Pollasky v. Minchener

• Decision Date: 13 June 1890
• Citation: 46 N.W. 5,81 Mich. 280
• Court: Michigan Supreme Court
• Parties: POLLASKY et al. v. MINCHENER.

46 N.W. 5

81 Mich. 280

POLLASKY et al. v. MINCHENER.

Supreme Court of Michigan

June 13, 1890

Error to circuit court, Wayne county; GEORGE GARTNER, Judge.

Henry M. Duffield, for appellants.

Dickinson, Thurber & Hosmer, for appellee.

CHAMPLIN, C.J.

The plaintiffs sued Minchener and Robert G. Dun to recover damages for a libel published by the R. G. Dun Co. Mercantile Agency, of which Minchener was the general manager of a district in Michigan, of and concerning the plaintiffs. Max E. Pollasky and Frank E. Pollasky composed the firm of Pollasky Bros., carrying on mercantile business at the village of Alma, Gratiot county, Mich. They had been engaged in business at that place since 1882. They were in good credit, and had never filed or placed a chattel mortgage upon their property, and in carrying on their business bought mostly upon credit, and had established a business reputation for prompt payment of their bills. R. G. Dun & Co. is a mercantile agency well known in the mercantile community and have a clientage throughout the United States estimated at 25,000 subscribers, and in the state of Michigan of about 600. The alleged libel consists in R. G. Dun & Co. sending from their Detroit office to their subscribers what is known as a "Notification Sheet," under date of February 23, 1887, which, under the head of "Items of Record," "Michigan," among other items contained the following: "Alma-Pollasky Bros. Chat. Mort., $10,000. D. G., clothing, and B. & S." This item was wholly false. R. G. Dun & Co. were non-residents, as also was Robert G. Dun, and no service of process was had upon him in this suit, and he did not appear to the action. Minchener was general manager of a district of the Michigan business and was located at Detroit. He was paid a salary, and a further compensation for his services, depending upon the amount of business done in Michigan. He had authority to employ clerks and to discharge them. Notification sheets were sent direct to subscribers from the Detroit office. Reports were made to, and all letters containing information affecting the credit of tradesmen were mailed to his address individually in Detroit. He had a chief clerk who opened these letters and noted their contents. Minchener based his defense upon two grounds: First, That the communication was privileged; second, that the libel, if libel it was, was published by R. G. Dun & Co.; that he was not a member of that company, and had no proprietary interest therein, and was not responsible for its publication. The trial court took the case from the jury, and directed a verdict for defendant upon the ground that Minchener was not liable.

1. Was the notification sheet, which was sent to all subscribers, a privileged communication? In Bacon v. Railroad Co., 66 Mich. 166, 33 N.W. 181, I discussed the subject of privilege in actions for libel, and shall not go over the ground again. I adhere to what I there said, both as to absolute and qualified privilege. There is no foundation for the claim that the libel set forth in the declaration is absolutely privileged. The question is, do the facts of this case bring the publication within the class of communications which are qualifiedly privileged? Qualified privilege extends to all communications made bona fide upon any subject-matter in which the party communicating has an interest, or in reference to which he has a duty, to a person having a corresponding interest or duty; and embraces cases where the duty is not a legal one, but is of a moral or social character, of imperfect obligation. Bacon v. Railroad Co., 66 Mich. at page 170, 33 N.W. 181, and cases cited. The mercantile agency does not stand in such relation, either of interest or duty, with its subscribers generally, that communications from it to them generally are privileged. Exceptions exist in relation to those persons who are interested in obtaining the particular information, and to whom it is furnished upon special request. To this extent, and no further, are such communications protected by a qualified privilege.

Consider for a moment the relation of the mercantile agency to its subscribers. It undertakes to furnish them, for a consideration paid in advance, such information relative to the responsibility and credit of merchants and others as it obtains from its subagents, servants, and correspondents, without guarantying the accuracy, reliability, or correctness of such information, or being responsible for any loss caused by the neglect of its agents and servants, or for their want of verity. It expressly stipulates that it will not reveal to such subscribers the sources of its information, nor the names of the persons from whom they received it, and requires a pledge from the subscribers that they will never, under any circumstances, communicate to the persons reported the information received concerning them from the mercantile agency. It also adopts measures to prevent the particular communities from ascertaining the name or identity of the person reporting the standing of business men in that community. These secret and inquisitorial agencies ramify every part of the United States and the dominion of Canada, and possess the power of destroying with falsehood or calumny the credit of any business man in the country, and of bringing him to bankruptcy and ruin. To hold such vast secret inquisitions exempt from liability for false publications respecting the character and standing of a business man would be to sanction the highest injustice. The business man's integrity, his reputation for fair and honest dealing, his prosperity in the transaction of his business, are of the utmost importance to him, and are oftentimes his best capital with which to carry on his business. Commercial credit is based upon confidence, and all know upon how frail foundation commercial confidence is builded. A breath of suspicion may destroy it. Confidence is withdrawn, and the party is ruined. And so, in a broader field, a breath of suspicion is directed against the public credit, suspicion gives place to rumors of disaster, rumors disseminated undermine the general confidence, and a panic is the result. On the other hand, these same commercial agencies, which always have their fingers upon the business pulse of the country, are a most potent factor in keeping up public confidence. They issue their manifestoes of encouragement, and scatter them broadcast over the land. They are read by the business men of the country. The newspapers assist the circulation among all classes of people, and public confidence is strengthened, or, at least, fears of disaster are allayed. In this they exert a strong influence for good, and are recognized institutions in carrying on the business of the country. But they are also potent for evil to the individual. They send out their notification sheets containing a false statement respecting a particular person, and he is undone,-no one will trust him, and all claims are pressed for immediate payment. His business character is sullied, confidence is withdrawn, and his business career has received a blow which it will require a long time to repair.

The notification sheet containing the false statement respecting the acts of Pollasky Bros. was not alone sent to those who were dealing with them and extending them credit, but to between six and seven hundred subscribers in Michigan, and others residing out of the state, from some of whom they might wish to purchase goods upon credit, and this without any request being made to be informed of the standing or credit of Pollasky Bros.; and others of whom, and by far the greater number, were engaged in different lines of business, and who were in no manner interested in knowing their standing, or financial ability or business integrity. To all such the communication was not privileged. It cannot be said that a black-smith, a saw-miller, and lumber dealer, a furniture manufacturer, a dealer in hardware, a chemist, mineral water bottlers, butchers, book agents, physicians, or...