Peterson v. Cleaver

• Decision Date: 23 December 1920
• Docket Number: 21090
• Citation: 181 N.W. 187,105 Neb. 438
• Parties: MAMIE PETERSON, APPELLEE, v. MAYME HEDRICK CLEAVER ET AL., APPELLANTS
• Court: Nebraska Supreme Court

181 N.W. 187

105 Neb. 438

MAMIE PETERSON, APPELLEE, v. MAYME HEDRICK CLEAVER ET AL., APPELLANTS

No. 21090

Supreme Court of Nebraska

December 23, 1920

APPEAL from the district court for Douglas county: LEE S. ESTELLE JUDGE. Affirmed.

AFFIRMED.

Matthew Gering, William J. Hotz and Stiner & Boslaugh, for appellants.

Anson H. Bigelow and Weaver & Giller, contra.

DAY, J ROSE, J., not sitting.

OPINION

DAY, J.

The plaintiff recovered a judgment in the district court for Douglas county for $ 1,500 against the defendants in an action for libel. Defendants have appealed.

The defendant, the Degree of Honor of the state of Nebraska, is a fraternal organization doing a fraternal insurance business, having also social features, and composed of a grand lodge with subordinate lodges. It is a corporation organized under the special provisions of our statute relating to fraternal benefit societies.

At the time in question the defendant, Mayme Hedrick Cleaver, held the post of Grand Chief of Honor, which was the chief executive office of the society. The Degree of Honor owned and controlled a paper known as the Degree of Honor Journal, which was the official organ of the society, in which were published communications from the officers to the members, as well as news items of special interest to the membership. This paper circulated only among the members and a few of its advertisers.

Among the subordinate lodges of the association was Washington Lodge No. 27, located at Omaha, in which the plaintiff held the position of financier. As such officer it was the duty of the plaintiff to collect dues and assessments from the several members of lodge No. 27, and turn the money so collected over to the treasurer of such lodge, for which service she was paid four cents per capita.

As the outgrowth of some difficulties in the affairs of lodge No. 27, reference to which will be hereinafter made, Mrs. Cleaver, as Grand Chief of Honor, prepared and had published in the Degree of Honor Journal the article which forms the basis of this action. The communication is quite lengthy, and we set out only that portion of which complaint is made, omitting innuendoes: "The financial affairs of the order were placed in the hands of John M. Gilchrist, certified public accountant, who found the treasurer's books $ 1,266 short, and the financier's not only short, but in such condition that more than 140 members were suspended during the time between December 28th and March 7th, who did not know of nor suspect their suspension. The former treasurer of the lodge has assisted in every way possible to straighten out the affairs of the order, and has promised to make good her shortage, but the former financier has not only refused to assist in straightening out her books, but has persisted in communicating with and collecting assessments and dues from the members, and has also tacitly refused to make good her shortage. I have issued three official letters. In my last I explained that from and after May 13th any member who paid assessments to any one excepting those whom I had designated would be suspended individually. According to the expert accountant's report, Washington Lodge No. 27, suspended, was paying a salary to the financier computed on a basis of 739 members, while in fact they actually had only 569 members. If the plaintiffs in this case had met with the overtures of the grand lodge officers this might all have been amicably settled by April 1st, and it is earnestly to be hoped that better judgment will prevail very soon."

The petition avers that the article charges that plaintiff was short in her accounts as financier of her lodge, and also that she was receiving a salary based upon a per capita membership of 739, while in fact the lodge had but 569 members. The petition also contained the usual averments in actions for libel.

The answers of the defendants admitted the preparation and publication of the article in the Degree of Honor Journal, the official organ of the order, and by way of defense pleaded that it was a privileged communication, and made without malice or ill will, and made only for the purpose of informing all of the members of the conditions existing in the order. The answers also pleaded that the article was true and published with good motives and for justifiable ends. The reply denied the affirmative allegations of the answers.

In this state of the record the trial court, correctly we think, ruled that the article was libelous per se, and permitted evidence to be introduced as to the damages the plaintiff had sustained. There being no dispute in the testimony as to the occasion of the publication, the court ruled that it was qualifiedly privileged, and that the qualified privilege was a complete defense unless the plaintiff established by a preponderance of the testimony that the publication was made with express malice.

We think the theory upon which the case was tried was the proper one, in harmony with the evidence and supported by the law.

In the brief for defendants it is urged that the publication was privileged, and hence a complete defense. The word "privileged," as applied to libel, is a general term. For the sake of clearness of application it is often divided into two classes, viz., absolute privilege and conditional or qualified privilege. Townsend, in his work on Slander and Libel (4th ed.) sec. 209, says:

"By an absolutely privileged publication is not to be understood a publication for which the publisher is in no wise responsible, but it means a publication in respect of which, by reason of the occasion upon which it is made, no remedy can be had in a civil action for slander or libel. A conditionally privileged publication is a publication made on an occasion which furnishes a prima facie legal excuse for the making of it; and which is privileged, unless some additional fact is shown which so alters the character of the occasion as to prevent it furnishing a legal excuse. The additional fact which, in the majority of cases, is required to be shown to destroy this conditional privilege is malice, meaning bad intent in the publisher, i. e., an intent to injure the person whom or whose affairs the language concerns."

Newell, Slander and Libel (3d ed.) sec. 496, states the rule as follows: "A communication made in good faith upon any subject-matter in which the party communicating has interest or in reference to which he has a duty, either legal, moral, or social, if made to a person having a corresponding interest or duty, is qualifiedly privileged, and the burden of proving the existence of malice is cast upon the person claiming to have been defamed." Wise v. Brotherhood, L. F. & E., 252 F. 961; Finley v. Steele, 159 Mo. 299, 60 S.W. 108. Tested by this rule, it is clear that the defendants would be protected in making the publication, provided that in so doing they did not act maliciously.

But it is urged on behalf of defendant the Degree of Honor that an action for libel will not lie against it at the instance of one of its members. It is pointed out that it is a corporation organized under special provisions of our statute authorizing fraternal societies to be created without capital stock, and privileged to insure its members, and to conduct its business for the sole benefit of the members. It is argued that such organizations can hardly be classed as corporations or copartnerships. We are not willing to assent to this proposition.

Notwithstanding the fact that it is organized under special provisions of the statute, without capital stock, it is none the less a corporation, having a distinct entity, apart from its members. It is an artificial person created by statute, in which capacity it may sue and be sued. The mere fact that it does not make dividends for its members, or that there may not be funds out of which a judgment could be paid, does not, in our judgment, exempt it from being sued. A libel is a wrongful act, a tort, and there seems to be no good reason why a corporation of this character should not respond in an action for libel brought by one of its members, the same as in any other tort.

The cases cited by counsel for either side are hardly to the point now being considered. Neither has our considerable research been rewarded in finding one. In Gilbert v Crystal Fountain Lodge, 80 Ga. 284, 4 S.E. 905, it was held that a...