Case Name: George Herbert Smith, Appellant, v. New Yorker Staats-Zeitung, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1913-01-03
Citations: 154 A.D. 458
Docket Number: 
Parties: George Herbert Smith, Appellant, v. New Yorker Staats-Zeitung, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 154
Pages: 458–461

Head Matter:
George Herbert Smith, Appellant, v. New Yorker Staats-Zeitung, Respondent.
First Department,
January 3,1913.
Libel — qualified privilege under section 1907 of the Code of Civil Procedure — additional matter in account of judicial proceedings not privileged — complaint stating cause of action — burden upon defendant to show privilege.
The qualified privilege of one publishing a fair and true report of judicial proceedings created by section 1907 of the Code of Civil Procedure does not extend to other matters added to the report of the proceedings.
Thus, a publication which, having truthfully stated that the plaintiff with others was arrested for using the mails for fraudulent purposes, goes further and recounts the details of an alleged scheme to sell worthless stocks and falsely connects the plaintiff therewith, which article i& ■ alleged to have been published recklessly, maliciously and without effort ■ to ascertain the truth or falsity of the charges made, is not entitled to the qualified privilege.
Such article being libelous se, a complaint thereon cannot on demurrer be held to fail to state a cause of action, on the theory that the article was privileged, for the privilege is a defense to be pleaded and proved by the defendant.
Appeal by the plaintiff, George Herbert Smith, from an order of the Supreme Court, made at the New York Special ■ Term and entered in the office of the clerk of the county of New York on the 8th day of October, 1912, sustaining the defendant’s demurrer to the complaint in an action for libel.
Edmonds Putney of counsel [Putney, Twombly & Putney, attorneys], for the appellant.
John E. Donnelly of counsel [Alfred J. Amend with him on the brief], Amend & Amend, attorneys, for the respondent.

Opinion:
Clarke, J.:
The complaint sets up that the defendant published in an edition of said newspaper dated July 29, 1911, an article concerning this plaintiff which, translated into English, is as follows: " 'Caught. Post Office Inspectors Bring Suit Against Four of the Head Members of the American Tanning Co. Post Office Inspectors Kincaid and Booth made a good find yesterday in that they discovered cgold brick ' dealings which show to be the worst since the Burr case. According to their suspicions that underhand dealings were going on, the inspectors arrested in the Annex of the Produce Exchange , also F. 0. Canfield and Gr. Herbert Smith, the two probable heads of the American Tanning Co. The four prisoners were brought before the district judge with the charge that they had used .the mail for fraudulent purposes in connection with selling certain coal and tanning shares, and the judge placed and Smith each under $2,500, and stated that the trial would take place October 2nd. The Post Office inspectors bring the heaviest charges against Robinson or Raymond for, according to their statements, he was the Secretary and the leading spirit in Henry N. Roach & Co., a brokerage firm which sold stocks for different companies, most of which failed, and the stocks were then placed in newer companies of doubtful character. One of the latest companies. which Henry N. Roach used in this way is the American Tanning Co., against which the charge has been made. It was organized in May or June, 1909, and incorporated with a capital of $1,500,000, consisting of 150,000 shares quoted at $10 per share. They advertised extensively as having their own tannery in Newark, equipped with the newest and fastest known process. Both inspectors claim"that the plant in Newark, N. J., is leased by the month and that the company has not dressed a single hide for business purposes. According to the charge, the company kept the people ' in the dark,' especially those with smaller interests, until it went into the hands of the receivers, - as with all previous companies with whom H. N. Roach & Co. had dealings. Over 42,000 shares were sold at $10 a piece and Roach & Co. was to get half of the profits for material and notices; the shareholders, however, received nothing. The inspectors estimate the earnings of the organizers at $439,000. Among the thousands of sufferers was one woman confined to her bed whose husband was an invalid and the son in the last stages of consumption. In spite of this, she was persuaded to take a mortgage on her house for $1,000 and to invest it in shares of the American Tanning Co.' TV", That said article is wholly false as to this plaintiff, except that -this plaintiff was arrested on the 28th day of July, 1911, and was admitted to bail in the sum of $2,500 pending a hearing before United States Commissioner Shields. That the complaint upon which plaintiff was arrested was thereafter dismisséd by said Commissioner Shields upon motion of the United States District Attorney for the Southern District of New York without any hearing ever having been had thereon, the plaintiff discharged, and all proceedings against the plaintiff terminated. That said article was published recklessly, wilfully, wantonly and maliciously, and without any attempt to ascertain the truth or falsity of the charges therein made."
Defendant demurred upon the ground that the complaint did not state facts sufficient to constitute a cause of action. The learned Special Term said in its opinion: "From the admissions by plaintiff in his complaint, the article was a report of a judicial proceeding, and it -appeared to be substantially correct. It was, therefore, privileged," and sustained the demurrer. (77 Misc. Rep. 601.)
. That conclusion is not warranted by the record. It would seem that there is a great deal stated in the- article which is not the report of a judicial proceeding. It may be that everything there stated occurred in the course of the judicial proceeding referred -to, but it is not apparent upon the face of the complaint. . On the contrary, the charge is that the article was wholly false, except that the plaintiff was arrested and admitted to bail. The complaint affirmatively states that the commissioner, on the district attorney's own motion, and without a hearing, dismissed the charge, discharged the plaintiff and terminated the proceeding.
The Code of Civil Procedure provides as follows:
Ҥ 1907. An action, civil or criminal, cannot be maintained against a reporter, editor, publisher, or proprietor of a newspaper, for the publication therein of a fair and true report of any judicial, legislative, or other public and official proceedings, without proving actual, malice in making the report.
" § 1908. The last section does not apply to a libel, contained in the heading of the report; or in any other matter, added by any person concerned in the publication; or in the report of any thing said or done, at the time and place of the public and official proceedings, which was not a part thereof."
The qualified privilege therein provided for is limited to a fair and true report of the judicial proceedings and does not extend to other matters added thereto. "The articles being libelous per se, privilege is a defense to be pleaded and proved, and upon the defendant rested the burden of showing that the publication was privileged." (Stuart v. Press Pub. Co., 83 App. Div. 467.) It follows, therefore, that the defendant must be 'put to its answer.
The order appealed from should be reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs, with leave to the defendant to withdraw the demurrer and interpose an answer upon payment of said costs and within twenty days after the service of the order to he entered hereon.
Ingraham, P. J., McLaughlin, Scott and Dowling, JJ., concurred.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs, with leave to defendant to withdraw demurrer and to answer on payment of costs.