Court Opinion

ID: 9790615
Source: CourtListenerOpinion
Date Created: 2023-08-31 01:55:59.800119+00
Date Added: 2024-06-11T07:37:30.277593
License: Public Domain

ROSSMAN, J.,
dissenting.
I dissent for the reasons which I group in the following three categories: (1) Although the instructions to the jury stated that the measure of damage was an “amount of money as will justly compensate plaintiffs for damages, if any, done by the publication of the article to their business, and to their business alone,” the record contains no evidence that the slight amount of business which the plaintiffs had done yielded a profit or would probably yield one in the future. (2) Although this is an action for defamation, the instruction above quoted authorized the jury to award damages for all injuries “done by the publication of the article to their [plaintiffs’] business;” and, therefore, empowered the jury to include in the award something for injury to the business, whether or not the injury was the result of the alleged defamation of the plaintiffs. For example, suppose that A, who knew nothing whatever of the plaintiffs, had a radio which needed repairs and who, after reading the defendants’ article, became apprehensive of all “blind ads” and thereupon concluded it would be better not to telephone to “Ph. 9098” (the number given in the plaintiffs’ advertisement) . The challenged instruction authorized the jury to deem as a subject for redress, by the award of damages, any instance in which a prospective customer *32refrained from telephoning to “Ph. 9098” (a) whether or not he was aware of the plaintiffs’ existence, and (b) whether or not the plaintiffs were defamed to him. (3) The reasons stated in my dissenting opinion in Marr v. Putnam, et al., 196 Or 1, 246 P2d 509.
It is important that we bear in mind the fact that the damages awarded by the challenged judgment have been granted, not to the plaintiffs as individuals, but to them as a partnership, and upon the premise that the partnership business was defamed by the published article and thereby damaged. The judgment, as the majority decision says, was predicated upon the proposition that “the publication caused actual damage to plaintiffs’ business. * * * The matter of compensatory damages was expressly limited to plaintiffs’ business as distinguished from personal damages.” The majority recognizes, as Restatement of the Law, Torts, § 562, Comment (b), does, the distinction between the damages which a partnership may recover for harm done to its business and the additional sums which the members of the partnership may recover for any defamation of them personally by the wrongful publication. As is pointed out in “Restatement of the Law of Torts,” 89 Pa Law Rev 265 at 283, Section 562, supra, deems a partnership, in instances such as the one at bar, “as a legal person distinct from the partners.” Accordingly, since the jury was cautioned to allow nothing in this action which either of the plaintiffs as an individual could recover in an action instituted by himself, it becomes necessary to determine whether the partnership had a business of the character that the law of damages recognizes as the basis for an award.
First, it is well to take note of the fact that the defendants, in the course of the trial in the circuit *33court, repeatedly objected that the evidence did not show that the plaintiffs had a business which could afford a basis for the award of damages. For example, at the close of the instructions, the defendants challenged, by proper exceptions, the instruction quoted in part in a preceding paragraph. The material part of that instruction was the following:
“* * * I instruct you that as a matter of law * * * you shall not award to plaintiffs any amount for any alleged injuries done to their persons or reputations, but * * * to such amount of money as will justly compensate plaintiffs for damages, if any, done by the publication of the article to their business, and to their business alone.”
The defendants’ exception was the following:
“Defendants except to the giving by the Court to the jury of the instruction defining general damages on the ground and for the reason that under the evidence in this case, we respectfully urge, there was no basis for any general damages exceeding a nominal amount, * *
The quoted instruction, which was based upon a hypothesis that the business was that of the plaintiffs as partners, was the result of the holding in Marr v. Putnam, et al., 196 Or 1, 36, 246 P2d 524, that the action which the plaintiffs had filed was instituted by them as a partnership and not in their individual capacities. By reverting to that decision, it will be noticed that the ruling was made after the defendants’ assignments of error had been overruled. Thus, there can be no room for cavil as to the sufficiency of the defendants’ (appellants’) exceptions.
Since the instruction expressly admonished the jury that “you shall not award the plaintiffs any amount for any alleged injuries done to their persons *34or reputations,” we must believe that the verdict allowed nothing to the partnership for injury to either plaintiff individually. The instruction, as we have seen, limited recovery for injury “to their business, and to their business alone.” We cannot infer that when the trial judge spoke those words he had in mind injury to the partnership by virtue of anything that happened to any tangible item of property which the partnership possessed. First, the complaint mentioned nothing of that kind. Next, the plaintiffs, in connection with the conduct of their business, employed in it only the following: (1) a space 10 by 12 feet in size, in the attic of the home of plaintiff John Marr, which they used as their shop; (2) repair tools and a few radio parts belonging to John, which he thought were worth possibly $350; and (3) a Ford coupe of an undisclosed age and value which the plaintiff Eobert Marr used in picking up and delivering the radio sets of those who responded to the advertisement, “Ph. 9098.” None of those items were acquired in order to launch this little business venture. The plaintiffs did not claim that their business, to which they had given no name, had won for itself any good will, let alone good will of a monetary value. In fact, no name was chosen for it and no assumed-name certificate was filed, according to Eobert, until after the venture had ceased functioning and the plaintiffs had in contemplation the institution of this action. Hence, it is certain that the jury did not allow the $4,000 damages under a belief that any of the above items (attic space, tools, parts, automobile) were adversely affected by the defendants’ publication.
The damages which were allowed must have been awarded under a belief that the plaintiffs had a profitable business when the defendants published their article *35and that its capacity to continue to earn profits was destroyed. The following, being a photographic copy of all of the bookkeeping records of the partnership shows the entire volume of business which was transacted by the partnership from the day that the business began, November 21, 1946, until it ceased operations 51 days later, January 11,1947.
The above bookkeeping entries account for every cent which the plaintiffs received from their business venture. 'It identifies every item of repair business which they handled — 17 in number — and for which they were paid a total of $187.12. The latter was the gross amount; yet when the little venture, which had yielded only $187.12, folded its tents and quit, there emerged from it, Phoenix-like, a judgment against the defendants for $4,000.
The above entries include these three:
“Net Profit Nov. $42.12”
“Net Profit Dec. $44.11”
“Net Profit Jan. ’47 $12.45”
The three total $98.68. Thus, in the 51 days in which the venture was in operation it brought to the plaintiffs a net profit of $98.68; provided the above in truth represents net profits. Assuming that the sum of $98.68 was, in fact, a net profit, the business earned $1.93 per day. Since the jury awarded $4,000, it must have assumed that the business would continue to earn $1.93 per day for a total of 2,072 days, or for approximately six years. No justifiable inference can be entertained that the plaintiffs would have expanded their business, for they had no plan for so doing, and expressed themselves as desiring nothing more than “a small limited” amount of repair work. They had

*36

*37other sources of income and wanted to do no more than supplement it.
It will be noticed that the entries in the plaintiffs’ books as reproduced above allowed nothing for such items as rent, light, heat, use of tools and automobile. Obviously, this case must be determined upon the principles of law that govern all other tort cases in which damages are sought upon charges of lost profits. Accordingly, before a juror could determine whether or not the plaintiffs had earned a profit in the 51 days they were in the radio repair business, some deductions must be made from gross income on account of the expense items just mentioned. The record discloses nothing concerning the amount of any one of them. Again, by reverting to the two sheets of bookkeeping items, it will be noticed that nothing was deducted as the cost of the advertisements which the plaintiffs had inserted in the Capital Journal.
When the plaintiffs instituted this action they, of course, assumed the burden of presenting evidence showing that they had a business which was earning a net profit. Let us now turn to the authorities.
The following is taken from Blakiston v. Osgood Panel & Veneer Co., 173 Wash 435, 23 P2d 397:
“We are committed to the principle that before one can claim and recover future profits for the loss or injury to a business, it must be shown that the business was established and going and not a mere experiment, or new adventure. Schultz v. Wells Butchers’ Supply Co., 151 Wash. 328, 275 P. 737. And, further, that the damages for loss of anticipated profits of a business, while recoverable in any proper case, must be shown with a reasonable degree of accuracy. Id.; Pearce v. Puget Sound Broadcasting Co., 170 Wash. 472, 16 P. 2d 843.”
*38Catarau v. Sunde & D’Evers Co., 188 Wash. 592, 63 P2d 365, ruled:
“In order to recover damages for loss of profits to a business, it must appear that the business has been in successful operation for such a period of time as to give it permanence and recognition. Webster v. Beau, 77 Wash. 444, 137 P. 1013, 51 L.R.A.(N.S.) 81; Andreopulos v. Peresteredes, 95 Wash. 282, 163 P. 770; Schultz v. Wells Butchers’ Supply Co., 151 Wash. 382, 275 P. 737; Lockit Cap Co. v. Globe Manufacturing Co., 158 Wash. 183, 290 P. 813; Blakiston v. Osgood Panel & Veneer Co., 173 Wash. 435, 23 P.(2d) 397; Automatic Canteen Co. of Washington v. Automatic Canteen Co. of America, 182 Wash. 133, 45 P.(2d) 41; 17 C.J. 797, § 118.
“There was nothing substantial upon which the court could submit the issue of the contemplated investment. That issue was, therefore, properly withdrawn from the jury.”
The rule stated in those decisions is employed generally by the courts. For example, 53 CJS, Libel and Slander, § 242, p 365:
“Following the general rule, it has been held that the correct measure of damages to the business is the diminution of the net income from the business.”
The same principle is stated in this way in 15 Am Jur, Damages, § 155, p 571:
“It may be stated as a general rule that in tort actions a recovery may be had for loss of profits, provided their loss is the proximate result of the defendant’s wrong and they can be shown with reasonable certainty. The profits recoverable in such cases are limited to probable, as distinguished from possible, profits.”
That rule is so familiar in this state that it is unneces*39sary to fortify its statement with citation to onr decisions.
Yet, notwithstanding the rule given by the authorities from which I just quoted, and the fact that the evidence fails to establish any basis for a belief that the plaintiffs had a business which would probably return a profit for them in the days to come, a judgment was entered in their favor in the sum of $4,000.
This is not an instance in which the owners of a business are attempting to hold a purported wrongdoer liable for an alleged unjustifiable interference with a business device [such as a method of advertising] which in the past had brought to the business its customers. In recent years an ever-expanding number of decisions have developed the principles of law which govern cases in which it is claimed that another, through wrongful action, has interfered with the business’ access to its customers. Many of those cases are cited and analyzed in Harper and James, The Law of Torts, ch 6. That treatise deduces from the decisions the governing principles of law. A study of that chapter indicates that in most instances the cases were not governed by the law of defamation. If we view the blind advertisements which the plaintiffs published in the two Salem newspapers as a business device which was intended to yield them a satisfactory number of customers, it will readily be seen that the decline in their business, after publication of the challenged article, could readily have occurred merely because people had become apprehensive of blind advertisements. I will presently go into that matter, but for the present rest upon the conclusion that before the plaintiffs were entitled to any recovery in this action it was incumbent upon them to present evidence showing that they had a business which was profitable. *40Since no evidence of that character is in the record, the plaintiffs are not entitled to receive from the defendants $4,000 or any other sum. I am satisfied that the majority has disregarded reversible error.
I now proceed to the second ground for this dissent. The principle of law which underlies it is frequently employed by the courts. Spain v. Oregon-Washington R. & N. Co., 78 Or 355, 153 P 470, ruled:
“When the evidence leaves the case in such a situation that the jury will be required to speculate and guess which of several causes occasioned the injury, that part of the case should be withdrawn from their consideration.”
Those words were quoted in and governed Coston v. Portland Trust Co., 131 Or 71, 278 P 586, 282 P 442. See, also, Lippold v. Kidd, 126 Or 160, 269 P 210, 59 ALR 875, and Wintersteen v. Semler, 197 Or 601, 250 P2d 420, 255 P2d 138.
In Ash v. Childs Dining Hall Co., 231 Mass 86, 120 NE 396, 4 ALR 1556, which has become almost a landmark in the law of torts, Mr. Chief Justice Eugg said:
“There is nothing in the record from which it can be inferred that the harm to the plaintiff resulted directly from any failure of duty on the part of the defendant. The precise cause of her injury is left to conjecture. It may as reasonably be attributed to a condition for which no liability attaches to the defendant as to one for which it is responsible. Under such circumstances, the plaintiff does not sustain the burden of fastening tortious conduct on the defendant by a fair preponderance of all the evidence, and a verdict ought to be directed accordingly.”
Prosser on Torts, p 222, states the rule in this way:
“On the issue of the fact of causation, as on other issues essential to his case, the plaintiff has *41the burden of proof. He must introduce evidence which affords a reasonable basis for the conclusion that it is more likely than not that the conduct of the defendant was a substantial factor in the result. A mere possibility of such causation is not enough; and when the matter remains one of pure speculation or conjecture, or the probabilities are at best evenly balanced, it becomes the duty of the court to direct a verdict for the defendant.”
Section 285 of 38 Am Jur, Negligence, at page 976, says:
“In showing that the negligence charged was the proximate cause of the injury, it is not enough for the plaintiff to prove that the negligence might perhaps have caused the injury. If, for example, the injury complained of might well have resulted from one of many causes, it is incumbent upon the plaintiff to produce evidence which will exclude the operation of those causes for which defendant is under no legal obligation. If the cause of the injury to the plaintiff may be as reasonably attributed to an act for which the defendant is not liable as to one for which he is liable, the plaintiff has not sustained the burden of fastening tortious conduct upon the defendant.”
This court has applied, in cases of libel, the rule that if the injury for which the plaintiff seeks damages may have resulted from some cause other than the purported defamation, the plaintiff cannot recover unless the evidence shows that the latter, rather than the other competing causes, was the more probable. DeLashmitt v. Journal Publishing Co., 166 Or 650, 114 P2d 1018, 135 ALR 1175, and Mannix v. Portland Telegram, 144 Or 172, 23 P2d 138.
The instruction to the jury, quoted in a preceding paragraph, authorized the jury to include in its award “such amount of money as will justly compensate plaintiffs for damages, if any, done by the publication of *42the article to their [plaintiffs’] business.” Note must be taken of the fact that the instruction did not restrict the jury to compensation for injury which may have resulted from the defamation of the plaintiffs. Accordingly, as I have stated before, although the action at bar is based upon averments that the business was destroyed because the article defamed the plaintiffs, the instruction just quoted authorized the assessment against the defendants of all damages “done by the publication of the article to their business.”
I will now take note of an additional fact which so far has not been mentioned. Before the alleged defamatory article was published, the advertisement quoted in the majority opinion had been run, not only upon the classified advertisement page of both of Salem’s daily newspapers, but also upon another page of each where it appeared in a column which interspersed local news with brief advertisements, such as the plaintiffs’. Plaintiff John Marr testified:
“Q Now did you do any other advertising during that period along prior to the 4th of December?
“A We had another ad in the Capital Journal and the Statesman in the locals column.”
His brother Robert, who gave similar testimony, explained the discontinuance of the advertisement in the locals column in this way:
“The reason we didn’t stay there was because it was more expensive.”
Upon the classified advertisement page the plaintiffs’ advertisement appeared in a column, a page and a half in length, entitled “Por Sale Miscellaneous.”
Any or all of the following three circumstances may have accounted for the decline in the plaintiffs’ business: (1) withdrawal of the advertisement from *43the local news column; (2) knowledge on the part of some readers of the article that the plaintiffs were the radio repairmen who identified themselves as “Ph. 9098” and an ensuing belief upon their part that the plaintiffs were dishonest, with the result that they withheld their patronage from them; (3) radio owners who (a) had no knowledge whatever of the plaintiffs, (b) did not know the identity of the advertiser who identified himself as “Ph. 9098”, and (c) did not know whether or not the article was true, but who felt that it was better not to answer blind advertisements.
The evidence fails to show that the second of the above reasons was more likely to have been the cause of the decline in the plaintiffs’ business than either or both of the other two. That question, however, was left by the evidence in the realm of conjecture and guesswork. The fact that the plaintiffs did not take it out of that realm alone should suffice to warrant a holding that they failed to discharge the burden of proof. But, if we may resort to conjecture, the second of the above-listed reasons for the decline in the plaintiffs’ business appears to have been the least likely of the three. Surely the repetition of the advertisement in the more expensive locals column had a greater drawing power than in the lengthy column of the classified advertisements page entitled “For Sale Miscellaneous.”
There is still another reason for saying that the second of the above-listed possible causes for the decline in the plaintiffs’ business was the least likely. The article was published December 4, 1946, and more than eleven years have passed since that day. In the interval, although the cause has been tried twice in the circuit court, not a single witness testified that he thought ill of either of the plaintiffs on account of the article. No one who knew them indicated that his *44friendship for or confidence in the plaintiffs had been in any way impaired by the article. Likewise, no one indicated, that he withheld his business from them because of the article. Some of the plaintiffs’ witnesses expressed concern for them on account of fears that the drawing power of the advertisement would be impaired. That fear, and not a belief that anyone would deem either of the plaintiffs a dishonest person, was the object of concern of their friends. In fact, the plaintiffs themselves entertained the same concern over their infant enterprise after they had read the defendants’ article, as we see from the following account given by plaintiff Robert Marr of the call which he and his brother made upon the Journal reporter who wrote the article; he swore:
“We told him [the reporter] we were afraid that it aimed at our ad and damaged our ad, and consequently would hurt the results we were getting from the ad, and asked him what could be done to identify us.”
Thus we observe that, immediately after the article appeared, the apprehension which the plaintiffs experienced was that the article was “aimed at our ad and damaged our ad.” No thought was voiced that anyone who read the article would deem the plaintiffs dishonest. A couple of years after leaving Willamette University, the plaintiff, John Marr, established in Salem a business under the name of Marr which is engaged in the repair and sale of radio and television sets. He stated that at the outset he located the business in the basement of a commercial structure, but that an expanding volume of business soon enabled hi-m to move to the ground floor. Seemingly, the next step he took was to incorporate his business and in so doing he retained for it the name of Marr. It appears *45from his testimony that before long he moved again, this time to a nearby superior structure. He also testified that another concern, located in a different part of Salem, has purchased some of the capital stock •which he issued, and that the service cars of the two enterprises carry upon their sides both names. Accordingly, I repeat, the second of the three above-listed possible causes of the decline of the plaintiffs’ volume of business seems the least likely of the three to qualify as proximate cause.
The business which was done under the designation of “Ph. 9098,” it is true, came to an end, but that was not because anyone who knew the plaintiffs thought ill of them and withheld his business. One who is responsible for a libel which identifies an individual may properly be held liable under the rule of “libel per se,” even though the defamed person may be unable to call to the witness stand anyone who thought ill of him. The reason for the rule consists in part in the fact that, years later, someone may encounter the writing and that then the damage will be done. Nothing of that kind is possible in this instance because the partnership which sought the damages has been ended and the business, which it is claimed was injured, quit operations years ago. Again, the article did not say that all repairmen who used blind advertisements were dishonest.
The drawing power of the business device upon which the plaintiffs depended to win for them patronage, that is, their unique little advertisement, succumbed possibly because of the publication of the article; but this is not an action of the type analyzed in Harper and James, ch 6, supra. In cases of that kind malice, in the form of unjustifiable purpose, must be established. In the present instance, the trial judge *46ruled as a matter of law that no evidence of malice was presented. Confusion in the law will ensue if we attempt to jam this case into the form of an action for defamation. It must be clear that the plaintiffs were not defamed; or, if someone feels that defamation must be presumed, then it is clear that the wrong rule for the measurement of damages was given to the jury. The plaintiffs did not discharge the burden of proof which they undertook when they instituted this action. They have not shown that their business was lost to them through defamation. The motion for a directed verdict should have been sustained. Error was committed when it was denied.
I dissent for the above reasons.