## Facts

- Halberstadt sued New York Life Insurance Company for malicious prosecution, alleging the company caused embezzlement proceedings to be initiated against him in Mexico City.
- The pleadings asserted that a criminal complaint was made and a warrant for Halberstadt’s arrest issued.
- The complaint did not allege that the warrant was executed, that Halberstadt was arrested or served, or that he appeared in the Mexican court.
- New York Life pleaded affirmative defenses alleging Halberstadt left Mexico before the warrant could be served and remained away long enough for the proceeding to be dismissed solely by operation of Mexican lapse-of-time rules.
- The defenses further alleged the dismissal was not after a merits trial, not for ordinary failure to prosecute (except as tied to lapse of time), and not due to withdrawal of the complaint; one defense alleged Halberstadt left to avoid arrest.
- Halberstadt demurred to the second and third defenses as legally insufficient; the trial court sustained the demurrer, the Appellate Division overruled it, and Halberstadt appealed on certified questions.

## Issues

1. Whether the mere application for and issuance of an arrest warrant, without execution or the accused being brought before a tribunal, constitutes a “prosecution” sufficient for malicious prosecution.
2. Whether a dismissal obtained solely by lapse of time after the accused absconds from the jurisdiction constitutes a favorable termination for malicious prosecution purposes.
3. Whether the defendant’s pleaded facts, taken as true on demurrer, state legally sufficient defenses to the malicious prosecution claim.

## Decision

- The Court of Appeals affirmed the order overruling the demurrer to the second and third affirmative defenses.
- The Court concluded that an unexecuted warrant, without arrest, service, or appearance, ordinarily does not amount to the kind of prosecution required for malicious prosecution.
- The Court held that a termination caused solely by the accused’s absence and a technical lapse-of-time dismissal is not a termination “in favor of” the accused.
- Because the challenged defenses alleged facts that would negate favorable termination (and cast doubt on whether any actionable prosecution occurred), they were sufficient in law and could be proved at trial.

## Legal Principles

- Malicious prosecution requires a criminal proceeding of a substantial character; mere issuance of a warrant, without execution or the accused being subjected to court process, is generally insufficient.
- Favorable termination must reflect a disposition consistent with the accused’s innocence or lack of reasonable grounds for the charge, not merely a procedural or technical ending.
- A termination by compromise, consent, requested exemption, or other non-merits disposition that does not indicate vindication is inadequate.
- A dismissal resulting solely from the accused’s absconding and consequent lapse-of-time rules does not satisfy the favorable-termination element.
- On demurrer to an affirmative defense, the pleaded facts are assumed true; if those facts would defeat an element of the claim, the defense is legally sufficient.

## Conclusion

The court held that the insurer’s defenses—alleging Halberstadt avoided arrest and obtained dismissal only through lapse of time—were legally sufficient because such circumstances do not establish an actionable prosecution or a favorable termination required for malicious prosecution.


Halberstadt v. N.Y. Life Ins. Co., 194 N.Y. 1, 86 N.E. 801 (N.Y. 1909)