Court Opinion

ID: 3587633
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:37:09.680119+00
Date Added: 2024-06-11T13:38:51.514538
License: Public Domain

This is an action for libel. On the trial the plaintiff recovered a small verdict. He appealed to the General Term from the judgment in his own favor, on the ground that the trial judge admitted improper evidence offered by the defendant, and also that he erroneously submitted to the jury the question whether certain facts alleged in the answer of the defendant, in mitigation of damages, existed, although there was an absence of any proof to sustain such allegations. It is claimed that, by reason of these errors, the plaintiff was prejudiced in respect of the award of damages.
There is, we think, no doubt that errors were committed by the trial judge in the respects mentioned. The plaintiff is, therefore, entitled to a new trial, unless the defendant is right in his contention that the alleged libel was a privileged publication, and, therefore, no recovery whatever was justified.
It will be sufficient to state very briefly the facts upon which the action is based, in order to present the question to be determined. In 1883, the Manufacturers' National Bank of Troy, claiming that its cashier had misappropriated and embezzled the property and funds of the institution, brought an action on the cashier's bond against the surviving surety and the representatives of a deceased surety to recover the amount of the alleged defalcation. The agent of some of the defendants in the action thereupon applied in writing to the attorneys of the bank for a statement of the claim. This was furnished, but not in detail, and the agent of the sureties, desiring fuller information, called at the banking-house of the bank and there had an interview with the cashier and requested him to furnish as particular and complete an account as he could, "so that we could see how we stood." In compliance with the request, the bank by its cashier prepared and delivered to the agent of the sureties a paper indorsed, "A partial statement in detail of the defalcations of A.B., late cashier of The Manufacturers' National Bank of Troy," which contained an itemized *Page 424 
account, with dates and amounts constituting the claim. The account comprised a statement of alleged false charges made by the cashier in the accounts of depositors, items for drafts and securities of the bank abstracted, and, in addition, items amounting in the aggregate to $16,621.95, entered in the account as "cash items drawn from the bank by collusion with theteller, without the knowledge or authority of the officers of the bank." The alleged libel for which this action is brought is founded on the words "by collusion with the teller," contained in this statement, and also on a repetition of the same words in a similar account subsequently furnished as a bill of particulars in the action, on the demand of the attorneys for the sureties. The plaintiff in the present action was the teller of the bank during the period of the alleged defalcations by the cashier, and no question is made but that the words "by collusion with the teller," contained in the statement delivered to the agent of the sureties and in the bill of particulars referred to him.
It cannot admit of question that the publication was libelous and sustained the action, unless the publication was, as claimed, privileged. It charged the plaintiff with complicity in the crime of embezzlement committed by the cashier. The words are susceptible of no other interpretation. The general doctrine of privilege, as applied to actions for libel and slander, is founded upon the reasonable view that in the intercourse between members of society, and in proceedings in legislative bodies and in courts of justice, occasions arise when it becomes necessary or proper that the character and acts of individuals should be considered and made the subject of statement or comment, and that, in the interests of society, a party making disparaging statements in respect to another on such a lawful occasion, should not be subjected to civil responsibility in an action of this character, although such statements were untrue. The law of privilege has been stated by judges in different forms of words, but the comprehensive definition of BLACKBURN, J., in Davis v.Sneed (L.R. [5 Q.B.] 611), as applied to communications between individuals, is especially *Page 425 
worthy of notice. "Where," says that learned judge, "a person is so situated that it becomes right in the interests of society that he should tell a third person certain facts, then if he,bona fide and without malice, does tell them, it is a privileged communication." There are many examples in the books of communications held to be privileged, where the same words, if used other than on a lawful occasion, would be libelous, but which, by reason of the occasion when they were published or spoken, will not sustain an action, although proved to be untrue, unless proved to have been spoken maliciously. The cases of charges made in giving the character of a servant, or in answering an authorized inquiry concerning the solvency of a tradesman, or where the communication was confidential between parties having a common interest in the subject to which it relates, are illustrations. (BRONSON, J., Washburn v. Cooke,
3 Den. 112.) In these and like cases, the privilege is not absolute, but conditional, that is to say, the occasion being lawful, the communication is prima facie privileged and rebuts the inference of malice which would otherwise arise, and imposes on the plaintiff, who prosecutes an action of slander or libel, the burden of proving that the defendant was moved by actual malicious intent in making the communication, and, failing in that, he fails in the action. But, as has been said, if the occasion is not a privileged one, the same words may give a right of action, as where an employer, being under no duty, legal, moral or social, to give information, makes defamatory statements affecting the servant's character, or where a person, under like circumstances, imputes insolvency to a trader. In such cases the law presumes both malice and the falsity of the words, and the defendant is liable for damages unless he can prove that the words were true.
There is another class of privileged communications where the privilege is absolute. They are defined in Hastings v. Lusk
(22 Wend. 410). In this class are included slanderous statements made by parties, counsel or witnesses in the course of judicial proceedings, and also libelous charges in pleadings, *Page 426 
affidavits or other papers used in the course of the prosecution or defense of an action. In questions falling within the absolute privilege the question of malice has no place. However malicious the intent, or however false the charge may have been, the law, from considerations of public policy and to secure the unembarrassed and efficient administration of justice, denies to the defamed party any remedy through an action for libel or slander. This privilege, however, is not a license which protects every slanderous publication or statement made in the course of judicial proceedings. It extends only to such matters as are relevant or material to the litigation, or at least it does not protect slanderous publications plainly irrelevant and impertinent, voluntarily made, and which the party making them could not reasonably have supposed to be relevant. (Ring v.Wheeler, 7 Cow. 725; Hastings v. Lusk, 22 Wend. 410;Gilbert v. People, 1 Den. 41; GROVER, J., Marsh v.Ellsworth, 50 N.Y. 309; Rice v. Coolidge, 121 Mass. 393;McLaughlin v. Cowley, 127 id. 316.)
Where the claim of privilege is interposed as a defense to an action for libel or slander, it is not the test of privilege that the words were uttered or published on a privileged occasion. Where there are several distinct charges, some privileged and some not privileged, those not privileged are not justified by the charges that are privileged. (Clark v. Roe, 4 Ir. C.L. 1;Tuson v. Evans, 12 Ad.  El. 733; Warren v. Warren, 1 C.M.  R. 250.) The policy upon which the doctrine of privilege rests does not call for an extension of the privilege to such cases. The public interests are sufficiently protected when the privilege is limited to communications which fairly ought to have been made, or in case of judicial proceedings to matters not wholly outside of the cause. But no strained or close construction will be indulged in to exempt a case from the protection of privilege.
Both occasions on which the publication in this case was made were privileged, that is to say it was the right of the sureties to receive, and it was the reasonable duty of the *Page 427 
defendants to give all proper information bearing upon the claim made by the bank against the sureties. The occasion, therefore, justified the bank in disclosing the facts relating to the alleged defalcation of the cashier, and even if the bank was misinformed, and there had been no defalcation in fact, such information was privileged, and the cashier could have maintained no action unless, perhaps, in respect to the first publication on proof of actual malice. But the incorporation into the publication of the statement that the teller acted in collusion with the cashier was, so far as appears, wholly irrelevant and unnecessary. The teller was not a party to the bond or to the suit. There was no issue which called for an investigation of the teller's conduct. The information that the teller had been in complicity with the cashier was not in response to any inquiry made by the defendant. The information did not on its face explain, or tend to explain or establish any fact relevant to the defendants' case against the sureties, nor can it be seen how knowledge of the fact communicated would be of advantage to the sureties. If upon any ground the information was relevant or material, as no such ground appears on the face of the publication, we are not at liberty to assume its existence. The burden of showing its relevancy under the circumstances was upon the defendants. It is not impossible that a narration on the trial, of the facts as to the defalcation of the cashier, might incidentally involve a disclosure of the acts of the teller, but this did not, we think, justify the defendants in the publication in advance of the defamatory matter as to the teller, not so far as appears, having any relevancy to the liability of the sureties on their bond. Prima facie the publication was not privileged.
The ordinary consequence follows that malice is presumed from the defamatory nature of the publication, and the defendants must rely for their defense upon a justification (which was not attempted) or upon proof in mitigation of damages. The cases ofKlinck v. Colby (46 N.Y. 427) and Marsh v. Ellsworth
(50 id. 309), are not inconsistent with the conclusion we have reached. Both cases recognize the rule that the *Page 428 
question of privilege depends upon there being a lawful occasion for speaking and the use of words pertinent to that occasion.
The conclusion reached requires a reversal of the judgments at the Circuit and General Term and a direction for a new trial.