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WALRUS MFG. CO. v. EXCEL METAL CABINET CO.

April 16, 1957

WALRUS MANUFACTURING COMPANY, Plaintiff,
v.
The EXCEL METAL CABINET COMPANY, Inc., Defendant



The opinion of the court was delivered by: MORGAN

This is an action for libel. It is brought concerning a letter written by one E. A. Malnati, Jr., an employee of the Excel Hospital Equipment Company, exclusive sales agents for defendant.

At the time of the writing of the letter in suit, Malnati, then 26 years of age, was employed as a clerk in the Purchasing Department and an assistant in the Sales Department of the Excel Hospital Equipment Company. He was at no time an employee of defendant. However, his letter was written on the stationery of defendant, to which he had free access, and was signed by Malnati on behalf of defendant.

 The letter in suit, dated April 12, 1954, insofar as pertinent, reads as follows:

 'Needless to say, we were very sorry, and a little surprised, to learn that the contract for both the hospital and laboratory casework was awarded to the Walrus Mfg. Company for the amount of $ 119,000 which was about $ 30,000 lower than the lowest combined price received in competitive bidding.

 'We are certain that no manufacturer, regardless of the quality of the unit he intends to furnish, can manufacture, ship and erect a job of this size for this contract price. As you can no doubt appreciate, every qualified casework manufacturer is faced with approximately the same basic material, labor and production costs which vary only slightly in regard to manufacturing procedure and factory location.

 'You are no doubt aware that the Walrus Mfg. Company has only recently entered the metal casework business.

 'We sincerely believe that any initial savings made by purchasing a job of this quality will only be dissipated by the aggravation, loss of time, general dissatisfaction and high maintenance costs which will be incurred during the course of the project and the life of the hospital

 'We trust that our comments in regard to this work will not be misconstrued, as our only purpose is our desire to point out the recognized differences between quality hospital casework and a product which may not prove satisfactory under the heavy service which is inflicted upon it in hospital usage.'

 This letter was composed in long-hand by Malnati, who then gave it to a stenographer at the New York City offices of his employer. After being typed, no other employee of defendant corporation read or otherwise ratified it. A copy of the letter was sent to the Architect in charge of the project concerning which plaintiff had received the contract referred to in Malnati's letter. Another copy was sent to the Director of the Physical Plant at the University of Tennessee, where the project was located. The last named person sent a copy of this letter to the firm of general contractors in charge of the project, where it was read by a partner in the firm and by the project manager.

 Plaintiff here seeks damages, both compensatory and punitive. It is true that Chief Judge Burke of this District denied defendant's motion to dismiss the complaint by his order dated June 10, 1955. That does not constitute a substantive decision respecting the libelous character of the letter after trial.

 As to the questions of admissibility of certain evidence raised on trial, we make the following conclusions of law:

 (a) Testimony, the purpose of which is to prove mitigating circumstances, lack of malice or mitigation of damage is admissible. Civil Practice Act, Section 388; Abell v. Cornwall Industrial Corporation, 241 N.Y. 327, 150 N.E. 132, 43 A.L.R. 880; Fleckenstein v. Friedman, 266 N.Y. 19, 193 N.E. 537.

 (b) Testimony that plaintiff's reputation and standing in community were not affected by a publication actionable per se is inadmissible. Linehan v. Nelson, 197 N.Y. 482, 90 N.E. 1114, 35 L.R.A.,N.S., 1119.

 (c) Testimony of third persons as to their understanding of the letter is inadmissible. Bishop v. New York Times Co., ...


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