorporates portions of Count 1. It further alleges that with intent to injure French, Sr. and French, Jr. in their profession and to injure the other plaintiffs herein the defendants charged the plaintiffs before the Camden County Grand Jury on May 5, 1938 with a criminal conspiracy to cheat certain persons by bringing false actions at law, and with having induced certain persons to swear falsely in the said actions, whereupon on May 6, 1938 an indictment was returned against the plaintiffs, the plaintiffs tried and the jury disagreed in April 1939. On September 25, 1941, the indictment was nolle prossed. The result of the defendants' actions was the injury to the plaintiffs' reputations, their physical sufferings, and French, Sr. and French, Jr. were injured in their profession. French, Sr. demanded $ 1,000,000 damages.

 Count 10 incorporates portions of Count 1 and alleges that on January 10, 1939, the defendants with intent to injure French, Sr. and French, Jr. in their profession filed charges of unethical conduct against them with the Camden County Bar Association, that these charges were investigated, and that on February 27, 1942 they were dismissed. It alleges that the defendants originated and prosecuted these charges, the result of which was that the plaintiffs suffered physically and in their reputations, and that French, Sr. and French, Jr. were damaged in their profession. French, Sr. demands damages of $ 1,000,000.

 Count 11 incorporates portions of Counts 1, 2 and 9, and charged that the defendants caused the criminal actions against French, Jr. who was damaged to the sum of $ 1,000,000.

 Count 12 incorporates portions of Counts 1, 2 and 10 and alleges that the defendants brought about the disbarment proceedings against French, Jr. who seeks $ 1,000,000 damages.

 Count 13 incorporates portions of Counts, 1, 3 and 9 and alleges that the defendants brought the criminal action against the plaintiff Haus who seeks $ 100,000 damages.

 Count 14 repeats the allegations of Count 13 and applies to plaintiff Middleton who seeks $ 300,000 damages.

 Count 15 repeats the allegations of Count 13 and applies to plaintiff Grogan who seeks $ 100,000 damages.

 Count 16 repeats the allegations of Count 13 and applies to plaintiff Harry Smith who seeks $ 100,000 damages.

 Count 17 repeats the allegations of Count 13 and applies to plaintiff Ralph Smith who seeks $ 100,000 damages.

 Count 18 repeats the allegations of Count 13 and applies to plaintiff Allan Hubbs who seeks $ 300,000 damages.

 The initial question to be determined is what causes of action are alleged in the complaint. The plaintiffs have argued on the basis that a conspiracy per se is actionable and that the acts performed pursuant to it are matters demonstrating how the conspiracy was accomplished. On the other hand, the defendants have argued that a civil conspiracy is neither a tort nor a cause of action but that the allegation of its existence is material merely as bearing upon the rules of evidence, as enhancing damages, or to bring within the ambit of liability some one who may have conspired but who did not actually participate in acts arising from the conspiracy. All parties are in agreement that malicious prosecution and malicious injury to business or malicious interference with business are the substantive wrongs attempted to be alleged in the complaint.

 The law of civil conspiracy in New Jersey was early treated in the decision in VanHorn v. VanHorn, 52 N.J.L. 284, 20 A. 485, 10 L.R.A. 184; Id., 53 N.J.L. 514, 21 A. 1069, affirmed in 56 N.J.L. 318, 28 A. 669. In this case the rule was expressed that the 'courts almost uniformly disregard the charge of conspiracy as an actionable element, and consider the malicious injury and resulting damage as the foundation and support of the action.' The rule has been further interpreted in the case of Louis Kamm, Inc., v. Flink, 113 N.J.L. 582, 175 A. 62, 58, 99 A.L.R. 1, in the following manner by Mr. Justice Heher:

 'The essence of the action, it seems, is not the conspiracy, but the damage done to the plaintiff. In an action on the case against several for a tort, though a conspiracy be charged in the complaint, one of the defendants may be convicted and the rest acquitted; the foundation of the action being the damage and not the conspiracy. To recover against all, a joint wrong must be shown, but if only one is shown to be concerned, the plaintiff may still recover against the one. The underlying principle is that the action is founded on the tort, and can, therefore, be sustained against one as well as against several for the damage resulting from the wrongful act. Upon no other theory, this court has held, can recovery be had against one alone, where conspiracy is alleged in an action against two or more, as two at least must participate to constitute conspiracy. The courts disregard the charge of conspiracy as an actionable element, and consider the malicious injury and the resulting damage as the foundation and support of the action. Conspiracy ordinarily is not the gist of the action, but is only matter of inducement or evidence. It is the rule in this state that, in any action charging conspiracy, a verdict may be rendered against one alone upon proof that he intentionally inflicted the injury through persuasion or by false presentations, instigated by malice. VanHorn v. VanHorn, supra.

 'If conduct is complained of which only becomes actionable because of the dishonest combination to accomplish some wrongful act, this combination must be shown. And one cannot combine with himself; he must have associates. It is seldom, if ever, however, that a case can occur in which a man may not have redress without counting on the joint wrong; for the injury accomplished by means of the conspiracy may be treated as a distinct wrong in itself, irrespective of the steps that led to it. The general rule is that a conspiracy cannot be made the subject of a civil action unless something is done which, without the conspiracy, would give a right of action. The damage is the essence of the action, not the conspiracy; and though the conspiracy may be said to be of itself a thing amiss, it must nevertheless, until something has been accomplished in pursuance of it, be looked upon as a mere unfulfilled intention of several to do mischief. (Cases cited).

 'The combination implies the intentional causing of loss or damage without justifiable cause. While combination is not an essential element, it may serve to show the unlawful motive and purpose.' 113 N.J.L. 592-593, 594, 175 A. 62, 69, 99 A.L.R. 1.

 It would appear, therefore, that the conspiracy is not the critical issue in determining the cause of action, but the acts done pursuant to the conspiracy.

 To maintain a cause of action alleging malicious prosecution in a civil action the plaintiff must have 'been arrested without cause and deprived of his liberty or made to suffer other special grievance different from said and superadded to the ordinary expense of his defense. See Potts v. Imlay, 4 N.J.L. 330, 335 (reprint pages 377, 382), 7 Am.Dec. 603; Bitz v. Meyer, 40 N.J.S. 252, 29 Am.Rep. 233.' Schnieder v. Mueller, 132 N.J.L. 163, 166, 39 A.2d 132, 134.

 See also Hammill v. Mack International Motor Truck Corp., et al., 104 N.J.L. 551, 553, 141 A. 775; Pine et al. v. Okzewski et al., 112 N.J.L. 429, 170 A. 825; Saum v. Proudfit, 122 N.J.L. 96, 4 A.2d 35. The detention must be malicious but under due form of law, Pine et al. v. Okzewski et al., supra, 112 N.J.L.at page 432, 170 A. 825. The principal elements in addition must be that the prosecution is ended, that there was a want of probable cause and that it resulted from the acts of a defendant, actuated by malice. Baldwin v. Point Pleasant Beach & Surf Club, 3 N.J.Super. 284, 286, 66 A.2d 62; Miller v. Lai, 77 N.J.L. 135, 71 A. 63; Potter v. Casterline, 41 N.J.L. 22; Weisner v. Hanse, 81 N.J.L. 601, 80 A. 455.

 Detention is unnecessary, however, where the prosecution is criminal, Hammill v. Mack International Motor Truck Corp., et al., supra, 104 N.J.L.at page 553, 141 A. 775. The withdrawal of the complaint, Hammill v. Mack International Truck Corp., et al., supra, 104 N.J.L.at page 553, 141 A. 775, or the judgment of acquittal or nolle prosequi, Apgar v. Woolston, 43 N.J.L. 57, 64; Stein v. Schmitz, 137 N.J.L. 725, 727, 61 A.2d 260, terminates a criminal prosecution.

 The action of malicious interference with business or malicious injury to business is based upon the interference with the right to pursue a lawful business, calling or occupation free from undue interference or molestation. Louis Kamm, Inc. v. Flink, 113 ...


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