The action in this case was brought in the County Court of Richland County by service of summons and complaint upon the insurance commissioner of South Carolina, on July 1, 1925, and the plaintiff in her complaint charges the defendant with writing a letter which contained language libelous, defamatory, false, and malicious, and meant to charge, and did charge, the plaintiff with unprofessional and unethical conduct, in the practice of her profession, etc.
The defendant interposed an answer containing a general denial, and sets up that it was not the intention on the part of the said agency company or its employees to reflect upon the character of the said firm of Pierce Lester, or either of them, and such language was not so taken by them, or by the insurance commissioner to whom copies of the same were mailed, and, further, that any libelous language that was used by the agency company, or its agents, or servants, if such was used, was unauthorized by the defendant and without the scope of the authority of the said agency company, or its *Page 21 agents or any one else, and, further, that the defendant disavows any knowledge of letter alleged contained the libelous, defamatory, false, and malicious language until after the institution of this suit.
The complaint reads as follows:
"(1) That at the time hereinafter mentioned plaintiff was a licensed practicing attorney in the State of South Carolina, and engaged in the practice of her profession.
"(2) That at the time hereinafter mentioned the defendant was engaged in the general insurance business and indemnifying persons against accidental injuries and providing benefits for loss of time by sickness, etc.; that the plaintiff herein in pursuance of the practice of her profession represented John Harper in a claim by him against the said defendant insurance company and while the matter in dispute was pending between the said plaintiff and the said defendant for settlement and adjustment, the said defendant on March 9, 1925, wrote a letter to the plaintiff and mailed, published, and circulated a copy thereof to Hon. John J. McMahan, the insurance commissioner, Columbia, South Carolina; that said letter, among other things, referring to the plaintiff, used the following language: `And it seems that some of these negroes through your influence are having their policies canceled. * * * Likewise we do not think you as attorneys should encourage policyholders to try to take advantage of this or any other insurance companies.'
"(3) That the language contained in the letter above-quoted was received by the plaintiff and by Hon. John J. McMahan, insurance commissioner, as aforesaid; that the defendant caused the same to be published and circulated of and concerning the plaintiff in the manner above set forth; that the said language above set forth was libelous, defamatory, false, and malicious, and meant to charge and did charge the plaintiff with unprofessional and unethical conduct in the practice of her profession; the said above false, *Page 22 defamatory, malicious language and charges of and concerning the plaintiff by the defendant also meant to charge and did charge the plaintiff with violation of the ethics of her profession in that it charged the plaintiff with using the influence of her office as an attorney to cause negroes to cancel their policies of insurance, contrary to law, good morals, and honest dealings, and in violation of the solemn contract and agreement made and entered into by said negroes, the clients of plaintiff; that the defendants meant to charge and did charge the plaintiff with unprofessional and unethical conduct in the above-quoted language in that the said defendant charged the plaintiff with having encouraged policyholders to try to take advantage of the defendant and of other insurance companies; that the above-quoted language written, published, and circulated of and concerning the plaintiff meant to charge and did charge the plaintiff with fraud, deceit, and of being a moral delict, and guilty of legal and moral turpitude in that said language used aforesaid did reflect upon the character, integrity, and reputation of the plaintiff and brought her into ill repute and did humiliate and embarrass her and expose her to public hatred, contempt, scorn, and ridicule, in that said language as above set forth meant and intended to and did charge the plaintiff with cheating and swindling and did impute a dishonest and fraudulent motive to her, and said language was also calculated and intended to degrade and disgrace plaintiff and subject her to a loss of public confidence and esteem, and said language and charges above set forth did reflect upon, impair and destroy the confidence and esteem in which plaintiff was held in her business, calling, reputation, and profession as an attorney.
"(4) That by the writing, circulating and publication of the above-quoted false, defamatory, malicious and libelous language and charges of and concerning plaintiff as above set forth defendant meant to charge and did charge plaintiff with unethical and fraudulent and unprofessional conduct *Page 23 as an attorney subjecting her to disbarment as attorney for such violation to her damage three thousand ($3,000.00) dollars."
At the close of the testimony the plaintiff and defendants each made a motion for a directed verdict, but the Court overruled the motions and submitted the case on his charge to the jury which returned a verdict for $1,000, actual damages. Thereafter the defendant made a motion for a new trial on four grounds, which motion was denied by the Court; then within due time the defendant served 14 exceptions.
Exception 1 assigns error to the trial Judge and contends that his Honor charged on the facts and such charge was prejudicial to the defendant. This exception is without merit, as the Court in that portion of the charge referred to the allegations of the complaint.
Exception 2 assigns error to his Honor in allowing a letter written by the defendant to insurance commissioner to be offered in evidence. This letter was not prejudicial to the defendant, and the exception is overruled.
Exception 3 is based on objection to the introduction in evidence of a letter from Mr. McMahan, insurance commissioner, to J.B. Cleland, an officer of the defendant company. This letter referred to the matters out of which this controversy arose, and as well as others tended to elucidate the issues between the defendant company, and the parties represented by the plaintiff, and the writer thinks it was admissible under the case of McLeod v. American PublishingCo. et al., 126 S.C. 363 (Syl. 3), 120 S.E., 70, which holds, "The Courts * * * are more liberal in the admission of evidence in cases of libel and slander than in other cases," and especially as Mr. McMahan testified and was cross-examined by the defendant.
Exception 4 is based on objection to the testimony of A. J. Smith, concerning the contract of the railroad employees' insurance company with the defendant. The question of agency is ordinarily one for the jury, and as Mr. Smith *Page 24 testified to the relation between the agency company and the defendant, we think his testimony was competent, and do not see that it was prejudicial to the defendant. Agency may be proven by circumstances. Salley v. Parker et al.,112 S.C. 109, 98 S.E., 847.
Exception 5 is made on objection to the testimony of the plaintiff in relating what negro clients of hers told her about the policies of insurance in question. While the McLeod case,supra, does hold that Courts are more liberal in the admission of evidence in libel and slander cases than in other cases, it does not pretend to relax or revoke the well-established rules of evidence to the extent claimed on the issue of the introduction of this evidence. In Jones v. C. W.C. RailwayCo., 144 S.C. 216, 142 S.E., 517, the Court quotes Ruling Case Law on hearsay testimony as follows:
"The reason for this rule of exclusion is that hearsay is not subject to the ordinary tests required by law for ascertaining its truth, the author of the statements not being subject to cross-examination in the presence of a Court of justice, and not speaking under the penal sanction of an oath, there being no opportunity to investigate his character and motives, and his deportment not being subject to observation. And the misconstruction to which such evidence is exposed, from the ignorance or inattention of the hearers, or from criminal motives, is a powerful additional objection."
In Jowers v. Dysard Const. Co., 113 S.C. 84,100 S.E., 892, the Court held:
"In a subcontractor's action against a contractor to recover for the construction of certain manholes and flush tanks in sewer system, where plaintiff had testified that his work was satisfactory to the city, a report of a city inspector was properly excluded as hearsay."
The defendant was deprived of the right of cross-examination and confrontation of the parties whose statements the plaintiff repeated in her testimony. So it is clear that this hearsay testimony was not competent, and should *Page 25 not have been admitted, but the inquiry should extend further before reversing the case on that ground, to wit: Was this testimony prejudicial to the defendant? In Powersv. Rawls, 119 S.C. 136 (Syl. 17), 112 S.E., 79, held:
"There is a legal presumption that incompetent testimony of some probative force upon a material issue of fact is prejudicial."
In the writer's opinion, this testimony was calculated to create prejudice against the defendant in the minds of the jury, and was highly prejudicial and should not have been admitted. This exception should be sustained.
Exception 6 is based on his Honor's exclusion of the testimony of J.C. Briggs that he did not misrepresent the terms of the policy to any of the negro clients of the plaintiff. The plaintiff was permitted to testify that the negroes told her that he had. The charge of misrepresentation is a serious charge, and very much calculated to prejudice the jury against the defendant, certainly if not contradicted.
Under the case of McLeod, supra, and under Section 426, Code Civ. Proc., reading as follows:
"In the action mentioned in the last section the defendant may, in his answer, allege both the truth of the mater charged as defamatory, and any mitigating circumstances to reduce the amount of damages; and, whether he prove the justification or not, he may give, in evidence, the mitigating circumstances," — the writer is of opinion that this testimony should have been admitted, and that his Honor erred in failing to admit it, as it had probative force and effect, and in reply to testimony on the issue raised by the testimony of the plaintiff. This exception should be sustained.
Exceptions 7, 8, 9, and 10 contend that his Honor erred in not directing a verdict for the defendant at the close of the testimony, and those exceptions may be grouped and considered together. It is well to repeat the language complained of, to wit: *Page 26
"And it seems that some of these negroes through your influence are having their policies canceled. * * * Likewise, we do not think you as attorneys should encourage policyholders to try to take advantage of this or any other insurance companies."
Libel is defined as follows in the case of Smith v. BradstreetCo., 63 S.C. 530, 41 S.E., 764:
"Libel is malicious defamation, expressed either by writing or printing, or by signs, pictures, effigies or the like, tending to blacken the memory of one who is dead, or to impeach the honesty or integrity or reputation, or publish the natural or alleged defects of one who is alive, and thereby to expose him to public hatred, contempt, ridicule or obloquy, or to cause him to be shunned or avoided, or to injure him in his office, business or occupation."
In Williamson v. Askin Marine Co., 138 S.C. 48,136 S.E., 21, it was held:
"If, taking all words together in their proper meaning, necessary inference is to charge crime, they are actionable."
This case follows Morgan v. Livingston, 2 Rich., 573, which held:
It is a well-settled principle that "it is not necessary that the words, in terms, should charge" the crime. "If, taking them all together, in their popular meaning, such is the necessary inference, then there is no doubt that they are actionable."
In Pegram v. Styron, 1 Bailey, 595, the action was for slander in the use of the following expression:
"He has sworn to a lie, and I can prove it; and he ought to have his ears cut off; he has perjured himself."
The Court said:
"That was an extrajudicial oath, not in a Court of justice, and one upon which perjury could not be assigned. The words were therefore not actionable, and the motion for a nonsuit is granted." *Page 27
In Oliveros v. Henderson, 116 S.C. 77, 106 S.E., 855, the Court adopted the decree of his Honor, Judge Rice, in which he said:
"In determining whether words are libelous or slanderous, they must be given their ordinary, popular meaning, unless, however, the defendant, at the time such words were used, modifies or explains the meaning which he gives them to mean [as?] something other than their ordinary, popular meaning."
In James v. W.U. Tel. Co., 130 S.C. 533,126 S.E., 653, an exception assigning error in the refusal of the following request to charge was sustained:
"The Court instructs the jury that, even though the words in question would, from the ordinary meaning of the expression used, imply a crime, yet they are not actionable perse as charging such a crime if they were used, and were understood by the readers or hearers to be used, with reference to acts or conduct on which no such crime could be predicated and from which no libelous charge could be inferred."
In Pegram v. Styron, supra, it was also held:
"Although the words spoken import a criminal charge, yet if they are explained at the time, or are understood by the persons who hear them, to refer to a matter not criminal, they are not actionable, without special damage."
The opinion states that the words proved were understood by the witnesses to relate to the oath, to any account filed with the administrator of the estate of David Brown, deceased. That case was approved by Judge Freeman in 85 Am. Dec., 491.
In Bell v. Clinton Oil Mill et al., 129 S.C. 242,124 S.E., 7, it was held:
"A statement to a third person to get word to plaintiff that his company was going to place his account with surety indemnifying company against certain acts of its employees, some of which were not criminal, held not actionable." *Page 28
In Hubbard v. Furman University, 76 S.C. 513,57 S.E., 479, it was held that the following words were not libelous: "To patrons of the College: You are doubtless aware of the changes made in the College Conservatory of Music. These were made for the good of the department and in the interest of our patrons."
In McGregor v. State Co. et al., 114 S.C. 48 (Syl. 2),103 S.E., 84, it was held:
"To constitute actionable libel of a retail druggist concerning his business, the writing must have been inspired by malice; it must have tended to impeach the druggist's reputation and injured his business."
Syl. 3:
"An averment that a publication was libelous is a conclusion."
Syl. 4:
"A publication may be false and malicious, but not actionable."
What does the expression "to try to take advantage of" mean, in the words complained of? In order to ascertain the meaning of those words, all of the communications and transactions between the parties must be considered and taken together. Webster's Dictionary defines the word "advantage" as "benefit, gain, profit." So it impresses me that the defendant, by its agent, simply meant that the plaintiff should not deprive that insurance company, the defendant insurance company, or any other insurance company, of any benefit, gain, or profit.
The plaintiff had charged the defendant with misrepresentations in a controversy by letters and it does seem that a party ought to have the right to hit back, or at least to do what the defendant did in this case, protest against the plaintiff's advising its customers to cancel their policies. Having in mind the principles evolved in the cases supra, it seems clear to the writer that no inference of the charge of a crime can be drawn from the words complained of as *Page 29 alleged in the innuendo, and certainly the words themselves do not show a libel per se, and the most extreme view of the testimony in favor of the plaintiff fails to show that those words constitute a libel per quod.
Of course, a defamatory libel may be committed against a person in relation to his trade or profession, which tends to impair his credit, or charge him with fraud, or indirect dealing, as referred to in Davis v. Davis, 1 Nott McC., 290, and numerous other cases. But how can the alleged defamatory words referred to in this case be construed as charging the plaintiff with crime, fraud, indirect dealing, or bring upon her disgrace, or even any shadow.
The communications show that the plaintiff represented certain policyholders in the defendant company, which claims that she persuaded them to cancel their policies, and clearly the said communications of the defendant's agent referred to herein applied to the alleged persuasion by the plaintiff of the defendant's customers to cancel their policies in said company, but the plaintiff denied persuading defendant's customers to cancel their policies.
Was this persuasion a crime? Was it a fraud? Was it dishonorable? Could the most strained construction put upon it bring upon the plaintiff discredit, dishonor, or moral turpitude? I think not. As no special damages were alleged, or proved, unless the language complained of alleged a crime, and the testimony established it as a crime, the plaintiff has no cause of action.
In this day of rush, press, and competition, how is a business to protect itself, if it cannot in moderate language enter its protest to the course of conduct of some person calculated to cause it loss of customers and injure it? Is the constitutional right of free speech so curbed as not to give a business charged with wrongdoing the right of self-protection by the use of polite language and earnest entreaty not to do certain acts that would injure the business? I cannot believe it. *Page 30
The judgment of the lower Court should be reversed, and the complaint dismissed.