Denver Public Warehouse Co. v. Holloway

• Decision Date: 06 November 1905
• Citation: 83 P. 131,34 Colo. 432
• Parties: DENVER PUBLIC WAREHOUSE CO. et al. v. HOLLOWAY.
• Court: Colorado Supreme Court

83 P. 131

34 Colo. 432

DENVER PUBLIC WAREHOUSE CO. et al. v. HOLLOWAY.

Supreme Court of Colorado

November 6, 1905

Appeal from District Court, City and County of Denver; F. T Johnson, Judge.

Action by Judson H. Holloway against the Denver Public Warehouse Company and others. Judgment for plaintiff. Defendants appeal. Reversed.

Thomas H. Hood, for appellants.

Horace G. Benson, for appellee.

STEELE, J.

Judson H. Holloway brought his action in the district court of the Second judicial district against the Denver Public Warehouse Company, John L. Jerome, and D. R. Benedict, based upon the following letter: 'Denver, Colo., Dec. 4, 1901. Mr. D. R Benedict, Manager Denver Public Warehouse Co., City--Dear Sir: I have given a good deal of thought to the report you made yesterday of the disappearance of forty-one bags of sugar on consignment to the warehouse. I am not satisfied with the statement that no explanation can be given for this loss. Your foreman is on duty through business hours. It would be impossible for the 41 bags of sugar to disappear without his knowledge. When merchandise of this sort is put in his charge, we have got to depend upon finding the goods there or receipts for same. I don't consider that it was possible for this sugar to have been taken out of the warehouse during the night. Please discharge Mr. Holloway immediately from his position as foreman, and tell him that it is my intention to prosecute him for the theft of the sugar, unless he can give some reasonable explanation. Yours truly, John L. Jerome.'

The amended complaint alleges that the Denver Public Warehouse Company is a corporation, and that at the time of the sending of the letter John L. Jerome was the treasurer and D. R Benedict was the manager of the business of the said company. It is further alleged that the defendants, for the purpose of impeaching plaintiff's good name and subjecting him to disgrace, and to bring him into disrepute among his neighbors and acquaintances, did falsely, wickedly, and maliciously write and publish the aforesaid letter, and that the said defendants did maliciously and willfully publish said letter and the contents thereof by reading the same to various people, and permitting other persons to read the same, for the purpose of injuring this plaintiff in his reputation. Plaintiff therefore prays for damages in the sum of $10,000. A demurrer to this amended complaint, upon the ground that it did not state facts sufficient to constitute a cause of action, was filed, and the demurrer was overruled. In the answer the defendants admit writing and sending the letter as alleged in the complaint, and alleged that it was written by said Jerome to said Benedict in the course of their said employment by and for the warehouse company; that said defendant John L. Jerome, in good faith and without ill will or evil intention of any sort toward the plaintiff, and in no other manner whatsoever, on December 4, 1901, wrote and sent to said defendant D. R. Benedict the said letter believing the statements therein to be true; and that said D R. Benedict, in good faith and without ill will or evil intention of any sort toward the plaintiff, and in no other manner whatsoever, received and submitted to plaintiff said letter in regard to the discharge of said plaintiff from his position as foreman. The replication denies the matters set forth in the answer. The trial resulted in a verdict in favor of the plaintiff and against the defendants jointly for the sum of $5,000, from which judgment the defendants have appealed.

We shall not undertake to consider all of the assignments of error, for the reason that we are of opinion that the court in his instructions to the jury has committed error which requires the reversal of the judgment.

Instruction No. 3, given by the court, is as follows: 'The court instructs the jury that the suspicion or belief in the mind of the publisher that the article published is true constitutes no justification of the charge. The publisher, in order to justify, must not only prove that there was such belief and suspicion, but he must prove that the identical charge made was true. It is the policy of the law to protect the innocent from reports that may be spread over the world by means of writing contaminating, vile, and malignant falsehoods, which may make an impression which would take much time and trouble to erase, and which it might be difficult, if not impossible, ever completely to remove.'

Instruction No. 4: 'The court instructs the jury that, where a false article is libelous upon its face, the law implies malice, and evidence of malice is not required outside of the publication; and in this case, if the publication is false, the plaintiff is not bound to offer other evidence than that of the publication in proof of malice, for in such case the law implies malice in the author and publisher and each subsequent publisher, whether in fact malice existed or not.'

Instruction No. 12: 'The court instructs the jury that a publication, the obvious tendency of which, taken as a whole, is to fasten suspicion of guilt of a felony upon the plaintiff, is actionable, although the publication contains no direct charge; and in this case, if the jury believe from the evidence that the tendency of this letter in question, taken as a whole, is to falsely and maliciously fasten the suspicion of guilt of a felony upon the plaintiff, even though you may believe that it contains no such direct charge, your verdict will be for the plaintiff, unless defendants shall have proved by a preponderance of the evidence that the charge made is true, or that the publications of the letter were each privileged publications and without malice in fact.'

Instruction No. 20: 'The jury are instructed that the stockholders, officers, and directors of a corporation have the right or privilege to communicate to each other, or to the corporation of which they are members, whatever they know, or have reason to believe, and do in fact believe, in respect to the management of the corporation or the conduct of any one of its employés or servants. These are what in law are called 'privileged communications.' And, when words are thus spoken or written in such privileged communications, the party concerning whom they are spoken or written cannot recover for such words so spoken or written, unless he shows that said communications were made with malice or without probable cause toward him, or unless the same are published to some third person other than such officers and directors.'

It appears to us that the court has proceeded upon a wrong theory, and has excluded from the consideration of the jury the question of the right of the officers of this corporation to communicate with each other upon the subject of the conduct of one of the employés. In Wagner v. Scott, 164 Mo 289, 63 S.W. 1107, the court, quoting from Newell on Slander and Libel, says: 'A privileged communication is an exception to the rule that every defamatory publication implies malice. A qualified privilege is extended to a communication made in good faith upon any subject-matter in which the party communicating has an interest, or in reference to which he has a duty, either legal, moral, or social, if made to a person having a corresponding interest or duty, and the burden of proving the existence of malice is cast upon the person claiming to have been defamed. * * * The theory of privilege in connection with the law of defamation involves a variety of conditions of some nicety, and also a doctrine not always of easy application to a set of facts, and, such being the case in any trial, whether civil or criminal, while the questions of libel or no libel, malice or no malice, are matters of fact for the jury, the question of privilege or no privilege is entirely one of law for the judge. That is to say, it is exclusively for the judge to determine whether the occasion on which the alleged defamatory statement was made was such as to render the communication a privileged one. The jury, however, will be the proper tribunal to determine the question of express malice, where evidence of ill will is forthcoming; but, if, taken in connection with admitted facts, the words complained of are such as must have been used honestly and in good faith by the defendant, the judge may withdraw the cause from a jury and direct a verdict for the defendant." And, in quoting from Gassett v. Gilbert, 6 Gray, 97, further says: "The question whether in a particular case a publication is to be deemed privileged--that is, whether the situation of the party making it and the circumstances attending it were such as to rebut the legal inference of malice--is a question of law, to be determined by the court in the first instance. But," the court proceeds, "in deciding this question, the conditions on which it is held to be privileged must necessarily be assumed--that is, it must be taken for granted that the publication was believed, by the party who made it, to be true, and that it was made bona fide--because, if these elements are found to be wanting, then the jury would be authorized to infer malice. The sole duty of the court, therefore, in such cases, is to determine whether the occasion, in the absence of actual malice, would justify the publication. If so, then it is incumbent on the...