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Green v. U. S. Dealer's Protective Assoc. & Mercantile Agency

16 Abb. N. Cas. 419 Court Supreme Court, Third District ; Special Term, English

Delivered by Peckham, J.

Contents

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p. 419
GREEN v. U. S. DEALERS’ PROTECTIVE ASSOC. & MERCANTILE AGENCY.
Supreme Court, Third District ; Special Term,
November, 1885.

Headnote

Action to enjoin publication of plaintiff’s name as a debtor. —Temporary Injunction.
An association incorporated to protect dealers from giving credit to delinquent debtors to members thereof, cannot be restrained by injunction from publishing to its members, the plaintiff’s name as such a delinquent, if he be in fact so indebted, and such publication will be the truth.*
* A complaint alleging that the defendant, a commercial agency, published a false statement of a recovery of judgment against the plaintiff, and that “ such false and libelous publication greatly injured and damaged the plaintiff,” states no cause of action, as no special damages are alleged, and none are presumed to have ensued from such a libel. Woodruff v. Bradstreet Co., 35 Hun, 16 .
Motion to dissolve preliminary injunction.
The pleadings and motion papers show that defendant is a corporation organized under the laws of Pennsylvania, the object of its incorporation being stated to be to afford protection to its members in giving credit and to prevent those who refuse to pay legitimate debts to its members from obtaining further credit from members of the association. That any reputable dealer throughout the United States and Canada, can become a member of defendant’s association on payment, to defendant, of the sum charged by it therefor, on signing a contract for the term of one year, pledging himself to keep all matters pertaining to said association confidential, not to show any of defendant’s delinquent list's, or copy of the books issued by said association, to any one not a member, nor to allow any other person to use the letter forms of the association. The association furnishes mem
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bers with printed letters of two kinds: the first, called “member’s letter,” to be sent by the member to a debtor requesting payment, and stating that the object of the association is to afford protection in giving credit, and is to the merchant or professional man a safeguard against those who contract debts, and can, but will not, pay ; that members furnish to the association a list of parties who owe them and fail to pay or make settlement; each member of the association agreeing to refuse credit to any one whose name appears in such lists until a settlement of claims has been made, and the same noted by the association; that unless paid by a time designated, the member will report the debtor’s name to the association before a time stated, ‘ ‘ after which date their matter goes to press.” If no attention is paid, by the debtor, to this letter, a second or “ agent’s letter,” signed by an agent of defendant, is sent to the debtor, stating that his name has been sent by the member to the association as a delinquent debtor failing to respond to the “member’s letterthat no member of the association will credit any delinquent whose name appears on the lists published from time to time ; that if the debtor do not want his name so published among the list of delinquents,—and it is assumed that the neglect in this case has been through carelessness,—the debtor must call upon the creditor before a time stated, and make satisfactory arrangements, otherwise the debtor’s name will go foward to the main office for publication. If no attention be paid to the “agent’s letter,” the association then sends to the debtor an “association letter,” stating the object of the association, that the member has reported to it the sending of his letter, that he has given the debtor reasonable time to pay, and that he has failed to do so ; and that, unless on or before a time stated, he makes a satisfactory settlement with the member, his name will be published in
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the defendant’s annual book and will also appear in .its lists of delinquent debtors, which book and list are sent to all members of the association throughout the United States and Canada for their protection and future guidance; as matter of fact, no agreement is made by members not to trust any one who is a delinquent to other members.
The motion papers also show that plaintiff being indebted to one of defendant’s members, the routine above stated had been gone through with, and defendant was about to publish plaintiff’s name in its list of delinquent debtors and eventually in its annual books, and to distribute the same to its members throughout the United States and Canada. Plaintiff obtained a preliminary injunction restraining defendant from doing so, which defendant moves to vacate.
Nathaniel C. Moak, for the defendant, and the motion.
I.It is legal and proper for an individual, or a corporation, to ascertain all they can with reference to the financial standing and the integrity of dealers, and to communicate the results of such investigation to subscribers. The distinctions made, or rather the rules laid down, by the cases are : 1. If intelligence be given to one who specially asks for it, the communication is privileged, and, though false, the giver is not liable unless he was actuated by actual, as distinguished from legal, malice. 2. If given generally, to all to whom, the giver sees fit to communicate it, it is not privileged, and if false, the giver is not protected by the law of privilege. The term ‘ privilege,’ as applied to a communication alleged to be libelous, means simply that the circumstances under which it was made were such as to repel the legal inference of malice, and to throw upon the plaintiff the burden of some evidence of its existence beyond the mere falsity of the charge ’ ’ (Lewis v. Chapman, 16 N. Y. 369 , 373). An agency which simply publishes to its subscribers
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the truth is not liable for libel or slander (Trussell v. Scarlett, 18 Fed. Rep. 214 ,216, note; Ormsby v. Douglass, 37 N . Y. 477 ; Jeffras v. McKillop, 4 Supm. Ct. [T. & C.] 578, 580). To render such an agency liable the publication must be a “false report” (Kingsbury v. Bradstreet Co., 35 Hun, 213 ; citing Sunderlin v. Bradstreet, 46 N. Y. 188 ). Judge Cooley (Torts, p. 217) thus lays down the rule: “ But if one makes it his business to furnish to others information concerning the character, habits, standing and responsibility of tradesmen, his business is not privileged, and he must justify his reports by the truth.” To same effect, Taylor v. Church, 8 N. Y. 452 . In Sunderlin v. Bradstreet ( 46 N. Y. 192 , 193) the court said: “The defendants in making the communication assumed the legal responsibility which rests upon all who, without cause, publish defamatory matter of others,—that is, of proving the truth of the publication or responding in damages to the injured party. The communication of the libel, to those not interested in the information, was officious and unauthorized and, therefore, not protected, although made in the belief of its truth, if it were, in point of fact, false. When a communication is made in the discharge of some public or private duty, the occasion prevents the inference of malice which the law draws from unauthorized communications, and affords a qualified defense depending on the absence of malice (Toogood v. Spyring, 1 C. M. & R. 181 ; Fowles v. Bowen, 30 N. Y. 20 ). There has been no diversity in the utterance of judges and courts upon the subject, but all have spoken one language (See Beardsley v. Tappan, 5 Blatch. C. C. 497). In those cases in which the publication has been held privileged, the courts have held that there was a reasonable occasion or exigency, which for the common convenience and welfare of society fairly warranted the communication as made. But
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neither the welfare nor convenience of society will be promoted by bringing a publication of matters, false in fact, injuriously affecting the credit and standing of merchants and traders, broadcast through the land, within the protection of privileged communications. The principle of Taylor v. Church is recognized in all the cases.” A written communication by a banker in the country to a mercantile house in New York, in respect to the pecuniary responsibility of a customer of such house, whose note has been sent to Mm for collection, is privileged (Lewis v. Chapman, 16 N. Y. 369 ; rev’g 19 Barb. 252 ). In the case of State ex rel. Lanning v. Lonsdale (48 Wisc. 349, 369), it was held that a communication to a commercial agency from its local correspondent, as to the commercial standing of a person doing business in any place, is so far privileged in the hands of the persons conducting-such agency, that they may lawfully make known its. contents confidentially to their subscribers seeking information upon that subject; provided this is done-without malice, and in the belief that the statements; are true. In Fleming v. Newton (1 H. L. Cas. 363, 376-380), it was held not to be actionable for one to-publish a list of the register of protests for non-payment of bills of exchange and promissory notes.
II. If defendant’s acts are not illegal, it is immaterial how, or from what motive, they are performed, The owner of lands adjoining a turnpike gate may-construct a road aronnd it, and by traveling over his own lands enter the turnpike at a point beyond the gate (Auburn, etc. Plank Road Co. v. Douglass, 9 N. Y. 444 ; rev’g 12 Barb. 553 ). It is immaterial what may be the motives of such owner, so long as the act is legal; a corrupt intent alone will not give a right of action (Auburn, etc. Plank Road Co. v. Douglass, 9 N. Y. 444 ; rev’g 12 Barb. 553 Pickard v. Collins, 23 Barb. 444 ; Grates v. Lounsbury; 20 Johns. 427 ;
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Lawrence v. Ocean Ins. Co., etc., 11 Johns.. 241 ; aff’d 14 Id. 46; De Lancey v. Ganong, 9 N. Y. 9 ; Moran v. McClearns, 41 How. Pr. 289 ; S. C., 60 Barb. 388 ; McKeon v. See, 4 Robt. 467, 499 ; Muchler v. Molhollen, Hill & D. Supp. 262; Pratt v. Potter, 21 Barb. 589 ). A party is not liable for the consequences of an act done upon his own land, lawful in itself, and which does not infringe upon any lawful rights of another, simply because he was influenced in the doings of it by wrong and malicious motives ; the courts will not inquire into the motives actuating a person in the enforcement of a legal right (Phelps v. Nowlen, 72 N. Y. 39 ; Glendon Iron Co. v. Uhler, 75 Penn. St. 467 ; Osborne v. Warren, 44 Conn. 357 ). Upon defendant’s land was a spring, which was surrounded by an embankment, the effect of which was to raise the water in a well upon plaintiff’s land. Defendant, not for his own benefit, but simply with intent to divert the water from plaintiff’ s well, dug a ditch through the embankment, thus restoring the water to its natural course ; the effect of which was to lower the water in the well, to plaintiff’s injury. In an action for damages and to restrain the diversion of the water, held, that the action was not maintainable (Phelps v. Nowlen, 72 N. Y. 39 ; distinguishing Panton v . Holland, 17 Johns. 92 , 95, and limiting Trustees v. Youmans, 50 Barb. 319 ; aff’d in 45 N. Y. 362 .) Conspiracy and corrupt motives will not .give a court power to act where it has not the power independent thereof (Matter of Valentine, 22 Weekly Dig. 175,176). “ This court is not,” as Lord Cairns says, “ to interfere as a censor morum to restrain the publication of statements or expressions which are not actionable in a court of common law” (Hammersmith Skating Rink Co. v. Dublin Skating Rink Co., Irish Rep. 10 Eq, 235, 237 ; citing Prudential Assur. Co. v. Knott, 1 L. R. 10 Ch. App. 142 ; 11 Eng. Rep. 498).
III. The complaint is defective in that it does not
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allege defendant was engaged in any business in which credit was given to or required by defendant. Where a publication could only affect the business standing of a party the fact that he was engaged in such business should be stated in the complaint to give effect to the innuendo (Woodruff v. Bradstreet Co., 35 Hun, 16 ; Kingsbury v. Bradstreet Co., 35 Hun, 212 ; Comm. v. Stacey, 8 Phila. 617 ). In the last case cited, the court (pp. 618-9) said: “The words of the alleged libel do not charge or impute to the prosecutor any act which imports criminality, and for which he could be indicted. Upon principle, and the authority of repeated decisions, therefore, we must hold that this count of the indictment is defective, because there is no colloquium; no averment of precedent matter, to which the innuendo can applyand citing Hawkes v. Hawkey, 8 East, 427, 431. “ A complaint, in an action by a merchant for slander, in saying that he adulterated sugar, cheated the government, and swore he did not do so, is not sufficient, without allegations of circumstances from which the fair inference can be drawn, that the words used were spoken and introduced in such a way as presumptively to work an injury. Without such allegations, an innuendo cannot suffice. It is not sufficient for plaintiff to allege that he was, as a member of a business firm, engaged in the business of refining sugar ; for, to make the innuendo available, it must appear with sufficient certainty that the words were spoken of the plaintiff in his business relation as a sugar refiner” (Havemeyer v. Fuller, 10 Abb. N. C. 9 ).
IV. Neither an injunction nor an equitable suit will lie to restrain the publication of a libel or an article affecting the financial credit of the plaintiff (New York, Juv. Guard. Soc. v. Roosevelt, 7 Daly, 188 , 192). An injunction will not lie to restrain the publication of a libel. Courts have no power to suspend or abridge the right of every person to “freely speak, write or
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print on any subject” (Life Association v. Boogher, 3 Mo. App. 173 ; Brandreth v. Lance, 8 Paige, 24). Nor to restrain a publication as to plaintiff’s solvency. (Mulkern v. Ward, L. R. 13 Eq. 619 ; Fleming v. Newton, 1 H. L. Cas. 363). The jurisdiction of a court of chancery does not extend to cases of libel, or of slander, or of false representations, as to the character or quality of the plaintiff’s property, or as to his title thereto, which involves no breach of trust or of contract (Boston Diatite Co. v. Florence Manuf. Co., 114 Mass. 69 ; Prudential Assur. Co. v. Knott, L. R. 10 Ch. App. 142 ; 11 Eng. Rep. 498). The rule is different where it is a libel, a slander affecting the use of a business name, a trade-mark, or when it rests upon the ground of the plaintiff’s property in his business name, trade-mark or letters, and of defendant’s unlawful use thereof (Boston Diatite Co. v. Florence Manuf. Co., 114 Mass. 69 , 70). In such a case, in analogy to slander of title, an action will lie, but in such case it must be affirmatively shown that the publication is not justified in fact. The court refused an injunction to restrain the defendants from continuing to publish statements that the skates, about to be introduced by the plaintiffs, were an infringement of the defendant’s patent.
There is no jurisdiction to restrain a publication, whether libelous or not, merely because it may tend to injure property. Semble, there is no jurisdiction to compel a party, at the instance of his opponent, to assert his legal rights (Hammersmith Skating Rink Co. v. Dublin Skating Rink Co., Irish Rep. 10 Eq. 235). “To maintain an action for a libel, injurious to plaintiff’s business, it must be shown, not only that defendant’s publication was not justified in fact, but that it was with malice, and for a willful purpose of inflicting injury” (Snow v. Judson, 38 Barb. 210 , distinguished).
Plaintiffs’ complaint alleged, in substance, that
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they were the owners of a valuable right, secured by letters-patent, and were engaged in the manufacture of the patented article; that defendant has printed, published and circulated a circular or notice, claiming it to be the owner of various letters-patent securing such right, and was exclusively authorized to make and sell such patented articles, and threatening prosecutions for infringements of its right, in consequence whereof plaintiffs were injured in their trade, etc. Defendant, in its answer, set up its letters-patent, and alleged that plaintiffs’ trade was an infringement upon its rights. The court below found the issuing of the circular ; that it was injurious to plaintiffs’ business ; but that it was issued in good faith, with the sole purpose of advising the public of what they considered their rights ; and the action was one not within its jurisdiction. Held (distinguishing Burrall v. Jewett, 2 Paige, 134; and Middlebrook v. Broadbent, 47 N. Y. 443 ), no error” (Hovey v. Rubber Tip Pencil Co., 57 N. Y. 119 .)
Newton A. Calkins, for the plaintiff, opposed.
I.The publication of plaintiff’s name as a delinquent debtor is not privileged. A privileged communication is when one speaks in the performance of a duty, legal or moral, or in the assertion of his own rights, or to vindicate or protect his own interests. (Lyons v. Townsend, 2 Edm. Sel. Cas. 453 ; Thorn v. Blanchard, 5 Johns. 508 ; Howard v. Thompson, 21 Wend. 319 ; Cook v. Hill, 3 Sandf. 341 ; Richard v. Fobes, 17 Weekly Dig. 474 ; White v. Nicholls, 3 How. [U. S.] 266.
II. If defendant be a commercial agency it would only be protected in furnishing information when a communication is confined to those having an interest in the information (Sunderlin v. Bradstreet, 46 N. Y. 188 ). An agent for an association of merchants to
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ascertain the pecuniary standing of merchants is not privileged in his report of such standing (Taylor v. Church, 8 N. Y. 452 ).
III. Plaintiff presents a case of immediate danger of irreparable loss or injury, and is entitled to an injunction (McHenry v. Jewett, 90 N. Y. 58 ; Clinton Liberal Inst. v. Fletcher, 55 How. Pr. 431 ; Kerr on Inj. 611; Mitford Pl. & Pr. in Eq. 229).
IV. That danger is imminent, and that the injury will be great and irreparable, must be the judgment of the law upon the facts stated (Sheridan v. Jackson, 72 N. Y. 170 ; Scofield v. Whitelegge, 49 N. Y. 259 ; Pattison v. Adams, 7 Hill, 126 , 127; Cook v. Warren, 14 Weekly Dig. 50 ; High on Inj.. §§ 34, 35).
V. If a communication is made maliciously which would be privileged if not actuated by malice, defendant is not protected. The only effect of the communication being privileged is to remove the presumption of malice, and shift the burden of proof to the plaintiff (White v. Nicholls, 3 How. [U. S.] 266).
VL Defendant, though a corporation is liable (Phila. &c. R. R. Co. v. Quigley, 21 How. [U. S.] 202).
VII. To make a libel, it is sufficient if defendant induce a bad opinion to be had of plaintiff, or make him contemptible or ridiculous, if it tend to bring him into hatred, contempt or ridicule (White v. Nicholls, 3 How. [U. S.] 266).

I think this injunction must be dissolved. Even if it be assumed that the court can grant injunctions to restrain publication of a libel (and the English courts have gone to that extent), yet where such jurisdiction is claimed, the courts refuse to exercise it by granting an injunction unless the plaintiff prove the publication to be untrue (Quartz Hill, &c. Mining Co. v. Beall, L. R. 20 Ch. Div. 501).

This decision is made while recognizing the general

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right to issue an injunction in an action to restrain the publication of a libel (Thorley’s Cattle Food Co. v. Massam, L. R. 14 Ch. Div. 763 ; Thomas v. Williams, Id. 864 ; Hill v. Davies, L. R. 21 Ch. Div. 798).

These decisions are based generally upon the extension of the jurisdiction to issue an injunction, granted by the late judicature acts.

The courts in this State have not gone so far, as I think. But, assuming they have, there is no proof of the falsity of the charge that plaintiff is a delinquent debtor, who can but will not pay. The complaint does not allege its falsity. The counsel for plaintiff, in his argument and brief, admits the truth of the statement that plaintiff can but does not pay.

I do not intend to decide off-hand that an action at law to recover damages for the publication of such a statement may not be sustained. I express no opinion on that question. I do say that, until such action has been sustained, while no denial of the truth of the allegations of ability and omission to. pay is made, an injunction ought not to issue. In any event, not until trial of the action.

The motion to dissolve is granted, with $10 costs in each case.

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