Johnson v. Life Ins. Co. of Ga.

• Decision Date: 15 June 1955
• Docket Number: No. 17019,17019
• Citation: 227 S.C. 351,55 A.L.R.2d 813,88 S.E.2d 260
• Court: South Carolina Supreme Court
• Parties: , 55 A.L.R.2d 813 Johnnie JOHNSON, Appellant, v. LIFE INSURANCE COMPANY OF GEORGIA and H. P. Stewart, Respondents.

Page 260

88 S.E.2d 260

227 S.C. 351, 55 A.L.R.2d 813

Johnnie JOHNSON, Appellant, v. LIFE INSURANCE COMPANY OF GEORGIA and H. P. Stewart, Respondents.

No. 17019.

Supreme Court of South Carolina.

June 15, 1955.

James P. Mozingo, III, Darlington, for appellant.

McEachin, Townsend & Zeigler, Florence, Robert L. Kilgo, Darlington, for respondents.

LEGGE, Justice.

Appellant sued in the court of common pleas for Darlington County to recover damages, actual and punitive, because of slander alleged to have been committed by the defendant Stewart in the course and scope of his employment as agent of the defendant Life Insurance Company of Georgia. At the close of all testimony the motion of the corporate defendant for direction of a verdict in its favor was refused. The jury rendered a verdict against both defendants for $25,800 actual and $10,000 punitive damages. The defendants then separately moved for judgment notwithstanding the verdict or, alternatively, for a new trial. Thereafter Judge Henderson issued his order granting the corporate defendant's motion for judgment and granting a new trial as to the defendant Stewart unless the plaintiff remit $5,800 of the verdict for actual damages and all of the verdict for punitive damages. That order, from which this appeal is taken, rests, as to the corporate defendant, upon the finding by the learned circuit judge that there was no evidence from which the jury could reasonably have concluded that Stewart, in making the slanderous statement attributed to him, was acting within the scope of his employment. In this aspect of the appeal, therefore, we shall consider the testimony and all reasonable inferences to be drawn therefrom in the light most favorable to the plaintiff's case. Thompson v. Rutland, 225 S.C. 485, 83 S.E.2d 163; Fagan v. Timmons, 215 S.C. 116, 54 S.E.2d 536.

The plaintiff, in addition to policies with other companies, had two policies with the defendant, one providing for payment of $1,000 in the event of death and also for the payment of $500 for the loss by severance of one foot at or above the ankle joint, and the other being a 20-payment life policy in the amount of $50,000, with provision for waiver of premiums in the event of total disability. On March 28, 1950, both of these policies being then in force, plaintiff suffered the accidental loss of his left leg. The defendant company, after having made investigation, made settlement with the plaintiff under the first mentioned policy on December 20, 1951, paying to him the dismembership benefit $500, and marking the policy as paid up. On January 14, 1952, the date of the alleged slander, the matter of waiver of premiums on the $50,000 policy was in controversy with respect to the furnishing of the required proofs.

The defendant Stewart was an agent of Life Insurance Company of Georgia in its industrial insurance business, with authority to collect premiums and to solicit insurance. During his period of employment with the company, about seven years, he worked the same 'debit', which covered portions of Darlington, Kershaw and Chesterfield counties. On this 'debit' lived Mr. and Mrs. James Easterling, who operated a grocery store and filling station some five miles north of Hartsville, in Darlington County, and about three miles from the residence of the plaintiff, whom they had known for some twenty years, and who occasionally stopped at their store to make small purchases. The Easterlings, who carried two industrial policies with the defendant company, testified that on January 14, 1952, Stewart came to their store and in the course of collecting the premiums on their policies asked Mrs. Easterling if she and her husband were ready to increase their insurance. She replied: 'No, the ones we have may not be no good. Why haven't they paid off Johnnie Johnson's claim?' Stewart then said: 'Because he shot his leg off on purpose. He shot his leg off on purpose to collect this insurance company's money. He had stolen the insurance money from the other companies, but he wasn't going to steal it from this company.'

Stewart had had nothing to do with either of the two policies which the plaintiff, Johnnie Johnson, had with the defendant company. Johnson was not on Stewart's debit nor had Stewart ever worked that debit for any other agent. At the time of the alleged slander Stewart and Johnson did not know each other. Stewart had had nothing to do with the investigation of Johnson's claim by the company, or with the payment of the claim. His testimony that at the time of the alleged slander he knew nothing about Johnson's claim against the company, is uncontradicted. It is undisputed that the claim had been paid more than three weeks prior to the date of the alleged slander.

In numerous decisions of this court, extending over nearly half a century, the principle has been affirmed that in order to hold a corporation liable for a slander uttered by its agent it must appear that the latter was at the time acting within the scope of his employment and in the actual performance of the duties of the corporation touching the matter in question.

In Hypes v. Southern R. Co., 82 S.C. 315, 64 S.E. 395, 396, 21 L.R.A.,N.S., 873, it appeared from the complaint that the plaintiff, a locomotive engineer of the railway company, had turned in a time report showing the number of hours he had worked during the previous month; that his claim had been disallowed to the extent of $37; and that later, in an interview with the division superintendent for the purpose of adjusting the claim, the division superintendent had said in the presence of several people, "I am going to stop you fellows from stealing from the company'.' and had called the plaintiff a 'thief'. The judgment of the lower court, overruling the demurrer to the complaint, was affirmed, the court saying: 'In the case at bar the complaint shows a contract relation between the corporation and the person slandered, and that the slander was in reference to a matter growing out of such relation, a dispute as to the correctness of plaintiff's claim for wages, a matter within the duty of the agent to adjust'. (Emphasis ours.)

And so in Nunnamaker v. Smith's, 96 S.C. 294, 80 S.E. 465, demurrer to the complaint was held to have been properly overruled where one who was the president, treasurer and general manager of the corporate defendant, and in charge of its store, was alleged to have slandered the plaintiff, a clerk by accusing her of short-age in her sales-receipts cash.

Similarly, in Lee v. McCory Stores Corp., 117 S.C. 236, 109 S.E. 111, we held that the general manager of a chain store, in sole charge of its local business, was acting within the scope of his authority in charging an employee with theft.

So also in Jenkins v. Southern R. Co., 130 S.C. 180, 125 S.E. 912, the corporate defendant was held liable for a slanderous statement concerning a shipper made by its station agent whose duty it was to handle such shipments and safeguard the interests of the railroad concerning them.

And in Mann v. Life & Casualty Ins. Co. of Tennessee, 132 S.C. 193, 129 S.E. 79, where, in the course of an address before a meeting of the company's agents, Smith, the district superintendent, made a slanderous statement concerning a former agent who had left the company's employ, but whose account with the company was in process of being adjusted by Smith, the court's adherence to the same principle is shown by the following excerpt from the opinion:

'Smith was at the meeting called by him in the actual discharge of his duty to the company. He was speaking of the agents' duty to the company, urging them to collect the balances due the company on the various debits, charging them with honesty and loyalty to the company. Smith's testimony shows that his address to the agents was in the discharge of his duty to the company. The testimony shows that Smith was adjusting the accounts of debits between the company or Hollingsworth and Mann. Mann had left the employment of the company at the time the alleged slanderous remarks were made, but he had not had a final settlement with the company. There was evidence to submit it to the jury for their determination whether Smith's remarks were made about Mann and there was some evidence of ratification to go to the jury. Smith is still in the employment of the company. * * * A master is liable for the slander uttered by his servant if at the time of uttering the slander the servant was engaged in the discharge of his duties intrusted to him in reference to the particular matter in hand and acting within the scope of his employment'.

In the Mann case the plaintiff obtained a verdict against both the insurance company and Smith, and the trial judge set it aside and ordered a new trial as to the insurance company, refusing to disturb it as to Smith. From this order the plaintiff appealed, contending, inter alia, 'that the judge erred in construing the law to be that there was no liability on the part of the defendant, the insurance company, because its employee, Smith, had been entrusted with no duty in regard to Mann, who had left the company's employ before Smith came to Columbia, unless the company ratified Smith's acts, and that there was no evidence that the company had knowledge of the incident or had ratified the same'. On appeal, this court, speaking through Mr. Justice, later Chief Justice, Watts, was unanimous in reversing the trial judge's order granting a new trial to the insurance company; and the language of the opinion as quoted above leaves me in no doubt as to its reasoning.

On petition by the insurance company for rehearing, a majority of the court concurred with Mr. Justice Cothran in holding that the statement in the original opinion, to the effect that retention of Smith in the company's employ was evidence of ratification, should be stricken out as inapplicable under the facts of the case and...