England v. Automatic Canteen Co. of America

• Decision Date: 20 July 1965
• Docket Number: No. 16011.,16011.
• Citation: 349 F.2d 989
• Parties: Thomas E. ENGLAND, Plaintiff-Appellant, v. AUTOMATIC CANTEEN COMPANY OF AMERICA, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

349 F.2d 989 (1965)

Thomas E. ENGLAND, Plaintiff-Appellant, v. AUTOMATIC CANTEEN COMPANY OF AMERICA, Defendant-Appellee.

No. 16011.

United States Court of Appeals Sixth Circuit.

July 20, 1965.

Lyman Brownfield, Columbus, Ohio, Brownfield, Kosydar, Folk, Yearling & Dilenschneider, Columbus, Ohio, on brief, for appellant.

Earl F. Morris, Columbus, Ohio, Wright, Harlor, Morris, Arnold & Glander, by Rudolph Janta, Jr., Jon M. Anderson, Columbus, Ohio, Friedlund, Levin & Friedlund, by Arthur M. Solomon, Chicago, Ill., on brief, for appellee.

Before PHILLIPS, Circuit Judge, MACHROWICZ, District Judge, and McALLISTER, Senior Circuit Judge.

McALLISTER, Senior Circuit Judge.

Thomas E. England brought an action in the District Court in Ohio, claiming damages from the Automatic Canteen Company of America for libel, arising out of a statement made by the Company in an annual report to stockholders. It was stipulated between the parties that whether the statement in question was libelous was the "initial determinative issue for determination in this case and could be disposed of primarily to other issues." The district court found that the statement in question was not libelous and entered an order dismissing the action, from which Mr. England appeals.

The claimed libelous statement was contained in a lengthy annual report rendered by the Automatic Canteen Company of America to its stockholders, in which were described developments in the affairs of the Company since the preceding annual report, income and revenues during the period covered, the financial position of the Company, a trend in the industry, equipment of the appellee, and other general information about the affairs of the Company.

In the Spring of 1950, the appellee company published its annual report of which no complaint is here made by appellant. The report stated: "The Company is also defendant in a suit brought in the Federal Court in Ohio by one of the Company's distributors charging the Company with violations of the Federal Antitrust Laws and other alleged illegal practices."

The foregoing was true. Appellant had sued appellee company in March 1949 under the antitrust laws. He had been in the business of jobbing and selling packaged food items, such as candy bars, cigarettes and the like, through vending machines leased from appellee company. The Company owned and leased such vending machines to appellant, and sold merchandise for the machines which it leased.

Later on, in the Fall of 1950, appellee vending company sued appellant, asking among other relief the appointment of a receiver of the assets of the distributor. A hearing was held upon the application for a receiver, and by agreement of the parties, a receiver was appointed for the assets of appellee Automatic Canteen Company of America, which were in appellant's possession as distributor, under a lease from appellee, and certain accounts which appellant had established with third parties, such as service stations, whereby appellant had obtained the right to place vending machines, known as canteens, on location, to serve the public.

The alleged libelous statement in this case appeared in appellee's report to stockholders for the year ended September 30, 1950, in which it was stated: "As previously reported, a distributor and the Company are involved in litigation in Chio. In these proceedings the Court has appointed a receiver for the assets of the distributor. In the opinion of the management no loss to the Company will result from this litigation."

The Company had appointed appellant as a distributor in Ohio. How many similar distributors the Company had in Ohio does not appear. In appellant's possession, as distributor, he had assets, including vending machines, or canteens, of the Company. The receiver was appointed for these assets, which were in appellant's hands by virtue of his being distributor.

The report of the Company to its stockholders, that in the...