Morgan v. Halberstadt, 62.

• Decision Date: 13 March 1894
• Docket Number: 62.
• Parties: MORGAN v. HALBERSTADT.
• Court: U.S. Court of Appeals — Second Circuit

60 F. 592

MORGAN v. HALBERSTADT.

No. 62.

United States Court of Appeals, Second Circuit.

March 13, 1894

Benjamin F. Einstein, for plaintiff in error.

Robert H. Griffin, for defendant in error.

Before WALLACE and LACOMBE, Circuit Judges.

LACOMBE Circuit Judge.

The complainant sets out four causes of action, based on separate articles, which appeared in the defendant's newspaper on September 5, September 30, October 10, and November 1, 1891 respectively.

The first of these is as follows:

'This is the situation in the Beers' Mutual Admiration Society at Broadway and Leonard street. Everything is done to avoid publicity and to screen the truth. Not one of the twenty men composing the board of trustees, save those two or three who hold executive offices, knew of the Merzbacher defalcation until the Times exposed it. Not one of these men--these alleged guardians of trust funds--knows that Halberstadt, Beers' Mexican agent, is short in his accounts $28,000; and yet this same Halberstadt, while standing in the barroom of the Hoffman House, early last March, surrounded by such men as Merzbacher and Dinkelspiel boasted of the manner in which he was helping himself to the company's funds.'

The second is as follows:

'The policy of the New York Life with reference to its defaulting agents in Spanish America furnishes another explanation of the district with which the company has long been regarded by the policy holders in Rio. The career of John Davis, for instance, is familiar to everybody in the tropics who takes an interest in insurance matters. Davis, it will be remembered, handled a business of $9,000,000 a year in Mexico. He led a fast life, and when he disappeared one day his accounts were found to be short $30,000. No attempt was made to arrest him. The career of the two agents who immediately preceded Davis is equally notorious in the tropics. These agents, or one of them at least, owed his appointment to the defaulter Merzbacher. Their shortage was found to be $60,000. Neither of them was arrested. The case of the intemperate German agent, who was found to be short in his accounts $12,000, in Chile, and who was subsequently transferred to Mexico, is another familiar story. This agent was not only not punished, but he was transferred to another agency. Then came the defaulter Merzbacher, with a shortage of $700,000 standing opposite his name. The news of his defalcation was received in Brazil with astonishment.'

The third is as follows:

'The notoriously bad character of the agents whom Mr Beers employs to do the work of the New York Life Insurance Company is a theme that constantly presents new features and new attractions. Dinkelspiel, Merzbacher, Webber, Stoddart, Moore, Halberstadt, Davis, and Vanuxem are names that stand at the head of the list of Mr. Beers' warm personal friends and admirers, and to each of these men he had given valuable appointments, with unlimited opportunities to swindle and deceive the policy holders. The readers of the Times are entirely familiar with the methods and the extent to which the agents named have availed themselves of those opportunities.'

The fourth is as follows:

'Since the present feeling of distrust of the company's management arose efforts have been made to enlighten a deceived lot of policy holders concerning the abuses of various sorts committed by Messrs. Beers, Merzbacher, Dinkelspiel, Sanchez, and others, but, notwithstanding all that has been said, it is evident to those who, like myself, are acquainted with the management of the Spanish-American department, that there are details of an important nature lacking. It is a fact that the most immoral methods of doing business prevail in that department, and that the arch conspirator who, next to Beers, is responsible for these immoralities, is Sanchez himself. * * * He and his subagents have made use of all sorts of exaggerations and deceits in Spanish America, where the insurance public is completely ignorant of life insurance, and where the most improbable stories as to conditions of policies, and the results that will accrue from them, may be told with perfect safety. * * * S. E. Halberstadt is another one of the company's agents to whom attention must be drawn if the company's affairs in Spanish America are to be thoroughly exposed. This man is said to have been a defaulter while in the employ of the New York Life in Peru and Chile. He has been for some years the company's representative in Mexico, where his accounts have steadily run in arrears, as he himself boasted one night at the Hoffman House, in this city. The entire staff of the Spanish-American department have been witnesses to the scandalous quarrels that took place between Merzbacher and Halberstadt in the former's private office in this city. One of the most remarkable things about this man's career is the freedom with which he talks about the officers of the company, notably President Beers, and his son-in-law, Berthelot. Halberstadt was a candidate for Merzbacher's position, but he has not obtained it yet. Another agent who has stolen the company's money in Spanish America was until very recently manager at Buenos Ayres.'

There was evidence showing that the plaintiff was the person referred to by name, and, in the second article, as 'the intemperate German agent.'

1. Plaintiff in error assigns error in the instructions to the jury, in that the circuit judge charged as follows:

'The articles in the New York Times are charged in the complaint to be each and every one libelous. The explanation (or, as it is called in legal phrase, the innuendo) which is given in the complaint of the meaning of the article represents that the articles were libelous. In my opinion, gentlemen, each article was in fact libelous.'

--To which charge defendant duly excepted.

The very authorities cited by the plaintiff in error abundantly sustain this part of the charge. They hold that the language used must be given its ordinary meaning; that the test is whether, in the mind of an intelligent man, the language naturally imports a criminal or disgraceful charge; that the language is to be understood by the court in the sense in which the world generally would understand it, giving to the words their ordinary meaning; that the language is to be understood in the ordinary and most natural sense; and that when the writing complained of is plain and unambiguous, the question in a civil action, whether it is a libel or not, is a question of law. Hayes v. Ball, 72 N.Y. 420; More v. Bennett, 48 N.Y. 472; Williams v. Godkin, 5 Daly, 499; Weed v. Foster, 11 Barb. 203; Snyder v. Andrews, 6 Barb. 43,--to which list of authorities may be added Rue v. Mitchell, 2...