Court Opinion

ID: 8270607
Source: CourtListenerOpinion
Date Created: 2022-10-16 19:31:47.031393+00
Date Added: 2024-06-11T16:43:30.134304
License: Public Domain

Van Syckel, J.
(dissenting). The alleged libelous publication was a printed communication published by a commercial agency in the city of New York, of which the defendants below were members. The publication was contained in what is known as a “ notification sheet,” by which the agency communicated to its subscribers information affecting the financial standing of merchants and traders in various parts of the country. The plaintiffs below complained that in one of such notification sheets- it was falsely stated that she had put a chattel mortgage on her stock of merchandise.
The case shows that every subscriber to the commercial agency was required to enter into and did enter into a written agreement with the agency that all communications made by the agency, either verbally or through notification sheets, should be strictly confidential, and should be exclusively confined to the business of such subscribers’ establishments. The information furnished is declared in this contract to be furnished to subscribers on request, for use in their business, as an aid to them in determining the propriety of giving credit.
The trial court ruled that the agency had the protection of privilege in every case where the subscriber had a direct and personal interest in the person who is the subject matter of inquiry, and that in all other cases they must stand, as others, on the truthfulness of their report and their protection under the contracts with subscribers not to divulge the secrets of their business.
.Malice, express or implied, is absolutely essential to support an action for defamation. If a man writes and publishes of another that which is false and defamatory, the law will usually imply malice on his part without any evidence of express malice. But there are many occasions on which one may pub*434lish of another that which proves to be untrue, when the legal implication of malice will not arise. In such cases the publication is not actionable unless express malice can be shown. This-leads to the consideration of the much discussed doctrine of privilege.
The term “ privileged,” as applied to a communication alleged to be libelous, means simply that the circumstances under which it was made are such as to repel the legal inference of malice, and to throw upon the plaintiff the burden of offering some evidence of its existence beyond the mere falsity of the charge. Mr. Justice Selden, in Lewis v. Chapman, 16 N. Y. 369.
Baron Parke, in Wright v. Woodgate, 2 C., M. & R. 573, has clearly defined the term. He says: “ The proper meaning of a privileged communication is only this: that the occasion on which the communication was made rebuts the inference prima facie arising from a statement prejudicial to the character of the plaintiff, and puts it upon him to prove there was malice in fact — that the defendant was actuated by motives of personal spite or ill will, independent of the occasion on which the communication was made.”
This rule is founded in public policy, and has been liberally applied.
In Waller v. Lock, 45 L. T. (N. S.) 243, Jessel, Master of the Rolls, says: “ If an answer is given in the discharge of a social or moral duty, or if the person who gives it thinks it to be so, that is enough; it need not even be an answer to an inquiry, but the communication may be a voluntary one.”
He further observes, in the same case: “ It appears to me that if you ask a question of a person whom you believe to have the means of knowledge, about the character of another with whom you wish to have any dealings whatever, and he answers bona fide, this is a privileged communication.”
In Toogood v. Spyring, 1 C., M. & R. 181, 184, Baron Parke says: “ If such publications * * * be fairly made, by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters *435where his interest is concerned, in such cases the occasion prevents the inference of malice which the law draws from unauthorized communications. * * * If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society; and the law has not restricted the right to make them within any narrow limits.”
To the like effect is the expression of Lord Ellenborough, in Delany v. Jones, 1 Esp. 193: “ Though that which is spoken or written may be injurious to the character of the party, yet if done bona fide, as with a view of investigating a fact in Avhich the party making it is interested, it is not libelous.”
In Laughton v. The Bishop, L. R., 4 P. C. 504, the House of Lords ruled that “a communication made bona fide upon any subject matter, in which the party communicating has an interest, or in reference to which he has or believes he has a duty, is privileged, if made to a person having a corresponding interest or duty, although it contains criminatory matter which, without that privilege, would be defamatory and actionable.”
Mr. Justice Selden, in Lewis v. Herrick, supra, states the doctrine even more broadly: “ Where the circumstances show that the defendant may reasonably be supposed to have had a just and worthy motive for making the charge, then the law ceases to infer malice from the mere falsity of the charge, and requires from the plaintiff other proof of its existence.”
Weatherstone v. Hawkins, 1 T. R. 1105, was an action by a discharged servant against his former master for words spoken by him to one Rogers, who applied for information about the servant’s character. There was a count, also, for libelous words contained in a letter written by defendant to one Collier after Rogers had declined to employ plaintiff. This letter accused plaintiff of embezzlement. This letter was not written in reply to a request by Collier for information, nor under an injunction of secrecy; its sole purpose seems to have been to vindicate the defendant for uttering the previous *436defamatory words to Rogers, and thus to prevent a suit by plaintiff. Lord Mansfield, in deciding the case, said: “ I have held, more than once, that an action will not lie by a servant against his former master for words spoken by him in giving the character of a servant. The general rules are laid down as Mr. Wood has stated, but to every libel there may be a necessary and implied justification from the occasion, so that what, taken abstractedly, would be a publication, may, from the occasion, prove to be none — as, if it were read in a judicial proceeding. Words may also be justified on account of the subject matter or other circumstances. In this case, instead of plaintiff’s showing it to be false and malicious, it appears to be incidental to the application by Rogers to the master of the servant. And the letter was written to the brother-in-law of the plaintiff for the express purpose of preventing an action being brought.”
Hewer v. Dawson, Buller N. P. 8, was an action for saying of the plaintiff, who was a tradesman, “ he cannot stand it long; he will be a bankrupt soon.” Special damage was laid in the declaration that one Lane had refused to trust the plaintiff for a horse. Lane, the person named in the declaration, was the only witness called for the plaintiff. It appeared in his testimony that the words were not spoken maliciously, but in confidence and friendship to Lane, and by way of warning him, and that in consequence of that advice he did not trust the plaintiff with the horse. Chief Justice Pratt said that “ though the words were otherwise actionable, yet, if they should be of opinion that the words were not spoken in malice, but in the manner before mentioned, they ought to find the defendant not guilty.”
It did not appear that the defendant was applied to for the information or that he had any interest in the transaction other than a friendly disposition to warn Lane of the risk.
McDougall v. Claridge, 1 Campb. 267, was for a libel on the plaintiff in his profession as a solicitor. The libel was a letter written by defendant to bankers at Nottingham, charging the plaintiff with improper conduct in the management *437of their affairs. It appeared, however, that the letter was intended as a confidential communication, and that the defendant was himself interested in the affairs which he supposed had been misconducted. Lord Ellenborough held that the action would not lie; that it was impossible to say that the defendant had maliciously published a libel to aggrieve the plaintiff, if he was acting bona fide, with a view to the interests of himself and of the persons whom he addressed.
In the case of Toogood v. Spyring, supra, Baron Parke decided that if a former master, when applied to, gives the character of a discharged servant in the presence of a third person not interested, the communication, if made bona fide, is privileged.
In the subsequent case of Kine v. Sewell, 3 M. & W. 302, he expressed his conviction that the law had been properly laid down in the previous case.
Lawless v. Anglo-Egyptian Cotton Company, L. R., 4 Q. B. 262, was an action against a joint stock company, the directors of which had published in the form of a printed circular, issued and sent to all the stockholders, the report of an auditing committee appointed to make an investigation into the finances of the company. The report contained defamatory statements concerning the plaintiff, who had been manager of the association. It was held that under these circumstances the presumption of malice did not arise, and the plaintiff was therefore non-suited.
The following cases show that in the authorities heretofore cited the rule has been correctly enunciated : Bank v. Henty, L. R., 7 App. Cas. 741; Thompson v. Dashwood, L. R., 11 Q. B. 43; Tuson v. Evans, 12 Ad. & El. 733; Phila., W. & B. R. v. Quigley, 21 How. 202; Finden v. Westlake, 1 M. & M. 461; Hatch v. Lane, 105 Mass. 394; Brow v. Hathaway, 13 Allen 239; Somerville v. Hawkins, 10 C. B. 580.
These cases show that all that is necessary to entitle such communications to the claim of privilege is that the relation of the parties should be such as to afford a reasonable ground for supposing an innocent motive for giving the information *438and to deprive the act of the appearance of an officious inter-meddling with the affairs of others. Van Wyck v. Aspinwall, 17 N. Y. 190; Klinck v. Colby, 46 N. Y. 427.
The cases heretofore cited have been considered without reference to mercantile agency cases.
The trial judge adopted the rule laid down in Sunderlin v. Bradstreet, 46 N. Y. 188, and in Erber v. Dun, 12 Fed. Rep. 526, both of which are commercial agency cases.
In other cases of this character a different view has been-held.
In Trussell v. Scarlett, 18 Fed. Rep. 214, Judge Morris ruled that a notification sheet of R. G. Dun & Co., sent to a subscriber, containing a charge of bankruptcy against plaintiff, was a privileged communication. To this case Dr. Wharton has appended a note maintaining the view that if the-agency confines itself to the confidential communication of such information to its customers, then, if it acts bona fide, and without malice or recklessness, these communications are privileged, and the defendant, if sued for libel, would be entitled to a verdict.
The same opinion was entertained by Judge Nelson in Locke v. Bradstreet, 22 Fed. Rep. 771 ; by Judge Dewey in Billings v. Russell, 8 Boston Law Rep. (N. S.) 699, and by the Wisconsin court in State v. Lonsdale, 48 Wis. 848.
The underlying principle of the many cases cited, in my judgment, condemns Sunderlin v. Bradstreet, and Erber v. Dun, and extends the rule of privilege to all communications, spoken or written, bona fide, in the performance of what may reasonably be considered a duty to the public or to an individual, and also to communications required by a common interest, or by the relation in which the persons, between whom the communication is made, stand to each other. A false, defamatory publication must, when no other adequate-motive appears, be attributed to malice; but whenever the attending circumstances are such as to lead a reasonable and just mind to reject the presumption of actual malice, an-*439essential requisite to the support of the action for libel disappears.
It is this consideration of what justly may and what may reasonably be presumed to actuate the conduct of men, that has led the judicial mind to introduce and apply the doctrine of privilege. The conceded instances in which this protection is accorded are not rare. Words spoken by a member in a legislative assembly; by one upon the subject matter before a religious meeting; by counsel in the conduct of a cause; by one in response to inquiries by a friend concerning a physician, a lawyer, or a tradesman, and by a former master to one who desires to know the character of a servant. Words thus spoken are not actionable per se; the presumption of malice is excluded, because it is not reasonable to suppose that it is present. No case has been cited, and I think none exists, where the plaintiff has been permitted to make an issue of the fact, whether the person applying to a former master in regard to the character of a servant, had in truth an interest in knowing. It has been deemed sufficient to put the case within the rule of privilege, that application was made and the answer given bona fide. Nor has any consideration been given to the magnitude of the interest which elicted the inquiry, or whether the interest was present or prospective. Nor, in the case of master and servant, has the master ever been held to any accountability for failing to use reasonable care to inform himself that the inquiry was made in good faith.
Where inquiry is made of the master by one person at the solicitation of another, and where a tradesman inquires as to the responsibility of persons he may hope will sometime offer to deal with him, although he has no direct present interest in them, communications in reply seem to be clearly within the principle of the protecting rule.
It is now almost universally conceded that mercantile agencies are of great utility and advantage, if not absolutely essential, to those engaged in conducting the business and commerce of the country over the wide field where their enterprise leads them. The strict rule applied in the court below, if it *440does not tend to suppress, will go far to destroy the purpose and utility of these institutions.
It may be said that in New York the rule in Sunderlin v. Bradstreet has been productive of no such result. But there the pledge of secrecy has hitherto served the agencies from a disastrous flood of civil suits and criminal prosecutions, which they could not have survived. Experience there furnishes proof, not of the wisdom of the rule, but that it is wise not to enforce it. There is no consideration of public policy which commends the application to them of an illiberal rule.
If immunity is accorded to the master making statements concerning his servant, when in fact the inquiry is made by one who does not intend to employ the servant, and if malice is not presumed to exist where a merchant makes inquiry of his neighbor or friend concerning the pecuniary responsibility of those with whom he may in the future have transactions, how can the doctrine of privilege be restricted, in this controversy, to cases where the subscriber has a present direct and personal interest in the person who is the subject of inquiry ?
Business interests are so ramified at this day that large enterprises cannot be successfully conducted without a comprehensive survey of the whole field of industry. The manufacturer must have some knowledge of the financial condition of those who are his rivals in business, as well as of those who may be induced to purchase his productions, in order that he may act judiciously in fixing his limit of production. The dealer in brewers’ grains, in order to determine the extent of his purchases, must know something of the business of the consumers, their pecuniary ability to purchase, and the probable volume of business in the district of country over which his transactions extend. In fact, every man who has merchandise to sell is to some extent interested in knowing how every man in the country stands in credit.
Though one is not a customer to-day, he may be to-morrow. Orders are given by letter, by telegram, by telephone, or in person, requiring immediate response. It involves the use of *441the mercantile agency sheets, the loss of the customer, or the risk of selling blindly.
The subscribers to the commercial agency in effect say to it: “ We have an interest in knowing the financial condition of all business men whose standing you report; we assure you of our good faith by being willing to pay you for that information, and we pledge ourselves to receive it as a confidential communication.” These circumstances, repellant of the presumption of malice, constitute the substance and essence of privileged communications.
How, under these conditions, can the obligation be imposed upon the agency to make sure that the subscriber has a present interest in the persons reported, without narrowing the privilege, which has operated as a shield in the many cases referred to ?
Business methods have changed; every department of human activity is marked by progress. There must be a correct apprehension of legal principles as they apply to a progressive state of society, if we would keep pace with the march of events, and render the common law as true and unjerring a guide in jurisprudence to-day as it has been in the past. It is the pride of the common law that it is sufficiently broad and elastic to adapt itself to the exigencies of the times, and to adjust itself to the new and ever varying conditions that may arise in the progress of the age.
The rule that a business man may inquire of his friend or his neighbor as to the responsibility of one who has applied for credit, answered well enough fifty years ago, but it is altogether inadequate to the present requirements of trade and commerce.
The law of Sunderlin v. Bradstreet would even suppress the prevalent practice in business circles of employing a credit clerk, to ascertain and report the standing of business men in the district which he canvasses. No man could safely answer his inquiries, and the clerk could not report to his employer, without being liable to prosecution. The old adjudications, relied upon to support the more narrow rule, are the declara*442tions of judges whose vision did not take in the widely different conditions which prevail in the affairs of men to-day. This doctrine utterly disables the agency to become capable of imparting even the information which it is conceded may lawfully be given. If the agency may furnish only to one having a direct interest, how would any one dare give the information to the agency, for, until some one having such interest has applied to the agency, the communication is within the prohibited class ?
In my opinion, the defendants, in furnishing information to subscribers under the conditions imposed, are not subject to the presumption that they were moved by malice, and I therefore vote to reverse the judgment below.
For affirmanoe — The Chancellor, Chief Justice, Depue, Knapp, Parker, Brown, Cole, McGregor, Paterson. 9.
For reversal — Dixon, Magie, Van Syokel, Clement, Whitaker. 5.