Pavlovsky v. Board of Trade of San Francisco

• Decision Date: 04 June 1959
• Citation: 171 Cal.App.2d 110,340 P.2d 63
• Court: California Court of Appeals Court of Appeals
• Parties: George PAVLOVSKY, etc., Plaintiff and Appellant, v. BOARD OF TRADE OF SAN FRANCISCO, an unincorporated association, Defendant and Respondent. Civ. 18310.

Page 63

340 P.2d 63

171 Cal.App.2d 110

George PAVLOVSKY, etc., Plaintiff and Appellant, v. BOARD OF TRADE OF SAN FRANCISCO, an unincorporated association, Defendant and Respondent.

Civ. 18310.

District Court of Appeal, First District, Division 2, California.

June 4, 1959.

Hearing Denied July 29, 1959.

Maxwell Keith, San Francisco, for appellant.

Alexander, Bacon & Mundhenk, Herbert Chamberlin, James M. Conners, San Francisco, for respondent.

DRAPER, Justice.

Demurrer to plaintiff's complaint was sustained with leave to amend. Plaintiff elected to stand upon the complaint. He appeals from judgment of dismissal thereafter entered.

While the complaint is in three counts, it is apparent that they represent but three statements of a claim based upon a single alleged wrongful act of defendant. All three counts allege that: Plaintiff is a retailer who for 20 years has 'maintained a good reputation and credit standing.' Defendant Board of Trade is an unincorporated association composed of some 350 wholesalers, manufacturers and jobbers. 'Its purpose is to provide for joint action by all of its members in dealing with financially embarrassed or insolvent debtors.' Its constitution and by-laws obligate all members to 'take joint action with respect to debtor parties whose names have been submitted to the (board) by a member.' Customarily, members 'cease to deal, on a credit basis, with parties named to the (board), and who appear on said Board's lists of reported debtors.' The three counts vary in their allegations of the action of the board as to plaintiff, but all allege in substance that he was so listed by the board, that extension of credit to him was curtailed or terminated, and that he suffered business losses and became ill as a result thereof.

The first count clearly sounds in libel. It alleges that defendant board 'published the name of plaintiff as a debtor party,' that this led the members of the board to believe plaintiff to be 'financially embarrassed or insolvent,' when in fact he was not so, and that this 'publication was false and defamatory.' Conceding that this allegation meets the other requirements of the code definition of libel (Civ.Code, § 45), the issue before us is whether it is unprivileged. Defendant argues that the publication is privileged within the meaning of Civil Code Section 47, subdivision 3, as a communication without malice to persons interested therein by one who is also interested.

Ordinarily, privilege must be pleaded as an affirmative defense. Taylor v. Lewis, 132 Cal.App. 381, 22 P.2d 569. But where the existence of the privilege is shown on the face of the complaint, it may be raised by general demurrer. Locke v. Mitchell, 7 Cal.2d 599, 602, 61 P.2d 922. Here the complaint alleges that the purpose of the board is 'to provide for joint action by all of its members' as to debtors, and that it is required to 'actively engage in causing joint action * * * of all of its members in dealing with debtor parties complained of by any member * * * to said Board.' It is implicit in these allegations of the purpose and rules of the board that the members, in joining it, requested it to inform them all of credit complaints made by any member, and that all were interested therein. It follows, under the rationale of the decisions, that the communication from board to members, if made without malice, was within the privilege defined in Section 47(3). Locke v. Mitchell, supra; Emde v. San Joaquin County Central Labor Council, 23 Cal.2d 146, 161, 143 P.2d 20, 150 A.L.R. 916; Maher v. Devlin, 203 Cal. 270, 263 P. 812; Freeman v. Mills, 97 Cal.App.2d 161, 217 P.2d 687; Glenn v. Gibson, 75 Cal.App.2d 649, 171 P.2d 118; Morcom v. San Francisco Shopping News, 4 Cal.App.2d 284, 40 P.2d 940.

Plaintiff cites authority (36 Am.Jur. 182, Mercantile Agencies, § 9; 30 A.L.R.2d 776) for the contention that credit reports by mercantile agencies are not privileged. No California authority is cited, and the texts cited by plaintiff affirmatively show that the weight of authority elsewhere does extend the privilege to such agencies. Moreover, plaintiff's authorities show that a 'mercantile agency' is one which collects and distributes credit information for profit. His own allegations establish that defendant board is not of this type. Thus even the minority view does not aid him here.

The privilege here invoked is not absolute. It exists only in the absence of malice. When the privilege appears from the face of the complaint, that pleading must allege malice in fact in order to state a cause of action. Locke v. Mitchell, supra, 7 Cal.2d 599, 602-603, 61 P.2d 922; Washer v. Bank of America, 21 Cal.2d 822, 831, 136 P.2d 297, 155 A.L.R. 1338. Mere falsity is not enough to show actual malice. Emde v. San Joaquin County Central Labor Council, supra, 23 Cal.2d 146, 161, 143 P.2d 20, 150 A.L.R. 916. The compliant here lacks...