Rosenzweig & Sons, Jewelers, Inc. v. Jones , 50 Ariz. 302 ( 1937 )

This is an appeal from a judgment giving damages for an alleged libel in favor of E.W. Jones, hereinafter called plaintiff, against Rosenzweig Sons, Jewelers, Inc., a corporation, hereinafter called the company.

There are some seven specific assignments of error, but we think the case can and should be determined on certain general questions of law raised thereby. The facts necessary for a determination of the case may be stated as follows.

For some four years plaintiff was employed by the company as the manager of a jewelry store in Mesa, and had executed a fidelity bond in its favor with the Fidelity Deposit Company of Maryland as surety. On May 18, 1934, he was discharged from his employment, and Max Reiter was substituted by the company as manager. On the 1st day of October of that year the company, acting through Harry Rosenzweig, I. Rosenzweig, and Newton Rosenzweig, who were the managing officers of the company, filed with the surety a claim under the bond above referred to, for a loss in the sum of $315, alleging in the claim that certain moneys and articles received by Jones, but which the company either owned or was responsible for, had been "misappropriated by the said E.W. Jones to his own use and benefit with the intent to fraudulently deprive the said Rosenzweig Sons, Jewelers, Inc., of same." The surety, acting in the regular course of business, notified plaintiff of this charge against him, and thereafter he brought suit against the company, the three Rosenzweigs, and Max Reiter, his successor as manager of the Mesa store of the company, for damages for libel.

The case was tried to a jury, and it appeared in plaintiff's case beyond contradiction that Max Reiter had no knowledge of, nor part in, the making of the claim to the surety, nor that there was any intention on the part of the company to make such a claim, although much testimony had been offered by plaintiff tending to show that Reiter had made various statements to third parties in regard to plaintiff, from which the jury might infer that he was actuated by a malicious desire to injure plaintiff. The defendants then moved for an instructed verdict in their favor, and particularly for an instructed verdict in favor of the defendant Max Reiter, on the ground the evidence failed to disclose any facts which would sustain a judgment against him, and, the court intimating that it was inclined to grant the motion as to Reiter, the plaintiff moved for a nonsuit as to the latter, which was granted. The motion for judgment in favor of the other defendants, however, was denied. Thereupon counsel for defendants moved to strike from the record all evidence and testimony concerning the statements made by Reiter to third parties in regard to the plaintiff, and, after some discussion, the court made the following ruling:

". . . Therefore, the motion is granted, gentlemen of the jury, in so far as it pertains to any statements made by Mr. Reiter, if such statements were made, reflecting upon the honesty or integrity of the plaintiff, Jones, with reference to his stewardship in connection with the management of the business and during the time he was in that capacity or at or immediately after the departure as an employee of the defendant company. You are instructed in your consideration of the case to disregard such statements entirely."

There was no assignment of cross-error by plaintiff as to this ruling, so we must assume it was correct.

The case then proceeded and was finally submitted to the jury, which returned a verdict in favor of the plaintiff and against the company, but returned no verdict against the Rosenzweigs individually. After the usual motion for new trial was made and overruled, this appeal was taken.

There were certain other matters of evidence and proceedings during the trial which we will refer to in their proper place, but the above gives a fair picture of the situation.

The principal reason urged by the company for a reversal of the case may be stated as follows. Assuming that the claim made to the surety company was libelous, in that it charged that plaintiff had committed a felony, it is admitted by both plaintiff and defendants that it was qualifiedly privileged, and that, in order for plaintiff to recover damages against any of the defendants, he must prove not only the publication of the libel, but that it was made maliciously and with intent to injure him. It was, therefore, incumbent upon plaintiff to show, by legal evidence which would authorize the jury to draw such an inference, that the publication of the claim was malicious. A corporation can act only through its officers and agents, and the only method of showing that it was actuated by malice is by the conduct of some, at least, of these officers and agents. Plaintiff recognized this fact and introduced evidence of certain acts and statements by Reiter and the three Rosenzweigs, from which it is contended the jury might reasonably infer malice on their part imputed to the corporation. But, says defendant company, so far as any statements or acts of defendant Reiter reflecting on the honesty or integrity of plaintiff were concerned, the court struck them from the record and ordered the jury to disregard them in its consideration of the case, so that such acts and conduct may not be used to sustain a claim of malice on behalf of the corporation, and, so far as any acts or conduct on the part of the three Rosenzweigs were concerned, since the jury failed to return a verdict against them, and it is admitted that they published the libelous statement, the only theory upon which a verdict in their favor would be legally permissible is that they were not actuated by any malice. If, therefore, no malice appears on the part either of Reiter or the three Rosenzweigs, there is nothing which would sustain a finding that the company itself was guilty of malice.

[1, 2] Let us examine the situation to see if this position is well taken. It is obvious that, since the malice imputed to the company can only be deduced from the acts or statements of some of its agents, if plaintiff fails to show any acts or statements on the part of such agents, from which malice may be reasonably inferred, he has failed to sustain the burden imposed upon him to show actual malice. The court, on motion, struck out all testimony in regard to any statements made by Reiter reflecting upon the honesty or integrity of the plaintiff, Jones. Since there is no assignment of cross-error on this point, we must assume the ruling was correct. Webster v. Parks,17 Ariz. 383, 153 P. 455; Barth v. A. B. Schuster Co.,25 Ariz. 546, 220 P. 391. The only evidence which would authorize a jury to even surmise that Reiter had any malice, individually or as an agent of the company, against plaintiff were statements of this nature. There remains, therefore, nothing in the case which would authorize a jury to infer malice on behalf of the company by reason of the conduct of Reiter.

We come then to the acts and statements of the three Rosenzweigs. The testimony as to what they said and did in regard to plaintiff, aside from the actual filing of the claims which is alleged to be libelous, is in considerable conflict, and we think the jury might well have found either way upon the question as to whether or not the evidence showed malice on their part. Since admittedly they were the actual publishers of the libel, if it was done maliciously there was no legal reason justifying the jury in not returning a verdict against them for at least a nominal amount and, therefore, the only excuse for its conduct in that respect must have been that the jurors believed there was no malice on their part. We think that when the verdict of the jury can be sustained only on one theory of the evidence, we must assume that they followed this theory, and that their reasons for choosing this theory were the proper ones. This has been held frequently where the verdict returned was in favor of plaintiff.Miller v. Haley, 38 Ariz. 469, 300 P. 1020; Hilltop MetalsM. Co. v. Hall, 29 Ariz. 300, 241 P. 35. And it appears to follow logically that, if there is only one theory of the facts upon which a verdict can be returned in favor of a defendant, we must assume the jury adopted that theory also. We think, therefore, that the jury, by failing to return a verdict against the Rosenzweigs individually, necessarily found that there was no actual malice on their part in the publication of the libel. Since there is no contention that there is any evidence that any employee or agent of the company, except the Rosenzweigs and Reiter, did anything which would justify a finding of malice, it would appear that there is no evidence in the case to sustain this absolutely necessary element, and that the verdict was, therefore, not sustained by the evidence.

There is but one ground, we think, upon which even a plausible argument to the contrary can be made, and that is, that since, as a general proposition of law, where defendants are accused of a joint tort, a jury may return a verdict against one and in favor of the other, the jury in this case could have properly returned the verdict which it did. At first sight it would appear that there is some merit in the suggestion, but a careful analysis of the reason for the rule stated will show the fallacy of the proposition. It is well set forth in Swain v. Tennessee CopperCo., 111 Tenn. 430, 78 S.W. 93, 94, as follows:

"The parties in all these cases are joint tort feasors. The reason for holding them liable for all the damages inflicted by any of them is that they are all present, in person or by representation, and join in the wrongful act, or in some way knowingly aid in doing it, thereby consenting to and approving the entire wrong and injury done. The whole injury is committed by each and all of the trespassers, and it is but just and right that each of them should be held responsible for all the damages inflicted; and, the liability being several and joint, they may be sued separately or jointly."

On an examination of the cases where a jury found against one tort-feasor and in favor of another, it will generally be found either that the one discharged by the jury had no connection with the tort or else that if he did have some connection therewith, nevertheless the defendant against whom the judgment was rendered played some active personal part in the wrongful act.

So far as we know, there is no case flatly in point on the facts where a corporation was sued for libel jointly with the agents who actually committed the libel, and the agents were released but the corporation held responsible for the libel. An analogous situation, however, has arisen many times in actions for negligence where an employer was joined, under the doctrine ofrespondeat superior, with an employee, in a suit on an act of negligence committed by the latter. While it is true there are a few jurisdictions where the employee may be released by the jury, and the employer, who took no active part whatever in the tort, is held in damages, yet the overwhelming majority of cases are to the effect that, in a verdict against an employer who has in no way participated in the act of negligence on which the action is founded and in favor of the employee who actually committed the tort, the judgment against the employer must be reversed. The rule and the reasons therefor are set forth in Doremus v.Root, 23 Wn. 710, 63 P. 572, 573, 54 L.R.A. 649, as follows:

"The general rule undoubtedly is that, where one has received an actionable injury at the hands of two or more persons acting in concert, or acting independently of each other if their acts unite in causing a single injury, all of the wrongdoers, however numerous, are severally liable to him for the full amount of damages occasioned by such injury, and he may enforce the liability in an action against them all jointly, or any one of them severally, or against any number of them less than the whole. While the wrong committed is the joint wrong of the several parties participating therein, it is also, in contemplation of law, the several wrong of each of the participants. Cooley, Torts (2d Ed.) p. 153. On this principle, at common law, a jury in actions ex delicto against several persons, contrary to the rule in actions ex contractu, were permitted to find against one or more of the defendants and in favor of the others. The rule with regard to actions ex delicto remains the same under the Code; and the practice now permits the jury in an action for tort against several defendants to return a verdict against so many of them as the proofs show are guilty of the wrong charged, and in favor of the others. As it is the peculiar province of the jury to determine the guilt or innocence of the several defendants, a verdict finding in favor of some and against others, even though there may be no very apparent reason for the distinction made, is not for that reason alone so far arbitrary or inconsistent as to require a reversal of the judgment entered thereon against those who have been found guilty. Gulf, C. S.F.R. Co. v. James, 73 Tex. 12,10 S.W. 744 [15 Am. St. Rep. 743]. It seems to be equally well settled, also, that silence of the verdict as to one of the defendants will not vitiate it as against the others. Such a verdict is treated as a finding in favor of the defendant not named on all of the issues, on which he is entitled to a judgment that plaintiff take nothing by his action. [Citing cases.] These general rules are relied on by the respondent to sustain the judgments entered in the court below. It must be borne in mind, however, that there are wide distinctions between the ordinary action for injuries, where all of the defendants participated in the wrongful act which caused the injury, and actions like the one before us, where one is liable because he committed the act and the other by operation of law, both with respect to the relations of the defendants to each other and to the injured person. . . . So, also, in such an action, whether brought against the employer severally or jointly with the employee, the gravamen of the charge is, and must be, the negligence of the employee; and no recovery can be had unless it be proven, and found by the jury, that the employee was negligent. Stated in another way: if the employee who causes the injury is free from liability therefor, his employer must also be free from liability. This was held in New Orleans N.E.R. Co. v.Jopes, 142 U.S. 18, 12 Sup. Ct. 109, 35 L.Ed. 919. . . . In the course of the opinion it was said: ``It would seem, on general principles, that, if the party who actually causes the injury is free from all civil and criminal liability therefor, his employer must also be entitled to a like immunity. . . . If the immediate actor is free from responsibility because his act was lawful, can his employer — one taking no direct part in the transaction — be held responsible?' . . . So, too, from the principle that there can be no liability on the part of an employer for the act of his employee in which he took no part, if the employer is free from liability, it follows that a judgment in favor of the employee in an action brought against him for an injury caused by such an act is a bar to a recovery against the employer in an action brought against him for the same cause of action."

[3] We think that all justice and reason upholds this view of the law. When the only reason why a judgment may be returned in favor of a plaintiff is that A has committed a tort, and the liability of B, if any, is an imputed one only, it would be a denial of all justice to say that the one who actually did the wrong may go free, while the one who can only be liable because of the former's wrongdoing is mulcted in damages. We hold, therefore, that, since there was no legal evidence before the jury that Reiter did or said anything from which malice could be imputed to the company, and since a verdict in favor of the Rosenzweigs, who actually published the libel, can only be legally sustained on the theory that the jury found them innocent of any actual malice, the verdict against the company cannot be sustained.

The judgment is reversed and the case remanded, with instructions to enter judgment in favor of the defendant company.