National Life Ins. Co. v. Abernathy , 206 Ala. 26 ( 1921 )

"A corporation is liable in damages for the publication of a libel as for other torts. To establish its liability, the publication must be shown to have been made by its authority, or to have been ratified by it, or to have been made by one of its servants or agents in the course of the business in which he was employed. And the same is true as to slander. Some of the cases hold a corporation liable for a slander maliciously uttered by an agent within the scope of his employment though not expressly authorized or subsequently ratified. Other cases hold that the corporation to be liable must have authorized the uttering of the slanderous words or have ratified them." Newell on Slander and Libel (3d Ed.) § 448. I think that the sounder view and the one supported by the overwhelming weight of authority is the one which draws no distinction between slander and libel and places them upon practically the same footing as malicious prosecution and other torts, and which renders the corporation liable for the slanderous utterances of its agents while acting within the line and scope of authority whether previously authorized or subsequently ratified or not. Mills v. Grant, 233 Mass. 140, 123 N.E. 618; Rivers v. Yazoo R. R.,90 Miss. 196, 43 So. 471, 9 L.R.A. (N.S.) 931; Hypes v. So. R. R., 82 S.C. 315, 64 S.E. 395, 21 L.R.A. (N.S.) 873, 17 Ann. Cas. 620; Sawyer v. Norfolk R. R., 142 N.C. 1,54 S.E. 793, 115 Am. St. Rep. 716, 9 Ann. Cas. 440, and note; Empire Cream Co. v. Lavalle Dairy Co., 75 N.J. Law, 207, 67 A. 711; Roemer v. Jacob Schmidt Brewing Co., 132 Minn. 399,157 N.W. 640, L.R.A. 1916E, 771; Fensky v. Maryland Co., 264 Mo. 154,174 S.W. 416, Ann. Cas. 1917D, 963; Kharas v. Baron, 171 App. Div. 388,157 N.Y. Supp. 410; Vowles v. Yadish (Iowa)179 N.W. 117, 13 A.L.R. 1132; Buckeye Cotton Oil Co. v. Sloan, 250 Fed. 712, 163 C.C.A. 44; So. Ice Co. v. Black, 136 Tenn. 391,189 S.W. 861, Ann. Cas. 1917E, 695; Ecuyer v. New York Life Insurance Co. (Wash.) 181 P. 871, 186 P. 327; Payton v. Clothing Co., 136 Mo. App. 577, 118 S.W. 531; Waters-Pierce Co. v. Bridwell, 103 Ark. 345, 147 S.W. 64, Ann. Cas. 1914B, 837; Rosenberg v. Underwriters, 190 Ill. App. 64; Hopkins Chemical Co. v. Reed Drug Co., 124 Md. 210, 92 A. 478; S.W. Telegraph Co. v. Long (Tex. Civ. App) 183 S.W. 421; Cotton v. Fisheries Co., 177 N.C. 56, 97 S.E. 712. See, also, note to the case of Roemer v. Jacob Schmidt Brewing Co., L.R.A. 1916E, 774, which refers to both English and American cases on this subject.

The only cases, other than a few old ones subsequently repudiated by decisions of the same state, recognizing a distinction between libel and slander in respect to the liability of corporations, are the ones cited in the foregoing opinion of the court.

The case of Singer Co. v. Taylor, supra, quotes approvingly 10 Cyc. 1216, and from Mr. Odgers in his work on Libel and Slander (star page 368). The quotation from Cyc. seems to be based upon Redditt v. Singer Mfg. Co., 124 N.C. 100,32 S.E. 392. This case does not support the text, but if there should arise a doubt on the subject, said text is not in harmony with the rule declared by the North Carolina court in the case of Cotton v. Fisheries, 177 N.C. 56, 97 S.E. 712, and cases there cited. The quotation in our Taylor Case, supra, from Mr. Odgers, is from an early edition of his work, and it appears to have been based upon an early English case, he being an English author, but as has been well and fully brought out by the able opinion of the Massachusetts court in the case of Mills v. Grant, 233 Mass. 140, 123 N.E. 618, the subsequent English cases are not in line with the text taken from Mr. Odgers and which has been omitted from the last edition of his work. The case of Singer Mfg. Co. v. Taylor, supra, being based upon a false foundation and being in conflict with the overwhelming weight of authority as well as contrary to logic and reason, should, in my opinion, be overruled. The case of McIntyre v. Cudahy Co., 179 Ala. 404, 60 So. 848, is based entirely upon the Taylor Case, the soundness of which does not appear to have been questioned in brief or discussed in the opinion. The cases of Republic Iron Steel Co. v. Self, 192 Ala. 403, 68 So. 328, L.R.A. 1915F, 516, and Choctaw Co. v. Lillich, 204 Ala. 533,86 So. 383, 11 A.L.R. 1014, merely cite with approval the Taylor Case. I think the Taylor Case, supra, not only erroneous in approving the quotation from Mr. Odgers, but makes a fallacious distinction as to the applicability of the law as laid down by this court through Brickell, C. J., in the case of Jordan v. Ala. G. S. R. R., 74 Ala. 85, 49 Am. Rep. 800 (overruling the case of Owsley v. M. W. P. R. R., 37 Ala. 560), to actions of slander. It is true, the Jordan Case dealt with an action for malicious prosecution, but it departed from the former rule that corporations could not be liable for the acts of their agents involving crime, and evil intent, malice, etc., and the opinion in doing so laid down the broad principle that —

"Corporations are now responsible civilly, the same as natural persons, for wrongs committed by their officers, agents or servants, while acting in the course of their employment or which are authorized or subsequently ratified."

This being a sound principle broadly stated should apply to all wrongs whether involving a malicious prosecution, libel, slander, or other torts, at least the Mississippi court in the case of Rivers v. Yazoo R. R. Co., 90 Miss. 196, 43 So. 471, 9 L.R.A. (N.S.) 931, which was a slander case, quotes approvingly from the rule as laid down by Brickell, C. J., in the Jordan Case. It will not be amiss to observe that some confusion in the earlier cases was no doubt due to statements made in determining when the slander was or was not within the scope of the agent's duty or when there was or was not a contractual obligation on the part of the corporation to protect the plaintiff, a passenger, bailee, guest, etc., from insult, slander, or abuse. If the agent acted within the scope of his duty the corporation is liable for his wrongs whether under contractual duty to protect the injured party or not, and the fact as to whether or not there is a contractual obligation is a factor in determining whether or not the agent was acting within the scope of his authority. On the other hand, there are cases where a corporation has been held liable for slander or abuse of its "passenger, guest or customer" whether inflicted by an agent with authority or not — not that it was liable for the unauthorized act, but because of a contractual duty to protect his passengers, guests, etc., from insult or abuse from third persons. Again, some of the courts have held that in order for a corporation to have been liable in the instant case for slander, there should have been proof that it was authorized or subsequently ratified, but that was due to the fact that the proof did not show that the agent who uttered the slander was acting within the scope of his authority. Sawyer v. R. R. Co., 142 N.C. 1, 54 S.E. 793, 115 Am. St. Rep. 716, 9 Ann. Cas. 440.

I fully appreciate the admonition in brief of appellant's counsel against departing from the rule of stare decisis, but while certainty and repose is desirable, it should not be founded upon a glaring and undebatable error, and the sooner that a structure, based upon a false foundation, is demolished, the better for our jurisprudence. "Where a grave and public and palpable error widely affecting the administration of justice must be either solemnly sanctioned or repudiated, fiat justitia, ruat cœlum, should apply, and not the rule of stare decisis." Indeed, the false doctrine declared in the Owsley Case, 37 Ala. remained the law in this state until repudiated and corrected in the Jordan Case nearly 20 years thereafter. I therefore hold that amended counts 2 and 6A were not subject to the defendant's demurrer for failing to aver that the slander was authorized or subsequently ratified by the defendant corporation as it avers that the agent was acting within the line and scope of his authority when uttering the slanderous words.

I therefore dissent from the holding of the majority and in which GARDNER, J., concurs.