McAlister & Co. v. Jenkins

• Citation: 214 Ky. 802,284 S.W. 88
• Parties: MCALISTER & CO. v. JENKINS ET AL.
• Decision Date: 28 May 1926
• Court: Court of Appeals of Kentucky

284 S.W. 88

214 Ky. 802

MCALISTER & CO. v. JENKINS ET AL.

Court of Appeals of Kentucky.

May 28, 1926

Appeal from Circuit Court, Jefferson County, Common Pleas Branch First Division.

Suit for libel, brought by G. H. McAlister, doing business as McAlister & Co., against I. Sidney Jenkins and others. From a judgment sustaining the demurrer to the petition, plaintiff appeals. Affirmed.

Burwell K. Marshall, of Louisville, for appellant.

Allen P. Dodd, of Louisville, for appellees.

TURNER C.

Appellees were the three members of the real estate commission for the city of Louisville, appointed under the provisions of the act of the General Assembly of 1924, being chapter 138, p. 468 of the Acts of that year.

Under the provisions of that act there was filed before the commission composed of the three appellees a complaint against G. H. McAlister (doing business as McAlister & Co.) and two of his salesmen concerning their conduct in two real estate transactions in Louisville. After notice to the persons against whom the complaints were lodged, as required by the provisions of the act, a hearing was had, and the commission, in a finding signed by each of its members, found McAlister not guilty under the terms of the statute, but in each instance found his salesmen guilty of certain improper practices designated in the act, and revoked their licenses. There was, however, appended to this finding, certain other language referring to McAlister which forms the basis of this action for libel.

It is alleged that certain affidavits were filed by named individuals with the real estate commission wherein it was stated that such parties had employed the plaintiff to sell for them certain real estate, and that plaintiff's salesmen had obtained from the complainants a contract wherein plaintiff was authorized to sell such property for a designated period, and that the plaintiff's salesmen had made certain misrepresentations to the complainants and had been guilty of certain improper practices in the conduct of the business mentioned, and that accordingly the defendants caused notices to be given to plaintiff and his salesmen that the commission would hold an investigation of such charges and requiring them to appear and defend. It is alleged that defendant Jenkins knew that certain statements contained in the affidavits so filed before the commission were false, and that he had so informed each of his codefendants, and that therefore each of the members of the commission at the time they heard the complaint knew of the falsity in the affidavits. But, notwithstanding such knowledge upon their part, it is alleged that on the 8th of December, 1924, they formed a conspiracy among themselves to falsely and maliciously report facts about plaintiff which they knew to be untrue for the purpose of injuring him in his good name and business standing that in the finding or report so made by defendants upon the hearing of each of the charges against plaintiff and his salesmen they found or reported that plaintiff had not been proven guilty of any violation of the real estate statute involved, but that each of his salesmen was guilty of certain improper practices designated in the act, and their licenses were each revoked. The plaintiff then alleges that in such finding or report, after finding the plaintiff not guilty of the charges, and after finding each of his said salesmen guilty of certain improper practices prohibited by the act the board and its individual members proceeded further to say of and concerning the plaintiff that:

"While the commission is unable, from the evidence submitted, to find G. H. McAlister guilty of a violation of any of the provisions in clause 8 of the Real Estate License Law, yet it feels that he is morally responsible for the acts of his salesmen in selling real estate, and, while he testified that he did not know of the transactions which took place between the complainants and his salesman E. I. Rawles, yet we consider it was his duty as the head of the firm to know, and he should know, the method employed by his salesmen in selling and listing property through his office."

The same language is used in the finding or report upon the hearing of the other complaint, and the allegation is that such statements were falsely and maliciously made by the defendants, and that, after finding the plaintiff not guilty, and after finding his said salesmen had been guilty of misrepresentation and making a false promise, they falsely and maliciously used the quoted language as to plaintiff, knowing the same to be false and wholly without foundation and contrary to the evidence submitted on the hearings, and that said statements were made solely for the purpose of injuring plaintiff and to carry out the unlawful conspiracy formed by defendants to injure him in his business, that the language used in each of the findings was false and defamatory, and that each of defendants knew that the statements were false and without foundation at the time they were so made, and that defendant Jenkins, for the malicious purpose of doing the plaintiff greater injury, gave out the alleged information contained in the reports to the newspapers for publication.

The court below sustained a demurrer to this petition, upon the ground that it was absolutely privileged, and the correctness of that view is the only question presented on this appeal.

It seems to be conceded on the one hand that, if the matter complained of was absolutely privileged, and pertinent to the inquiry, the demurrer was properly sustained; and it appears to be conceded on the other that, if the matter was only conditionally privileged, in view of the allegation of express malice, the demurrer should have been overruled.

The plain purpose of the act creating the commission was to regulate and supervise the business of real estate agents and their employees in cities of the first and second class; and to that end it creates a commission and confers certain powers upon that body and imposes upon its members the discharge of certain duties with reference to such real estate agents and their employees. It is, as said by appellant's counsel, an administrative body, but the act expressly imposes upon its members the exercise of certain duties which we shall see demand of them the exercise of discretions which make their duties in some respects quasi judicial. After providing that no one shall act as a real estate broker or salesman without first having procured a license so to do, and after defining what a real estate broker and a real estate salesman are within the meaning of the act, it creates the commission of three to be appointed by the...