259 F.2d 106 (9th Cir. 1958), 15778, Lyon Furniture Mercantile Agency v. Carrier

Docket Nº:15778.
Citation:259 F.2d 106
Party Name:LYON FURNITURE MERCANTILE AGENCY, Appellant, v. Irene M. CARRIER, doing business as Wishmaker, House, Appellee.
Case Date:September 17, 1958
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

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259 F.2d 106 (9th Cir. 1958)



Irene M. CARRIER, doing business as Wishmaker, House, Appellee.

No. 15778.

United States Court of Appeals, Ninth Circuit.

September 17, 1958

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Samuel A. Miller, Catlin & Catlin, Los Angeles, Cal., Meyer Lindenbaum, New York City, for appellant.

David G. Licht, Beverly Hills, Cal., for appellee.

Before BARNES and HAMLEY, Circuit Judges, and CLARK, District Judge.

HAMLEY, Circuit Judge.

Irene M. Carrier, doing business as Wishmaker House, at Phoenix, Arizona, brought this libel action to recover actual damages in the sum of $25, 000, and punitive damages in the sum of $50, 000. Defendant Lyon Furniture Mercantile Agency (Lyon) entered a general denial, and offered the affirmative defense that the communications in question were qualifiedly privileged. After a trial without a jury, judgment was entered for the plaintiff in the sum of $2, 000, covering actual but not punitive damages. Defendant appeals.

Lyon is a partnership which engages in business in California and other states. The principal activity of the company is that of a credit reporting agency. It supplies this service to manufacturers, wholesalers, and jobbers in the home furnishing industry. Lyon has eight offices from coast to coast, and issues over one hundred thousand credit reports annually. These reports are issued only to subscribers under a contract, and then only in response to written request.

On December 29, 1953, Lyon released to certain wholesale furniture dealers a credit report concerning Wishmaker House. Revised credit reports covering the same business were similarly released on March 9 and 23, 1954, and April 18, 1955. 1

In her amended complaint, Mrs. Carrier alleged that these reports were absolutely false in the following particulars:

'That by innuendo that reports impute to plaintiff the securing of said business by coercion and duress; that the reports state that plaintiff had no previous retail furniture experience; that plaintiff employed a manager to operate said business; that 1954 payments were slow; that the bulk of plaintiff's purchases are being made on a C.O.D. basis.'

It was alleged that Lyon made and delivered these reports wilfully and maliciously, then knowing the described statements to be false, and for the express and sole purpose of destroying Mrs. Carrier's credit and financial standing and of ruining her business. It was further alleged that, by reason of the making and publication of these statements, Mrs. Carrier's credit standing was damaged, with resulting adverse effect upon the business. 2

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The trial court found that 'many' of the five statements contained in the credit reports concerning which Mrs. Carrier complains were 'false and untrue.' The court did not expressly find that the statements were 'wilfully and maliciously' made. Instead, the court found:

'That the defendant, acting by and through its duly authorized agents and servants, was grossly negligent in the preparation of the aforesaid reports in that then and there was in its possession information showing a substantially more favorable condition of plaintiff's business and of plaintiff's financial condition than was reported. The defendant was grossly negligent in the interpretation of the financial condition of the plaintiff as disclosed by the aforesaid statements and information then and there available to defendant.'

The allegations concerning damage to the business (see footnote 2) were found to be true. Actual damages in the sum of $2, 000 were found to have been sustained. No. punitive damages were allowed.

On this appeal, defendant contends in effect that: (1) One of the assertedly libelous statements was not made, by innuendo or otherwise; (2) the finding of fact that 'many' of the statements in question were false is clearly erroneous; (3) special damages was not proved; (4) the statements were qualifiedly privileged; and (5) the motion to require plaintiff to file an undertaking to pay costs, as provided in West's Ann.Cal.Civ.Proc. 830, should have been granted.

One of the libelous statements allegedly made was that Mrs. Carrier secure the business 'by coercion and duress.' It is not claimed that the credit reports issued by Lyon contain any express recital to that effect. It is her position, however, that other recitals contained in these reports by innuendo imply that Mrs. Carrier acquired the business in that manner. The recitals relied upon as giving rise to this innuendo, all having to do with Mrs. Carrier's marital difficulties, are quoted in the margin. 3

The 'taking over' or 'acquisition, ' by a husband or wife, of the property or business of a marital community, due to 'marital difficulties, ' does not reasonably imply the exertion of coercion and duress. It is common knowledge that in Arizona the division of community property as a result of marital difficulties is subject to court control. Consequently, when it is stated that one or the other member of the community 'took over' or 'acquired' property as a result of such difficulties, the natural assumption is that it was done pursuant to court decree, if not by agreement between the parties.

The quoted words, therefore, cannot be said to imply that Mrs. Carrier acquired the business by coercion and duress, unless those words are to be given an unnatural and forced meaning. An unnatural and forced meaning, however, may not arise by innuendo. Lorentz v. R.K.O. Radio Pictures, 9 Cir., 155 F.2d 84, 87. Nor does the record reveal any extrinsic facts which would support such an implication. 4

For the reasons indicated, we hold that no recital in the credit reports gave

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rise, by innuendo or otherwise, to the implication that Mrs. Carrier acquired the business by coercion and duress.

The next question to be dealt with is whether the finding of fact, that 'many' of the statements in question were false, is clearly erroneous. Since this finding is inconclusive as to just which statements were false, we must examine the supporting evidence as to each. We may, however, disregard the alleged statement that plaintiff secured the business by coercion and duress, since it has been...

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