Case ID: ad_125/html/0856-01.html
Source: Caselaw Access Project
Author: {"author": "Houghton, J.: \n      Laughlin, J. (dissenting):", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hapgoods, Respondent, v. James L. Crawford, Appellant.
    First Department,
    May 8, 1908.
    Slander of corporation—pleading — innuendo—application of words to officers.
    A corporation cannot maintain an action for slander or libel upon words spoken or published solely of and concerning its officers or stockholders.
    Hence, although words alleged are slanderous as against the plaintiff corporation, its complaint fails to state a cause of action if, by innuendo, it states that the defendant meant the words to apply to the plaintiff’s officers.
    Laughlin. J., dissented, with opinion.
    Appeal by the defendant, James L. Crawford, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Hew York on the 24th day of January, 1908, upon the decision of the court, rendered after a trial at the Hew York Special Term, overruling the defendant’s demurrer to the fourth cause of action in the amended complaint.
    
      Henry Hirschberg, for the appellant.
    
      H. B. Bradbury, for the respondent.
   Houghton, J.:

The plaintiff is a business corporation and the action is for slander against it. The fourth cause of action alleged in the complaint, to which the defendant demurred on the ground that it fails to state facts sufficient to constitute a cause of action, sets forth that the defendant was guilty of slandering the plaintiff in that he said that “ ‘ It (meaning the plaintiff) is composed of a lot of fakirs, robbers, thieves and business pirates, who are devoted to fraudulent practices, and take advantage of men when in their weakest position to extort money from them and give them absolutely nothing in return,’ meaning thereby that the officers of the plaintiff were fakirs, robbers, thieves and business pirates, and were persons of bad character with whom it was dangerous to do business, and said words were so understood by those in whose presence they were uttered.”

Ho special damages are alleged. Had the plaintiff been content to allow the words their ordinary meaning, possibly a good cause of action against the plaintiff corporation would have been alleged. By the innuendo which it has pleaded, however, it alleges that the hearers understood the words as referring to the officers of the corporation and not to the corporation itself.

A corporation may sue for a lib.el upon it as distinct from a libel upon its individual members, and a corporation engaged in business may maintain an action for libel upon such business without proof of special damage where the language used concerning it is defamatory in itself and injuriously and directly affe'cts its credit and necessarily and directly occasions pecuniary injury. (Union Associated Press v. Heath, 49 App. Div. 247, 253; Mutual, etc., Assn. v. Spectator Co., 50 N. Y. Super. Ct. 460.) It cannot maintain an action for slander or libel upon words spoken or published solely of and concerning its officers or stockholders. (Brayton v. Cleveland Special Police Co., 63 Ohio St. 83.)

Interpreting the words uttered as the plaintiff alleges they were spoken and understood, they related to the officers of the corporation and not' to the corporation itself. The demurrer was, therefore, properly interposed and should have been sustained.

The interlocutory judgment should be reversed, with costs, and tlie demurrer sustained, with costs, with leave to the plaintiff to amend its complaint within twenty days upon payment of costs.

Ingraham, McLaughlin and Scott, JJ., concurred; Laughlin, J., dissented.

Laughlin, J. (dissenting):

I am of the opinion that the statements slander the corporation and that they are slanderous per se. Plaintiff is -a duly incorporated employment agency “engaged in procuring positions of a technical, executive, clerical and sales nature for men only throughout the United States.” It is alleged that defendant said concerning the plaintiff in the presence and hearing of others, in substance, that it is composed of dishonest men who are engaged in fraudulent practices in taking advantage of men and extorting money from them without giving anything in return. In an action by a corporation for libel or slander, damages are presumed when the management or credit of the corporation is assailed. (Reporters' Assn. v. Sun Printing & Publishing Assn., 186 N. Y. 437.) The charge is not made expressly that the corporation is guilty of dishonest practices, but the charge is pointedly made against all of its officers upon whom it must rely to conduct its business and that affects the corporation itself and is sufficient to render an article published or words uttered libelous or slanderous per se, as against the corporation. (Mutual, etc., Assn. v. Spectator Co., 50 N. Y. Super. Ct. 460.) The words uttered being slanderous per se, the complaint is good on demurrer even though plaintiff - has alleged' an innuendo of which the words are not susceptible, or has alleged that they were understood in a sense different from their ordinary meaning, for upon the trial plaintiff may rest upon the words as uttered and abandon the construction placed thereon in the complaint and the innuendo. (See Morrison v. Smith, 177 N. Y. 366, 369.) Since the nature of the slander was such that damages to the corporation are presumed, the action lies to recover general damages on the theory that the words are slanderous per se without special damages being alleged. I am, therefore, of opinion that the interlocutory judgment should be affirmed, with costs.

Judgment reversed, with costs, and demurrer sustained, with costs, with leave to plaintiff to amend on payment of costs.