
    Patrick H. McCarty, Respondent, v. John S. A. Lambley, Appellant.
    
      Slander — privileged communications — words of a store manager, informed of a theft, spoken to the accused — the accused must show express malice — inconsistent charge upon the question of express malice and mitigation.
    
    Where employees of a mercantile house have informed its manager, not a member of the firm, that another employee has stolen, and has admitted to them that he has stolen, property of the firm, the subsequent words of the manager, spoken in the presence of others, to the accused, charging him with theft and discharging him, while prima facie slanderous, are, in view of the confidential relations of the parties and of the interest of the manager and of his duty to his employers, to be regarded as privileged as matter of law, and the burden is cast upon the accused of showing express malice as matter of fact.
    Where the question of express malice is ¡submitted to the jury in an action for slander, and the court, after stating the necessity of express malice to a recovery, says, in treating of mitigation, in substance, that, if the jury find that the •accusation was made in good faith, but under an honest mistake, they may take the honest mistake into consideration in reducing the damages, and sub- . .sequently refuses the defendant's request for a charge that .if the manager made his statements in the honest belief of their truth, they were privileged, and an absolute defense was established, a new trial should be granted, as the . legal effect of the charge is to instruct the jury that, although they might find that the words were spoken honestly, in good faith, they might also find that they were spoken maliciously.
    Appeal by the defendant, John S. A. Lambley, from a judgment -of the Supreme Court in favor of the plaintiff, entered in the office ■of the clerk of the county of Onondaga for $250 damages and costs ■on the 1st day of May, 1896, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 19th day of May, 1896, denying the■ defendant’s motion for a new trial made upon" •the minutes.
    The plaintiff brings this action to recover ■ damages for certain ■defamatory words alleged to have been spoken to and concerning' him by the defendant.
    The undisputed facts of the case, so far as it is necessary to detail them, are as follows:
    The defendant, at the time the alleged slanderous words were uttered, was manager for the firm of D. McCarty & Co., which firm carried on ■ a large wholesale and retail department store in the city of Syracuse, and employed some 300 persons in the conduct of its business. The plaintiff, a young man twenty-two years of age, had charge of the bundle counter in this store, his duty being to receive from and deliver to the proper persons bundles of goods or other property placed in Iris charge.
    Some time prior to July 10, 1895, one John J. Colwell, who was also in the employ of McCarty & Co., having charge of the hat, hosiery and furnishing department, took a straw hat from the hat counter. This hat was six and seven-eighths inches in size, of a jieculiar shape and color, and the only one of that size, shape. and color remaining in stock. He inclosed the hat in a paper bag, wrote his name upon the hag and sent it to the plaintiff’s bundle counter to be retained there until called for.
    ' On the tenth of July, George J. Barnard, a salesman in the store, sent a boy to the plaintiff’s bundle counter for the hat. The boy did not return, but the plaintiff came to Barnard and Colwell with a book in his hand and had a conversation with them, after which he returned with a straw hat of the same size and color as the one delivered to him by Colwell. The hat was somewhat worn and soiled and the plaintiff admitted having worn it the night previous and also that morning. He delivered this hat to Colwell, and it was thereupon charged up to the plaintiff.
    The evidence, of both Colwell and Barnard is that the plaintiff .admitted having taken the hat, and they both swore that they had seen him wearing it at different times. The plaintiff, however, denied having made the admissions to these persons which they tes.tified to, and said that .he found that some one had taken his hat and left this one in its place; that he thereupon appropriated the one left and wore it that night and the next morning, and^that these were the only occasions of his wearing the hat.
    But, without going further into the controverted evidence, it is only necessary to add that it is conceded that Colwell and Barnard reported the matter to the defendant and informed him that the plaintiff had admitted to them that he had stolen the hat. The defendant thereupon sent for the plaintiff,' and in the presence and hearing of several other persons, charged him with theft, and dismissed him from service.
    
      A day'or two thereafter one James K. Mara, who was then á student in the law office of the attorneys of record for the plaintiff, went with the plaintiff to the store of .McCarty & Co., and there had an interview with the defendant. Mara testified that he went at the instance of one of the plaintiff’s attorneys; that he requested the' defendant to allow the plaintiff to make an explanation, which request was ■ refused, and that. the defendant reiterated the charge that the plaintiff had stolen the hat.
    Such further facts, as are deemed important will oe referred to later on.
    
      Raymond Cobb, for the appellant.
    
      Leonard T. Jones, for the respondent.
   Adams, J.:

The words spoken by the defendant to the plaintiff during their first interview were unquestionably slanderous per se, and as they were spoken in the presence and hearing of third parties, they were-manifestly actionable* unless they were either justifiable or privileged. The same may be said respecting the reiteration of the accusation to the witness Mara upon tire subsequent occasion above referred to.

A defense of justification was interposed by the defendant, and evidence was given which tended! very strongly to establish that defense. ■ It was thought, however* by the learned trial court that there was sufficient; controversy respecting- it to raise an issue of fact, and this issue was duly submitted to the jury, and determined, by them adversely to the defendant’s contention. We must, therefore, regard their verdict as conclusive so far as that feature'of the case is concerned.

We are thus ’brought directly to a consideration of the question of privilege, and in order to deal intelligently with that question it is desirable to understand precisely the relations existing between these parties as well as between them and their' employers,, and. also the nature-of the duties which these relations imposed upon them, or more especially upon, the defendant who obviously occupied a position of great responsibility. .He was charged with the. executive management .of a. large mercantile establishment* Subordinate to him and subject to his control were upwards of 300 employees,for whose conduct and fidelity in the discharge of their duties he was in a measure responsible. His relation to his principals, as well as to his co-employees, was, therefore, highly confidential; and he-would clearly have béen remiss in the-performance of his duty had he permitted a person, whom he had reason to believe dishonest,, to remain in the service of the firm.

The plaintiff, as has been seen, was likewise an employee of McCarty & Co., but not of the same grade as the defendant. He. was in a sense subordinate to the latter, and it is not disputed that the defendant had the right to discharge him for proper cause.

The circumstances of the case would seem, therefore, to bring into operation the rule that a person clothed with the authority, and charged with the delicate responsibilities which rested upon this defendant, may not only discharge a subordinate for dishonesty, but he may, with assurance of immunity from liability, state the-reasons for his action, although they involve a charge of criminal conduct and that charge is made in the presence of third parties-Provided, nevertheless, that in so doing he. acts in good faith and in the honest belief that the party against whom the chaige is made was actually guilty o.f the crime charged.

Privileged communications have been defined by a text writer to-“comprehend all statements made bona fide in performance of a duty, or with a fair and reasonable purpose of protecting- the interest of the person making them, or the interest of the person to whom they are made. A communication made bona'fide upon any subject-matter in which the party communicating has an interest, or in reference to which he has a duty, is privileged if made to a person having a corresponding interest or-duty, although it contain criminatory matter, which, without this privilege, would be slanderous and actionable.” (Townshend on Slander & Libel, § 209.)

The rule as thus stated has been frequently recognized and adopted by the courts in this State (Keane v. Sprague, 30 Alb. L. J. 283 ; Klinck v. Colby, 46 N. Y. 427; Byam v. Collins, 111 id. 143; Hemmens v. Nelson, 138 id. 517; Pendleton v. Hawkins, 11 App. Div. 602), and when applied to the undisputed facts of this case we think it required the trial court to hold, as matter of law, that what was said by the defendant to the plaintiff during the first interview was, primafacie, privileged. For, as has been stated, it was conceded that-the defendant had been informed by two of his ■subordinates that the plaintiff had not only stolen the hat* but that he had admitted his guilt. (Klinck v. Colby, supra; Lovell v, Houghton 116 N. Y. 520.).

It is proper, however, that there should be no misapprehension as to the meaning of the term “ privileged ” as it is here used.

We have already stated that the words complained of are prima faeie slanderous, and that, ordinarily,-they would be regarded as inferentially malicious. When, therefore, we speak of them as “ privileged,” we- simply mean that the circumstances -in which, they were used rebut the inference which would otherwise arise from their utterance. Or, in other words, that,.when their privileged character is established, as a matter of law, the burden is cast upon the plaintiff of establishing, as a matter of fact, the existence of express malice. (Townshend on Slander & Libel, § 209, supra; Klinck v. Colby, supra; By am v. Collins, supra; Lovell v. Houghton, supra.)

The learned trial court appears to have adopted this view in. submitting the case to the jury, and, so far as this particular feature of it is concerned, his charge leaves nothing to be desired. The jury, it is true, were permitted to determine the question of privilege as one of fact, but they were instructed that if they came to the conclusion that the words spoken were privileged, the plaintiff could recover no damages until he had proven that their utterance was accompanied by express malice. . What constituted express malice was also very clearly and comprehensively stated, and it is not to be denied that there is some evidence in the case which, standing by itself, if -deemed credible by the jury, may possibly have justified them in reaching the conclusion that the defendant had taken advantage of the particular occasion in question to give utterance to an unfounded ■charge.

It may be conceded, .therefore, that not only was the question of ■express malice fairly in the case, .but that it was also one of vital importance. It was, consequently, very desirable that the jury should have labored under no misapprehension as to the consequences of their deliberations.

After defining express malice, and stating to the jury the neces^ sity of its existence in order to warrant a recovery by the plaintiff, if they found that the words uttered were privileged, the learned trial court further instructed them as follows, viz.: “ If you find that, the justification has not been proved, and find that the communication was not privileged under the rules which I have laid down, then you come to the question of mitigating circumstances. Even though the accusation may not be true, even though the communication may not be privileged, yet, if you find the accusation was-, made in good faith, believing it to be true, made upon a lawful occasion, you will take those circumstances into consideration in mitigating the damages which the plaintiff might otherwise be entitled to recover at your hands; take those circumstances into consideration-in reducing the damages. For if he has made an honest mistake,, with reasonable grounds to believe it to be true; made the accusation in good faith, from honest motives, from a desire to protect, himself and the firm of which he is manager from theft and wrong,, and from no ill-will, no desire to injure the plaintiff, then, gentlemen, those circumstances are to be considered in reducing the damages which the plaintiff might otherwise be entitled to * *

This portion of the charge was excepted to by the defendant’s, counsel, who asked the court to charge that if the statements were made in the honest belief of their truth, the communication was. privileged and would constitute an absolute defense.

This request was declined and the defendant again duly excepted. If the views to which we have given expression' correctly state the. law of this controversy, the refusal of the trial court to charge in accordance with this request places the case in this somewhat anomalous situation : The words complained of are prima facie privileged;. they are, therefore, not actionable unless accompanied by express malice in their utterance. Nevertheless the jury were permitted to infer from the refusal of the court to charge as requested, as well as from the language quoted from the body of the charge, that they-, might find them to have been spoken in perfect good faith and in the honest belief of, their truth and yet spoken maliciously.

We do not see how these two propositions can possibly stand together. That is, how words can be spoken honestly and in perfect good faith, and at the same time be uttered maliciously. We. conclude, therefore, that the request of the defendant’s counsel was proper, and that the exception to the refusal of the court to charge. in accordance therewith presents error which is fatal to the plaintiff’s recovery, and which is not cured by the remaining portions of the charge, admirable as they are.

We have thus far considered the case with reference to the original accusations made to the plaintiff at the time he was discharged; ■and it is perhaps proper that a word or two should be said respecting their reiteration at the time the plaintiff interviewed the defendant in' company with the witness Mara on the thirteenth of June.

It is to be remembered that this interview was sought by the plaintiff for the purpose of discussing the question of his discharge; that Mara appeared in a semi-professional capacity, and as a representative of the plaintiff’s attorneys to demand a retraction and reinstatement- for his client, and that what was there said by the defendant was in reply to questions or demands made by Mara. We incline to the opinion, therefore, that the parties’ relation towards each other was legally such as to bring any communications or ■statements made by either within the same rule to which we have ■already adverted. (Billings v. Fairbanks, 136 Mass. 177.) Or, to state the matter more concisely, that the statements made to Mara were privileged, to the extent of requiring proof of express malice in order tó render them actionable. But it is not necessaiy to pass definitely upon this feature of the case, as we can see no ■escape from the consequences of the exception heretofore eon■sidered, and we, therefore, conclude that a new trial is rendered necessary.

Judgment and order reversed and a new trial' ordered, with costs to abide the event.

All concurred, except Follett and Ward, JJ., not voting.

Judgment and order reversed and a new trial ordered, with costs to abide the event.  