J. Hartman & Co. v. Hyman & Lieberman

• Decision Date: 26 June 1926
• Docket Number: 222
• Citation: 134 A. 486,287 Pa. 78
• Parties: Hartman v. Hyman & Lieberman, Appellants
• Court: Pennsylvania Supreme Court

134 A. 486

287 Pa. 78

Hartman v. Hyman & Lieberman, Appellants

No. 222

Supreme Court of Pennsylvania

June 26, 1926

Argued May 12, 1926

Appeal, No. 222, Jan. T., 1926, by defendants, from judgment of Superior Ct., Oct. T., 1925, No. 220, affirming judgment of C.P. No. 2, Phila. Co., Sept. T., 1923, No. 343, in case of J. Hartman Co., Inc., v. Charles Hyman and Harry Lieberman, trading as Hyman & Lieberman. Affirmed.

Appeal from Superior Court.

The opinion of the Supreme Court states the facts.

Error assigned was judgment of Superior Court, quoting it.

Judgment affirmed.

Ruby R Vale, with him Robert B. Greer and Herman N. Schwartz, for appellants. -- The exact question involved in the case has been decided by the Supreme Court of Pennsylvania in a case involving the same association as the instant case and under similar facts, and this precedent has been followed by the Court of Common Pleas, No. 3, of Philadelphia County in a case also involving the same association, under similar facts, and has been subsequently approved by the Supreme Court and by Pennsylvania text-book writers: McIntyre v. Weinert, 195 Pa. 52; Zolyan v. Clayberger, C.P. No. 3, Phila. Co., June T., 1917, No. 3136, not reported; McDonald v. Lee, 246 Pa. 253; 3 T. & H. Pr., p. 2253, by Dr. Bolles and Judge KIRKPATRICK.

The conclusion reached by the court below is contrary to all the cases in other jurisdictions.

A harmful, incidental effect or result in the lawful performance of a legal act does not constitute a tortious wrong: Scott v. Pittsburgh, 266 Pa. 52.

Robert F. Jackson, with him Harold B. Beitler, for appellee. -- Defendants were guilty of publishing words actionable per se: Wood v. Boyle, 177 Pa. 620; Hayes v. Press Co., Ltd., 127 Pa. 642; the communication was not qualifiedly privileged. Weston v. Barnicone, 175 Mass. 454; Elkington v. London Ass'n., 28 Times L. Rep. 117; Taylor v. Church, 8 N.Y. 452.

Before MOSCHZISKER, C.J., FRAZER, WALLING, SIMPSON, KEPHART, SADLER and SCHAFFER, JJ.

OPINION

MR. JUSTICE SIMPSON:

In its petition for an appeal to this court, defendants' counsel strenuously contended that, if our opinion in McIntyre v. Weinert, 195 Pa. 52, had been followed by the Superior Court, it would have entered a judgment non obstante veredicto in his clients' favor, instead of affirming the judgment for plaintiff; and that a failure to follow it "results in two divergent lines of authority in Pennsylvania with . . . the consequent necessity for balancing a recent decision of the Superior Court against the law as announced" by us in that case. It was only because earnest, able and conscientious counsel so asserted, that we allowed the appeal. Recognizing this, in the opening sentence of his printed argument he passes over all minor matters occurring at the trial, and limits himself to the question of "the nature of the communication." To this, and the effect of the evidence bearing on it, we shall accordingly limit this opinion.

The action is for slander of trade. The relevant facts, which are not disputed, will be quoted from the opinion of the Superior Court, Hartman v. Hyman, 87 Pa.Super. 358: "Defendants and other wholesale produce dealers are members of the Philadelphia Produce Credit and Collection Bureau . . . Defendants had among their customers the plaintiff company [J. Hartman Co., Inc.], which carries on a retail produce business in the Reading Terminal Market in Philadelphia, and also another customer by the name of Hartman, whose place of business was in Trenton, New Jersey. The latter was indebted to defendants in the sum of $216.25. On Wednesday, July 25, 1923, defendants telephoned to the bureau . . . [and,] later in the day, defendants sent to the secretary of the bureau written notice that 'J. Hartman -- Terminal Market' was delinquent in its account with them in the sum of $216.25, although in fact plaintiff was not indebted to defendants. On the same evening there was delivered to each member of the bureau, by messenger, notice of the report received from defendants about plaintiff, with the result that when the president of plaintiff company went the next day to make his customary purchases, he was informed by members of the bureau, from whom he desired to purchase produce, that his name was on the 'black list' and that he could not purchase any goods on credit. Not being prepared to buy for cash he was unable to obtain any produce that morning and could not supply his customers that day."

At this time, the bureau had 137 members. One of its charter purposes was "to furnish information to members to enable them to regulate credits and collect debts." Its by-laws provided that all sales by members "shall be due and payable on the Saturday next succeeding such sales"; that if the account is not "paid on or before 12 o'clock noon of the succeeding Wednesday, the person or firm owing such account shall be reported by 2 p.m. of the same Wednesday to the Secretary" as a delinquent debtor; that a "failure to report overdue accounts by 2 p.m. as above provided shall subject the members so failing to a fine"; that the secretary, upon receipt of such notice, "shall tabulate the names of such debtors, and cause to be furnished a sufficient number of such lists of debtors to supply each member of the bureau with a copy thereof"; that, upon receipt of such a list, every member must "refuse to sell on credit to any person or firm reported as a debtor, or any branch house thereof, until duly notified by the secretary of the payment by him or them of the accounts due the several members of the bureau"; that "the payment of an account due any member of the bureau, shall not entitle the member to sell goods on credit to said debtor, until the member has reported the account 'Paid' and has received from the secretary notice that said debtor has been removed from the debtor list"; and that if a member does not comply therewith he shall be "subject to a fine of $5 for each offense, or upon repetition to expulsion at the discretion of the credit committee."

It will be noticed that those provisions are as inelastic as it is possible to make them. Though a member and his customer have had satisfactory dealings for many years, any delay in payment, however trivial and whatever the cause, must result in placing him on a delinquent debtor's list, all the members must be advised of the fact at once, all of them must refuse him any credit, no matter what their own knowledge may be as to his standing, and the other members are required so to do without themselves making any inquiries on the subject. They must take the secretary's notice, based solely on the information he receives from their fellow-member, as absolute verity, and must refuse all credit even though every member of the bureau knows that the delay in payment resulted from an injury to or sickness of the customer, from death in his family, from a robbery which took all his ready funds, or from the exercise of that neighborly charity which we are enjoined to bestow upon others in sickness or distress. None of these things can avail as against this rigid plan, devised and carried on to enable the members "to collect debts" due to them. If the bureau, as the promulgator of the slander, were the defendant in this action, we might be required to consider whether or not its agreeing to, and actually disseminating it, without making any inquiry of the one who might be greatly injured thereby, would not be sufficient to leave the question of its liability to a jury.

The bureau is not the defendant, however. The present defendants are the authors of the slander, and there is nothing in the by-laws, drastic and rigid as they are, which would have prevented defendants from making inquiries of plaintiff before they initiated the slander. A telephone call would have elicited the truth and avoided the damage done; but they made no attempt to communicate with plaintiff. An inspection of their own books would likewise have disclosed the falsity of the notice they were about to send to the bureau; but they made no such examination. Apparently they were careless of the harm they might inflict, their one thought being to put in motion...