Appeal from Trial Term, Kings County.
Action by Ralph W. Ashcroft against John Hays Hammond. From a judgment for defendant on a nonsuit, plaintiff appeals. Reversed.
[116 N.Y.S. 364] The action was for damages for libel. The plaintiff and the defendant were stockholders in a business corporation, named the Plasmon Company, of which the plaintiff was also manager. They disagreed as to the affairs and management of the company. At the annual meeting of 1904 a board of directors friendly to the plaintiff was elected. Thereupon the old board of directors and officers refused to go out, but held possession of the company. This was done at the instigation of the defendant. Samuel L. Clemens, a stockholder, sent the defendant the following telegram concerning the trouble:
" Broughton suggests Truslow should act as your attorney and proxy in Plasmon matter. We cannot accept Davis, or any one else as permanent manager, but will guarantee to protect your 22% interest on terms stipulated by you. Papers covering Truslow's appointment mailed you special delivery to-night. Please return them to me at Hotel Wolcott. Please wire Wheeler instructing him to vacate Plasmon offices forthwith, withdraw his policemen, recognize new board and release bank account. Also wire Truslow to relinquish deed of trust and other documents on payment of your loan by us. Telegraph reply Hotel Wolcott."
To which the defendant responded by telegram as follows, the Ashcroft named therein being the plaintiff:
" I shall strongly oppose turning over company to Ashcroft's board of directors. He has been identified with the rotten administration of Cook and Wright, and is incompetent or worse. Unless Davis accepts management and my stipulation that Ashcroft shall not be employed by the company, I shall retain Wheeler for the present. You have been imposed upon by Ashcroft and others regarding Wheeler. Am going to St. Louis tomorrow to be absent 10 days. On my return, I will discuss matters further with you and others interested. Meanwhile, will extend date of payment my notes."
The complaint is upon this telegram as a libel.
The answer consists of certain minor denials. A defence of privilege, and the same matter as a partial defence, i. e., in mitigation of damages.
R. A. Mansfield Hobbs, for appellant.
James Byrne (Elihu Root, Jr., on the brief), for respondent.
Argued before WOODWARD, JENKS, GAYNOR, BURR, and RICH, JJ.
The published matter is libelous per se if not protected by privilege. The non-suit was granted at the close of the plaintiff's case on the ground that the alleged defamatory communication was privileged. This ruling does not seem to have taken into consideration the law of privilege. In the case of an unprivileged publication which is libelous per se, the law presumes it to be false, and unless the defendant pleads as a defense that it is true, its falsity is not in issue, and no evidence on that head is permissible. The publication has to be taken as false during the trial, and the only question is one of damages. If the truth be pleaded as a defence, the burden is of course on the defendant to make it out. But in the case of a qualifiedly privileged communication, the law is the reverse. The occasion of qualified privilege out of which the publication arose does away with the presumption of falsity, and raises a presumption of good faith in the defendant; and therefore if the defence of such qualified privilege be pleaded, and the occasion of qualified privilege be shown, [116 N.Y.S. 365] either on the plaintiff's case or afterwards, the burden is put upon the plaintiff of destroying the privilege in order to recover. This he may do by showing that the published matter was false and the publication malicious. Having proved the matter false, he proves malice by showing that the defendant knew it was false, or did not have probable cause to believe it was true; for there is no privilege to lie-except the case of absolute privilege, which has a very limited application, and with which we are not now dealing. If the defence of the truth be pleaded and proved, the defence of qualified privilege is unnecessary; it does not need to be invoked; but if the defence of the truth be not made out, or be not pleaded (as is the case here), but only the defence of privilege, the burden is on the plaintiff to defeat the privilege, when the privileged occasion is shown, in the way stated in the foregoing. Hume v. Kushe, 42 Misc. 414, 421, 87 N.Y.Supp. 109.
Applying these rules to this case, it is apparent that the non-suit was error.
1. Assuming that the evidence for the defendant showed that the occasion of the communication was one of qualified privilege, the case was nevertheless for the jury, for there was also evidence tending to destroy the privilege, viz., that the published matter was false, and that the defendant knew it was false, or did not have probable cause to believe it to be true. A trial judge may not take a case from the jury unless the facts be undisputed, and not then unless different inferences may not be drawn therefrom in respect of the ultimate fact or facts to be found. The defendant, and Mr. Clemens, to whom the defamatory communication was addressed, had corresponding pecuniary interests in the company as stockholders; but that was only lawful occasion for them to address communications to each other honestly and in good faith for the welfare or protection of such interests (Odgers on Libel and Slander, ch. 9, p. 234, sub. II; Broughton v. McGrew [C. C.] 39 F. 672, ...