the crimes for which they were prosecuted. As basis for this finding is the fact that the defendant prosecuted the plaintiffs in order to satisfy and comply with the wishes of the company to which it looked to recoup its losses and this for the sole purpose or object of recovering its losses under paragraph A of the policy. In reaching this conclusion, it seems to us, we are applying the rule announced in the Curley case, supra, to a factual situation a step removed from those to which Pennsylvania Courts have applied it. We feel, however, that the latter courts would do likewise under similar circumstances. See VanSant v. American Express Co., supra, 169 F.2d at pages 368-370.
To avoid the application of the rule in the Curley case, defendant maintains that the admitting of the 'Crime policy' into evidence was error because the policy does not cover any losses sustained by defendant as the result of any conduct or acts of the plaintiffs, and therefore, the argument runs, it could not derive any pecuniary gain by instituting criminal proceedings against either plaintiff. A legal interpretation of the crime policy or the determination of what conditions must exist before the defendant may recover thereunder are not necessary in this case. Since the defendant believed, as indicated by its filing of the claim, that it could recover under one or more of its terms, the document was offered into evidence by plaintiffs for the purpose of showing what its actual terms were. This was done so that the jury would not draw any unfair inferences from the mere statement, which was obviously admissible, that such a policy existed. We can agree that a submission of the entire policy, without some explanation, to a jury might confuse them. But under the motions for judgments, we cannot make such an assumption with respect to the present jury. Moreover the attempt by plaintiffs' counsel to point out what he thought were the pertinent and relevant paragraphs of the policy to the jury was cut short by the objection of defendant's counsel on the ground that the document spoke for itself.
With respect to another essential element of an action for malicious prosecution the defendant claims that each plaintiff has failed to sustain his burden of proving malice. The rule is well established that the existence of malice is a question for the jury to decide; and that malice may be inferred from want of probable cause. Schofield v. Ferrers, 1864, 47 Pa. 194; Curley v. Automobile Finance Co., supra. Where the plaintiffs' evidence, as in the instant case, justifies a finding by the jury that private gain had a part in the initiation of the criminal proceeding, a prima facie case of malice is made out, casting upon the defendant the burden of going forward with the evidence to rebut such an inference. VanSant v. American Express Co., supra, 169 F.2d at page 367. Thus it is clear that each plaintiff has met his burden with respect to the proof of malice.
In the alternative, the defendant insists that its reliance upon the advice of competent counsel rebutted the inference of malice. The Pennsylvania appellate court cases hold that the bringing of criminal proceedings upon the advice of counsel rebuts the inference of malice arising from want of probable cause. Altman v. Standard Refrigerator Co., 1934, 315 Pa. 365, 173 A. 411; Stritmatter v. Nese, 1943, 347 Pa. 9, 31 A.2d 510; Hubert v. Alta Life Ins. Co., 1939, 136 Pa.Super. 147, 7 A.2d 98. But before the reliance upon advice of counsel may have any legal effect in an action for malicious prosecution, such advice must have been relied upon only after there has been a full and fair disclosure of all the relevant facts within the accuser's knowledge. Bell v. Atlantic City R.R. Co., 1902, 202 Pa. 178, 51 A. 600; Lipowicz v. Jervis, 1904, 209 Pa. 315, 58 A. 619; Muir v. Hankele, 1922, 273 Pa. 231, 116 A. 822; Restatement, Torts (1938) Sec. 666(2). At the trial plaintiffs introduced evidence to show that the manner of conducting business at defendant's warehouse was in a state of confusion. From that evidence, the jury could have found, among other things, that: The sales procedure was not always in accordance with defendant's instructions, the bookkeeping and inventory methods were lax, the employees were careless and indifferent in the execution of their duties, and these conditions were known to those in charge of the warehouse. A rule of principal and agent is that where knowledge is acquired by an agent in the course of his agency and it relates to matters concerning the business which the agent is authorized to conduct on behalf of the principal, such knowledge is imputable to the principal.
Although it was shown at the trial of the instant actions that defendant's vice-president did not have actual knowledge of the conditions at the warehouse, the above rule of agency may be applied, see Farneth v. Commercial Credit Co., 1933, 313 Pa. 433, 439, 169 A. 89, Simpson v. Montgomery Ward & Co., 1949, 165 Pa.Super. 408, 414, 68 A.2d 442, and knowledge of them is imputable to him and hence to the defendant. Defendant's evidence does not show that the true state of affairs at the warehouse during the period the alleged inventory losses occurred was disclosed to the attorney who advised prosecution; he was not told of the value and extent of plaintiffs' business with the defendant, nor did he know the terms and conditions of the crime policy or that the claim for substantial losses had been filed. From this omission the jury could have concluded that the advice of counsel was relied upon by the defendant without it having disclosed the true setting in which the alleged thefts took place.
Even if we assume that full disclosure had been made, the jury could still find malice. The case of Aland v. Pyle, 1919, 263 Pa. 254, states at pages 257, 258, 106 A. 349 at page 350: 'The fact that a prosecution is instituted upon advice of counsel after a fair statement of the facts is not conclusive evidence of the absence of malice. 'It is not the advice, however, that rebuts the presumption of malice, but the innocence of the defendant's conduct, of which his seeking advice is merely evidence; and whether the advice is a good defense depends upon the good faith with which it is sought and followed, and this is a question for the jury to determine from the evidence.' Smith v. Walter, 125 Pa. 453, 17 A. 466.' Taking into consideration the presence of the element of private gain, the jury could have determined that the advice of counsel was not sought in good faith by the defendant. Hubert v. Alta Life Ins. Co., supra, 136 Pa.Super. at pages 151-153, 7 A.2d 98.
On the subject of damages, the defendant has a number of objections. The first is that with the exception of $ 1,250 paid by each plaintiff as attorney's fees, there was a total absence of proof of actual damages suffered by plaintiffs. Second, the jury should not have been permitted to award punitive damages. The court failed to charge the jury that punitive damages must bear a reasonable relationship to the proven damages. And finally, the verdicts were excessive.
There are a number of circumstances and conditions for the existence of which the jury may award compensatory damages to a plaintiff in an action for malicious prosecution.
Some of these, a number of which overlap, may be listed as follows: Loss of liberty, loss of time, physical suffering or discomfort, mental suffering from humiliation and injury to feelings, injury to reputation and station in the community in which he resides, or does business, the risk of conviction, and the reasonable and necessary expenses in securing his release from arrest and defending the criminal prosecution. Once a plaintiff has established the essential elements of his cause of action, he is entitled to recover, without further proof, damages which normally result from being subjected to a criminal prosecution such as that to which the plaintiffs were required to endure. These are designated as general damages and include injury to reputation, humiliation and the distress resulting from being subjected to the risk of conviction.
On the other hand, if the plaintiff is to recover damages for additional loss or injury, such loss or injury must be established by proof and shown to be the natural and proximate result of the criminal proceedings.
At the trial the plaintiffs showed that they were arrested, held in custody for several hours immediately prior to and after the preliminary hearing, required to post bail in the amount of $ 1,500, and that they were subjected to a three-day criminal trial on charges amounting to felonies. Thus with the exception of physical harm and loss of business, it can not be said that the plaintiffs have failed to offer evidence from which the jury could allow compensatory damages in addition to the amount of the attorney's fees.
Besides compensatory damages, the jury may, under certain circumstances, award punitive damages in actions of this nature. This type of damage, sometimes referred to as exemplary or vindictive, may be meted out by the jury where they believe, and the evidence is sufficient to support that belief, that the conduct of the defendant in instituting and prosecuting the criminal proceedings was so malicious and intentionally oppressive, so wanton and careless, or so reckless as to indicate a disregard of the rights of the accused
. 'Such conduct must appear affirmatively in the evidence. It cannot be presumed'. Thompson v. Swank, 1934, 317 Pa. 158, 176 A. 211. In our opinion there was sufficient evidence which would substantiate the jury's belief that defendant's conduct was so wanton and careless as to indicate an utter disregard on the part of the defendant of the rights of the plaintiffs. Reduced to its simplest terms, the evidence which defendant took into consideration in causing the arrest of plaintiffs was the observation by its employees that a few items of supplies were transferred to the plaintiffs and that formal records covering the items and bearing the dates on which such items were transferred could not be found within the confines of the warehouse. When both the loose manner in which business was conducted at the warehouse and the value of the items for which each plaintiff was accused of stealing or receiving as stolen goods did not exceed $ 216 are kept in mind, the defendant's causing the arrest of two highly reputable plumbing contractors, whose day to day and week to week purchases at defendant's warehouse over a yearly period exceeded $ 11,000 and $ 18,000 respectively, without it endeavoring to obtain some explanation either from the plaintiffs or its suspected employees, merited the sting of punitive damages.
When fixing the amount of the punitive damages the jury may, in addition to the degree of malignity shown, take into account the financial worth of the defendant so that they may determine what amount will be sufficient to punish the defendant. Aland v. Pyle, supra, 263 Pa.at page 256, 106 A. 349; Arye v. Dickstein et al., 1940, 337 Pa. 471, 12 A.2d 19. 'There is no general rule on the subject of exemplary or punitive damages. The amount must not be excessive, nor indicate bias or feeling; it must not be grossly disproportionate to the real damage inflicted'.
Thompson v. Swank, supra, 317 Pa.at page 160, 176 A.at page 211. The jury, as has been adverted to earlier, returned a verdict in the amount of $ 15,000 in each action; each verdict was a lump-sum award. Nowhere in its requests for charge did the defendant ask for special findings by the jury with respect to damages. Although it took an exception to that part of the court's charge concerning punitive damages, the defendant did not ask the court to instruct the jury that such damages 'must not be grossly disproportionate to the real damage inflicted', or give any other ground for its exception. Rule 51 of the Federal Rules of Civil Procedure, 28 U.S.C.A., in part, provides: 'No party may assign as error the giving or the failure to give an instruction unless he objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the grounds of his objection'. The purpose of this rule is to give the trial judge an opportunity to correct any alleged error brought to his attention. Waters v. Kings County Trust Co., 2 Cir., 1944, 144 F.2d 680, 682, certiorari denied 323 U.S. 769, 65 S. Ct. 121, 89 L. Ed. 615. Partial compliance with the rule does not effectively serve that purpose. Palmer v. Hoffman, 1943, 318 U.S. 109, 119-120, 63 S. Ct. 477, 87 L. Ed. 645, 144 A.L.R. 719; Tucker v. Loew's Theatre & Realty Corp., 2 Cir., 1945, 149 F.2d 677, 680. At the time it was made, this court did not know the precise reason for defendant's exception, which at best was ambiguous. One of the reasons for the exception could be that the jury should not be permitted to award punitive damages. Consequently, as we have indicated above, a proper basis existed for overruling defendant's exception. Nor can we say, as did the court in Alcaro v. Jean Jordeau, Inc., 3 Cir., 1943, 138 F.2d 767, 771, that the defendant had reason to believe that the trial judge fully comprehended the grounds for its exception; all we can say is, it is reasonable to assume that the jury did award punitive damages. Because we do not know what portion of the verdict the jury attributed to compensatory damages, we are unable to determine whether the punitive damages are reasonable, let alone grossly, disproportional to the compensatory damages.
In answer to the objection that the verdicts were excessive, we can only point to what was said in Thompson v. Swank, supra. The test is not what sum this could would have awarded were it the trier of the facts, but did the amount fixed by the jury exceed the limits, albeit not clearly defined, set by the law of Pennsylvania. Bearing in mind, along with all the other factors in the case, that the defendant's net worth is in excess of six million dollars, we think that the verdict is within the bounds set by law and that it should stand undiminished by this court.
Most of the contentions advanced by the defendant to buttress its motion for new trials have been answered under the motions for judgment N.O.V. Many of the remaining ones, asserted to be prejudicial to its cause, could have been obviated by timely and properly grounded objections by the defendant. The total effect of these and other alleged errors is not such as would cause us to exercise our discretion in awarding new trials.
Accordingly, defendant's motion in each action to set aside the verdict and to enter judgment in its favor, or in the alternative for a new trial is denied.