Summary
In Reporters' Assn. v. Sun Print. Pub. Assn. (186 N.Y. 437, 441), the Court of Appeals said: "There has been some dispute in the cases as to the necessity of setting out the specific damage, which a corporation claims to have suffered from a libelous publication; but I regard the better rule to be that such an averment is not necessary, when the language is of so defamatory a nature as to directly affect credit and to occasion pecuniary injury."
Summary of this case from Drug Research Corp. v. Curtis Pub. Co.Opinion
Argued November 12, 1906
Decided December 18, 1906
Franklin Bartlett for appellant. A.P. Bachman for respondent.
The sufficiency of this complaint depends upon its allegation of the special damage, which the plaintiff claims to have sustained from the alleged libellous publication. That a corporation has the right to maintain an action of libel, when the publication assails its management, or credit, and inflicts injury upon its business, or property, is a proposition, which is true upon principle and which has the support of authority. (See Newell on Slander and Libel, p. 360 and cases cited.) It is as much entitled to the protection of the law, in those respects, as is the natural person. It differs from the latter, in that it has no character to be affected by a libel; but its right to be protected against false and malicious statements, affecting its credit, or property, should be beyond question. There has been some dispute in the cases as to the necessity of setting out the specific damage, which a corporation claims to have suffered from a libellous publication; but I regard the better rule to be that such an averment is not necessary, when the language is of so defamatory a nature as to directly affect credit and to occasion pecuniary injury. (See Shoe Leather Bank v. Thompson, 18 Abb. Pr. 413; Knickerbocker L. Ins. Co. v. Ecclesine, 2 J. S. 76; Union Assoc. Press v. Heath, 49 App. Div. 247; Trenton, etc., Ins. Co. v. Perrine, 23 N.J.L. 402.) In the present case, the learned justices of the Appellate Division are in accord that this publication is not libellous per se and, as I think, correctly. It may well be that the Newsboys' Company and Newsboys' Magazine, which are spoken of in the earlier part of the article, might complain of its language; but, as it was observed below, "what is said with respect to the Newsboys' Magazine as to `grafters' and `police,' and `police records,' cannot be said to legitimately refer to this plaintiff." There is no other association of this plaintiff with the Newsboys' Company and Magazine, nor other implication of similarity in practices and in police repute, than what may be found from both having been spoken of in the course of the article, and it would be going further than common sense allows to infer from that circumstance a necessary connection in disreputable practices. The portion of the article referring to the plaintiff, clearly, is not libellous per se. What does it import to say that "subscription lists seem to have been exchanged among the `Press Artists' League,' the `Reporters' Association of America,' `The Interstate Press' and a score of other concerns organized for the same purpose, because the canvassers have always seemed to hit on the same easy marks," except that the concerns are "beggars" for subscriptions and aid each other in soliciting them, through the exchange of lists which show what persons have been successfully approached by each. It has not been considered injurious to a person's character, or to his credit, that he has importuned for business and it will not, I believe, be so considered for a business corporation to do so. By reference to the record in King v. Sun P. P. Co., ( 84 App. Div. 310; affd., 179 N.Y. 600), to which counsel for the appellant calls our attention, it will be seen that we affirmed an order, sustaining a demurrer to a complaint, where the libellous article related to plaintiff's efforts to procure subscriptions for, and to effect sales of, the publication of a work of art and to his general business as a publisher. It was much more severe in personal allusions than the present article; but it was not considered libellous per se and the discussion in the courts was upon the sufficiency of the allegations of special damage.
The disagreement of the Appellate Division, in this case, was upon the question of the special damage alleged. That special damage must be alleged, the article not being libellous per se, was conceded; but the dissent was from the opinion that the allegation was sufficient, that the publication etc. "has caused to this plaintiff a serious loss in business, the refusal by clients to pay the just claims due by contract and has greatly damaged the plaintiff in credit and reputation." Under the settled rule, whenever special damage is claimed, the plaintiff must state it with particularity, in order that the defendant may be enabled to meet the charge. (1 Chitty on Plead. 414; Newell on Slander Libel, 634; Linden v. Graham, 1 Duer, 670; Bassil v. Elmore, 65 Barb. 627; Cook v. Cook, 100 Mass. 194.)
In Linden v. Graham, ( supra), it was said of an action of slander, (and the same rule would apply), that "the special damage must be fully and accurately stated. If the special damage was a loss of customers * * * the persons who ceased to be customers, or who refused to purchase, must be named; and that, if they are not named, no cause of action is stated. (1 Selden, 14; Kendall v. Stone)." In Tobias v. Harland, (4 Wend. 537), the slanderous words were spoken of articles manufactured by the plaintiff, whereby divers persons refused to purchase them. It was held that "the general allegation of the loss of customers is not sufficient to enable the plaintiff to show a particular injury," (English cases being cited), and the demurrer was sustained. In Chitty's Pleading, ( supra *p. 424), it is said "the general rule is that when the law infers damage and the words are actionable, without special damage, none need be laid in the declaration; but that it is otherwise when the words are only actionable in respect of the particular injury resulting therefrom," and the rule is pertinently illustrated by the author. The reason for the rule should be quite obvious. If the article complained of is not defamatory of itself, damage is not implied in law. But if the plaintiff, nevertheless, charges that damage has actually occurred, as the result of the publication, then he should aver what it was and with such particularity as that it shall appear to be the legal, natural and proximate, if not the necessary, consequence of the article. ( Terwilliger v. Wands, 17 N.Y. 54. ) If that were not true, no legal cause of action would be shown. Furthermore, particularity in such a case is both proper and necessary; because the facts must be peculiarly within the plaintiff's own knowledge and the defendant should have notice of the cause of complaint, to be prepared to meet it. (1 Chitty on Pl. *857.)
The damage charged in this complaint is a loss in business from the refusal of clients to pay just claims due upon contract. That, however, is, in effect, a statement that the loss was occasioned by the wrongdoing of a third person and, therefore, it cannot be the legal and proximate result of the defamation. For a contract debtor to refuse payment of his indebtedness is an illegal act, for which the law affords a complete remedy by an action; in which a full indemnity is presumed. A breach of contract is an illegal act and it could not be regarded as the legal consequence of the alleged libellous article. ( Kendall v. Stone, 5 N.Y. 14.) To allege the loss of some particular contract, or the business of some certain persons, would charge a specific damage, as the consequence of the publication of the article, which the defendant could prepare to meet upon the trial of the issue. There is that vagueness of language as to the clients, which was condemned in Linden v. Graham, ( supra).
For these reasons I think this complaint failed to state a sufficient cause of action, according to the rules of pleading, which have been laid down in the books and which commend themselves as being reasonable.
I advise, therefore, that the question certified be answered in the negative; that the order and judgment appealed from be reversed and that the defendant have judgment dismissing the complaint, with costs in all the courts; but with leave, however, to the plaintiff, within twenty days from service of the order and upon payment of the costs, to amend its complaint.
CULLEN, Ch. J., HAIGHT, VANN and WERNER, JJ., concur; HISCOCK, J., concurs on ground last stated in opinion; WILLARD BARTLETT, J., not sitting.
Ordered accordingly.