Grand Union Tea Co. v. Lord

Decision Date01 March 1916
Docket Number1373.
Citation231 F. 390
PartiesGRAND UNION TEA CO. v. LORD.
CourtU.S. Court of Appeals — Fourth Circuit

[Copyrighted Material Omitted]

R Randolph Hicks, of Norfolk, Va., for plaintiff in error.

Allan D. Jones and S. O. Bland, both of Newport News, Va., for defendant in error.

Before PRITCHARD, KNAPP, and WOODS, Circuit Judges.

KNAPP Circuit Judge.

The plaintiff in error, defendant below and hereinafter so called, conducts a large number of stores in different parts of the country. The territory in which it operates is divided into divisions, one of which, with headquarters at Washington, included the store at Newport News, Va. The general manager of this division was C. C. Van Allen, who lived in Washington. It was his duty, among other things, to take an inventory at least twice a year of the stores under his supervision, and he had authority to hire and discharge employes. The management of the business in his division, at least in large degree, was subject to his control. From January, 1913, until the 20th or 21st of April, 1914, the plaintiff, Lord, was in charge of the Newport News store. Van Allen visited this store, and took an inventory about the 7th of January, 1914, and found a shortage in the stock, as he asserts, of about $500. He took another inventory on the 11th of February, and discovered a further shortage of upwards of $700, which had accrued since his January visit; but nothing appears to have been done about these shortages, and Lord continued in charge of the store. claims to have found an additional shortage in the stock of 180-odd dollars, and a small shortage in the cash, the amount of which is disputed. This inventory was commenced soon after Van Allen's arrival at the store, and continued throughout the day and evening. It was resumed the next morning, but Lord soon afterwards left the store without explanation, and did not return during that day. In the afternoon some effort was made to locate him, but he was not found. Inquiry was made at his residence, and also at the store of one Moncure, in whose house Lord was living. It seems that Moncure himself had gone to Richmond that day; but he called at defendant's store on his return to inquire if Lord had gone home; and it was for words spoken to him at that time by Van Allen that this suit for slander was brought. At the trial Moncure was a witness for plaintiff and testified as follows concerning the incident:

'I met Mr. Van Allen one afternoon when I came to the store of the Grand Union Tea Company, from Richmond. I stopped by the store, poked my head in, and said-- 'Has Mr. Lord gone up?' Some one told me he was not there, and then Mr. Van Allen got up and said, 'Is not this Mr. Moncure?' and I told him that was my name. He asked me if Mr. Lord lived at my house, and I told him that he did. He said that Mr. Lord had acted in a very peculiar way, and that he went off without saying anything to us, and, about as I can remember, 'His stock is short and his cash'-- he did not say how much-- and I remarked, 'I am very much surprised to hear it,' and went home.'

The words claimed by Moncure to have been spoken of and concerning Lord on this occasion, namely, 'His stock is short and his cash,' are substantially the words set out in the declaration and alleged to be actionable. There was a verdict of $2,000 for the plaintiff, and the case comes here on writ of error.

The defendant contends that a verdict should have been directed in its favor for reasons which will be briefly considered. It is argued, in the first place, that defendant, a corporation, is not liable for the alleged slander because the statement concerning Lord was not made by Van Allen in the scope of his employment or in the performance of his duties, and particularly because it was not authorized by the corporation. We deem it unnecessary to review the numerous cases involving the liability of a corporation for the tortious acts of its agent, because the law is well settled that a corporation is liable for the slanderous words of its agent if the agent at the time is transacting the business of the corporation, and the slanderous words are spoken in the course of such business and in connection therewith. Washington Gas Light Company v. Lansden, 172 U.S. 534, 19 Sup.Ct. 296, 43 L.Ed. 543; Stewart v. Wright, quoting many cases, 147 F. 321, 77 C.C.A. 499; Waters-Pierce Oil Company v. Bridwell, 103 Ark. 345, 147 S.W. 64, Ann. Cas. 1914B, 837; Hypes v. Southern Railway Company, 82 S.C. 315, 64 S.E. 395, 21 L.R.A. (N.S.) 873, 17 Ann.Cas. 620; Fensky v. Maryland Casualty Company, 264 Mo. 154, 174 S.W. 416; Sun Life Assurance Company v. Bailey, 101 Va. 443, 44 S.E. 692. Van Allen was concededly engaged in the business of defendant and acting in its behalf when the words complained of were spoken, and the words themselves had reference to the acts of Lord in the work for which he was employed. Under the decisions quoted, and many others which have been examined, we are clearly of opinion that the defendant should be held responsible for the language of Van Allen on the occasion in question.

In the second place, it is insisted that the action must fail because the words used by Van Allen were shown to be true. It is of course familiar doctrine that proof of the truth of the words spoken is a good defense in an action for slander. But the justification must be as broad and complete as the misconduct charged in the utterance, and we are convinced after careful reading of the testimony, that the justification attempted in this case did not reach that degree of certainty and completeness which would warrant the court in holding, as matter of law, that the language complained of was proven to be true. It is enough to say in support of this conclusion that Van Allen, upon whose testimony alone rests the charge of shortage in the stock, did not have that personal knowledge of the facts, particularly as to the January shortage, which enabled him to testify with certainty that such a shortage existed. When this inventory was taken the papers were sent to New York, the main office of the company, for the extensions to be carried out, and Van Allen had notice from New York, some three or four weeks afterwards, that the inventory 'did not figure up exactly.' He claimed to have himself verified the February inventory, but as this was apparently based on the January figures, its correctness depended upon the unproven accuracy of the previous inventory. Concerning the inventory in progress when the alleged slander was uttered, it is also true, as we understand the record, that Van Allen did not have the personal knowledge necessary to prove the shortage he claimed to have found at that time. It is significant that Lord made no attempt to explain the discrepancy, and there is much ground for belief that the alleged shortage existed; but we think there was lack of sufficient legal proof of the shortage alleged to make out a case of complete justification. Moreover, some circumstances were shown which the jury might properly...

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