People ex rel. Carvalho v. Warden

The decision with respect to the civil liability of a 'corporation for the acts of its president and other officers are not controlling on the question presented by this appeal. In all of those cases there was for the basis of the decision the fact that the officer assumed to act for the corporation, and that it was with respect to a matter which might properly have been delegated, and ordinarily is delegated to such officer by the board of directors. Moreover this is a criminal prosecution for a violation of a statute where criminal intent is an essential element of the crime, and the statute must be construed strictly in favor of the accused. (Penal Code, § 242; Roberson v. Rochester Folding Box Co., 171 N. Y. 538 , 557.)

The learned counsel for the People concedes that there must be a criminal intent, but he contends that, although section 2425 of the Penal Code provides that the publication must be malicious, yet section 244 of the same Code provides that if the publication be a libel as defined in section 242, then it is deemed to be malicious unless justification or excuse therefor is shown as therein provided. He contends that intent to publish the article constituting the libel is sufficient to constitute the criminal intent within the purview of these provisions. It is not necessary to go further than this concession to sustain the order now under review, for I am of opinion that the mere fact that the relators held the offices enumerated is not sufficient to show that they intended to publish the libel.

It is further contended on behalf of the People in effect that there is a presumption of law that the relators were managers: of the corporation which published the libel arising from the fact that they held these respective offices. I am of opinion, that this contention is not sound. The Star Company was as stock corporation, and if we consult the statutes of the state with respect thereto we find that the management of such corporations is vested in the board of directors (Gen. Corp. Law ,[Gen. Laws, chap. 35; Laws of 1890, chap. 563; Laws of 1892,

chap. 687], § 29, as amd. by Laws of 1901, chap. 214, and Laws of 1904, chap. 737 [now Gen. Corp. Law (Consol. Laws, chap. 23; Laws of 1909, chap. 28), § 34] ; Id. § 30 [now Gen. Corp. Law (Consol. Laws, chap. 23; Laws of 1909, chap. 28) § 35] ; Id., § 39, added by Laws of 1895, chap. 672, as amd. by Laws of 1901, chap. 355 [now Gen. Corp. Law (Consol. Laws, chap. 23; Laws of 1909, chap. 28), § 43] ; Id., § 3, snbd. 6, as amd. by Laws of 1895, chap. 672 [now Gen. Corp. Law (Consol. Laws, chap. 23; Laws of 1909, chap. 28), § 3, snbd. 6]), .and we find that section 27 of the Stock Corporation Law (Gen. Laws, chap. 36; Laws of 1890, chap. 564; Laws of 1892, chap. 688), which is now section 30 of the Stock Corporation Law (Consol. Laws, chap. 59; Laws of 1909, chap. 61), and which, is the only statute relating to the powers of a president, or a -secretary, or a treasurer of a corporation, provides that the directors may appoint from their number a president, and may appoint a secretary, a treasurer and other officers, agents and employees, “who shall respectively have such powers and perform such duties in the management of the property and affairs of the corporation, subject to the control of the directors, as may be prescribed by them or in the by-laws.” Section 614 of the Penal Code, which related to frauds in the management of -corporations, also expressly recognized by the definition of director ” that the management of the affairs of a corporation is vested by law in the board of directors. -It is quite clear, I think, that no presumption arises sufficient to sustain a criminal prosecution that either a president, or a secretary, or a treasurer is a manager of a corporation, and it has been so held with respect to a secretary and treasurer. (Mecabe v. Jones, 10 Daly, 222 ; Folwell v. Miller, 145 Fed. Rep. 495 ; Cook Corp. [6th ed.], §§ 716, 717, 718. See, also, People v. Sherman, 103 N. Y. 513 , opinion of Landon, J., General Term, in Case and Points in Court of Appeals; Rox v. Hays, 14 Ont. L. Rep. 201, 207; Vardeman v. Penn. Life Ins. Co., 135 Ga.

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117.) It may be that, since the statute requires the corporation to elect a president from the number of the board of directors, it is to be presumed that Carvalho was a director, but even so that did not, in my opinion, make him a manager of the corporation within the provisions of the Penal Code in question. I think that the Legislature did not intend to embrace in the term “ manager,” as therein used, every director of a corporation; nor did it intend to embrace the officers of a corporation as such, for had such been the intention I think a specific reference would have been made thereto, since the Legislature was aware that corporations are managed by their boards of directors and not by the directors individually and that certain, functions are delegated to the officers. The language of section 246 of the Penal 'Code with respect to what may be shown in defense of a prosecution is significant. It is provided that the defendant may show that the libel was published without his knowledge or fault and against his wishes by another who had. no authority from him and whose act he disavowed as soon as he knew of it. This language is very significant, as indicating that only the actors in the publication are included by the term “ manager,” as distinguished from the owner or proprietor of the paper. Whether an individual or a corporation, the owner or proprietor is not obliged to publish the paper and is held, responsible for whatever is done by his or its employees. The statute presupposes authority in the defendant, prosecuted as-a manager, to prevent the publication and to publish a disavowal thereof. It is not to be presumed, in the absence of evidence showing his connection with the publication, that a mere-officer of a corporation or a director thereof is a manager of the. corporation within the provisions of said section 246 of the Penal Code.

I therefore vote for an affirmance of the order.

Clarke and Scott, JJ., concurred; Ingraham, P. J., and Miller, J., dissented as to relator Carvalho.

The decision of the question presented depends upon the construction to be given to section 246 of the Penal Code, now reenacted as section 1344 of the Penal Law. .We have held that this publication was a criminal libel within sections 242 and 243 of the Penal Code and that the corporation publishing the article was properly convicted of that crime. (People v. Star Co., 135 App. Div. 517 .) By section 245 of the Penal Code (now section 1343 of the Penal Law) it is provided that to sustain a charge of publishing a libel it is enough that the defendant knowingly displayed it or parted with its immediate custody under circumstances which exposed it to be seen or understood by another person than himself. And then follows section 246 which provides that every editor or proprietor of a book, newspaper or serial and every manager of a copartnership or incorporated association by which a book, newspaper or serial is issued is chargeable with the publication of any matter contained in such book, newspaper or serial.

T'he relator Carvalho was the president of the corporation publishing this article; Merrill was its treasurer, and Clarke its secretary, and their names appeared on each of the papers as such officers pursuant to the requirement of chapter 475 of the Laws of 1907. The question is presented whether these officers or either of them were managers of this corporation within the meaning of section 246 of the Penal Code before referred to.

At common law the proprietor of a newspaper in which a libel was published was answerable criminally as well as civilly for the acts of his servants or agents and for misconduct in conducting the newspaper although it was shown that he had nothing to do with conducting the newspaper, and that it was conducted by his agent without any interference on his part. (Rex v. Walter, 3 Esp. N. P. Cas. 21; cited and approved in Andres v. Wells, 7 Johns. 260 , in which case it is said: “ The

principle laid down by Lord Kenyon is salutary and essential.”) I do not understand that this statement of law has ever been questioned. The proprietor of a newspaper being thus responsible civilly and criminally for a libel published in it, if such proprietor was a corporation which could act only by its officers or agents, any officer, agent or employee of the corporation who had to do with the publication would be civilly and criminally responsible. The statute then provides that every “ manager ” of an incorporated association by which a newspaper is issued is chargeable with the publication of any matter contained therein, and the question is presented as to who is a manager of a corporation. As we have seen, at common law the proprietor of a newspaper was responsible for the acts of his agents in control of it, and the particular agent or employee who had to do with the publication was also civilly and criminally responsible for a publication. When, however, a corporation, undertook .the publication of newspapers it became necessary to define those who would be responsible criminally for libels . contained in a publication published by a corporation. Strictly speaking, the corporation was the proprietor of the publication and thus was civilly liable for it. The provisions of section 246 of the Penal Code were enacted in 1881 (Laws of 1881, chap. 676), and there the “manager” of a corporation as distinct from the corporation was made responsible for the crime. The meaning of the word “ manager ” is one who manages. In the 'Century Dictionary a manager is defined to be one who manages, directs or controls; one charged with the management, direction or control of an affair, undertaking or business; k director or conductor. And thus to make •one criminally responsible for a publication contained in a newspaper published by a corporation it must appear that the person proceeded against was charged with the management, direction or control of the undertaking or business in which the corporation was engaged. A corporation can only act by its

authorized officers or agents. Generally speaking, it is controlled and managed by its board of directors, but its president is necessarily the general executive officer of the corporation, and one dealing with the corporation is justified in assuming that the president is the one who acts for the corporation. By virtue of his position he is, I think, a manager of the corporation and, therefore, it can fairly be said that the president of a corporation is its manager within the meaning of this provision. By the section in question the manager is chargeable with the publication, but in a prosecution for libel he may show in his defense that the matter complained of was published without his knowledge or fault and against his wishes by another who had no authority from him to make the publication. If he can be fairly said to be the “ manager ” of the corporation within the meaning of that term as used in this section, he is made by the express mandate of the Legislature responsible, and I think the president of the corporation comes within the provision quoted as its manager.

I agree with Mr. Justice Lauglan that the term would not include the treasurer or secretary, they being officers whose authority is confined to the performance of certain specific duties and neither being the general executive head of the company.

I think the order appealed from should, therefore, be reversed in so far as it discharges Carvalho, the president, and the prisoner remanded, and affirmed as to the other two defendants.

Miller, J. concurred.

Order affirmed.