Montgomery v. Dennison

• Decision Date: 21 November 1949
• Docket Number: 1000
• Parties: MONTGOMERY v. DENNISON et al. Appeal of DENNISON. Appeal of BETTER BUSINESS BUREAU OF PITTSBURGH, Inc.
• Court: Pennsylvania Supreme Court

69 A.2d 520

363 Pa. 255

MONTGOMERY v. DENNISON et al.

Appeal of DENNISON. Appeal of BETTER BUSINESS BUREAU OF PITTSBURGH, Inc.

No. 1000

Supreme Court of Pennsylvania

November 21, 1949

Argued September 29, 1949

Appeals, Nos. 60 and 61, March T., 1949, from judgment of Court of Common Pleas of Allegheny County, Oct. T., 1945, No 1788, in case of John D. Montgomery, also known as John Montgomery v. G. H. Dennison et al. Judgment affirmed.

Trespass. Before ADAMS, J.

Verdict for plaintiff and against both defendants; defendants' motions for judgment n.o.v. and for a new trial refused, and judgment entered on the verdict, as remitted. Defendants respectively, appealed.

The judgment of the court below is affirmed.

J. Roy Dickie , with him Dickie Robinson & McCamey, for appellants.

Zeno Fritz , for appellee.

Before MAXEY, C.J., DREW, LINN, STERN, PATTERSON, STEARNE and JONES, JJ.

OPINION

MR. CHIEF JUSTICE MAXEY

The defendants in an action of trespass for libel appeal from the refusal of the court below to grant a new trial where an adverse judgment was rendered against them jointly and severally in the amount of $100 for compensatory damages and $2,500 for punitive damages which amount was reduced by remittitur from $5,000. Two questions are presented. First, whether the action of the defendants in publishing the letter which constituted the libel amounted to an abuse of an otherwise conditionally privileged communication; and secondly, whether the judgment for punitive damages can be sustained where no express malice was proved?

The plaintiff at the time of the alleged libel and for a long time prior thereto served as Captain of the Guards at the United States Court House in Philadelphia. He had thirty-nine guards working under his supervision. These guards policed the federal building in Philadelphia, and plaintiff as their captain had access at all times to the various federal offices in that building, such as the federal court rooms and judicial offices, as well as the office of the F.B.I. and the Internal Revenue Department. He was a member of the National Association of Post Office Custodial Employees and president of this organization's local branch, and editor of its national official publication, "Post Office Custodian."

G. H. Dennison, the individual defendant, is a director and manager of the corporate defendant, the Better Business Bureau of Pittsburgh, Inc., a Pennsylvania non-profit corporation. Among the Bureau's various corporate purposes are to "promote truthfulness and reliability in advertising and merchandising of all kinds by encouraging methods that are honorable and discouraging those that are fraudulent and deceptive, and to investigate and report of every form of solicitation to which the public may be subjected, i.e., charity, advertising, and financial, and where fraudulent or deceptive individuals or methods are revealed to give publicity thereto and to aid in procuring legal action against them."

Sometime prior to June 7, 1945, Dennison had acquired information from letters and newspaper clippings regarding two men, Harris and Bloom, who were known in many cities as solicitors of advertisements. From this information Dennison concluded that these individuals had been engaged in several fraudulent schemes and were securing advertising contracts through unfair and illegal means. On June 4, 1945, a person who referred to himself as "Mr. Callahan" and as a "former business associate of Harris and Bloom" telephoned Mr. Dennison from Harrisburg, informing him that Harris and Bloom had entered into a contract with the "Post Office Custodian", the official publication of the National Association of Post Office Custodial Employees, for the purpose of soliciting advertising for this journal, and further advising Dennison that plaintiff, editor of the journal, had received $1,000 from Harris and Bloom to sign the contract. The tenor and purport of the information was that Mr. Montgomery had accepted a bribe for the purpose of committing the national official publication to this advertising contract. Relying on this information and without any acquaintance with Montgomery, Dennison wrote a letter to Jesse M. Donaldson, Chief Post Office Inspector at Washington, D.C., now Postmaster General of the United States, in which Dennison referred to Harris and Bloom as "a vicious and persistent combination". This letter contained the following paragraph which constitutes the basis of the present action: "We were informed on June 4 (and have not yet had an opportunity to confirm these statements) by a Mr. Callahan, who represented himself as an employee of Harris and Bloom, that this firm had paid a man named Montgomery 1,000 to sign a contract whereby the promoters were to become the official representatives of the subject Association. Montgomery is connected with the Philadelphia Post Office, presumably as a janitor, and is editor of the subject publication." Copies of this letter were mailed to the General Managers of the Scranton Better Business Bureau and the Philadelphia Better Business Bureau, respectively, the Postmaster at Pittsburgh, the United States Attorneys at Philadelphia and Pittsburgh, and to two officers of the National Association of Post Office Custodial Employees. All copies were typed on the Pittsburgh Better Business Bureau stationery and were signed by Dennison as its General Manager. The original letter is now in the "John D. Montgomery Personnel File" filed in the United States Post Office Department at Washington.

The trial developed the following facts: Montgomery as editor of the Post Office Custodian did on April 30, 1945, enter into a written contract with Harris and Bloom. Under the terms of the contract Harris and Bloom had the exclusive authority to solicit ads for the "Post Office Custodian", had authority to pay from the proceeds certain expenses, and the profits were to be divided equally between Harris and Bloom and the National Association of Post Office Custodial Employees. Plaintiff testified that he received nothing for entering into this contract and that there was nothing fraudulent about the contract. This testimony was undisputed.

As soon as plaintiff learned about the letter he met Chief Post Office Inspector Donaldson at Washington and informed him that the charge was unfounded. This official told Montgomery that it was his duty to protect the government from fraud and that he would have to make an investigation. Montgomery then went to Pittsburgh, consulted a lawyer and had a conference with Dennison. Montgomery demanded that Dennison make a retraction and undo as far as possible the harm that he had done him. Plaintiff claimed that Dennison offered to make a retraction. Dennison denies this, and declared that he wanted to investigate whether or not this plaintiff was acting in good faith. Plaintiff testified that his reputation suffered from the defamatory letters Dennison sent out to about ten people. He also claimed that he paid out $50 for attorney fees, $40 for a trip to Pittsburgh and $8 or $9 for other expenses.

The trial judge correctly told the jury that if Dennison could prove that Montgomery did receive $1,000 for entering into this contract, that would constitute an absolute defense. There was no such proof.

The trial judge further told the jury that the paragraph of the offending letter was capable of a defamatory meaning, and added: "... I submit to you, members of the jury, to determine whether or not the contention of the plaintiff is right, that the meaning of that paragraph is that the plaintiff, Montgomery, did a dishonest act in receiving a thousand dollars in order to enter into a contract."

The trial judge said to the jury: "... before an action of libel is made out, it must appear that the conduct of the defendant is malicious. Malice... may be either express or implied... it is also proper for a jury to find in a case of this type, if the evidence warrants it, that there was malice even though there is no express evidence of it: In other words, the circumstances may be sufficient to warrant the jury coming to the conclusion, that the defendant was motivated by malice." The court thereafter pointed out that there were two circumstances urged by plaintiff as sufficient grounds for the conclusion that the defendant acted maliciously; one was that the defendant did not have reasonable and probable grounds on which to base a belief that what he stated in the letter was true; secondly, that the jury would be justified in concluding that the meaning of the paragraph in question was that Montgomery had done a dishonest act.

As to the defendants' claim of privilege the trial judge charged the jury: "The privilege on which the defendant stands in this case is a conditional privilege.... It is argued here that the Better Business Bureau had certain information with reference to this plaintiff and it was part of their duty to protect the members of this Association of custodians down in Philadelphia, and that the proper way to do that was to notify officers in charge of that Association that some endeavor, which they may have believed, had existed to get money fraudulently from that Association.... if you believe there was reasonable and probable cause to send the letters, then, under those circumstances, this defendant brings himself within a privilege in the law and you should not find a verdict in the case for the plaintiff unless you find that the defendant abused that privilege.

"Now if the defendant establishes his privilege, then there are different ways within the law that a privilege can be abused. The ground on which the plaintiff stands in this case to establish abuse of the privilege is this: it is claimed...