Waters-Pierce Oil Co. v. Bridwell

• Decision Date: 29 April 1912
• Citation: 147 S.W. 64,103 Ark. 345
• Parties: WATERS-PIERCE OIL COMPANY v. BRIDWELL
• Court: Arkansas Supreme Court

147 S.W. 64

103 Ark. 345

WATERS-PIERCE OIL COMPANY v. BRIDWELL

Supreme Court of Arkansas

April 29, 1912

Appeal from Boone Circuit Court; George W. Reed, Judge; reversed.

STATEMENT BY THE COURT.

This is an action brought by plaintiff, B. N. Bridwell, against the Waters-Pierce Oil Company and its agents for slander alleged to have been committed by making defamatory statements in regard to the inspection and quality of the oil, which he was engaged in selling. The evidence on the part of the plaintiff tended to establish substantially the following facts: The Indian Refining Company and the Waters-Pierce Oil Company were rival corporations, engaged in the business of selling illuminating oils and kindred products in Boone and other counties of the State of Arkansas. The plaintiff made a contract with the Indian Refining Company where he had the exclusive agency for the sale of its oil in the territory named. E. C. Hodges was the salesman in charge for selling the oil for the Waters-Pierce Oil Company in that territory and J. H. Shattuck and Jim Taylor were salesmen under him. Bridwell had an established trade in the territory, and a salesman of the Waters-Pierce Oil Company went to his customers and told them that the oil sold by the plaintiff would not stand the test of inspection prescribed by the laws of the State of Arkansas. They said to the customers of Bridwell's that both they and Bridwell were subject to indictment for selling the oils purchased from him. This had the effect of causing Bridwell's customers to quit purchasing oil from him and ruined his business. The oil sold by him, when inspected, stood the test required by the laws of the State. The statements made by the agents of the Waters-Pierce Oil Company were made for the purpose of inducing Bridwell's customers to quit buying oil from him and to buy from the Waters-Pierce Oil Company.

On the other hand, Hodges, Shattuck and Taylor all testified that they were not authorized by the Waters-Pierce Oil Company to state that the oil sold by the plaintiff, Bridwell, would not stand the test provided by the laws of the State, and that they had no authority to make such statements. Evidence was also introduced by the defendants tending to establish the fact that the oils sold by Bridwell would not stand the test prescribed by the inspection laws of the State. There was a trial before a jury, which resulted in a verdict for the plaintiffs against all the defendants for $ 800. The defendants have duly prosecuted an appeal to this court.

Judgment reversed, and cause remanded.

J. W Story and Mehaffy, Reid & Mehaffy, for appellant.

1. The amended and substituted complaint states a wholly different cause of action from the original complaint, and defendant had no opportunity to try the case made by it. 21 S.E. 669; 4 Enc. Pl. & Pr. 83, 86; 76 S.W. 912; 67 Ark. 142.

2. Court erred in its charge to the jury. 55 Ark. 300. Instruction No. 7 correctly stated the law, and it was error to modify it.

3. Mere puffing, trade talk, or lying in trade is not actionable. Bishop on Cont. § 664-5; 31 Ark. 72.

4. A corporation is not liable for slander by its agents, unless made by its authority, or ratified by it, or done within the scope of employment.

E. G Mitchell, Pace & Pace and J. M. Shinn, for appellee.

HART, J. MCCULLOCH, C. J., and WOOD, J., concur in the judgment.

OPINION

HART, J., (after stating the facts).

The plaintiff filed an amended and substituted complaint. An amended pleading filed as a substitute for the original pleading supersedes it, and the original pleading ceases to be a part of the record. 31 Cyc. 465.

The statements which are made the basis of this action are that the agents of the Waters-Pierce Oil Company, while engaged in selling its oil, stated to the customers of the plaintiff that his oil would not stand the test prescribed by the inspection laws of the State of Arkansas, and that both plaintiff and his customers in selling said oil were acting in violation of the criminal laws of the State, and were subject to indictment. The complaint alleges that these statements were made of and concerning plaintiff's business and were injurious thereto. Hence the complaint stated a good cause of action. 25 Cyc. 326; Studdard v. Trucks, 31 Ark. 726; Haney Manufacturing Co. v. Perkins, 78 Mich. 1, 43 N.W. 1073; Blumhardt v. Rohr, 70 Md. 328, 17 A. 266. See also case note to Victor Safe & Lock Co. v. Deright, 8 Am. & Eng. Ann. Cas. pp. 810-811.

There is some conflict of authority in respect to the liability of a corporation for slander; but, inasmuch as a corporation must transact its business and perform its duties through natural persons, it is now well settled that a corporation is liable in damages for slander as it is for other torts. To establish its liability, the utterance of the slander must be shown to have been made by its authority or ratified by it, or to have been made by one of its servants or agents in the scope of his employment and in the course of the business in which he is employed. Payton v. People's Credit Clothing (Mo. App.) 136 Mo.App. 577, 118 S.W. 531; Penn. Iron Works v. Henry Voght Machine Co., 139 Ky. 497, 8 L.R.A. (N.S.) 1023; Rivers v. Yazoo & Miss. Valley Rd. Co., 90 Miss. 196, 9 L.R.A. (N.S.) 931 (Miss.); 43 So. 471; Hypes v. So. Ry. Co., 82 S.C. 315, 17 Ann. Cases 620, 64 S.E. 395; Sawyer v. Norfolk & So. Rd., 9 A. & E. Ann. Cases, 440; 142 N.C. 1, 54 S.E. 793; Victor Safe & Lock Co. v. Deright, 147 F. 211, 8 Ann. Cases 808; Buffalo Lubricating Oil Co. v. Standard Oil Co., 42 Hun 153.

In section 279 of Wood on Master & Servant, the author says: "The question usually presented is whether, as a matter of fact or of law, the injury was received under such circumstances that, under the employment, the master can be said to have authorized the act; for, if he did not, either in fact or in law, he can not be made chargeable for its consequences, because, not having been done under authority from him, express or implied, it can in no sense be said to be his act, and the maxim previously referred to does not apply. The test of liability in all cases depends upon the question whether the injury was committed by the authority of the master, expressly conferred or fairly implied from the nature of the employment and the duties incident to it."

And again the same author, in section 307, says: "The simple test is whether they were acts within the scope of his employment; not whether they were done while prosecuting the master's business, but whether they were done by the servant in furtherance thereof, and were such as may fairly be said to have been authorized by him. By 'authorized' is not meant authority expressly conferred, but whether the act was such as was incident to the performance of the duties intrusted to him by the master, even though in opposition to his express and positive orders."

In the case before us, there is no evidence of express authority to utter the defamatory words given to the agents by the corporation, nor of any subsequent ratification on the part of the corporation. Of course, the mere utterance of the defamatory language can not authorize the inference that they were done by the agents in the course of their employment. It is not necessary, however, that there be some evidence of authority, express or implied, given to the agent to make the defamatory statements; but there must be some evidence from which an authority might be implied on the part of the agent to represent the corporation as within the apparent scope of his employment in regard to the defamatory statements.

The issue of whether authority to utter the slander should be implied becomes one of fact for the jury where the facts and circumstances in proof would induce a reasonable person to infer that the act is within the scope of the agent's authority; but if only one inference should be drawn from the evidence, and that is a want of authority, the...