
    Ormsby v. Douglass.
    
    
      Blander.—Mercantile agency.
    
    A confidential communication, by the proprietor of a mercantile agency, to a subscriber, who is interested in-the question, respecting the credit of a third person, is privileged.
    Where a communication is primé fame privileged, the plaintiff, to maintain an action for slander, must not only show it to bo false, but also malicious ; in such case, the falsity of the charge is not sufficient, per se, to raise the inference of malice.
    Appeal from the general term of the Superior Court of the city of New York, where a nonsuit, entered upon the trial, had been sustained, and final judgment rendered in favor of the defendant.
    This was an action by Waterman L. Ormsby against Benjamin Douglass, to recover damages for a verbal slander.
    It appeared on the trial, before Piebbepont, J., that the defendant kept a mercantile agency, in New York city, the business of which was to obtain information as to the credit and responsibility of persons in business, and to furnish such information to those who had occasion to use it. By the terms of subscription (which constituted the contract between the defendant and the person to whom the alleged slanderous words were uttered), all information was considered strictly confidential, and furnished only for the use of subscribers, and not to be communicated to any other person.
    In July or August 1854, one Benton, a subscriber, who held a note indorsed by the plaintiff, presented a written call for information as to the credit, responsibility, &c., of the plaintiff. The book was examined by the clerks, and, after consulting the defendant, and some objection by him to reporting in writing, because rePor^ was bad> an^ a further conversation with the witness, the defendant stated, that Ormsby was “ a man of no responsibility ■ he was a had man, and worked for counterfeiters; and was a counterfeiter.” Afterwards, in another conversation, after the plaintiff’s attorney had written a letter to the defendant, the witness asked the defendant, if he had made further inquiries, and the result, and he said, he had, and that the report was not so much out of the way, after all. He also stated, that he had given the report to some four or five other persons. Certain exceptions were taken upon questions of evidence, which are referred to in the opinions.
    At the close of the plaintiff’s evidence, the defendant moved for a nonsuit and a dismissal of the complaint, on the ground, that the words spoken by the defendant concerning the plaintiff appeared to have been spoken confidentially, in the course of the defendant’s employment, to one of his employers, on the application of the latter, who had need of the information, for the purpose of governing his discretion in his business, and that, under +he circumstances, the communication was not unlawful, there being no evidenee of malice or bad faith. The court granted the motion; to which the plaintiff’s counsel excepted; and the exceptions were directed to be heard, in the first instance, at general term; where a motion for a new trial was denied, and final judgment entered in favor of the defendant, from which the plaintiff appealed to this court.
    
      Gilpin, for the appellant.
    
      Fullerton, for the respondent.
    
      
       Also reported in 5 Trans. App. 100.
    
   Miller, J.

While the law authorizes actions of slander to be maintained, to vindicate the reputation and character of individuals who have been wrongfully and unjustly assailed, it also upholds the principle, that, in a certain class of cases, communications between individuals are regarded as privileged, and are, therefore, protected from the presumption of *malice which is usually to be inferred from the charge itself. Where the wrongful act is'intentional, a malicious intent is implied, and the party is held responsible. But, in actions of slander, if it be made to appear, that the defendant had just occasion to speak the words, then malice is not to be presumed, and some additional evidence is necessary to establish the charge. The rule is well settled, that a communication, which would otherwise be slanderous and actionable, is privileged, if made in good faith, upon a matter involving an interest or duty of the party making it, though such duty be not strictly legal, but of imperfect obligation, to a person having a corresponding interest or duty (Van Wyck v. Aspinwall, 17 N. Y. 190; Harrison v. Bush, 5 Ellis & Bl. 344); and this principle applies to an agent employed to procure information as to the solvency, credit and standing of another, who communicates confidentially, and in good faith, the information obtained, to his principal, who has an interest in the subject-matter. (Washburn v. Cooke, 3 Denio 110.)

Within the rule laid down, the slanderous words for which the plaintiff seeks to recover' damages in this action were clearly privileged, and the judge upon the trial committed no error in nonsuiting the plaintiff They were communicated by the defendant, in the performance of a duty imposed upon him, to a person who had an interest in the matter, and who had a right to require the information. The communication was in response to an inquiry as to the responsibility and standing» of the plaintiff, and embraced information relating to that subject. The witness had a note in his possession at the time, indorsed by the plaintiff, and there would appear to have been some necessity for making the inquiry, and some reason presented to the defendant, from which he might well infer that there was occasion for the party to obtain the information he desired. So long as the defendant acted in good faith, in reporting facts which came to his knowledge, which had any bearing upon the subject of inquiry, even although the report may have contained criminatory matter, which otherwise would have been slanderous actionable, he was justified and excusable. The communication made being, primá facie, privileged, as is apparent, the presumption of malice does not necessarily arise, and the onus probandi to establish malice is upon the plaintiff. The privileged character of the communication relieves the party from the malicious intent which is usually to be presumed from the act itself; and the action is to be regarded as governed bjr the same rule as an action for malicious prosecution.

The presumption of malice being rebutted, the plaintiff must establish malice, affirmatively, on the part of the defendant, in uttering the alleged slanderous words. He must show that defendant was influenced by some other motives than the mere discharge of a duty, and that the communication was not made solely for privileged purposes. (Howard v. Thompson, 21 Wend. 319-20; Somerville v. Hawkins, 10 C. B. 583; Taylor v. Hawkins, 16 Q. B. 308; Harris v. Thompson, 13 C. B. 333; 5 Ellis & Bl. 334; 3 Denio 113; 17 N. Y. 193.)

It is said, that the defendant falsely charged the plaintiff with a crime, and that the answer of the defendant to the inquiry made was not responsive to the question put. It is true, that the report made embraced a charge of a criminal offence; but it was, I think, directly responsive to the question asked. It related to the standing of the party. It affected his responsibility as a business man, and his financial credit and character. It had much to do with the question whether, as a business man, he was entitled to credit and confidence, and to what extent. It was, in fact, what the witness inquired for, and had a direct bearing upon the inquiry made, which embraced information as to the plaintiff. It was not an allegation or charge made by the defendant, but a report of information he had obtained in the due course of his business, and which had been entered upon his books. He merely communicated to a person, who had a right to demand it, such information as he had, including a fact within the range of the inquiry made. Surely, if any communication of this kind, made in good faith, is privileged, *then the whole is protected as much as any part of it, and it cannot well be urged, that there is malice, because the whole truth is told, and a portion of it is criminatory. Nor is there any evidence ' that the communication made to the witness, produced by the plaintiff, was repeated by the defendant in a form, or under circumstances, which constitute malice, or that it was uttered to others with any malicious intent. If the alleged slanderous words were communicated to other persons besides the witness, the surrounding circumstances evince that it was in good faith and confidentially, to those who had a right to require it, and where it would be protected as a privileged communication.

While defamatory words are not shielded from punishment, when published with a malicious intent, there was nothing in the conduct of the defendant, and in the manner in which he performed the delicate and responsible duty which devolved upon him, affecting, as it did, the credit, responsibility and character of the plaintiff, which evinces malice. He refused to give a written report; was extremely careful and cautious, and with considerable apparent reluctance and hesitation, -he imparted the information he possessed as to the defendant, thus rebutting the idea that any evil intent existed, and showing quite clearly that he acted in good faith. The business in which the defendánt was engaged is sanctioned by the usages of commercial communities, and the proof in this case fails to establish that he transgressed any rule of law in its transactions.

The offer to prove efforts on the part of the defendant to procure testimony as to the truth of the slanderous words, does not appear to have been distinctly ruled upon by the court, nor was any exception taken in regard to it, and therefore it is unimportant. The terms of subscription, signed by the witness, were competent testimony to prove the relationship existing' between him and the defendant, and the privileged character of the communication. No other questions are made which call for remark, and the judgment should be affirmed.

* Woodruff, J.

The evidence of the terms of the contract between the defendant and the witness Benton, to whom the alleged slanderous words were uttered, was properly received in evidence as contained in the subscription.

1. It tended to show the relations existing between the defendant and the person to whom the words were spoken, and. to raise the legal question whether the communication was privileged. In that sense, it is to be regarded as part of the res gestee.

2. It had a direct bearing on the question of malice. It was of precisely the same nature as the testimony which was rejected on the trial of Taylor v. Church, and the rejection of which was held in this court to entitle the defendant to a reversal of the judgment and a new trial. (8 N.Y. 452.)

It was not erroneous, to reject the plaintiff’s offer “to show efforts on the part of the defendant to pro» cure testimony as to the truth of the slanderous words.” ■This general offer did not propose to prove any misconduct of the defendant which could be relevant as an aggravation of damages, or as showing malice. A defendant sued or complained of for alleged slander has an unqualified right to procure testimony, and, of course, to “ make efforts ” to procure .testimony bearing on the inquiry whether the words are true or not, to be used, if necessary, for defence or mitigation, as the case may be. The rule, often stated, that alleging the truth in the answer, and failing to prove it, aggravates the wrong, does not make such an offer admissible; on the contrary, the existence of such a rule would furnish a reason, in itself, why a defendant, before alleging the truth of the words spoken, should satisfy himself on the very question, whether he can prove it or not. And if he has alleged it in his answer, he certainly may lawfully make efforts to procure testimony “as to its truth.” It would be strange, if a party complained of could not, in a proper manner, endeavor to procure testimony which, if found, might avail for his protection.

If the defendant in those efforts did any act which showed that his motives were malicious, or which ought to be *regarded as aggravating the alleged wrong, a different question would be suggested. If such acts were admissible, they were not proposed to be proved on this occasion. The offer should have pointed to acts which the court could see were wrongful. Here, all that was proposed to be proved was, so far as the court could see, lawful and proper.

The remaining question goes to the merits of the plaintiff’s case: Was the complaint properly dismissed, or had the plaintiff proved a cause of action? This depended upon two questions: 1. Was the communication made to Babcock privileged? 2. Did the plaintiff give any proof which would warrant a finding that the words were spoken maliciously ?

It is a general rule, that confidential communications respecting the character of another, made to one who is interested in the communication, and desires the information as a guide to himself in the conduct of his own affairs and dealings with such other, are privileged and not actionable, unless there be proof of malice. (Starkie on Slander, p. 321; Bradley v. Heath, 12 Pick. 162, and cases cited; 3 B. & P. 587; 9 B. & C. 403.) On the other hand, if the occasion is used as a mere pretext or cloak, under which maliciously to utter false aspersions, with intent to injure, the occasion will not justify the speaking, (Weatherston v. Hawkins, 1 T. R. 110.) And it is well settled, that, when the occasion is one which makes the communication prima facie privileged, proof that it was false is not enough to create a presumption of malice. (Fowles v. Bowen, 30 N. Y. 20.)

Communications respecting the character of a servant, made to one who contemplates giving him employment, and desires and has a right to information on the subject, are privileged. (Carroll v. Bird, 3 Esp. 204; 4 Burr. 2425; Hodgson v. Scarlett, 1 B. & A. 240.) And the rule is stated even more broadly, that a publication warranted by an occasion apparently beneficial and honest, is not actionable, without express malice; as, for *example, a communication, in time of war with France, to the officers of a volunteer corps in England, that the sergeant, who was'a Frenchman, had been the executioner of the king of France, and other words showing his sympathy with the public enemy, was held privileged. So, a communication by a party interested, to those interested with him, respecting the conduct of a solicitor in the management of their concerns. (McDougall v. Clenridge, 1 Camp. 267.)

And it is enough, that the person to whom the communication is made, is interested; as, when a communication was made to the Bishop of Durham, respecting the steward to his estates. (Clewn v. Lorrande, cited 1 Camp. 267.) And, to come more nearly to the case before us—■ a communication made to one who had become surety for the purchases of the plaintiff. (Dunman v. Bigg, 3 Camp. 260.) Upon the same general principle, merchants have an interest in knowing, and have a right to know, the character of their dealers and of those who propose to deal with them, and of those upon whose standing and responsibility they, in the course of their business, have occasion to rely. As a necessary consequence, they may make inquiries of other merchants, or of any person who may have information : and if such merchant, or other person, in good faith, communicates the information which he has, or thinks he has, the communication is privileged. These principles are not new nor unfamiliar, but have often been recognised in this state. The cases of Taylor v. Church (8 N. Y. 452; 1 E. D. Smith 283) and Fowles v. Bowen (30 N. Y. 20), and the cases cited therein, show the recognition of the rule.

Laying out of view, for the moment, the circumstance that the defendant in this case made it his business to seek information, in order to furnish it to those whose occasions and interest required knowledge of the standing and character of others who dealt or proposed to deal with them, it is clear, that if the witness Babcock, having procured a note to be discounted on the faith, in part, of the plaintiff’s Responsibility, or being about to do so, called on the defendant for information respecting his standing and responsibility, it was entirely lawful for the defendant to give him all the information which he had on the subject. It was, in a just sense, a duty which one member of the community owes to another, for mutual protection and benefit, and the law will recognise it as such by holding it privileged.

Information of the description referred to being important, there is no legal objection to the employment of an agent to seek and communicate it. And the agent may properly be paid for his time, labor and expense in the pursuit of such information. If one merchant may employ his own private agent to seek and communicate such information (3'Denio 110), there is no legal objection to the combination or union of two or more in the employment of the same agent. And, as a consequence, if an agent may act for several, he may make the pursuit of such information his occupation, and receive from those who desire to avail themselves of his services, and his knowledge acquired in such occupation, a compensation therefor. In short, the inquiry is not, how did the defendant acquire the information, nor whether he received compensation for the information he had gained, but was the occasion one which justified him in giving such information as he possessed to the applicant.

It is observed by Ingraham, J., in Taylor v. Church (1 E. D. Smith 283), in speaking of a business such as that in which the defendant is engaged, and which is called a mercantile agency: “Such establishments, properly conducted, and giving only correct information, are of the highest importance, not only to the parties immediately concerned, but to the mercantile community.-” In my opinion, the ,right of the plaintiff to recover does not at all depend on the question whether the defendant was pursuing this business for gain, but on the same principles as if he had been in the same business with the witness who applied to him, and had made the same communication.

*There was not the slightest evidence of malice. On the contrary, the defendant took precautions (by declining to answer in writing) to pre-. vent his communication passing to the knowledge of any but the applicant himself.

The proof that he had “given out” the same information to others was not material. That was not the slander for which the action was brought, and it did not tend to prove that he was actuated by malice in giving the information to the applicant. Indeed, in the connection in which the statement of the defendant that he had given it out to some others was made, it simply-warranted the inference that other applicants, similarly situated, had received the same information. If so, the defendant acted in those instances, as in this, in mere dischargé of his duty to his employers.

The animadversions of the counsel for the appellant are eminently just, when applied to any who, in the hope of gain, for their own emolument, in bad faith, make traffic the good name and reputation of others. But I cannot concede, that in the large population of a crowded city, and in a mercantile community where false representations, fraud, dishonesty and insolvency are easily concealed and but imperfectly known, or known to but few, when detected, where it is easy for strangers to practise upon the unwary or unsuspecting, a business is to be characterized as unworthy, which aims only to give correct information to those whose interests entitle them to seek it wherever it may be had. The judgment should be affirmed. .

Judgment affirmed.

Grover, J., dissented. 
      
       See Sunderlin v. Bradstreet, 46 N. Y. 188.
     