No. 14931.
IN THE SUPREME COURT OF THE STATE OF MONTANA
1980
FIRST TRUST COMPANY OF MONTANA,
Personal Representative of the
Estate of Jack W.Sisson, Decedent,
Plaintiff and Appellant,
VS.
LYLE McKENNA,
Defendant and Respondent and
Cross-Appellant.
Appeal from: District Court of the Tenth Judicial District,
Honorable LeRoy L. McKinnon, Judge presiding.
In and For the County of Judith Basin
Counsel of Record:
For Appellant:
Swanberg, Koby, Swanberg and Matteucci, Great Falls,
Montana
Fa Swanberg argued, Great Falls, Montana
ORHAM E
For Respondent :
Robert J. Emrnons argued, Great Falls, Montana
Leonard McKinney, Lewistown, Montana
Submitted: March 28, 1980
Decided: J N 1 7 1980
U
Filed: $mi! 7
M r . Chief J u s t i c e Frank I . H a s w e l l d e l i v e r e d t h e Opinion of
t h e Court.
I n a n a c t i o n by t h e s e l l e r s of a farm t o r e c o v e r a r e a l
e s t a t e commission and t r e b l e damages, t h e D i s t r i c t C o u r t
g r a n t e d summary judgment i n f a v o r of t h e r e a l e s t a t e b r o k e r
and d i s m i s s e d t h e b r o k e r ' s c o u n t e r c l a i m f o r m a l i c i o u s p r o s e -
cution. Both p a r t i e s a p p e a l from t h e r e s p e c t i v e judgments
a g a i n s t them.
I n 1970 J a c k S i s s o n and h i s b r o t h e r Mark owned a r a n c h
i n J u d i t h B a s i n County, Montana. The r a n c h c o n s i s t e d o f
a b o u t 8,400 a c r e s o f deeded l a n d and a b o u t 6,320 a c r e s of
l e a s e d l a n d t o g e t h e r w i t h l i v e s t o c k , machinery and improve-
ments. The d e f e n d a n t was a t a l l t i m e s p e r t i n e n t t o t h i s
c a s e a licensed real estate broker. I n October 1969, t h e
Sissons executed a real estate b r o k e r ' s c o n t r a c t authorizing
t h e defendant t o sell t h e Sissons' real property f o r
$800,000. The d e f e n d a n t was u n a b l e t o complete a s a l e and
t h e c o n t r a c t e x p i r e d on May 1, 1970. The S i s s o n s t h e r e a f t e r
had t h e r a n c h l i s t e d w i t h two o r more o t h e r r e a l e s t a t e
b r o k e r s , b u t no s a l e was consummated a t t h a t t i m e .
On a b o u t December 6 , 1972, t h e S i s s o n s a g a i n s o u g h t
defendant's s e r v i c e s i n s e l l i n g t h e ranch. Defendant s o u g h t
another broker's c o n t r a c t b u t w a s unsuccessful. He did,
however, b e g i n l o o k i n g f o r a p u r c h a s e r and d e t e r m i n e d t h a t
a n a r e a r a n c h e r , B i l l S k e l t o n , was i n t e r e s t e d i n p u r c h a s i n g
t h e r e a l p r o p e r t y o n l y f o r $700,000. Without i n f o r m i n g t h e
S i s s o n s of S k e l t o n ' s i n t e r e s t i n t h e l a n d , t h e d e f e n d a n t
attempted t o persuade t h e Sissons t o s e p a r a t e t h e l i v e s t o c k
and machinery from t h e r e a l e s t a t e f o r s e p a r a t e s a l e . The
S i s s o n s d e c l i n e d b e c a u s e t h e y wanted a s i n g l e sale.
On o r a b o u t December 1 4 , Floyd H i c k s , a c a t t l e b u y e r ,
expressed an i n t e r e s t t o t h e defendant i n purchasing t h e
cattle and machinery. Bill Skelton was apparently still
interested in buying just the land at this time for $700,000.
Defendant then approached the Sissons and apparently left
them with the impression that Hicks wanted to buy the entire
ranching operation for $900,000. The reason defendant did
not tell the Sissons that Hicks was only interested in the
cattle and machinery and that Skelton was to put up the
money for the land was given in the following testimony of
defendant broker:
"Q. Did they know who the buyer was? A. No.
"Q. Was there a reason why you did not tell
them who the buyer was? A. Yes.
"Q. What was the reason? A. Well, Jack
Sisson had fights with all his neighbors. When
I had the place sold to Sanmeyer, he refused to
go because he didn't like Sanmeyer. I knew the
same thing would happen if I told him who the
buyer was, so I didn't tell him the buyer. The
buyer was a very good buyer, substantial money,
good backing, but for personal reasons, Jack
wouldn't have sold, probably--that is my sur-
mise."
On December 18, the Sissons told defendant that they
would sell to Hicks for $900,000. Defendant and Hicks went
to the Sisson ranch, and a purchase agreement was drawn up
but not signed. Defendant and Hicks then went to Skelton's
ranch and discovered that Bill Skelton was beginning to
change his mind about buying the entire Sisson ranch. The
Sissons, in the meantime, discussed the proposed sale with
their accountant, who suggested that the sale price be
allocated $675,000 for the land and $225,000 for the per-
sonal property. The Sissons contacted the defendant and a
new purchase agreement was prepared on December 20 pursuant
to the accountant's advice. Hicks was not present at this
meeting, but he had given defendant $20,000 earnest money
for a deposit on the property. The Sissons signed the
agreement at this time.
On December 21 defendant again visited the Sissons. By
this time defendant knew that Bill Skelton was no longer
interested in purchasing all of the Sisson land. During the
visit, the defendant informed the Sissons that Hicks could
not handle the deal alone and that defendant would have to
go in with Hicks. Defendant also informed the Sissons,
during this visit, that he wanted five separate deeds so
that the ranch could be resold in parcels. On December 29,
the Sissons, Hicks, and defendant met; the buy and sell
contract was signed; and the earnest money was paid.
The District Court found that throughout the time
defendant was attempting to sell the ranch, he was in con-
tact with several neighbors and that some of these neighbors
were interested in buying parcels of the ranch. The Dis-
trict Court also found that defendant had not made any deals
to resell the parcels until after the closing date on Decem-
ber 29, 1972.
Within eleven days from the date when the defendant and
Hicks bought the ranch, the land was resold in parcels for
$800,000. The cattle, hay and equipment were eventually
resold for $279,657.39. This resulted in a $179,657.39
profit for defendant and Hicks. In addition, defendant
earned a commission on the sale of $45,000.
The amended complaint alleges that defendant breached
his fiduciary duty by failing to disclose to the Sissons the
fact that he had been conducting negotiations to resell the
parcels and that defendant had violated certain statutes
governing the conduct of real estate brokers. ~efendant's
answer, among other things, included a counterclaim for
malicious prosecution. During the pendency of the actions,
Jack Sisson died and the First Trust Company of Montana, the
personal representative of his estate, was substituted as
plaintiff in the action.
Both parties moved for summary judgment. The District
Court issued findings of fact, conclusions of law, and
judgment denying plaintiff a summary judgment and granting
defendant a summary judgment. Additionally, the District
Court granted plaintiff's motion for dismissal of defen-
dant's counterclaim. Plaintiff appeals from the summary
judgment against it, and defendant cross-appeals from dis-
missal of his counterclaim.
The plaintiff has listed several issues which may be
summarized as follows:
1. Did the District Court err in granting summary
judgment in favor of the defendant?
2. Did the District Court err in dismissing the mali-
cious prosecution counterclaim for failing to state a cause
of action?
Rule 56(c), M.R.Civ.P., provides that summary judgment
shall be rendered if there is no genuine issue as to any
material fact and the moving party is entitled to judgment
as a matter of law. In the present case the District Court
granted defendant's motion for summary judgment because the
court concluded there was no issue of material fact as to
the breach of any duty by the defendant. In this connec-
tion, the District Court also concluded that defendant had
acted in good faith in his dealings with the Sissons.
Obviously, the District Court felt that the duty a broker
owes to his principal is a duty of good faith and that
defendant did not breach his duty.
In the recent case of Lyle v. Moore (1979), - Mont .
, 599 P.2d 336, 36 St.Rep. 1307, this Court had occasion
to consider the duty of disclosure which a broker owed to
his principal. That case involved a clause in a broker's
agreement which said, among other things, that the broker
was entitled to a commission if the defendants withdrew the
broker's authority to sell before a certain date. The
defendants withdrew the authority before that date and the
plaintiff sued for his commission. The defendants claimed
they did not understand the terms of the contract. The
District Court held that this did not excuse the defendants
and gave judgment for plaintiff.. This Court reversed,
finding that the plaintiff had failed in his duty to explain
the provision granting the broker his commission if the
defendants withdrew his authority prior to a specified date.
This Court said, " [i]n Carnell v. Watson (1978), [176 Mont.
3441 578 P.2d 308, 312, 35 St-Rep. 550, 555, we recognized a
fiduciary relationship between a real estate broker and his
client. This fiduciary relationship between a broker and
his client has been found to encompass a 'duty of full
disclosure' by a number of courts." 599 P.2d at 337. We
went on to say:
". .
. there are times when the law imposes a
duty upon a party to speak rather than remain
silent and thereby to disclose information to
place the person with whom he is dealing on an
equal footing with him. The failure to speak in
such a case amounts to the suppression of a fact
which should have been disclosed and constitutes
fraud." 599 P.2d at 339. (Citations omitted.)
A broker has a duty to act in good faith toward his
client. Embodied within this duty is a requirement to make
full disclosure. This duty to disclose all pertinent facts
becomes particularly important where the broker is himself
buying the property. See Crowley v. Rorvig (1921), 61 Mont.
T h i s p r i n c i p l e i s s e t f o r t h i n Comment A t o Restatement
of Law, Agency 2d, S e c t i o n 390, i n t h e f o l l o w i n g language:
". . . Before d e a l i n g w i t h t h e p r i n c i p a l on his
own account, however, an a g e n t h a s a d u t y , n o t
o n l y t o make no m i s s t a t e m e n t s of f a c t , b u t a l s o
t o disclose t o the principal a l l relevant facts
f u l l y and completely . . ."
1 2 Arn.Jur.2d Brokers S91 a t 8 4 4 s t a t e s :
"The g e n e r a l r u l e i s t h a t a broker c a n n e i t h e r
purchase from, nor s e l l t o , h i s p r i n c i p a l u n l e s s
t h e l a t t e r expressly assents t h e r e t o o r , with f u l l
knowledge of a l l t h e f a c t s and c i r c u m s t a n c e s ,
a c q u i e s c e s i n such t r a n s a c t i o n . Moreover, even
though t h e p r i n c i p a l g i v e s h i s a s s e n t t o a pur-
c h a s e o r s a l e by t h e b r o k e r , t h e l a t t e r ' s a c t i o n s
throughout must be c h a r a c t e r i z e d by t h e utmost
good f a i t h , I n t h e e v e n t of any l i t i g a t i o n be-
tween him and h i s employer, t h e burden i s upon
him t o prove b o t h t h e permission and t h e exem-
p l a r y manner i n which he a v a i l e d himself of it.
The r e a s o n i s t h a t i t i s i n c o n s i s t e n t f o r one t o
a c t a s a p r i n c i p a l i n h i s own behalf w h i l e i s
d u t y bound t o a c t as t h e a g e n t of a n o t h e r , f o r
i n t h e l a t t e r c a p a c i t y he i s bound t o e x e r c i s e
h i s b e s t s k i l l and l a b o r and a h i g h d e g r e e of
f i d e l i t y and good f a i t h t o s e c u r e f o r h i s p r i n -
c i p a l t h e b e s t b a r g a i n p o s s i b l e , even though
h i s own c o n f l i c t i n g i n t e r e s t s a t t h e same time
impel him t o do j u s t t h e o p p o s i t e and t h e r e b y
g a i n t h e most advantageous terms f o r h i m s e l f . "
I n t h e p r e s e n t c a s e , d e f e n d a n t o r a l l y agreed t o buy t h e
l a n d on December 2 1 , 1972. On December 29 t h e p a p e r s were
s i g n e d and a check was g i v e n t o t h e S i s s o n s . Defendant
t e s t i f i e d t h a t on December 2 2 he o f f e r e d t h e e n t i r e ranch t o
Henry Wortheimer f o r $950,000. Wortheimer l a t e r d e c l i n e d
the offer. Defendant d i d n o t inform t h e S i s s o n s t h a t t h i s
o f f e r was o u t s t a n d i n g , He t e s t i f i e d :
"Q. W y d i d you n o t t e l l them? A. Well, we
h
made a d e a l t o buy on t h e 20th, a s f a r a s I
was concerned, and i t was s o l d on t h e 20th.
I t w a s now m o b l i g a t i o n t o t r y t o p i c k up
y
t h e p i e c e s . I was i n a p o s i t i o n I had t o d e a l
f o r myself."
Defendant a l s o t e s t i f i e d t h a t he had c o n t a c t e d Ray H i l l
on December 23 and H i l l had i n d i c a t e d a n i n t e r e s t i n pur-
c h a s i n g a p a r c e l of t h e ranch; t h a t he had c o n t a c t e d B i l l
S k e l t o n on December 2 0 t h and S k e l t o n i n d i c a t e d a n i n t e r e s t
i n p u r c h a s i n g a p o r t i o n of t h e r a n c h ; t h a t h e c o n t a c t e d
E l o i s e Reed on a b o u t December 27 and s h e w a s n o t i n t e r e s t e d .
On December 27, B i l l S k e l t o n gave d e f e n d a n t a p u r c h a s e
agreement f o r a p o r t i o n of t h e r a n c h . Defendant d i d n o t
inform t h e S i s s o n s of t h e s e f a c t s .
I n a d d i t i o n , d e f e n d a n t t o l d t h e S i s s o n s t h a t Hicks was
g o i n g t o buy t h e r a n c h f o r $900,000 when i n t r u t h Hicks
merely wanted t o buy t h e c a t t l e , hay, and machinery f o r
$200,000 and t h e l a n d was t o be s o l d f o r $700,000 t o B i l l
Skelton. Defendant d i d n o t t e l l J a c k S i s s o n t h a t S k e l t o n
w a s a p o t e n t i a l buyer b e c a u s e he was a f r a i d t h a t J a c k S i s s o n
would n o t a g r e e t o t h e s a l e i f he knew t h a t S k e l t o n w a s
involved.
Defendant a r g u e s t h a t he had no d u t y t o d i s c l o s e a f t e r
December 21 b e c a u s e t h a t was t h e day when t h e agency r e l a -
t i o n s h i p came t o a n end. H e a r g u e s t h a t t h e agency rela-
t i o n s h i p e n d s when a b r o k e r e a r n s t h e commission and t h e
commission i s e a r n e d when t h e b r o k e r p r o d u c e s a r e a d y ,
w i l l i n g and a b l e buyer f o r t h e p r o p e r t y . Therefore, accord-
i n g t o d e f e n d a n t , he no l o n g e r had a d u t y t o d i s c l o s e a f t e r
he produced h i m s e l f and Hicks a s r e a d y , w i l l i n g and a b l e
b u y e r s on December 2 1 .
Defendant i s c o r r e c t i n one r e s p e c t . Montana c a s e s
have r e p e a t e d l y s t a t e d t h a t a b r o k e r i s e n t i t l e d t o h i s
commission when h e p r o d u c e s a r e a d y , w i l l i n g , and a b l e
buyer. I n Diehl & A s s o c i a t e s , I n c . v . Houtchens ( 1 9 7 7 ) . 173
Mont. 372, 567 P.2d 930, t h i s C o u r t s a i d :
" I t i s a g e n e r a l l y a c c e p t e d law t h a t a r e a l
e s t a t e b r o k e r i s e n t i t l e d t o commissions when
h e h a s , i n p u r s u a n c e of h i s employment and
w i t h i n t h e t i m e s p e c i f i e d i n t h e c o n t r a c t of
employment, p r o c u r e d a p u r c h a s e r a b l e , r e a d y
and willing to purchase the seller's property
on the terms and conditions specified in the
contract of employment. Roscow v. Bara, 114
Mont. 246, 135 P.2d 364; 12 Am.Jur.2d 921,
Brokers S182. When the broker procures a buyer
who makes a counteroffer or agrees to terms at
variance to the terms specified in the employ-
ment contract, the seller has the option of
accepting or rejecting the counteroffer. If
the seller accepts the counteroffer of the
procured buyer, the seller is legally obli-
gated to pay commissions to the broker, either
under the terms of the contract of employment
or the mutually agreed terms of a contract for
sale.
"The broker's ability to recover commissions
is premised on the broker's ability to accom-
plish what he undertook to do in his contract
of employment .. .
"We note the distinction between a brokerage
contract which requires a broker to merely
find a purchaser and a brokerage contract
which requires a broker to sell, make or ef-
fect a sale. In the first case the broker
earns his commission when he procures a buyer
able, ready and willing to purchase on the
seller's terms. A broker employed to sell or
effect a sale does not earn his commission
until he completes the sale. Completion of
the sale, where real property is involved,
amounts to payment of the purchase price and
conveyance of title. O'Neill v. Wall, 103
Mont. 388, 62 P.2d 672." 567 P.2d at 933-35.
See also Hollinger v. McMichael (1978), - Mont. , 580
P.2d 927, 35 St.Rep. 856, and Apple v. Henry (1923), 66
Mont. 244, 213 P. 444.
It must be noted, however, that in each of the above-
cited cases, the issue was whether the broker was entitled
to a commission, not whether the broker had a duty to dis-
close relevant facts to the principal, and in none of the
cases was the broker the prospective buyer. A close reading
of these cases reveals that the rule of law set forth therein
is to protect a broker who has produced an eligible buyer.
These cases do not stand for the proposition that a broker
is released from a duty to disclose as soon as he proposes
to buy the land for himself.
H e r e d e f e n d a n t w a s n o t l e g a l l y bound t o buy t h e p r o p e r t y
on December 21, 1972, t h e d a t e t h a t d e f e n d a n t and Hicks
o r a l l y o f f e r e d t o buy t h e p r o p e r t y f o r $900,000 and t h e
iss sons o r a l l y a c c e p t e d t h e o f f e r . Defendant was n o t l e g a l l y
bound t o buy t h e l a n d u n t i l December 29 when t h e w r i t t e n
c o n t r a c t s were s i g n e d . H e c o u l d have backed o u t a t any
time. I t was d u r i n g t h i s t i m e t h a t t h e d e f e n d a n t made
s e v e r a l c o n t a c t s c o n c e r n i n g t h e p r o p e r t y and d i d n o t t e l l
t h e Sissons about t h e contacts.
R e s e a r c h h a s n o t r e v e a l e d a Montana c a s e which i s
d i r e c t l y on p o i n t . W e n o t e , however, t h e c a s e of I r b y v.
Lee (0kla.App. 1 9 7 3 ) , 512 P.2d 253, which p r e s e n t e d a s i m i l a r
fact situation. I n I r b y t h e d e f e n d a n t w a s a b r o k e r who had
been t r y i n g t o s e l l t h e p l a i n t i f f ' s l a n d . On A p r i l 1 4 ,
1969, t h e b r o k e r t o l d t h e p l a i n t i f f t h a t h e , t h e b r o k e r ,
would buy a p o r t i o n of t h e l a n d . On A p r i l 30, 1969, t h e
broker entered i n t o a c o n t r a c t with a t h i r d p a r t y t o sell
t h e p o r t i o n of l a n d t h a t t h e b r o k e r had bought. T h i s was
n o t disclosed t o t h e p l a i n t i f f seller. I n May t h e p l a i n t i f f
r e c e i v e d money f o r t h e l a n d and conveyed t h e l a n d t o t h e
broker. The c o u r t was p r e s e n t e d w i t h t h e i s s u e of whether a
f i d u c i a r y r e l a t i o n s h i p s t i l l e x i s t e d on A p r i l 30, t h e day
t h e broker contracted t o sell t o a t h i r d p a r t y . The c o u r t
held t h a t the fiduciary relationship d i d not expire u n t i l
May, when t h e b r o k e r p a i d t h e p l a i n t i f f f o r t h e p r o p e r t y .
The r e a s o n i n g used by t h e c o u r t was t h a t t h e b r o k e r was n o t
l e g a l l y bound t o buy t h e p r o p e r t y u n t i l May and he was,
t h e r e f o r e , s t i l l under a d u t y t o d i s c l o s e on ~ p r i l
30.
W e f o l l o w t h e same r a t i o n a l e and h o l d t h a t d e f e n d a n t
had a d u t y o f f u l l d i s c l o s u r e u n t i l he was l e g a l l y bound t o
buy t h e p r o p e r t y on December 29, 1972. his h o l d i n g corn-
p o r t s w i t h t h e h i g h s t a n d a r d s a p p l i c a b l e t o b r o k e r s buying
p r o p e r t y from a p r i n c i p a l . However, t h i s d o e s n o t a u t o -
m a t i c a l l y e n t i t l e p l a i n t i f f t o summary judgment. The c a s e
p r e s e n t s g e n u i n e i s s u e s of m a t e r i a l f a c t a s d i f f e r e n t i n f e r -
e n c e s c a n be drawn from t h e f a c t s a s t o whether t h e d e f e n -
d a n t breached h i s d u t y . Consequently, t h e summary judgment
i n d e f e n d a n t ' s f a v o r i s v a c a t e d and t h e c a s e i s remanded t o
t h e D i s t r i c t Court f o r t r i a l .
P l a i n t i f f has a l l e g e d t h a t t h e D i s t r i c t Court e r r e d i n
n o t f i n d i n g t h a t d e f e n d a n t v i o l a t e d c e r t a i n s e c t i o n s of
Montana's Real E s t a t e L i c e n s e Act. A t the t i m e t h i s action
a r o s e , t h e p e r t i n e n t s t a t u t e was found a t s e c t i o n 66-1937,
R.C.M. 1947, and h a s s i n c e been amended. Those amendments,
however, d o n o t change o u r d i s p o s i t i o n of t h e c a s e . In
p a r t i c u l a r p l a i n t i f f c i t e s s e c t i o n 37-51-321, MCA, which
provides i n p e r t i n e n t p a r t :
"Revocation o r s u s p e n s i o n - l i c e n s e - - i n i t i a t i o n
of
- p r o c e e d i n ~ - - g r o u n d s . The board may on i t s
of
own motion and s h a l l on t h e sworn c o m p l a i n t i n
w r i t i n g of a p e r s o n i n v e s t i g a t e t h e a c t i o n s of
a r e a l e s t a t e b r o k e r o r a r e a l e s t a t e salesman,
s u b j e c t t o 37-1-101 and 37-1-102, and may r e -
voke o r suspend a l i c e n s e i s s u e d under t h i s
c h a p t e r when t h e b r o k e r o r salesman h a s been
found g u i l t y by a m a j o r i t y of t h e board of any
of t h e f o l l o w i n g p r a c t i c e s :
" ( 3 ) p u r s u i n g a c o n t i n u e d and f l a g r a n t c o u r s e
of m i s r e p r e s e n t a t i o n o r making f a l s e p r o m i s e s
t h r o u g h a g e n t s o r salesmen o r any medium of
advertising o r otherwise;
" ( 9 ) offering r e a l property f o r s a l e o r lease
w i t h o u t t h e knowledge and c o n s e n t of t h e owner
o r h i s a u t h o r i z e d a g e n t o r on t e r m s o t h e r t h a n
t h o s e a u t h o r i z e d by t h e owner o r h i s a u t h o r i z e d
agent;
" ( 1 9 ) d e m o n s t r a t i n g h i s u n w o r t h i n e s s o r incom-
p e t e n c y t o a c t a s a b r o k e r o r salesman .. .I'
The District Court made no findings concerning these
statutory provisions. Because there is conflicting evidence
which presents a genuine issue of material fact, this issue
can be determined at the trial.
Defendant has appealed from dismissal of his counter-
claim. The counterclaim is based on an allegation of mali-
cious prosecution. The trial court dismissed this counter-
claim for failing to state a cause of action.
In actions for malicious prosecution the party bringing
the action must prove that there has been a termination of
proceedings. This rule has been stated as follows:
". . . On the other hand, an action for mali-
cious prosecution may not be asserted by way of
cross-complaint or counterclaim in the original
proceeding, prior to its termination, since -
it
is essential -- original proceeding
- that the
shall --previously terminated - favor
have been in
of - party bringing the malicious prosecu-
- the
tion action. Hence a counterclaim purportinq
- - -
to set forth the cause of action in-maiicious
prosecution is properly dismissed as premature
. . ."
(Emphasis added.) 52 Arn.Jur.2d Mali-
cious Prosecution S14 at 195.
In Bollinger v. Jarrett (1965), 146 Mont. 355, 406 P.2d
834, this Court said:
"It is also contended that it was error for the
court to render summary judgment against appel-
lant-buyer's counterclaim. The basis of the
counterclaim was that the sellers' action
wrongfully injured the credit standing of the
buyers. The only possible grounds for such a
claim are libel and malicious prosecution,
neither of which can be sustained here. There
is no libel because any publication in a judi-
cial proceeding is privileged under R.C.M.,
1947, 64-208. And malicious prosecution founded
is not the proper subject of
on-a civil action - - -
-
a counterclaim since it requires proof - -of t &
e
mination - - f ~ r r n e ~ ~ r o c e e d i n ~ ~ a v o r
of the of
the defendant therein. Baker v. ~i=an, 1 3 8
Cal.App.2d 510, 292 P.2d 595; 54 C.J.S. Malici-
ous Prosecution §54, P. 1021." (Emphasis added.)
406 P.2d at 837.
For this reason the dismissal of defendant's counter-
claim was proper.
Affirmed in part and reversed in part. The summary
judgment in defendant's favor is vacated and the cause
remanded to the District Court for trial.
Chief Justice
We concu
3'
Justices
Mr. Justice John C. Sheehy:
I dissent.
Justice