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Sant v. American Express Co.

decided: October 21, 1947.


Author: Gourley

Before McLAUGHLIN and O'CONNELL, Circuit Judges, and GOURLEY, District Judge.

GOURLEY, District Judge.

This matter comes befoer the Court on Petition for Rehearing filed by Frances Van Sant as appellant.

The plaintiff herein took an appeal to this Court on October 2, 1945, from the action of the District Court of the United States for the Eastern District of Pennsylvania, granting the motion of the defendant for a directed verdict in its favor and rendering judgment thereon. Oral argument on said appeal was held on the 15th day of April, 1946, and the judgment of the lower court was affirmed by this Court, and an opinion filed December 18, 1946. 158 F.2d 924. The Petition for Rehearing was granted on March 25, 1947, and the matter was heard by the Court on April 22, 1947.

It is contended by the plaintiff that the decision of this Court in affirming the judgment of the lower court was not decided in accordance with prior decisions of this Court, and controlling principles of law in the Commonwealth of Pennsylvania.

In this connection three propositions are urged by the plaintiff:

First: The plaintiff's evidence justifies a finding that the prosecution was instituted, at least in part, for a private end; hence, the burden of proof to show the existence of probable cause and lack of malice was on the defendant.

Second: The existence of probable cause is not tested as of the time when the complaint is filed and the prosecution initiated, or at the precise instant of arrest in all cases.

Third: Actual belief in guilt is an essential element of probable cause. If without actual belief in guilt any private person takes any affirmative act to further the prosecution, he is liable even though the prosecution was initated by himself or another with probable cause.

In affirming the judgment of the lower court in the first instance, it was held, in substance, that under the admitted or clearly established facts which existed on March 12, 1941, probable cause existed for the prosecution of the various complaints filed against Edna Frances Van Sant and, as a result thereof, it matters not whether the motives of the agents of the defendant company were praiseworthy or malicious, and it was the duty of the Court to enter a directed verdict in favor of the defendant. Van Sant v. American Exp. Co., 3 Cir., 158 F.2d 924.

This case is very unusual in that the action for malicious prosecution is based on several arrests of the plaintiff which it is claimed were instituted in behalf of, or at the request of the defendant. Specifically, the plaintiff alleged and offered evidence to prove -

(1) That she was arrested at the instance of the defendant, acting through its agents, servants and employees, on or about March 12, 1941, in the City of Baltimore, Maryland, said arrest being made on the basis of an information filed in the City of Philadelphia on March 12, 1941.

(2) That she was arrested and prosecuted at the instance of the defendant, acting through its agents, servants, and employees, for other offenses alleged to have been committed in Pittsburgh, Philadelphia and Upper Darby, Pennsylvania; Minneapolis, Minnesota, and Providence, Rhode Island.

Reference will be made to the background of this action in some detail in order that the subsequent discussion can be more clearly understood.

The plaintiff is a resident of Washington, D.C. The defendant, American Express Company, is an unincorporated association organized under the laws of the State of New York.

The plaintiff brought her action on the ground that the defendant falsely, maliciously and without probable or reasonable cause instigated a number of prosecutions against her in various state courts each of which was either abandoned or resulted in her acquittal. Specifically the plaintiff has alleged:

(1) She was arrested at the instance of defendant, acting through its agents, servants, or employees, on or about March 12, 1941, in the City of Baltimore, Maryland.

(2) At the instance of defendant she was brought to Philadelphia on March 13, 1941, where she was questioned by representatives of the defendant and members of the Police Department in the City of Philadelphia.

(3) She was questioned on March 14, 1941, while in the custody of the law, by representatives of the defendant, members of the Police Department in the City of Philadelphia, and presented for identification to numerous individuals who claimed they were defrauded.

(4) That she was arraigned before a magistrate on March 17, 1941 when a further hearing was requested by representatives of the defendant for the purpose of further investigation;

(5) That she was subjected to additional questioning by representatives of the defendant and members of the Police Department from March 13 to March 25, 1941;

(6) That on March 25, 1941, she was given a further hearing before a magistrate in the City of Philadelphia, in which she was charged with having committed offenses of false pretense, forgery, and uttering and publishing forged instruments;

(7) That after said hearing she was released on bail to appear at Philadelphia, Pittsburgh and Upper Darby, Pennsylvania;

(8) Said offenses were set forth to have occurred in Philadelphia, Pittsburgh and Upper Darby, all in the State of Pennsylvania;

(9) She was placed on trial in Pittsburgh on May 5th, and acquitted on May 7, 1941;

(10) Plaintiff's arrest was also caused by defendant on warrants issuing from Minneapolis, Minnesota, and Providence, Rhode Island, as a result of which she was imprisoned from April 14, 1941, until April 19, 1941, when she secured her release on bail;

(11) On or about May 15, 1942, plaintiff was extradited to Minneapolis, Minnesota, on the charges instigated by defendant as aforesaid, where, after being held in jail for about 15 days, she was released and discharged because the witnesses testified to her innocence;

(12) The charges preferred against her at Providence, Rhode Island, at the instance of the defendant aforesaid, were abandoned;

(13) On October 13, 1942, plaintiff appeared for trial in Media, Pennsylvania, for the offense alleged to have been committed in the Township of Upper Darby, Pennsylvania, and was acquitted and discharged of such charge on October 15, 1942;

(14) On April 28, 1943, plaintiff was tried and acquitted on the charges preferred against her in the City of Philadelphia.

A situation, therefore, arises where probable cause might be declared to exist in connection with one of the arrests or prosecutions, and would not be found to exist in connection with all.

The American Express Company deals in the sale, inter alia, of negotiable money orders and travelers checks. In the conduct of its business it maintains what amounts to a private police force called an Inspectors Department. The prescribed duties of this department are to cause the apprehension and prosecution of any persons thought to have committed offenses whereby the Company has sustained loss and thus to prevent and minimize future losses.

The head of that department is James J. Bulger, an officer who has the title of Assistant Vice President. Under his supervision there are various agents working in different parts of the United States and, perhaps, elsewhere.

In the year 1940 a gang of forgers was arrested in Cincinnati, Ohio, for fraudulent negotiation of travelers checks. The American Express Company cooperated in the arrest of that gang. The head of the gang was Wilbur Herbert Hartman. Among his accomplices were his wife, Pauline Hartman, Ruby Silber, and her husband, Carl Silber. At the trial Hartman was sentenced to prison for not less than one nor more than twenty years. The record of the present case does not show the exact disposition as to the others.

Bulger had full details on this gang not only because of the active cooperation of his department, but also because his agent, Charles C. Troyano, sent him a full report in June, 1940.

Then on January 2, 1941, sixty-three blank money orders of the American Express Company were stolen from a Western Union office at Columbus, Ohio, by a man who was never apprehended. Between January 3, 1941 and January 25, 1941, sixty-two of these money orders were negotiated by a woman (or women) who would purchase certain female apparel, pay for it with one of these money orders filled in for the sum of $45, payable to and endorsed "Relda Hardman", receiving in each instance the amount of change in cash. Such orders were cashed on the dates and in the cities listed as follows:

January 6, 1941 - Huntington, West Virginia.

January 11, 1941 - Minneapolis, Minnesota

January 11, 1941 - St. Paul, Minnesota

January 13, 1941 - Buffalo, New York

January 15, 1941 - Boston, Massachusetts

January 15, 1941 - Providence, Rhode Island

January 17, 1941 - Philadelphia, Pennsylvania

January 20, 1941 - Pittsburgh, Pennsylvania

January 25, 1941 - Indianapolis, Indiana

Bulger was informed of the loss on January 3, 1941. Upon presentation of these money orders for payment the American Express Company refused payment. Bulger assigned various agents to investigate, among them Jose T. Medina, who was in Buffalo, New York. On January 23, 1941, Medina reported to Bulger a description of the woman who had passed the money orders given him by an identifying witness. The description is as follows: "Age about 32 to 35; weight 125 lbs.; height, 5 feet, 5 inches; plump build; very good-looking; well dressed; had a gray fur coat three quarter size; light complexion, brown hair and brown eyes." This is an almost exact description of Pauline Hartman. Nevertheless, Bulger showed no concern nor did he take the trouble to check at that time on Pauline Hartman. There is no contention that Frances Van Sant had any connection with the Hartmans or Silbers.

The victims of these frauds complained to the police of the respective cities and gave various descriptions of the woman who victimized them. In Philadelphia the following complaints were received: On January 30, 1941, Louis Goldstein, Harry Goodman, man, and George Allen, Inc., complained that they had been defrauded. On February 11, 1941, a Miss Steiniger representing a store owned by T. Mogul, complained. On February 14, 1941, Charles David, Ladies Apparel Shop complained.

Then on February 28, 1941, Bulger offered a reward of $100 for the apprehension of the plaintiff. On March 6, 1941, Bulger wrote to the Sheriff of Frederick County, Maryland, offering a reward of $100 for plaintiff's arrest and stating, "We will take a chance on getting a conviction."

Although those complaints had been made to the police of the City of Philadelphia, no suspicion was directed toward the plaintiff until about March 9 or 10, 1941, when a Mr. Potts, a Philadelphia employee of the American Express Company, came to Lieutenant John T. Murphy of the Philadelphia Detective Bureau and gave him a photograph of the plaintiff previously taken in Washington. Potts then told Murphy that his company had information that plaintiff might be the girl who passed the money orders. Then on March 12, 1941, Murphy received a call from Superintendent LeStrange of the Upper Darby police who said that he had received a telegram from the American Express Company advising him that plaintiff would appear in the Baltimore Police District and that she might be the person who passed the checks. Murphy communicated this information to Potts who said he would contact his superior, Mr. Bulger, in New York. Potts later returned to Murphy, told the latter that he had contacted Bulger, suggested that a warrant be obtained, and that a telegram should be sent to the Police Department of Baltimore requesting them to arrest plaintiff. This was done. Potts then later said that Bulger would like to accompany the detectives to baltimore to apprehend plaintiff and that Bulger agreed to pay the expenses. Lieutenant Murphy had stated that the City of Philadelphia "does not defray expenses in private prosecutions."

Murphy directed one of his detectives, Francis J. Galen, and a female employee of the police department to go to Baltimore with Bulger. At Baltimore they met plaintiff who had been apprehended by the police of that city as a result of the telegram and Bulger requested that she permit a search of her belongings. She readily acquiesced and when informed that she was charged with fraudulently passing a money order in Philadelphia, waived extradition, denied the charge, and agreed to return voluntarily. All her belongings were packed and brought back with her. Bulger, who claimed forty years experience in such matters, questioned her during the return journey. She again denied knowing anything about any money orders. She gave him a detailed statement as to her movements during the period in which the money orders were negotiated, the names and addresses of people who could prove her innocence, and denied ever being in any of the cities where the money orders were negotiated except Philadelphia on one occasion in 1940.

Upon her arrival in Philadelphia she was lodged in a city hall cell room. Bulger again questioned her for three hours.

The Philadelphia victims were sent for so that they might be able to identify her. All her clothing and property were searched by the witnesses to ascertain whether any of the articles which had been purchased was among them, but nothing was identified. On March 14, 1941, nine or ten possible witnesses together with Bulger were present. The witnesses' personal concern was evidenced by their asking who was going to pay them for their loss of $45. Although they had sustained the loss two months prior thereto, the American Express Company had not yet reimbursed them. Bulger then promised them that they would all be paid.

There was no line-up. Outside of a few detectives and the witnesses, plaintiff was the only girl in the room. Even so, five or six witnesses said she was not the guilty person. All the rest at first seemed doubtful. Mr. Goodman first said she was not the girl, then changed his mind after a discussion with his wife in the hallway and when they came back, both identified her. Miss Goralick first "hedged on the identification" then finally said she was the girl. Miss Goldstein, who was with Miss Goralick at the time the money order was passed, said she could not identify plaintiff. Miss Steiniger, who at first seemed uncertain, after a twenty minute pause finally identified her. A Mr. Everett first identified her and then definitely stated she was not the woman.

On March 14, 1941, Lieutenant Murphy, who was still in charge of the case, said to Bulger, "I think you have the wrong girl." Bulger responded, "I know I got the right girl because I have proof." Plaintiff was arraigned before a magistrate on March 17, 1941, when a further hearing was requested for investigation.

In the meantime Lieutenant Murphy caused a check to be made of the statements given to him by the plaintiff. She was questioned about eight hours a day from March 13 until March 25. She stated that she was not out of the City of Washington between late November, 1940, and January, 1941; that she had been in Philadelphia only once in her life; and told of a visit to her mother in Everett, Pennsylvania, subsequent to January 25, 1941. She referred the police to the persons with whom, and the address at which, she lived. The official police investigation corroborated plaintiff's story in every detail. Just prior to the further hearing on March 25, 1941, and as a result of an intense official investigation, Detective Galen told Mr. Collins, who together with Bulger conducted the case for the American Express Company, that plaintiff was innocent and she should not be prosecuted. Bulger insisted that ...

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