W. C. Loftus & Co. v. Bennett

The judgment in this action must be reversed for the improper allowance, under objection and exception of proof of special damage. The action was brought to recover damages for a libel contained in an issue of a newspaper of which the defendant was the proprietor. That the defamatory matter contained therein was libelous per se is clear. The plaintiff corporation was the proprietor of several stores in which it conducted the business of clothiers in the city of New York and elsewhere. An attachment had been issued against it, and the sheriff had made a levy upon property in one of its stores. A motion had been made to vacate the attachment. The defendant published an article relating to that subject, and in it, among other things, stated that the plaintiff, a clothing firm, with a dozen stores in this and other cities, was in the hands of the sheriff; that an attachment had been procured against the plaintiff, and a motion had been made to vacate it; and that the affidavits used upon the motion disclosed a remarkable condition of affairs of the company; and a distinct charge of swindling. The attachment had in fact been procured, but property was levied upon in but one of the plaintiff’s stores. The article proceeded to state that one Lysaght had declared that Thomas J. Loftus, the president of the company, had induced him to invest money in the plaintiff corporation upon false representations as to the stock of merchandise the corporation had on hand; and the article also stated that counsel for the plaintiff in the attachment suit had said in argument that the president of the corporation had received, wrongfully and unlawfully, certain moneys •of the corporation, and that the president and his brother, by reason of the peculiar relations in which they stood to the corporation, had been violators of the Penal Code in their dealings with the corporation’s money. The plaintiff’s claim is that the publication was not a fair and true report of a judicial proceeding; that the sheriff did not hold the Loftus stores as stated in the headlines of the article published by the defendant; that the Lysaght statement was not made until after the argument of the motion to vacate the attachment, and was not used before the court on such application, and said statement or affidavit did not form a part of the judicial proceedings on the application to vacate the attachment; and that counsel for the plaintiff did not make the argument set forth in the article. The defendant in its answer attempted to justify, and alleged that the words in the headlines regarding the sheriff’s levy upon the Loftus stores were true; that the portion of the article relating to Lysaght’s statement was a fair report of a judicial proceeding, and published without malice; and that the reference to the statements made in argument related to the cause, and were a lawful publication.

On the evidence in the case, and upon the finding of the jury upon the issues, the plaintiff was entitled to a recovery for general damages, and, under the allegations of the complaint, some evidence of special damage may have been admissible. That the plaintiff sought to recover both for general and special damage is evident. The complaint contains the following allegation:

“By reason of said publication plaintiff has been injured in its business, reputation, prospects, and credit in general damages in the sum of twenty-

five thousand dollars;, and has also suffered- special damages, In special ways, in the sum of twenty-five thousand dollars. Said special damage has been caused by plaintiff’s inability to obtain credit on the purchase of goods; - loss of trade, plaintiff’s business 'having fallen off by reason of said publication, customers refusing to make deposits when ordering goods which plaintiff would not make without such deposit, and in that way the business of such prospective customers has been lost; loss of services of agents in various parts of the United States, who refused to continue in plaintiff’s employ after the publication of said article, whereby plaintiff was unrepresented in the trade, and unable to effect sales of the goods in the territory usually covered by said agents.”

Testimony was allowed on the trial concerning the loss of customers, and it is claimed by the appellant that that testimony was improperly admitted, because the names of the customers were not mentioned in the complaint in connection with the allegation of special damage arising from that cause. It has been frequently decided in the courts of this state, following the ordinary common-law rule, that when, in an action for slander or libel, special damage arising from the loss of customers is claimed, the names of such customers must be stated in the declaration, and that the plaintiff cannot prove that any one not named therein ceased to deal with him. Hartley v. Herring, 8 Term. R. 130; Hallock v. Miller, 2 Barb. 630 ; Linden v. Graham, 1 Duer, 672 ; Tobias v. Harland, 4 Wend. 537 ; Insurance Co. v. Ecclesine, 42 How. Frac. 215. The rulings in the cases cited seem to have been modified by what was decided in Bergmann v. Jones, 94 N. Y. 59 , although it is to be said that in that case prominence is given to the fact that the objection that the names were not stated in the complaint was not specifically taken. But whether it was error to admit evidence as to loss of customers we need not decide; for it is apparent that errors were committed in the allowance under objection and exception of evidence concerning other items of what cléarly constitute special, as distinguished from general, damages. General damages are such as the law implies or presumes to have accrued from the wrong complained of. “Special damages are such as really took place, and are not implied by law, and are either superadded to general damages arising from an act injurious in itself, as where some special loss arises from uttering the slanderous words actionable in themselves, or are such as arise from an act indifferent and not actionable in itself, but injurious only in its consequences, as where words become actionable by reason of special damage.” Chit. Pl. 385. In Dumont v. Smith, 4 Denio, 322 , this definition of Chitty’s is textually adopted in the opinion of the court by Jewett, J. In actions where the words, statements, or defamatory matter, are actionable per se, evidence of special damage may be given in enhancement of damages, provided the special damage is pleaded, but not otherwise (Shipman v. Burrows, 1 Hall, 442 ; Herrick v. Lapham, 10 Johns. 281 ; Bell v. Publishing Ass’n, 3 Abb. N. C. 157 ); and in Bergmann v. Jones, supra, which was an action upon a publication libelous per se, the court remarked that there could be no serious question that the person injured has the right to recover special damages, where a claim for the same is properly made in the complaint.

We are therefore of opinion that the judgment and order appealed from should be reversed, and a new trial ordered, with costs to appellant to abide the event. All concur.