Beecher v. Montgomery Ward & Co., Inc.

• Decision Date: 31 December 1973
• Citation: 517 P.2d 667,267 Or. 496
• Parties: James A. BEECHER, Appellant, v. MONTGOMERY WARD & CO., INC., an Illinois corporation, Respondent.
• Court: Oregon Supreme Court

Page 667

517 P.2d 667

267 Or. 496

James A. BEECHER, Appellant, v. MONTGOMERY WARD & CO., INC., an Illinois corporation, Respondent.

Supreme Court of Oregon.

Argued and Submitted Oct. 16, 1973.

Decided Dec. 31, 1973.

Raul Soto-Seelig, Portland, argued the cause for appellant. With him on the briefs was Paul J. Rask, Portland.

Ridgway K. Foley, Jr., and Gino G. Pieretti, Jr., Portland, argued the cause for respondent. With them on the brief were Souther, Spaulding, Kinsey, Williamson & Schwabe, Portland.

Before O'CONNELL, C.J., and McALLISTER, DENECKE, HOLMAN, HOWELL and BRYSON, JJ.

HOLMAN, Justice.

Plaintiff brought an action for libel against defendant, seeking both general and punitive damages. The jury returned a verdict for defendant and plaintiff appealed.

Plaintiff owed defendant several hundred dollars on an account for merchandise. The parties compromised the claim for $439, and plaintiff paid the compromised amount. Thereafter, defendant attempted to collect what would have been the balance of the bill had it not been compromised and finally wrote the following letter to plaintiff's employer:

'Jim Fisher Imports

106 N.E. Grand

Portland, Oregon

James A. Beecher

Re: Rt. 1, Box 294E

Estacada, Or 97023

780--281--081

Amt. of Mo. Payment $52.00

Balance on Account $204.50

'For the past several months we have been carrying a delinquent account in the amount indicated which is due from the above individual. 'We understand this person in employed by you and we would appreciate your co-operation in bringing this matter to his attention and requesting him to pay his obligation without further delay.

'Thank you for your assistance.'

The letter, when received by plaintiff's employer, was read by its manager and its service manager.

Before proceeding to plaintiff's assignments of error, we must decide whether the letter is capable of being the subject of a libel. Defendant contends that it is not, and, if defendant is correct, our inquiry is at an end. A defamatory communication is defined by 3 Restatement, Torts 140, § 559, as follows:

'A communication is defamatory if it tends so to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him.'

The court determines whether a communication Is capable of a defamatory meaning. If the court determines that it is, the matter is then submitted to the jury for a determination of whether a defamatory meaning Was understood by the recipients. Hinkle v. Alexander, 244 Or. 267, 277--278, 411 P.2d 829, 417 P.2d 586 (1966); 3 Restatement, Torts 304, § 614. It is our opinion that the present communication could have been understood by the recipients in a defamatory sense as being derogatory of plaintiff's credit. In Hinkle v. Alexander, Supra at 279, 417 P.2d at 590, we stated:

'In Hudson v. Pioneer Service Co., Supra, 218 Or. 561, 346 P.2d 123, we held that Hudson had not been defamed by a publication that he had failed to pay bills because he was not in a trade or business to which credit was essential. By the rule we have here adopted it would be immaterial whether or not plaintiff was in a trade or business. If the publication carries with it a fair implication that the person's credit cannot be trusted it should make no difference if he is or is not in a trade or business. If he is defamed he should be entitled to redress.'

Defendant argues that there is no proof of defamation because no one testified that he understood that plaintiff's credit was the subject of distrust. The jury does not have to have specific testimony to this effect because it may draw such a conclusion from all the circumstances surrounding the communication and the relations of the parties. The jury could have drawn the conclusion that plaintiff's employer understood the defendant to be saying that plaintiff was 'poor pay' and would not honor his just debts without pressure from his employer. The employer did not have to testify to this understanding in order for the jury to determine its existence.

If the communication was capable of a defamatory meaning and was so understood by the recipients, damage is assumed although no special harm or loss of reputation results therefrom. Since Hinkle we have been committed to the rule of 3 Restatement, Torts 165, § 569, which is:

'One who falsely, and without a privilege to do so, publishes matter defamatory to another in such a manner as to make the publication a libel is liable to the other although no special harm or loss of reputation results therefrom.'

Plaintiff's first assignment of error concerns the exclusion from evidence of the testimony of a witness, who was unrelated to the present transaction, that the evening before he had been served with process in an action on a Montgomery Ward bill which he had previously paid. Plaintiff contends that the evidence relates to malice and punitive damages because it shows a method of doing business whereby accounts which have previously been paid are at tempted to be collected a second time.

Generally, other conduct or acts of alleged wrongdoing which have no direct relation to the controversy being tried are of insufficient relevance to be admissible. However, in some instances, evidence of other acts similar to those in controversy are admissible to prove plan, scheme, and method of operation or intent. Karsun v. Kelley, 258 Or. 155, 160, 482 P.2d 533 (1971). In such latter situations, the relevance is weighed against the potential irrelevant use that can be made of the information considering that, in most instances, proving that defendant is a bad man or has...