Long v. Evening News Ass'n

• Citation: 113 Mich. 261,71 N.W. 492
• Parties: LONG v. EVENING NEWS ASS'N.
• Decision Date: 28 May 1897
• Court: Michigan Supreme Court

71 N.W. 492

113 Mich. 261

LONG v. EVENING NEWS ASS'N.

Supreme Court of Michigan

May 28, 1897

Error to circuit court, Wayne county; Fred H. Aldrich, Judge.

Garnishment proceedings by John H. Long against the Evening News Association. Judgment for plaintiff, and defendant brings error. Reversed.

Long C.J., and Grant, J., dissenting.

Elliott G. Stevenson, for appellant.

Levi T Griffin and C. E. Warner, for appellee.

GRANT J.

Plaintiff recovered a judgment in a libel suit against the defendant Tribune Printing Company, December 18, 1894. The case was affirmed in this court December 3, 1895. See 65 N.W. 108. December 9, 1895, execution was issued and returned unsatisfied. January 21, 1896, plaintiff instituted this proceeding in garnishment against the Evening News Association, which filed a disclosure that it had no property, money, or effects in its hands belonging to the Tribune Company. In February and March, 1895, the Tribune Company had sold and conveyed to the News Association all its property and assets. The theory of this suit is that these conveyances were fraudulent as to the creditors of the Tribune Company, and that therefore the News Association held the property in trust for said creditors. Plaintiff recovered verdict and judgment. Such further facts as are essential will be stated in connection with the points discussed.

1. One of the counsel for plaintiff, in his argument, used the following language: "Mr. Scripps supposed he could sit in the Tribune room or the Evening News room and blacken the character of a respectable citizen. You find him sitting in his sanctum, where nobody can see the hand that writes nobody can see the brain that works, and there he scribbles, and writes sensational articles against citizens of his own town, as he wrote the articles on which this judgment was rendered. Now, gentlemen of the jury, Mr. Scripps has set out-First, as the evidence shows, to libel John H. Long; second, to procure able counsel, as he testifies to himself, to defeat John H. Long upon the trial of the case. In that he failed to succeed. And it appears, on a trial by jury and by the highest court in the state, it was adjudicated that James E. Scripps did libel John H. Long, and he ought to pay the amount of judgment for it. Mr. Scripps says, 'I will go before another jury and another judge, and I will get another counsel, and I will yet defeat John H. Long so far as his ability to secure any payment of the debt is concerned.' James E. Scripps, known in this community as a large-moneyed man, now comes into this court to defeat a policeman who worked for two or three dollars a day, and defeat him against a judgment which he had obtained." In view of the fact that Mr. Scripps had nothing to do with the publication of the libelous matter, and that for that reason the court, in the libel suit, directed a verdict in his favor, the impropriety and injustice of the language are apparent. Its natural tendency was to greatly prejudice the jury. Its use cannot be defended upon the ground that Mr. Scripps owned most of the stock of the company, and was the managing director, and that therefore "theoretically it was his hand that wrote" and "his brain that worked."

2. Counsel were permitted to show that plaintiff had demanded a retraction of the article before he brought his libel suit, and that no retraction was made. Counsel seek to defend the admission of this evidence under the liberal rule applicable to cases where fraud is charged, and they insist that in some manner it tended to show a motive for the transfer. We think that this testimony was incompetent and immaterial. The record contains no evidence tending to show that the sales to the News Association were made with any reference to the plaintiff's suit, which was then pending in this court. If plaintiff has a right of action against the defendant, it is because the law attaches a liability from the undisputed facts, and not because of any intent to defraud or to state the proposition; otherwise, the transaction is a fraud in law, but not in intent.

3. James H. Stone, a former publisher of the Tribune, was called as a witness for plaintiff. He testified that, when he was connected with the Tribune Company, it had the franchise of the Western Associated Press, as did also the Free Press; that in January, 1891, when he had sold out the establishment to Mr. Scripps, the circulation of the daily was 12,000 to 13,000, and the weekly somewhat in excess of that; that the sale carried with it the entire property and "good will of the institution"; and that the price, including the liabilities assumed by the purchaser, was $90,000. The price paid was promptly held by the court to be incompetent. On cross-examination the witness testified that, during the 4 1/2 years of his management, the company had lost $37,000, and that "It is difficult to state what the good will of a paper might be worth, suppose the paper had lost eight or nine thousand dollars a year for four years, and then continued to lose for four years more. Conditions surrounding a newspaper affect its value, and franchises might increase or decrease the value, without reference to the actual earning results. A franchise could be transferred subject to the confirmation of the association. I think, if the Tribune Company were hard up, or another newspaper company, my judgment would be that the franchise would be of value for the purpose of sale by the company. Its transfer would be subject to the confirmation of the association to which it belongs. It requires consent." It had already appeared in the case-and is undisputed-that for four years after the sale by Stone, and to the time of the sale to the defendant, the Tribune Company had lost about $100,000. The following questions were then propounded and answered: "Q. And with a paper that has lost money during your experience, as you have stated, and lost during the next four years an amount exceeding a hundred thousand dollars, and was then without resources of its own, what would you say, as a newspaper man, as to the fairness of an arrangement by which its assets and property of all kinds was transferred to the News Association, to furnish the capital and conduct the paper, and return to the stockholders one-half of any profits made? A. I can't judge whether it would be fair and reasonable without a knowledge whether it was the best thing that could be done. If nothing else could be done, and the concern was unable to continue, it might be the wisest course. At the same time it might have been possible to have sold the paper for more than they realized in that way. Q. Do you think it possible to sell a paper that has lost in eight years one hundred and fifty thousand dollars, and is then in debt sixty-five to seventy thousand dollars, with tangible assets of less than one-half that amount? A. I think such things are done at times when the fool killers are asleep. Such things are not very rare." On redirect examination he was asked to give what he regarded as the elements of value in a newspaper, to which he replied: "First, I should regard field and opportunity; second, good will; third, condition of organization of the enterprise. That would include most everything, like its franchise, etc." Under objection and exception the witness was then asked: "Q. You know what the Associated Press is and you have already stated what it is. What, in your judgment, would be the value of a franchise, in the city of Detroit, like the Associated Press or the Western Associated Press,-either of them? A. It might be worth more to you than to me. All those matters come, to a certain extent, under the head of opportunity and the capacity to make use of. I have known times in the last ten years when I should regard the value of the Associated Press franchise in the city of Detroit worth $100,000. (Stricken out on motion. Question read.) Q. Confine your answer to January, 1895. A. I should regard a franchise in the Associated Press as worth all the way from $20,000 to $100,000, according to the circumstances of the business and the opportunity and capacity of the purchaser to use it." We do not think that this opinion of the witness was competent. His opinion was but a mere guess, and furnished an opportunity for the jury to guess. Outside the value of this franchise, there was no evidence to show that the tangible assets of the Tribune Company were worth any more than the price paid for them and credited on the debt due from that company to the News Association.

4. The learned trial judge, after instructing the jury "that if such transfer [of the tangible assets] was a bona fide conveyance of such property for an adequate price to satisfy an actual indebtedness, then such transfer would be valid, even though its effects would be to defeat the other creditors of the said the Tribune Company," instructed them as follows: "If you find that thereafter the Tribune Company possessed no other valuable property interests, rights, and franchises than the good will of its business and contracts with news associations, then the defendant would be entitled to a verdict, because such property would not be subject to levy and sale under a writ of execution, and even if you should believe that it was transferred to the Evening News Association for the purpose of defrauding the creditors of the Tribune Company, yet it is not such property that, when separated from the tangible assets, can be reached in proceedings of this kind. And there is no proof that any profits have accrued to the defendant by the use of such good will and franchises." While the good will of such a business and the franchise of the press association may be the subject of contract between vendor and vendee, it...