Court Opinion

ID: 8873503
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:42:37.59746+00
Date Added: 2024-06-11T17:06:15.677981
License: Public Domain

Niemeyer, J., dissents. Plaintiff’s action is based on the charge that defendant knowingly, maliciously and with intent to injure plaintiff and detract from and destroy his reputation as an artist, published in Life magazine a false statement that the portrait painted by Jacobs and reproduced in the magazine was the first portrait of Truman. The parties have narrowed the issues on appeal to two questions. Plaintiff ends his reply brief with the statement, “The only question before the court here is whether special damages must be alleged in this complaint. We submit that they need not be alleged. . . . ” Defendant, admitting on oral argument the general rule that false words causing special damage are actionable, contends that the alleged false statement is not actionable because it amounts “merely to ‘puffing’ of defendant’s own goods, not to disparagement of plaintiff’s goods,” and that an allegation of special damages is essential to a statement of a cause of action. The publication of falsehoods disparaging the merits, quality, utility or value of another’s property is not actionable unless the plaintiff has suffered special damages and pecuniary loss as a direct and natural result of the publication. In Prosser on Torts, chap. 20, sec. 106, under the title “Injurious Falsehood,” the author says (p. 1037) the action is broader in its scope than ‘ ‘ disparagement of property, ” “ slander of goods,” and “trade libel,” and (p. 1042) “it resembles the action for defamation but differs from it materially in the greater burden resting on the plaintiff and the necessity for special damages in all cases.” The principles governing the action are stated in the Restatement of the Law of Torts, chap. 28, entitled “Disparagement,” sec. 624 et seq., where in the introductory note the authors say, “In disparagement, the publisher is not liable unless the disparaging matter has caused financial loss.” In 33 Am. Jur., sec. 350, under the sub-title “Slander or Disparagement of Title or Property, ” it is said, ‘ ‘ The rule is generally recognized that special damage is a necessary element of a cause of action for slander of title or disparagement of goods or property, and that the special damages recoverable must be such as proximately flow from the slander uttered.” Professor Jeremiah Smith in his much cited article “Disparagement of Property,” 13 Columbia Law Review (1913), pp. 13-36, 121-142, says (p. 121), “Plaintiff’s burden of proving actual damage is not lightened by any ‘presumption’ or by any arbitrary rule of law. It must be found as a fact in all cases of disparaging statements, whether oral or written.” Advance Music Corp. v. American Tobacco Co., 51 N.Y.S.(2d) 692, cited in the majority opinion, is a decision of the trial court on an amended complaint. The original complaint had been dismissed because, among other reasons, it did not contain any allegation of special damage to plaintiff, the court saying (50 N.Y.S.(2d) 287, 291): “In this state it is a settled principle in the law of defamation that in the absence of a showing of special damage one may not recover for a slander or libel of property. ’ ’ In passing on the amended complaint the court cited, in support of the statement quoted in the majority opinion, Restatement, Torts, sec. 624 et seq., and 13 Columbia Law Review 13, 121, referred to above, and said, “. . . the amended complaint makes it abundantly clear by a wealth of detailed facts that defendants’ acts and representations were likely to and actually have caused actual damage to the plaintiff.” This case was reversed by the Appellate Division (53 N. Y. S. (2d) 337) but affirmed by the Court-of Appeals (296 N. Y. 79). In the latter court ‘ ‘ a wealth of detailed facts ’ ’ relating to damages is set out in a condensed statement of the pleadings. The question of special damages is not discussed by the court. See Frawley Chemical Corp. v. A. P. Larson Co., Inc., 274 App. Div. 643, 86 N.Y.S.(2d) 710, and National Refining Co. v. Benzo Gas Motor Fuel Co., 20 F.(2d) 763. In pleading special damages plaintiff is governed by the general rules of pleading applicable to the various actions in which such damages must be alleged and proved. In Prosser on Torts (pages 1044 and 1045) the author says: “Usually, however, the damages claimed have consisted of loss of prospective contracts with the plaintiff’s customers. ... It is nearly always held that it is not enough to show a general decline in his business resulting from the falsehood, even where no other cause for it is apparent, and that it is only the loss of specific sales that can he recovered. This means, in the usual case, that the plaintiff must identify the particular purchasers who have refrained from dealing with him, and specify the transactions of which he claims to have been deprived.” This strict rule is relaxed when it is not reasonably practicable for plaintiff to ascertain the names. 13 Columbia Law Review pp. 123, 124. The particular circumstances excusing the giving of names must be pleaded, as held in Erick Bowman Remedy Co. v. Jensen Salsbery Laboratories, Inc., 17 F.(2d) 255, cited by plaintiff. Plaintiff and defendant in that case were engaged in selling livestock remedies. Plaintiff’s action was based on a publication by defendant of the formula of one of plaintiff’s remedies with disparaging comment. The court held that the language would be actionable only by reason of some special damage occasioned by it and that such special damage must be particularly averred. After reviewing many authorities (including Ratcliffe v. Evans, 2 Q. B. 524, an action based on malicious falsehood), the court said (p. 261): “It was therefore necessary for the plaintiff to allege either the loss of particular customers by name, or a general diminution in its business, and extrinsic facts showing that such special damages were the natural and direct result of the false publication. If the plaintiff desired to predicate its right to recover damages upon general loss of custom, it should have alleged facts showing an established business, the amount of sales for a substantial period preceding the publication, the amount of sales subsequent to the publication, facts showing that such loss in sales were the natural and probable result of such publication, and facts showing that plaintiff could not allege the names of particular customers who withdrew or withheld their custom.” And (p. 262): “In the case at bar, the allegations of damages were clearly insufficient to admit proof and sustain a recovery for the loss of particular customers. The complaint did not allege the name of any particular person who withdrew or withheld his custom. They were likewise insufficient to admit proof and sustain a recovery for a general loss of business. The complaint did not allege a state of facts showing that it was impossible for plaintiff to allege and prove the loss of particular customers, it did not allege facts showing a general loss of business, and it did not allege facts showing that such diminution of profits was the direct and natural result of the publication. We therefore conclude that there was no sufficient allegation of special damages.” In an action different in character but where the allegation of special injury was essential to a recovery, our Supreme Court in Barrows v. City of Sycamore, 150 Ill. 588, 596, held that facts must be alleged to support a claim for special damage. Plaintiff brought suit for damage occasioned by the erection of a standpipe or water tower at a street intersection near her property, used for a hotel and residence. A demurrer to her declaration was sustained. On appeal, after holding that the allegations showed that the city wrongfully placed the structure in its streets and that the gist of plaintiff’s action was a special injury, which must be alleged, and proved, the court said: “Under this rule it is too clear for argument that neither of the first three counts of the declaration shows a right of action in the plaintiff. The special injury attempted to be set up in each of these counts is, that her property has been depreciated in value because of the danger of the building being destroyed or damaged by the stand-pipe falling or being blown upon it, or by bursting and flooding it with water, but not a single fact is alleged upon which the apprehension of such danger can be based. . . . True, as in the instances referred to by counsel for appellee, water towers and stand-pipes have fallen or been destroyed; but the same is true of buildings of every kind,— perhaps of all superstructures. If this one is hable to fall, blow down or burst, that liability must arise from certain facts, and those facts must be pleaded. Here we have nothing but the mere conclusion of the pleader.” In this case plaintiff divides his loss or damage into four classes. (1) Loss of benefit and advantage accruing to plaintiff by reason of his having made and executed the first portrait of Harry S. Truman. There is no allegation of fact from which any inference of economic benefit or advantage accruing from having painted the first portrait may be drawn. The monopoly arising from mailing the first portrait ended with the painting of the portrait by Jacobs. Therefore we must assume, in the absence of allegation of fact showing the contrary, that the value of plaintiff’s portrait depended on its intrinsic merits and not on the priority of its execution. (2) Plaintiff was made to appear as stating an untruth in his prior statements concerning his having made the first portrait of Truman. This alleged damage belongs in an action for personal defamation rather than in an action for disparagement of property. However, it need merely be said that there is nothing in the complaint showing that at any time prior to the institution of suit plaintiff made any statement or claim that he had painted the first por-, trait of Truman. It is not even alleged that in the publicity of the presentation to Truman the portrait was referred to as his first portrait. (3) The rights of reproduction of the portrait and the sale of such reproduction, which was to be publicized as a sale of the first portrait of Truman, was lessened and rendered of little or no value. Again, there is no allegation of fact showing financial loss because of the alleged reduction in value of these rights. There is no allegation that any contract had been entered into for the publication of plaintiff’s portrait as the first portrait of Truman, or how and in what manner the proposed publicizing was to be done, or of steps taken or expenses incurred in furtherance of that object. Plaintiff does allege that at the time of Truman’s accession to the presidency he had entered into a contract with unnamed persons granting them the right to sell a large number of the portraits, under which contract plaintiff was to receive a royalty on each portrait sold. So far as this complaint shows, this contract may have been fully performed. As heretofore stated, plaintiff is not aided by any presumption in respect to special damages. (4) Loss of commissions to do portraits of other prominent persons. Clearly this allegation is insufficient unless the names of persons whose portraits were to be painted and the financial loss to be sustained by the failure to get such commissions are stated. The court did not err in dismissing the complaint for failure to allege special damages. It is unnecessary to discuss the second question involved on appeal, defendant’s claim that the false statement complained of amounts merely to “puffing” of defendant’s own goods, not to disparagement of plaintiff’s goods. The judgment should be affirmed.