People's United States Bank v. Goodwin

• Decision Date: 03 May 1910
• Citation: 148 Mo. App. 364,128 S.W. 220
• Parties: PEOPLE'S UNITED STATES BANK v. GOODWIN et al.
• Court: Missouri Court of Appeals

128 S.W. 220

148 Mo. App. 364

PEOPLE'S UNITED STATES BANK v. GOODWIN et al.

St. Louis Court of Appeals. Missouri.

May 3, 1910.

1. LIBEL AND SLANDER (§ 73) — ACTIONS BY CORPORATION — RIGHT OF ACTION.

While, where a publication is a libel on the individual members of a corporation, but not on the corporation, the latter cannot sue therefor, unless it suffers special damage, yet a corporation may maintain an action for damages caused by a libel affecting its pecuniary interests, by reflecting on its solvency, the honesty of its management, or the quality of its products.

2. LIBEL AND SLANDER (§ 73) — LIBEL OF CORPORATION.

A published statement that a fraud order was issued against plaintiff bank by the Postmaster General, for the reason that sales of its stock had been made and deposits induced upon false representations that the funds of the institution were being misapplied, meant that plaintiff's managing officers, acting for the corporation, were applying its funds to illegal purposes, and not that the officers acting as individuals were doing so, and hence was actionable as a libel against the bank.

3. LIBEL AND SLANDER (§ 89) — DAMAGES — SPECIAL DAMAGES — PLEADING.

A libel, which denies the solvency of a corporation or injures its business, is actionable by it, without averment of special damage.

4. LIBEL AND SLANDER (§ 9) — LIBELOUS WORDS — WORDS TENDING TO INJURE BUSINESS.

If defendant stated in writing that the reason why the Postmaster General issued a fraud order against the plaintiff bank was because its funds were being misapplied, when the Postmaster General gave no reason for issuing the order, defendant is liable in an action against it by the bank for libel.

5. LIBEL AND SLANDER (§ 42) — PRIVILEGED COMMUNICATIONS — QUALIFIED PRIVILEGE — DISCHARGE OF PUBLIC DUTY — ACTS OF POSTMASTER GENERAL.

An accurate and impartial account of executive or legislative proceedings is privileged, if made in good faith; and a fair publication of acts of the Postmaster General and the reasons given by him for such acts are privileged, when made without malice as a matter of news or public concern.

Appeal from St. Louis Circuit Court; Geo. H. Williams, Judge.

Action by the People's United States Bank against Russell P. Goodwin and others. From a judgment for defendants, plaintiff appeals. Reversed and remanded.

This appeal was taken from a ruling of the court excluding any evidence on the ground the petition did not state a cause of action. The plaintiff took a nonsuit in consequence of that ruling, and after fruitless motions appealed. The petition is as follows:

"Plaintiff, People's United States Bank, by its attorneys, states that said bank was duly organized in the year 1904 as a banking corporation, under the general laws of the state of Missouri, and especially under article 8 of chapter 12 of the Missouri Revised Statutes of the year 1899, and as such corporation in November, A. D. 1904, was duly granted a certificate by the Secretary of the State of Missouri, to the effect that said bank had complied with the provisions of said corporation laws; and during the said month of 1904 plaintiff began the business of banking as such corporation accordingly, and its franchise and good will as such then became and were of great value, and plaintiff is now a banking corporation under the laws of Missouri.

"Plaintiff further states that said defendants Russell P. Goodwin and Robert M. Fulton, maliciously contriving and designing to injure plaintiff's franchise, good name, fame, and reputation, did, on or about the 19th day of March, A. D. 1907, wickedly, maliciously, knowingly, and intentionally, falsely, wrongfully, and unlawfully compose, write, instigate, dictate, publish, and circulate, of and concerning said plaintiff, and cause to be written, composed, dictated, published, and circulated, of and concerning said plaintiff, a certain false, malicious, scandalous, and defamatory libel of the following tenor, to wit: `The funds of the institution' (meaning thereby of plaintiff) `were being misapplied,' meaning thereby to charge, and in fact charging, that the plaintiff was misapplying, and causing and permitting its funds to be misapplied, on July 6, 1905, as further shown by the context of said libel, which context and its relation to said libel are shown by the following printed language composed, instigated, written, printed, published, and circulated by said defendants, wherein said libel appears, to wit:

"`One of which was the People's United States Bank, against which a fraud order was issued by the Postmaster General on July 6th, 1905, for the reason that sales of its stock had been made and deposits induced upon false representations and promises and that the funds of the institution were being misapplied.'

"That by defendants' said false, malicious, and defamatory libel, charging that the funds of the bank (meaning thereby of plaintiff) were being misapplied, said defendants meant and intended thereby to allege and charge that said bank (the plaintiff) on July 6, 1905, was being improperly and illegally managed, directed, and conducted, in that said funds were being misapplied by said bank to other uses and purposes than those which were lawful and proper under the charter and bylaws of said bank and the laws of this state then regulating and directing the management and action of said bank.

"That by said false and malicious libel plaintiff has been damaged and injured in its good name, fame, and reputation, and will continue in future to be so damaged, in the sum of twenty-two hundred dollars, in actual damages; and inasmuch as the wrong and injury aforesaid was willfully, maliciously, and intentionally done by defendants to plaintiff, the latter is therefore justly entitled to demand and recover, and it does hereby demand, of defendants on that account the further sum of twenty-two hundred dollars as punitive and exemplary damages therefor.

"Wherefore plaintiff prays a verdict and judgment against said defendants for the total damages aforesaid, in the sum of forty-four hundred dollars, and for its costs."

Barclay & Fauntleroy and Carter, Collins & Jones, for appellant. Chester H. Krum, for respondents.

GOODE, J. (after stating the facts as above).

Doubtless what was intended by the fraud order said in the alleged libel to have been issued by the Postmaster General was an order based on the statute of the United States authorizing that official to instruct postmasters to return all registered letters to the postmaster of the office where they were mailed, with the word "Fraudulent" plainly written or stamped on the outside, in cases where such letters arrive directed to a person, firm, bank, corporation, or association of any kind, on evidence satisfactory to the Postmaster General that the person, bank, company, or association is engaged in conducting a lottery or any scheme or device for obtaining money or property of any kind through the mails by means of false or fraudulent pretenses, representations, or promises. 2 Comp. St. U. S. 1901, § 3929. In support of the judgment below it is argued the supposed libelous matter, to wit, "The funds of the institution were being misapplied," was no reflection on the bank itself, but on its officers, and, if actionable at all, was so only on behalf of said officers, not of the bank. Proceeding with this argument, it is said that, if the words meant the bank was being improperly and illegally managed and conducted, as the bank could not conduct itself, the statement did not libel the bank.

In dealing with this question we have looked into every authority we could find, without becoming sure what the law is. A bank or other business corporation may maintain an action for a libel which affects its pecuniary interests by casting an imputation on its solvency, the honesty of its management, or, in the case of a vending or manufacturing corporation, on the quality of its wares or products. Odgers, Libel & Slander, 552; Townshend,...