Grubb v. Johnson

• Decision Date: 23 November 1955
• Citation: 289 P.2d 1067,205 Or. 624
• Parties: Francis W. GRUBB, Respondent, v. George E. JOHNSON and Oscar N. Enger, Appellants.
• Court: Oregon Supreme Court

Page 1067

289 P.2d 1067

205 Or. 624

Francis W. GRUBB, Respondent, v. George E. JOHNSON and Oscar N. Enger, Appellants.

Supreme Court of Oregon, Department 2.

Argued and Submitted Oct. 6, 1955.

Decided Nov. 23, 1955.

Bruce W. Williams, Salem, for appellants. On the brief were Williams & Skopil, Salem.

James O. Goodwin, Oregon City, for respondent. With him on the brief was Glenn R. Jack, Oregon City.

Before WARNER, C. J., and TOOZE, LUSK and BRAND, JJ.

BRAND, Justice

The plaintiff Grubb in an action against the defendants Johnson and Enger received a verdict and judgment for $500 general damages and $1,000 punitive damages for libel. The defendants appeal. The original complaint alleged that the defendants are partners in the operation of an insurance agency under the assumed name of Federal Oregon Agency and that prior to 18 December 1951 the plaintiff was a licensed insurance agent employed by the defendants, and:

'III.

'That on the 18th day of December, 1951, the said defendants filed false charges against the plaintiff causing a revocation of plaintiff's insurance license which was restored upon a hearing on the 28th day of January, 1952.'

It is further alleged that the acts of the defendants were deliberate, malicious and with knowledge that the charges were false and were done for the purpose of damaging plaintiff. It is alleged that the plaintiff was unable to follow the 'avocation' of selling insurance from December 18, 1951 to January 28, 1952. There were further allegations concerning damage to his reputation. The defendants filed an amended answer in which they admitted that they were partners engaged in the management of the insurance agency and denied all other allegations of the complaint. They then affirmatively alleged that on or about the 18th of December 1951 they 'did file with the Insurance Commissioner of the State of Oregon a revocation of solicitor's license as required by law.' They alleged that any revocation of the plaintiff's license was done by the Insurance Commissioner. As a second and separate defense they allege the truth of the supposed false charged claimed by the plaintiff. As a third separate defense they allege that the information set forth by the defendants in the revocation of solicitor's license was filed in accordance with the laws of the State of Oregon and that the defendants were under a duty to supply such information. Finally it is alleged that the defendants did not in any other way publish said words or information. The reply was a general denial.

The first witness for the plaintiff was the Insurance Commissioner for the State of Oregon. He identified a document entitled 'Revocation of Solicitor's License' which was offered and received in evidence. Counsel for defendant stated that he had no objection thereto. The instrument which is plaintiff's Exhibit 1 reads as follows:

'To the Insurance Commissioner of the State of Oregon, Salem, Oregon:

'This is to certify that the person named above as solicitor has ceased to be a solicitor for the undersigned and you are hereby directed to revoke the license heretofore issued to said solicitor to solicit insurance on my behalf. During the course of employment Francis W. Grubb on or about November 17, 1949 until November 30, 1951 withheld and misappropriated to his own use funds in the amount of approximately $3,397.79. This amount has been substantiated by a careful audit of all records by a Certified Public Accountant and is available for inspection at any time. It is my recommendation, based upon these misappropriations that Francis W. Grubb be denied any further license or privilege granted by the Insurance Commissioner of the State of Oregon.'

The instrument is signed by defendant George E. Johnson. Thereupon the plaintiff was permitted by the trial court to amend paragraph III of his complaint, to read as follows:

'III.

'That on December 19, 1951, defendant filed with the Insurance Commissioner of the State of Oregon certain false charges against plaintiff, to-wit: That plaintiff between November 17, 1949, and November 30, 1951, withheld and misappropriated to his own use funds in excess of $3,000.00; and defendants did recommend said Insurance Commissioner, that plaintiff should be denied any further license or privilege granted by said Insurance Commissioner, and said acts of defendants caused a suspension of plaintiff's eligibility to sell insurance in this state from the 18th day of December, 1951, until January 28, 1952.'

The facts above set forth form the basis for defendants' first assignment of error wherein it is asserted.

'That the Court erred in allowing plaintiff to amend his complaint after opening argument of counsel and evidence introduced by plaintiff and the amendment allowed changed plaintiff's cause of action.'

The defendants rely upon O.C.L.A. § 1-1006, now ORS 16.390, which provides that the court in furtherance of justice and upon such terms as may be proper, may at any time before the cause is submitted, allow a pleading to be amended by conforming the pleading to the facts proved 'when the amendment does not substantially change the cause of action * * *.' Defendants contend, first, that the amendment stated a new cause of action in violation of the statute, and under his second assignment of error he argues that since the amended complaint set forth a new cause of action and since the amendment was not made within one year after the cause accrued, the action was barred by the one-year statute of limitations. O.C.L.A. § 1-207, as amended by Laws 1947, Chapter 492, now ORS 12.120. It is apparent that if the amendment was properly allowed the did not state a new cause of action, then the first and second assignments are without merit.

It is obvious that the amendment to the complaint was made to '[conform] the pleading * * * to the facts proved.' The question is whether it substantially changed the cause of action. The defendants' position as set forth in the brief is confusing. They argue that the original complaint did not set forth the necessary allegations for a complaint in libel and allege that the amended complaint 'did state a cause of action for libel.' Yet they also assert that the original complaint was not vulnerable to demurrer. In fact, they did not test it by demurrer. As an apparent afterthought and for the first time in oral argument here, they suggested that the original complaint sounded in malicious prosecution and that therefore the amended complaint worked a substantial change in the cause of action.

We think the original complaint was intended by the plaintiff and was understood by the defendants to be an attempt to plead a cause for libel. It was not in form or substance an action for malicious prosecution. Plaintiff alleged that he was employed by the defendants who were an insurance agency. He was therefore under the statute, Oregon Laws 1947, Chapter 373, page 601, an insurance solicitor, and Exhibit 1, supra, shows that such was the case. Being such a solicitor, the Insurance Commissioner was required to revoke his license upon the written request of the employers. Oregon Laws 1947, Chapter 373, § 3, subd. 3.

The defendants had employed him, and, as appears in Exhibit 1, they directed the Commissioner 'to revoke the license heretofore issued to said solicitor to solicit insurance on my behalf.' (Italics ours.) They did not prosecute the plaintiff--they fired him. The original complaint did not state any cause of action for malicious prosecution. Nor was it a good complaint for libel. The allegation that defendants filed false charges against plaintiff was insufficient as a statement of the libel under any rule of law. The original complaint was at most a defective statement of a cause of action for libel. It would have been vulnerable to a demurrer. The amendment did not state a new cause of action. It corrected a defect in the old one. Ross v. Robinson, 174 Or. 25, 147 P.2d 204; Drake Lumber Co. v. Paget Mortgage Co., 203 Or. 66, 76, 274 P.2d 804; Elliott v. Mosgrove, 162 Or. 507, 91 P.2d 852, 93 P.2d 1070. Cooper v. Armour, C.C., 42 F. 215, 8 L.R.A. 47, does not support defendants' contention. The same must be said of the following cases cited by defendants: Carnahan Mfg. Co. v. Beebe-Bowles Co., 80 Or. 124, 156 P. 584; Foste v. Standard Life & Acc. Ins. Co., 26 Or. 449, 38 P. 617. Assignment of Error III is waived.

The fourth assignment of error reads as follows:

'That the Court erred in not granting the appellant's motion for an order of involuntary nonsuit at the conclusion of the respondent's case in chief for the reason that the defamation claimed was one of absolute privilege to the Insurance Commissioner and that it was incumbent upon the Court under the evidence to make such a finding.'

As preliminary to a consideration of privilege we observe that the complaint as amended adequately charged the plaintiff with the crime of embezzlement. The defendants concede that 'By the amendment allowed after the commencement of trial, the complaint did state a cause of action for libel.' We agree. It set forth the essential portion of the libel in language identical to that used in the letter written by defendants to the commissioner. It was not necessary that the accusation of crime should be in the technical language required in an indictment. Hurd v. Moore, 2 Or. 85; Woolley v. Plaindealer Pub. Co., 47 Or. 619, 84 P. 473, 5 L.R.A.,N.S., 498; Lowe v. Brown, 114 Or. 426, 233 P. 272, 235 P. 395; Peck v. Coos Bay Times Pub. Co., 122 Or. 408, 259 P. 307; Stevens v. Wilber, 136 Or. 599, 300 P. 329; Gatley on Libel and Slander, 4th ed., p. 54.

Rio Grande Valley Gas Co. v. Caskey, Tex.Civ.App., 33 S.W.2d 848, may be an authority as to the insufficiency of the original complaint but not as to that instrument after amendment.

Absolute Privilege

The general rule is well stated in American Jurisprudence, as follows:

'An absolutely privileged...