Case Name: Zatter W. Rose, Respondent, v. Imperial Engine Company, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1908-07-07
Citations: 127 A.D. 885
Docket Number: 
Parties: Zatter W. Rose, Respondent, v. Imperial Engine Company, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 127
Pages: 885–888

Head Matter:
Zatter W. Rose, Respondent, v. Imperial Engine Company, Appellant.
Fourth Department,
July 7,1908.
Libel—punitive damages — liability of corporation for acts of agent.
A letter charging a person with stealing is libelous per se.
Punitive damages will not be allowed against a principal for an act of an agent unless the principal participates in the act expressly, or impliedly by his conduct authorizes it, or approves it before or after it is committed.
"Where it appears that one writing a libelous letter in the name of a corporation had general management and exclusive control of the department of the corporate business, in the management of which the letter is written, the corporation is liable for punitive damages.
"Williams.and Kruse, JJ., dissented.
-Appeal by the defendant, the Imperial Engine Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Steuben on the 12th day of March, 1907, upon the verdict of a jury for $1,208, and also from an order entered in said clerk’s office on the 12th day of March, 1907, denying the defendant’s motion for a new trial made upon the_ minutes.
.Francis F. Wood [JSerendeen db Mandevijile with him on the brief], for the appellant.
Warren J. Cheney, for the respondent.

Opinion:
Robson, J.:
That the letter, for the publication of which the jury have awarded plaintiff the sum of $1,200 damages, is libelous per se, unless it is to be regarded as a privileged communication, is apparent. That the communication is not, as matter of law, privileged was determined on a prior appeal to this court.. (110 App. Div. 137.) The jury has found as matter of fact that it was not privileged, and we cannot say that this finding was against the weight of evidence.
Counsel for both parties seem to agree that the evidence appearing in the present record does not-materially differ from that presented in the record before the court on the prior appeal, except in regard to what was done by defendant's foreman, Johnson, by- way of making inquiries of plaintiff's fellow-workmen before he reported " to Hollister (who wrote the letter complained of) that the tools, which the letter charged plaintiff with stealing, had been taken by plaintiff. This additional evidence is to some extent contradictory of evidence given by the same witnesses on the first trial, and apparently was not considered either by the jury or the' trial court as entitled to much weight, with which apparent' conclusion we entirely agree.
This leaves for consideration only appellant's claim that defendant was in no event liable for punitive damages, and that theinstruc tion of the court in reference thereto was error. The charge of the court as to the degree of care which the agent should have used in verifying the facts, upon which he assumed to make the libelous statements contained in the letter, was in the exact language requested by defendant's counsel. The point wé are now considering seems, therefore, to narrow to a question as to . the extent of defendant's responsibility for the acts of Hollister, its agent. In other words, were they the acts of an agent simply, or were they in a broader sense the acts,of the defendant as an individual entity, or legal person, for which defendant was liable to the same extent' as it would have been if Hollister, had been himself the corporation ?.
For the tortious acts of a mere servant or sub-agent of the principal done or committed in the course of his employment, even if wanton or malicious, the principal is of course liable to respond in damages, which will fully compensate the person injured for the actual injury sustained. But " punitive or vindictive damages, or smart money, were not tobe allowed as against the principal, unless the principal participated in the wrongful act of the agent, expressly or impliedly, by his conduct authorizing it, or approving it, either before or after it was committed." (Lake Shore, etc., R. Co. v. Prentice, 147 U. S. 101, 114; Craven v. Bloomingdale, 171 N. Y. 439.) But if the wrongful act is either a part or in pursuance of a recognized business system, adopted and authorized by the principal, as in the case of Stevens v. O'Neill (51 App. Div. 364; affd., 169 N. Y. 375), or is the act of an agent or manager to whose charge the general management of the particular business, in the conduct of which the act complained of was done, then the principal is liable, in a proper case, to be cast in punitive as well as compensatory damages, even though the agent may have violated general instructions of the principal in that regard. (Crane v. Bennett, 77 App. Div. 102; affd., 177 N. Y. 106.)
This idea with its limitations is thus expressed by the court in Lake Shore, etc., R. Co. v. Prentice (147 U. S. 114), cited above: " The president and general manager, or, in his absence, the vice-president in his place, actually wielding the whole executive power of the corporation, may well be treated as so far representing the corporation and identified with it, that any wanton, malicious or oppressive intent of his in doing wrongful acts in behalf of the cor poration to the injury of others, may be treated as the intent, of the corporation itself." - . "
The evidence does not disclose the name or title by which Hollister's position or duties in defendant's service were designated. But it seems that he at least had the general management and exclusive control for the corporation of all that part or department of its business in the management of which and as a part of which management,'direction and control this letter in question was written in' the name of and as a letter authorized by the corporation itself. If defendant had. ashed to go to the jury for their determination as a question of fact whether or not. Hollister did occupy that representative relation to defendant, it is possible that it would have been entitled to have that matter thus determined. But no snch request was made, and we-cannot say that the evidence on that-point isj as matter of law, insufficient to sustain a verdict in which punitive damages were, as we - assume, included.
All concurred, except Williams and'Kruse,, JJ., who dissented.
Judgment and order affirmed,, with costs.