E. Kirk BROWN, Jr., Administrator of the Estate of E. Kirk Brown, Plaintiff,
Herbert D. CLULEY, Jr., and Gladys Cluley, Defendants. ELKTON REALTY COMPANY, a corporation of the State of Maryland, Plaintiff,
Herbert D. CLULEY, Jr., and Gladys Cluley, Defendants.
[57 Del. 183] Harrison F. Turner, Dover, for plaintiff E. Kirk Brown, Jr., Administrator of the Estate of E. Kirk Brown, and for plaintiff Elkton Realty Company.
Vincent A. Theisen and Victor F. Battaglia (of Theisen & Lank), Wilmington, for defendants in both cases.
Defendant, Herbert D. Cluley, Jr., is an accountant. As such he was engaged to aid plaintiff, E. Kirk Brown, Jr., in the administration of the Estate of E. Kirk Brown, Deceased (Civil Action No. 76, 1960); he was also engaged to handle the accounting affairs of plaintiff, Elkton Realty Company (Civil Action No. 102, 1960). The complaint in each case charges that Herbert D. Cluley, Jr. improperly drew a number of checks on the bank accounts of the plaintiffs, for improper purposes; in substance it is contended in each action, that Cluley having had these checks signed, cashed them and got the money; that he 'wrongfully devoted the funds' for 'his own use and benefit'. Gladys Cluley is the wife of Herbert D. Cluley, Jr. Each complaint charges that she 'accepted the benefits of the funds wrongfully diverted * * * when she knew or should have known that the said funds were wrongfully misappropriated'. Herbert Cluley, Jr. answered each complaint, generally denying the allegations of misappropriations of funds, including the allegations directed to his wife, Gladys.
He has set up two counterclaims. We are not interested in the first counterclaim. In the second counterclaim [57 Del. 185] he set up his engagement as an accountant for the Estate of E. Kirk Brown, Deceased, and for Elkton Realty Company; he then alleged that each plaintiff
'* * * thereafter maliciously and without proper cause therefor went before the Honorable Maurice W. Carrow, a Justice of the Peace of Kent County, Delaware, and charged the defendant before the said Justice with having committed the crime of embezzlement * * * and thereupon procured and caused a warrant to be issued by the said Justice for the arrest of the defendant.'
Continuing, the counterclaim went on to aver
'That thereafter * * * the defendant, Cluley, was arrested under the said warrants and was taken before the Honorable Maurice W. Carrow and was held in bail to answer the said charges before the Grand Jury of Kent County * * *.'
It was further averred in the counterclaim that the plaintiff, Brown,
'* * * thereafter * * * maliciously and without reasonable or
probable cause therefor appeared before the Grand Jury * * * and there charged the defendant with having committed three separate felonies of embezzlement, * * *.'
The counterclaim further charged
'That in making the charges, as aforesaid, before the Magistrate and the Grand Jury of Kent County, the plaintiff, Brown, falsely and maliciously failed to inform either the Justice of the Peace or the Grand Jury of the facts and circumstances surrounding the charges against the defendant, and falsely and maliciously testified before the said Justice and Grand Jury * * * that the defendant, Cluley, had taken the sums of money * * * and had [57 Del. 186] converted said sums to his own use, when in truth and in fact the checks so drawn were signed by the plaintiff, Brown, and said checks were handed to the defendant Cluley, * * * in payment of compensation, disbursements and out-of-pocket expenses owing to the defendant, * * *.'
Continuing, the counterclaim alleged
'As the result of the false and malicious conduct of the plaintiff, Brown, * * * the Grand Jury * * * returned three separate indictments charging the defendant, * * * with embezzlement * * *.'
The counterclaim concluded:
'That by reason of the aforesaid arrest and malicious prosecution * * * the defendant, Cluley, was subjected to great indignity, humiliation, pain and distress of mind and body, was prevented from attending to his usual business and was subject to expenses * * * in his defense upon such charges and was injured in his good name and reputation * * *, all to his damage * * *.'
Plaintiff in each case contended that this counterclaim failed 'to state a claim upon which relief can be granted'. It may be pointed out in passing that the counterclaim as originally pleaded undoubtedly was not good, since the counterclaim did not plead that the criminal proceedings upon which a counterclaim was based, had been terminated, but was still pending. See Craig v. Ginn, 3 Pennewill, 117,48 A. 192, 53 L.R.A. 715 (Sup.Ct.1801), in which it was held that a malicious prosecution suit may not be instituted until the action upon ...