Dun & Bradstreet, Inc. v. O'Neil

• Decision Date: 24 June 1970
• Docket Number: No. B--1929,B--1929
• Citation: 456 S.W.2d 896
• Parties: DUN AND BRADSTREET, INC., Petitioner, v. Truman O'NEIL, Respondent.
• Court: Texas Supreme Court

Page 896

456 S.W.2d 896

DUN AND BRADSTREET, INC., Petitioner, v. Truman O'NEIL, Respondent.

No. B--1929.

Supreme Court of Texas.

June 24, 1970.

Rehearing Denied July 22, 1970.

Stubbeman, McRae, Sealy, Laughlin & Browder, W. B. Browder, Jr., and James G. Noland, Midland, for petitioner.

Rountree, Renner & Snell, Robert B. Snell, Lamesa, for respondent.

HAMILTON, Justice.

Plaintiff-respondent, Truman O'Neil, brought this suit for libel against defendant-petitioner, Dun & Bradstreet, Inc., because as a part of its credit reporting services defendant had erroneously reported by 'Special Notice' that plaintiff had filed a voluntary petition in bankruptcy. The 'Special Notice' had been sent to fourteen of defendant's subscribers who had requested credit information about plaintiff during the preceding twelve months. Defendant alleged conditional privilege as a defense. At the close of plaintiff's evidence the trial court ordered an instructed verdict for defendant. The Court of Civil Appeals reversed the trial court's judgment, holding that defendant's conditional privilege had not been shown because the evidence did not reveal whether or not the fourteen persons who received the 'Special Notice' were interested in plaintiff's financial status At the time the 'Special Notice' was sent out. 448 S.W.2d 153. We reverse the judgment of the Court of Civil Appeals and affirm the trial court's judgment.

Defendant is a mercantile agency which provides credit information to its subscribers under a subscription agreement. The credit reports state that such information is furnished in strict confidence. As part of the 'arrangement' with its subscribers defendant offers a 'continuing service' which means that for a period of twelve months after a subscriber requests credit information about a particular person, defendant will furnish to that subscriber all additional up-dated information about that person.

On March 24, 1965, defendant issued a 'Special Notice' declaring that plaintiff had filed a voluntary petition in bankruptcy. This notice was sent to all defendant's subscribers who during the preceding twelve months had requested credit information about plaintiff. There were fourteen such subscribers. The next day defendant issued the following correction notice to the same fourteen subscribers:

'Any report to the effect that Alvin Truman O'Neil filed voluntary petition in bankruptcy is erroneous and should be disregarded.

'A voluntary petition in bankruptcy was filed by Alvin Numan O'Neil, a brother, but this did not in any way involve Alvin Truman O'Neil.'

The Court of Civil Appeals stated that plaintiff had been libeled as a matter of law, that defendant relied upon a conditional privilege as a defense, that a credit reporting agency is entitled to a conditional privilege if certain requirements are met, and that once the conditional privilege is shown to exist the burden is on the plaintiff to show that the privilege is lost, that is, plaintiff must then show actual malice. We are in agreement with these statements. Likewise, we are in agreement with the following general rules of law expressed by the Court of Civil Appeals regarding the requirements which defendant had to meet in order to be entitled to the defense of conditional privilege:

'* * * it has been held in the great majority of cases that reports of mercantile or other credit-reporting agencies, furnished in good faith to one having a legitimate interest in the information, are privileged.

'* * * it must have been furnished to persons having an interest in the information reported. * * * But the report of a credit-reporting agency loses its privileged character if it is sent indiscriminately to subscribers generally, or to those not inquiring concerning, or interested in knowing, the condition and financial standing of the person reported upon.' 15 Am.Jur.2d, Collection and Credit Agencies, § 22 and § 24 respectively.

'There is general agreement, however, that the privilege is limited by the extent to which the particular subscriber to whom the publication is made has an apparent, present interest in the report; and that in so far as there is general publication to those without such an interest, the risk of false information is one to be borne by the business.' Prosser, Handbook of the Law of Torts (Third Edition, 1964) at page 810.

'If an individual voluntarily or for profit give false and injurious information to persons interested in the trade and commercial standing of another at the time the information is given, such communications would be privileged; but if he furnish the same information to others not so interested,--to traders and merchants, as a class,--the communication would not be privileged.' Bradstreet Co. v. Gill, 72 Tex. 115, 9 S.W. 753, at page 757 (1888).

Our disagreement with the Court of Civil Appeals stems from that Court's interpretation of the general rules of law hereinabove quoted as applied to the facts here involved. The Court of Civil Appeals held that defendant's conditional privilege had not been shown to exist because there was no showing that defendant's fourteen subscribers had any interest in the financial status of plaintiff on March 24, 1965, the date on which the 'Special Notice' of bankruptcy was sent out, even though it was shown that these fourteen subscribers had inquired about plaintiff's status during the preceding twelve months. Apparently, the Court relied primarily upon the statement 'persons interested * * * at the time the information is given' taken from Bradstreet Co. v. Gill, supra.

We hold as a matter of law defendant's conditional privilege was shown to exist. 'Such privilege is termed conditional or qualified because a person availing himself of it must use it in a lawful manner and for a lawful purpose. The effect of the privilege is to justify the communication when it is made without actual malice.' Buck v. Savage, 323 S.W.2d 363 (Tex.Civ.App.1959) writ ref'd, N.R.E. Defendant did not release credit information to its subscribers in general as was done in Bradstreet Co. v. Gill, supra, nor did defendant publish the information 'for general use of subscribing traveling salesmen and persons engaged in merchandising' as was done in R. G. Dun & Co. v. Shipp, 60 S.W.2d 502 (Tex.Civ.App.1933) reversed on issue of damages, 127 Tex. 80, 91 S.W.2d 330. Rather, defendant sent the 'Special Notice' of bankruptcy in 'strict confidence' only to subscribers who during the preceding twelve months had requested credit information about plaintiff in particular. Under their contractual 'arrangement' defendant was obligated to send additional information about plaintiff to the fourteen subscribers who had requested information about plaintiff during the preceding twelve months. When the subscribers paid their subscription price their payment entitled them to defendant's one year 'continuing service.' Such an arrangement shows that the subscribers were not only interested in information at the time of their initial request but that they were also interested in subsequent information. Defendant's 'continuing service' could be for such a long period of time as to be unreasonable...