Fennell v. G.A.C. Finance Corp. of Baltimore No. 3

McWilliams, J., delivered the opinion of the Court. In this libel suit the verdict of the jury was in favor of the appellant (Fennell) against the appellee (GAC). The damages came to $40,000, $35,000 of. which was styled “punitive,” the balance “compensatory.” Four months later (5 March 1965) the trial judge granted GAC’s motion for a judgment N.O.V. Fennell appealed. While there are a number of subsidiary mat ²¹³ ters to be considered we shall be concerned principally with Judge Byrnes’ reason for granting GAC’s motion. 1 He said that “although * * * [the libelous matter] could well be morally and ethically reprehensible it is not, in this court’s opinion, actionable per se.” Fennell was discharged (honorably) from the Air Force in 1952.

He was 22 years old at the time. He drifted from one job to another until December of 1960 when he was employed as a salesman by The Jerome Apple Company and The Apple and Bond Company of Baltimore. The former is the general agent of the life insurance department of The Travelers Insurance Companies; the latter are general agents for Travelers’ Casualty, Indemnity, Fire and Marine departments. Although his education was limited and he seems to have had no special skills, he was not without some experience in the insurance business.

He was given a drawing account of $125 per week. Although the first few months were disappointing, the sales manager felt (in April) he “would make a good career agent.” Having a wife and five children to support, Fennell considered this to be the “best job of his career.” Early in April 1961 the sales manager told Fennell that he had been “taken off of the draw” which meant that he would no longer receive an advance of $125 per week, tie explained to Fennell that he had not sold enough insurance to justify continuing the advance. Fennell testified he “wasn’t fully aware that * * * [he had been] hired strictly to sell life insurance and casualty on the side * * He expressed doubt that he could get along “without some money coming in” so it was agreed that he would receive in cash commissions on any new business he produced. Otherwise his commissions would be retained and applied against the “draw” he had already received.

In the next two weeks he “went out and sold close to $200,000 worth of life insurance.” He said he “really concentrated on the life, instead of the casualty.” In June 1960 Fennell had borrowed from GAC $1,160 which he agreed to repay at the rate of $58.00 per month. He had borrowed money (which seems to have been repaid) from GAC ²¹⁴ on a number of previous occasions. He was behind in his payments when he went to work for Travelers, a. circumstance he had disclosed to his new employer. Fennell said “they knew my complete history, when I went to- work there.” Early in 1961 GAC allowed him to pay interest to date together: with ¡some sort of a penalty, and as a result his note- became “current” instead of “overdue.” ■ ■ He was again unable to make the full monthly payments. :Late in .March the manager (James C. Chambers) telephoned Eennell and asked him if he “was going-to come in and make a payment that day.” (He had paid $10.00 oh 10 March and $15.00 on 23 March.) Fennell replied he “couldn’t possibly come in and make a payment that day, because * * * [he] only had a few dollars.” Chambers said “he" was going to get that payment one way or the other” and that he was going to send a man around “to speak to * * * [his] boss.” Fennell said, “If you do that, it’s going to cost me my' job.” According to Fennell, Chambers replied that “he never cared if I worked again” and that “as far as he could see, I would never get a job aumywhere.” (Emphasis supplied.) About fifteen minutes later a man from GAC (not Chambers) did come to the office.

He asked for Mr. Brown, the president, but Fennell fobbed him off on the sales manager (Mr. Hooper) because Hooper 'was aware of his problems and he was afraid that if the GAC '’man got in to Mr. Brown “the job would be gone.” Whatever Hooper said or did was effective. There is no evidence that Brown ever learned of the visit; Despite the fact that he was now without' regular income Fennell continued his struggle to sell enough insurance to support his wife and family. He was not spectacularly successful but it appears he was making some progress. He sold a number of policies which the company, for one reason or another, had tó decline but, as Mr. Brown put it,' “L would say it’s • [Fennell’s 1 ] an average record for a man who' is’ new in the insurance business; you’re going to have policies taken with the zeal of trying to write business that a' moré experienced man would not take; and I would say it’s an áverage.”' On 18 May Chambers dictated and caused to- be mailed to ²¹⁵ Travelers, with copies to Mr. Brown and Fennell, the following letter: “Traveler’s Insurance Company Harford [sic] Connecticut RE: FENNELL, Robert C. [T.] Apple and Bond Incorporated 1 E. Redwood Street Baltimore 1, Maryland “Gentlemen: “It has been brought to our attention that a letter directed to you might bring about a satisfactory settlement of the long overdue indebtedness of the above.

Mr. Fennell signed a Promisory [sic] Note with our company on June 1, 1960 in the amount of $1160.00. This loan was contracted to be repaid over a period of twenty months at $58.00 a month. “There remains as of this date an unpaid balance of $1082.10 with no payments having been received since March 2$, 1961. “All our attempts to have Mr. Fennell pay this moral and legal obligation have been in vain: “We realize that the Traveler’s Insurance Company cannot act as a collection agency, however, we feel quite sure they do not condone this type of behavior; in as much as this man is directly or indirectly handling your funds and is acting as a representative of your company. “It is our contention that when a man is having financial difficulties, the greater the pressure is exerted the more likely the tendency is to infringe and tip the till. “We feel quite certain that if your office would discuss this matter with Mr. Fennell and his immediate supervisor, Mr. Herbert C. Brown, and direct the subject to contact us, we could enter into a mutually satisfac ²¹⁶ tory arrangement for the liquidation of this account. “Thank you for your cooperation in this matter: Very truly yours, N James C. Chambers Manager” The letter was seen by one or more officers of Travelers .in Hartford, Mr. Brown, Mr. Apple, Mr. Hooper and probably Mr. Dawson, an executive of the Apple companies. It also became a part of the company’s file. Fennell telephoned Chambers immediately after receiving his copy of the letter and asked him why he had done it.

Chambers replied, according to Fennell (and it is not denied), “he was going to take care of me; they were going to make sure I got well taken care of, right along * * Chambers was “severely reprimanded” by the regional supervisor of GAC and he was told “if it occurred in the future he would no longer be in * * * [GAC’s] employ.” 2 At the time of trial he was employed elsewhere (in Connecticut). He did not testify nor does it appear that he was deposed. Fennell described his relationship with Mr. Brown as “very good” before the receipt of the letter. Afterwards, he said, Brown “became very cold toward * * * [him].

In other words he really wasn’t—didn’t show an interest at all.” Hooper also told him that “Brown’s attitude had changed.” The following excerpt from Brown’s testimony seems to reflect a change in attitude. “By Mr. Hill: “Q. You don’t contend, do you, Mr. Brown, that this letter wouldn’t have any effect on being in your file on hiring this man? A. Of course, it would have an effect. “(Mr. Hill) Thank you very much. “By Mr. Psoras: “Q. What effect? A. If we were going to rehire ²¹⁷ him, we would want to be sure, first, that he has repaid or made arrangements to repay his account, on the condition that I rehire him, which would be that he would repay the balance, which goes to Travelers Insurance Company, and also that he would be on a commission basis only, rather than on a drawing account. 5 ’ It is conceded that Fennell was not actually discharged. He claims, however, that commissions on new business, which he was entitled to receive under the arrangement made with him after he was taken “off of the draw,” were not paid to him but were applied to his indebtedness to Travelers.

As a result, he “was more or less forced out * * *. Without the commissions, * * * [he] had no money to operate with.” As Mr. Brown phrased it, “as is usual in these cases, people have to eat, men take care of their families. He just left, about May of 1961.” He also testified that Travelers had advanced to Fennell a total of $2,000; that Fennell’s commissions (at the time of trial) amounted to $829.96; that he still owed $1,170.04. Even after the receipt of the letter Fennell said he continued to spend some time at the office servicing accounts.

For a while he had a job as a bartender but he was let go to make a place for a relative of the owner. He received unemployment compensation during the latter part of the summer and in September he enlisted in the U. S. Army. I. At the conclusion of the plaintiff’s case, and again at the conclusion of the whole case, GAC did not move for a directed verdict and state its reasons therefor, as provided by Maryland Rule 552 a, but instead, on each occasion, prayed the court to instruct the jury that there was “no legally sufficient evidence to entitle the plaintiff to recover.” The trial judge refused the first prayer and reserved his decision in respect of the second. Whether the proffer and rejection of such a prayer (often called a “demurrer prayer”) can sustain a motion for a judgment N.O.V. as provided by Maryland Rule 563 a 1 is a question which has not been raised in the case at bar and it does not, therefore, require our decision.

We observe in ²¹⁸ passing, -however,'that the. Rules, as they no.w, .exist-, prescribe the use of the motion for:a directed verdict and make. ¿10 mention of a “demurrer prayer.” 3 ' ■ Judge Byrnes, in,his charge to'the- jury, -declared that the letter was-libelous per se, that-the plaintiff was-“entitled to a verdict” arid that- their verdict should be' for the-,plaintiff. As stated earlier, he later changed his mind and directed-the. entry of. the judgment N.O.V. We think he was right the first time. We shall not have to venture very far into the thickets of the law of libel to find support for our decision.’ Anyone interested in learning just how tangled and how. nearly impassable the únderb.rush really is. need only observé the controversy 4 now raging between Dean .Prosser 5 and Mr. Eldredge. 6 In Kilgour v. Evening Star Co., 96 Md. 16, 23-24, 53 Atl. 716 (1902), which in our judgment is controlling here, Judge Page, for the Court, said: “The declaration charges that at the time of the publication the appellant was and still is a'practicing attorney and the State’s -Attorney of Montgomery County, and that the publication was ‘of and concerning him in respect of his said profession as a prac ²¹⁹ ticing attorney and of his duties as State’s Attorney.’ It is not contended that the words of the publication are libelous as against the appellant, otherwise than as they touch upon or have reference to his profession and his official position of State’s Attorney.

The rule of law applicable to a case of that kind, seems to be clear. ‘Words spoken of a person in his office, trade, profession, business or means of getting' a livelihood, which tend to expose him to the hazard of losing his office, or which charge him with fraud, indirect dealings or incapacity and thereby tend to injure him in his trade, profession or business, are actionable without proof of special damage, even though such words if spoken or written of an ordinary person,, might not be actionable per se.’ 18 Am. & Eng. Ency. of Law, p. 942 (2nd ed.); Wilson v. Cottman, 65 Md. 197 . “ ‘The words must go so far as to impute to - him some incapacity or lack of due qualification to fill the position, or some positive past misconduct which will injuriously affect him in it.’ Sillars v. Collier, 151 Mass. 50 ; Newell on Defamation, Slander and Libel, ch. 8, p. 178; Townsend, Libel and Slander, secs. 188, 189. “So this Court said in Newbold & Sons v. The J. M. Bradstreet & Son, 57 Md. 53 : ‘To say or publish of a merchant anything that imputes insolvency, - inability to pay his debts, the want of integrity in his business, or personal incapacity or pecuniary inability to conduct it with success, is slanderous or' libelous per se if without justification.’ ” (Emphasis.supplied.) In Pollitt v. Brush-Moore, Etc., Inc., 214 Md. 570 , 136 A. 2d 573 (1957), Judge-Collins, in an opinion adopted by the Court after his retirement, cited Kilgour with approval and quoted some of the language set forth above. He cited also Foley v. Hoffman, 188 Md. 273 , 52 A. 2d 476 (1947) and his comment in respect of that case is especially interesting and relevant: “[T]he defendant, Foley, the county treasurer, published remarks about the plaintiff, Hoffman, who had ²²⁰ been defendant’s chief clerk, which this Court held imputed to the plaintiff, not a particular act of carelessness or carelessness in some particular minor respect, but general incapacity or lack of due qualification to fill the position of chief clerk, and that he was justified in removing him from his staff on the grounds of inefficiency and neglect. It was there held that the demurrer was properly overruled because the words were libelous per se.” “Plaintiff also claims that the printed newspaper article tended to degrade and expose him to contempt and ridicule.

With this contention we agree. In Goldsborough v. Orem & Johnson, 103 Md. 671 , 64 A. 36 , the declaration alleged that the defendant falsely published of the plaintiff and of the majority of the members of the vestry of the church that they did ‘ “relentlessly turn their back upon legal and moral obligation to the detriment of a rector (meaning the said Reverend Thomas Carter Page) who suffered himself to become debilitated while plodding along the path of duty to his congregation (meaning the congregation of the said Christ Protestant Episcopal Church of Cambridge),” and the defendants meant thereby that the said four members of said vestry, including the plaintiff, voting for the said resolution as aforesaid, and in particular the plaintiff, had relentlessly violated legal and moral obligations.’ On demurrer it was held that this publication zvas libelous per se and such words charged the plaintiff with conduct calculated to make him the object of scorn and contempt of all honorable men. For the same reasons that the article here before us charged the plaintiff with conduct incompatible with the proper conduct of his office, it also charged him with conduct tending to degrade and expose him to contempt and ridicule.” 214 Md. at 579-80 . (Emphasis supplied.) ²²¹ Judge (now Chief Judge) Prescott, in Thompson. v. Upton, 218 Md. 433, 437 , 146 A. 2d 880 (1958), observed: “We have so recently had occasion to pass upon the legal principles involved herein, Pollitt v. Brush-Moore, Etc., Inc., 214 Md. 570 , 136 A. 2d 573 , that it will be unnecessary to unduly elaborate upon them. * * * We shall not attempt to do what has baffled the Courts for these many years, namely, to compose an all-inclusive definition thereof.

However, libel includes any unprivileged (i.e. a publication not having an absolute privilege), false and malicious publication which by printing, writing, signs or pictures tends to expose a person to public scorn, hatred, contempt or ridicule, Foley v. Hoffman, 188 Md. 273, 284 , 52 A. 2d 476 ; and also embraced therein is any such publication that relates to a person’s office, trade, business or employment, if the publication imputes to him some incapacity or lack of due qualifications to fill the position, or some positive past misconduct which will injuriously affect him in it. Foley v. Hoffman, supra; Pollitt v. Brush-Moore, Etc., Inc., supra, at p. 577.” (Emphasis supplied.) In the recent case of Heath v. Hughes, 233 Md. 458 , 197 A. 2d 104 (1964), Kilgour, Pollitt, Foley and Thompson were cited with approval by Judge Marbury, who spoke for the Court. GAC argued, perhaps not confidently, that the letter is not actionable per se since the plaintiff was not accused of hcmng committed a crime. In Lewis v. Daily News Co., 81 Md. 466 , 32 Atl. 246 (1895) it was said of the plaintiff that “he would be an anarchist if he thought it would pay.” (Emphasis supplied.) Judge McSherry (later Chief Judge) in a caustic opinion said, for the Court: “[T]o publish of another that he ‘would be an anarchist if he thought it would pay/ is to impute to him the possession of that degree of moral obliquity and turpitude which would mark him as a fit per ²²² son,-if-he. .-were personally benefited thereby, to-do.the violent, and felonious acts of which anarchists are known or believed to be guilty.” Id at 474.

In Lewis the defendant sought to,mitigate the sting of the publication .by suggesting, that the plaintiff • was charged merely with being, a. political propagandist .who advocated-visionary schemes;! Judge McSherry said it was ‘[grossly libelous” and he-paraphrased his characterization, in incandescent language. See also Keating v. Conviser, 246 N. Y. 632 , 159 N. E. 680 (1927). GAG contends Chambers, was merely asking Travelers for cooperation in..working out “a mutually,.-satisfactory arrangement £or¡the liquidation of” Fennell’s, .indebtedness, that he was interested only in collecting the overdue payments, that no -harm-was intended; and' no harm was...done. '.Our. credulity has limits which-/dp not. extend -that far.; Viewed as-a whole we ;think Chambers’ ..conduct reeks with , malice ■ and. recklessness, - What; he said. to.

Fennell in the March . telephone • conversation can-hardly .be„,interpreted, in any other.way; After demanding an immediate'payment and being told it was impossible,-he threatened’ to send,-.a. man,.to .-“speak,