Petition for rehearing denied May 23, 1944 ON PETITION FOR REHEARING (149 P.2d 108) A petition for rehearing filed by the plaintiff takes issue, not with our holding that the court below erred in submitting to the jury the question whether certain facts constituted probable cause, but with our decision that the judgment should for that reason be reversed. It is said that the facts relied on by the defendant Stadelman, even if they existed, did not constitute probable cause for two reasons: First, that there was no evidence which would justify him in believing that the plaintiff Kuhnhausen had committed grand larceny; and, second, that the conduct which Stadelman believed *Page 315 Kuhnhausen to be guilty of did not constitute under the common law or, under an existing statute, the offense charged against Kuhnhausen; and it is concluded that, had the trial resulted in a verdict for the defendant, the judgment would have been reversed for error in submitting to the jury the question of probable cause at all. If these propositions can be maintained we were, of course, in error when we reversed the judgment for the plaintiff and remanded the case for a new trial.
As the basis for their argument counsel quote the following from Vol. 3, Restatement of the Law of Torts, Ch. 29, § 662:
"One who initiates criminal proceedings against another has probable cause for so doing if he
"(a) reasonably believes that the person accused has acted or failed to act in a particular manner, and
"(b) (i) Correctly believes that such acts or omissions constitute at common law or under an existing statute the offense charged against the accused, or
(ii) mistakenly so believes in reliance on the advice of counsel under the conditions stated in § 666."
We accept the foregoing as a correct statement of the law. We also concur in comment (i) under this section, id., p. 408, which speaks of the circumstances which may require investigation by an accuser before he will be justified in commencing a criminal prosecution, and in the proposition that good faith in the accuser is not sufficient, but it must be faith grounded on facts "which in the judgment of the court would make his faith reasonable"; Director General v. Kastenbaum, *Page 316 263 U.S. 25, 68 L. Ed. 146, 44 S. Ct. 52; Stone v. Stevens,12 Conn. 219, 30 Am. Dec. 611.
The question, then, is whether there were facts known to Stadelman, or reasonably believed by him, which gave him reasonable grounds, without any further investigation than that which he made, to believe that Kuhnhausen had committed the crime charged against him. For an examination of that question we will state the evidence in somewhat more detail than in the original opinion.
Kuhnhausen was tenant of a furnished house owned by Stadelman. He took possession on December 28, 1940. Two days before, Stadelman had made a check of the furnishings and ascertained that the property afterwards claimed to have been stolen was in the house. This property consisted of the following items: One spray pump, one electric motor and belt, two bed mattresses, one bed spring, one garden hose and nozzle, cooking utensils and dishes. Kuhnhausen became delinquent in his rent, and on June 4, 1941, Stadelman commenced an action of forcible entry and detainer, and on June 7, obtained an order for the restitution of the premises. On June 8 the plaintiff vacated the house, leaving the key with a neighbor, but he left no forwarding address. Stadelman went to the house at 5:00 o'clock on June 8. A new tenant was in possession, and he informed Stadelman that Kuhnhausen had vacated the premises at 2:00 o'clock that afternoon. Stadelman looked over the house and discovered that the articles in question were missing. On that evening he reported the matter to the police. The police asked him if he knew the address of the party who had lived in the house, and, when Stadelman answered in the negative, he was told that he should take it up with *Page 317 his attorney or the district attorney. Stadelman consulted his attorney, A.M. Esson, the following day and told him the facts. Esson advised him to get in touch with Kuhnhausen. Stadelman endeavored to find out where Kuhnhausen lived from the neighbors and at the store where the latter had traded and from relatives of Kuhnhausen whom he located, but he was able to get no information. He did nothing further until June 26, when he recalled that Kuhnhausen had once told him that he worked at Molalla. He proceeded to Molalla, and, after inquiry, learned that a man of the name of Kuhnhausen was working in a lumber camp southeast of Molalla. He proceeded there and waited for Kuhnhausen to come in from the day's work. Kuhnhausen did not appear, but Stadelman saw Kuhnhausen's son and left a message with the son to tell his father that he wanted the stolen articles returned and the rent paid, and that he would give him ten days to return the stolen articles. The following day, June 27, Stadelman reported this occurrence to Mr. Esson. Nothing further was done until July 10. Not having heard from Kuhnhausen, Stadelman on that day again saw his attorney, who advised him to see the deputy district attorney, and that, in his opinion, Kuhnhausen was guilty of grand larceny. Stadelman then saw Thomas G. Work, deputy district attorney for Multnomah County, related the facts to him, and gave him Kuhnhausen's address at Molalla. On July 24 he again saw Work, who told him that he had written a letter to Kuhnhausen, had received no reply, and the letter had not been returned. On August 7 he again saw Work, who again told him that he had not heard from Kuhnhausen nor had his letter been returned, and he gave Work a new address for Kuhnhausen at Canby, *Page 318 Oregon. On August 15 he reported to Esson that the deputy district attorney had written letters to Kuhnhausen and had not heard from him. He waited until September 11 when he again saw the deputy district attorney, who told him that he had written a letter to Canby but still had no answer, and that the letter had not been returned. The deputy district attorney then wrote up the information of felony, which Stadelman signed and swore to. Kuhnhausen's arrest and imprisonment followed. Kuhnhausen did not deny that he had received the message from his son, or the letters from the prosecutor.
Taking all these facts to be true, we are of the opinion that they constituted probable cause for the prosecution. Suspicion under these circumstances would naturally be directed to the former tenant, the person last known to be in possession of the property, and, even though the immediate initiation of criminal proceedings might have been deemed precipitate and unjustified, yet when it became apparent to Stadelman that Kuhnhausen was avoiding him and the prosecuting attorney and refusing to make an explanation (and the evidence would support such a finding), then, after a consultation with his attorney and receiving his advice, we think that he had reasonable grounds for believing that Kuhnhausen had committed the offense charged.
If he erred in his judgment and Kuhnhausen was in fact innocent, his mistake was of the sort described in the Restatement, id., Comment g, p. 407:
"A third type of mistake occurs when the accuser, having no personal knowledge of the actual conduct of the accused, knows or is credibly informed of circumstances which lead him mistakenly *Page 319 to believe that the accused has acted or failed to act in a particular manner. Whether such knowledge or information is enough to give the accuser probable cause for initiating criminal proceedings depends upon whether the inferences of fact which he draws from the data before him are such as a reasonable man would draw."
It is argued, however, that the facts in the existence of which the defendant claims to have believed do not in any event constitute a crime and that the case, therefore, does not measure up to the requirement of the first subdivision of (b) in the rule above quoted from the Restatement. At most, it is said, there was but a conversion for which only a civil action would lie, and, indeed, not even a conversion, because Stadelman made no demand for the return of the property. We think that this contention is lacking in merit, even though it be conceded that the evidence does not sufficiently show a demand. Where conversion by a bailee is charged no demand is necessary when there has been "a possession maintained in violation of one's contract, an unfulfilled promise to return the goods, a diversion of property from the special purpose for which it was received": 65 C.J., Trover and Conversion, 43, § 56. And see 6 C.J., Bailments, 1154, § 128. Jeffries v. Pankow, 112 Or. 439, 223 P. 745, 229 P. 903, cited by the plaintiff, is not in conflict with the foregoing doctrine.
Kuhnhausen's only lawful possession of the goods in question was as a tenant of Stadelman; when that relationship terminated and he vacated the house his duty was to leave the goods there, and if instead he knowingly took them with him or otherwise disposed of them his act was wrongful and amounted to a conversion. Under the facts assumed Stadelman had *Page 320 reasonable grounds for believing that Kuhnhausen had converted his property knowingly and feloniously.
It is true that the crime in that case would not be grand larceny, as charged in the information on felony, but larceny by bailee: § 23-524, O.C.L.A. But, in preferring that charge, there is evidence that the defendant was advised by his attorney that the crime was grand larceny and that the deputy district attorney was of the same opinion; his mistake of law, therefore, in that regard would be protected: § 662, Restatement, id.; 34 Am.Jur., Malicious Prosecution, 736, § 52, 748, § 71; Climax DairyCo. v. Mulder, 78 Colo. 407, 416, 242 P. 666; Nettleton v.Cook, 30 Idaho 82, 87, 163 P. 300, L.R.A. 1917D, 1194.
Among the cases cited in support of the petition for rehearing are several in which it was held that the evidence failed to show probable cause, and it is said that these cases are in point here. We do not so regard them, and think that they are all clearly distinguishable. In Hutchinson v. Wenzel, 155 Ind. 49,56 N.E. 845, the defendant had charged the plaintiff with selling him a forged note. He relied altogether on the statement of the supposed maker of the note that it was a forgery. This was a man whom he did not know and who lived in a different community. The plaintiff, confronted with the charge, gave a circumstantial account of the execution of the note, offered to give double security for it until its integrity could be established, and named four residents of the place where both parties lived who knew all about the transaction. Without making any further investigation, and notwithstanding the advice of the chief of police to the contrary, and without advising with the prosecuting attorney who was present, the defendant signed an *Page 321 affidavit charging the plaintiff with uttering a forged note and brought about the plaintiff's arrest. It was under these circumstances, which seem to us to be obviously unlike anything in the case at bar, that the court held that there was no probable cause for the prosecution, saying:
Hazzard v. Flury, 120 N.Y. 223, 24 N.E. 194, grew out of the delivery of some rugs by the defendant to the plaintiff under an agreement that, when called on so to do by the defendant, the plaintiff would return the rugs in good order or the cash or a properly signed lease for the same. A dispute which arose resulted in an agreement that the defendant should receive in full settlement $36.25 in money and thirteen Smyrna 30-inch rugs. The plaintiff paid the money in two installments, and, at the time of the last payment, gave an excuse for failure to deliver the rugs and promised that he would do so in a few days. Two or three hours before this the defendant swore to a complaint charging the plaintiff with appropriating one of the rugs embraced in the settlement. A warrant for the plaintiff's arrest was issued, but was not served for several weeks thereafter. When the plaintiff paid the last installment the defendant did not tell him that he had sworn to the complaint. Before the warrant *Page 322 was served the plaintiff delivered to the defendant thirteen rugs, which he claimed to be in strict fulfillment of the contract. The defendant refused to receive them because they were not, he claimed, in accordance with the agreement. The ground of the court's decision that there was no probable cause to believe the plaintiff guilty of larceny was that, under the agreement made in settlement of the dispute, the plaintiff had the right to the possession of the rug which he was charged with stealing."The belief of an accuser counts for nothing when carelessly or recklessly formed upon a single item of information, if it be shown that he failed to inquire into other reasonable and convenient sources pointed out to him that would have established the innocence of the accused. There must be real, honest belief and reasonable grounds upon all the appearances after such investigation as a prudent person would make under the circumstances of the case, to afford a justification."
In Parli v. Reed, 30 Kan. 534, 2 P. 635, it appears that the defendant paid the plaintiff money on a contract for building a home, and became suspicious that plaintiff had spent the money instead of paying it to employees and material men. The defendant initiated a prosecution for embezzlement. It was held that there was no crime, and consequently no probable cause to believe that the plaintiff had committed a crime, because it was the plaintiff's own money.
The holding in Necker v. Bates, 118 Iowa 545, 92 N.W. 667, is, as counsel say in their brief, correctly stated in the first syllabus as follows:
"Where, on vacating the rented premises, a tenant left a harness in a barn thereon, which the landlord afterwards said he would not deliver unless legal proceedings were resorted to, the law furnishes an adequate civil remedy, and a prosecution for theft of the harness is not justified."
The court said:
*Page 323"There is nothing in the record before us on which to justify such proceedings. Had a demand been made for the harness and same followed by a refusal, the law afforded a civil remedy wholly adequate to ascertain and enforce the rights of the parties."
Although the court did not expressly so state, it is apparent that there was nothing in the facts to justify an inference of a felonious intent on the part of the plaintiff in refusing to turn over the harness.
The last of these cases cited by counsel is Turner v. O'Brien,5 Neb. 542. It does not appear to be contended that the facts of this case resemble those in the instant case, but it is cited for the proposition that mere conversion of property without theanimus furandi is no ground of probable cause nor for belief in the guilt in the party. A judgment for the defendant was reversed because the court instructed the jury in effect that, if they found that the plaintiff had converted to his own use the property of the defendant, and the defendant had been informed of the fact, and that the information was of such a character as to warrant a man of ordinary prudence in believing the plaintiff guilty of the offense charged, and, if the man did so believe, he would not be liable. The grounds of the decision were that the court erroneously left to the jury the question of probable cause and that the instruction omitted the element of felonious intent. We think that the case was correctly decided, but see nothing in it which conflicts with the views which we have announced here and in our former opinion.
The foregoing review of the cases claimed by the plaintiff to be in point on the facts seems to us to reveal the following distinguishing features: In Hutchinson v. Wenzel, supra, the accuser rashly relied on information which he was not justified in accepting as trustworthy and refused to avail himself of other obvious means of ascertaining the truth; in the other cases the accuser had no grounds for believing that a crime had been committed either, because, under the *Page 324 facts as known or believed by him, the charge could be nothing beyond appropriating property to the possession of which the plaintiff was entitled (Hazzard v. Flury, supra); or embezzling one's own money (Parli v. Reed, supra); or because nothing in the known or believed facts warranted an inference of felonious intent on the part of the one accused (Necker v. Bates, supra). None of these defects appear in the case at bar, if the defendant's testimony is to be accepted as true, and we are, therefore, of the opinion that the authorities cited do not support the plaintiff's position.
The contentions urged in the petition for rehearing were suggested in the original brief of the plaintiff, though with not so much elaboration. They were not discussed in our former opinion, as, perhaps, they should have been. Counsel have presented them with ability, but, as we are unable to take their view of the application of the principles of law insisted upon, the petition will be denied. *Page 325