EMDE ET AL. v. SAN JOAQUIN COUNTY CENTRAL LABOR COUNCIL ET AL.
The San Joaquin County Central Labor Council, Teamsters Local No. 439 and two of its officers, and a newspaper copartnership and its members, which own and publish the Stockton Labor Journal in San Joaquin County, have separately appealed from a joint and several judgment for special and punitive damages, which was rendered pursuant to the verdict of a jury in a suit for libel growing out of a labor dispute over an alleged violation of an agreement with Teamsters Local No. 439 regarding membership in the union, hours and wages of the drivers of respondents' milk trucks; and have also appealed from the orders denying defendants' motions for judgment notwithstanding the verdict.
The respondents own and operate a dairy in San Joaquin County under the name of Happyholme Dairy. They had always employed union drivers for their routes and had otherwise conformed to the agreement with the union in that regard. After the agreement was made, the dairy copartnership sold its milk routes to independent contractors who thereafter operated them. The chief issue in this case involved the validity and genuineness of those sales, and incidentally the question as to whether the purchasers were employees of the dairy company or independent contractors.
The labor council procured the publication of an article in the Stockton Labor Journal charging the respondents with violating their agreement by hiring non–union drivers and by compelling them to furnish their own vehicles and to work for commissions in lieu of agreed minimum wages. The suit was based on these and other alleged false statements. Finally, the published article urged all friends of union labor to boycott respondents' dairy products and to cease patronizing that enterprise. The published article resulted in a loss of many customers and great damage to the business. The libel suit was tried with a jury which returned a verdict for actual and punitive damages against each and all of the defendants. A joint and several judgment was accordingly rendered against them. From that judgment the defendants have separately appealed.
George W. Emde and his sister Lois A. Marshall, as copartners, owned and operated a dairy business near Lodi in San Joaquin County under the name of Happyholme Farms. They had a herd of about 200 Guernsey milk cows, from which they produced an average of 500 gallons of milk per day. The value of the business was approximately $85,000. The milk was marketed to customers consisting of stores, restaurants and individuals. The district was divided into three routes. There were some 800 regular purchasers of milk, including 70 to 75 wholesale customers. The company maintained and operated a milk–processing plant in connection with its business, the plant and equipment being valued at $20,000. The business was conducted successfully at a substantial profit.
The respondents employed three union men in their processing plant, namely, Geo. Clow, Ben Quast and Earl Vaughn. They also employed three union drivers of milk trucks, namely, Art Blewett, Reuben Quast and Leonard Kelley. November 1, 1937, the respondents, through the Milk Distributors Association of Stockton, executed a written agreement with International Brotherhood of Teamsters, Chauffeurs, Stablemen and Helpers of America, affiliated with the American Federation of Labor, regulating working conditions, wages and hours of all employees included within the jurisdiction of that brotherhood. This contract provides that “all employees under the jurisdiction of this Local Union shall become members of the same within thirty (30) days from date of taking their employment”; that “eight (8) hours shall constitute a day's work”; that “relief drivers and regular drivers” shall receive a minimum of $160 per month. Section 16 of the contract provides that “No employee shall be required or permitted to make any written or verbal contract that will conflict with this agreement.”
Dean De Carli had been employed by the respondents for six years as a sales manager. He was not a member of the labor union. It is not contended that the agreement with the labor council required him as sales manager to be a member of the union. Sales managers did not come within its jurisdiction. It appears that he did occasionally drive trucks and deliver milk in emergencies when the regular drivers were sick or incapacitated. The council had knowledge of that fact, but did not complain on that account. He was never asked to join the union.
July 1, 1938, the respondents orally agreed to sell and transfer routes one, two and three to independent contractors. With that purpose in view, negotiations were had with several persons. The sale contracts were finally consummated with Reuben Quast, Frank Vanek and Jack Nicewonger. Those written agreements were signed and deposited with the Stockton Savings and Loan Bank on September 23, 1938. Each of those men thereby purchased and thereafter operated his own separate route. The transactions were complicated. By the terms of the agreements each of these men became an independent contractor of the respondents' dairy company with the exclusive right to conduct and operate his own route, subject to certain conditions. They agreed to purchase milk from the respondents at the market price thereof, less a specified discount which represented their profit. They agreed to and did purchase respondents' trucks on conditional sales contracts and contracted to pay for them from the profits derived from sales of the milk. They received from the respondents numerous unpaid accounts of customers, agreeing to collect and account for the same. They agreed to and did deposit in said bank all receipts from old and new accounts to be applied by the bank to said obligations according to the terms of the written agreements. Each purchaser borrowed from the bank the necessary sum of money with which to pay the agreed purchase price of his truck. Those amounts ranged from about $1,700 to $2,600, for which each purchaser executed and delivered to the bank his separate promissory note. Payment of these notes was guaranteed by George W. Emde. Interest on the notes was paid by the makers thereof. Each of said purchasers derived profits from sales of milk in his respective district amounting to over $200 per month and made substantial payments on his said note and obligation at the bank. Mr. Quast was the only purchaser of a milk route who had formerly been an employee of the respondent under the jurisdiction of the labor council.
Learning of these proposed transfers of routes to independent contractors, the labor council, through its secretary C. C. Allen and the international organizer and agent William J. Conboy, protested on the ground that the transactions were mere subterfuges to avoid paying the drivers of routes the agreed minimum wages of $160 per month. Several conferences and some correspondence ensued upon that subject. Mr. Comboy interviewed the proposed purchasers in behalf of the Labor Council and persuaded one man by the name of Kelley to abandon the proposition. With the evident purpose of coercion the union membership cards of both Quast and Kelley were revoked, but they were subsequently restored. The purchasers assured Conboy they intended to employ only members of the union in conducting their milk routes, and that they proposed to carry on the business according to union labor rules. In the conversation with Bailey Fairchild, the business manager of the dairy company, Mr. Conboy asserted that the pretended sales of the routes and trucks were mere subterfuges, and he declared that the respondents were thereby trying to avoid paying their drivers the agreed wages by pretending to sell the routes and by placing the drivers on commissions. Those accusations were strenuously denied by both the representatives of the dairy company and by the purchasers of the routes who assured Mr. Conboy the sales were bona fide and genuine. Documentary and other proof of those facts were presented to Conboy, but he threatened the respondents, saying that if they did not take those routes and trucks back, “You will never sell much milk.” He declared that the labor union had forced other industries, under similar circumstances, to repossess their routes, and he then said to Mr. Fairchild, “Well, we are going to make them take them back.”
August 23, 1938, a meeting of the representatives of the labor council, including Messrs. Allen, Campbell, Fitzgerald, Conboy and their attorney, met with Messrs. Fairchild, Kent and Clark, representing the dairy company, and the three purchasers of the milk routes, Quast, Vanek and Nicewonger. A full and complete hearing of the controversy was then held. All of the facts relating to the sales of milk routes and trucks to the said purchasers were then presented. No settlement of the matter was reached. The meeting adjourned.
September 26, 1938, the same three representatives of the labor council again met with the same representatives of the dairy company and the purchasers of the milk routes, pursuant to the provisions of section 13 of the agreement with the labor union to submit all labor disputes to such a committee for arbitration. Other executive officers and members of the labor council, together with the reporter of the newspaper, also attended that meeting. This meeting was called in accordance with a written notice thereof which was served on the respondents requiring them to show cause why the Happyholme Dairy should not be placed on the “unfair list” because “they had hired non–union drivers and were not guaranteeing any wage.” At that meeting the respondents and the purchasers of the milk routes presented in evidence the contracts of sales and other documentary and oral proof of the genuineness of those sales. The defendants were given access to the records and documents which furnish very convincing proof in support of the findings of the jury that the sales were bona fide and that the purchasers of the routes thereby became independent contractors for the sale of respondents' milk on their own respective routes. The purchasers were then present and verified those facts. The representatives of the labor council, however, insisted on cancellation of the sales by the respondents. No agreement was reached by the joint committee. The meeting again adjourned.
September 30, 1938, the following article was printed and published in the Stockton Labor Journal:
“HAPPYHOLME DAIRY VIOLATES CONTRACT WITH TEAMSTERS
UNIONISTS URGED NOT TO PATRONIZE BY LOCAL COUNCIL
Action Comes After Three Months' Negotiations Fail to Bring Peaceful Settlement from Operators
“Because it had violated its signed agreement with Teamsters Local 439, hired non–union drivers and initiated a destructive labor policy, the Happyholme Dairy, located on the Sacramento Road at Lodi and serving the entire Stockton area, was placed on the official ‘We Don't Patronize’ list of the San Joaquin County Central Labor Council Monday night.
“All friends of organized labor are urged not to patronize this dairy. All other milk distributors in Stockton are operating on a union–basis, so there is no excuse for dealing with a non–union firm.
“According to officials of the Teamsters union, the Happyholme Dairy had been working under an agreement with the organization for several months. On July 1, however, while the contract was still in force, the management openly violated its word by hiring non–union milk wagon drivers.
“In addition, drivers were made to furnish their own vehicles and were put on a straight commission plan. This move wiped out the minimum wage guarantees established in the agreement with the union, although the status of the drivers as employees of the dairy remained unchanged. The destruction of wage minimums is a threat to gains made by organized labor throughout the district.
“A peaceful settlement of the difficulty has been sought for three months by the Teamsters Union, but the dairy managers have refused to make any concessions. Their persistent refusal to work out a mutually satisfactory arrangement has forced the union and the Central Labor Council to deny the dairy the patronage of organized labor.
“In Stockton, the Happyholme Dairy operates out of the Bobb Inn, 1147 North El Dorado, a non–union eating place.
“All friends of labor now getting milk from the Happyholme Dairy are urged to take their patronage elsewhere immediately and thus help maintain union–established and union–protected wage scales and working conditions.”
The initial heading to this article appeared in large type across the top of the front page of the newspaper. The italicized portions of the foregoing article were emphasized by placing them in black–faced type. Similar articles on the same subject were subsequently published in the Stockton Labor Journal, October 7th and November 18th of the same year.
This suit is not based on the fact that the labor council declared a boycott against the Happyholme Dairy and placed it on the “We Don't Patronize” list, urging “all friends of organized labor” to cease patronizing the industry. Those facts are only incidental issues in this case. The suit is founded on the publication of the alleged false and libelous statements, contrary to the provisions of section 45 of the Civil Code, which caused substantial damage and loss to respondents' business. The alleged false statements contained in the published article include the unqualified declarations that the owners of the Happyholme Dairy violated their agreement “by hiring non–union milk wagon drivers”; that “drivers were made to furnish their own vehicles and were put on a straight commission plan”; that “this move wiped out the minimum wage guarantees established by the agreement with the union, although the status of the drivers as employees of the dairy remained unchanged”; that the respondent has violated its contract “with teamsters,” and had “initiated a destructive labor policy.”
The cause was tried with a jury which rendered a verdict against the defendants for compensatory damages in the sum of $15,000 together with $5,500 additional punitive damages. On motion for new trial, the amount of the compensatory damages was reduced to $7,000, which reduction was accepted by the plaintiff. Judgment was rendered accordingly. From that judgment this appeal was perfected.
The judgment in this case is founded on the sound principle that neither an individual, a corporation, a labor organization nor the publishers of a labor journal may injure or destroy the business of another person by circulating false statements regarding it, without subjecting themselves to damages in an action for libel. The latest expression of the Supreme Court in the case of Magill Bros. v. Building Service, etc., Union, 20 Cal.2d 506, 127 P.2d 542, recognizes that fact. It is there said that while peaceable picketing is lawful, false banners may not be displayed in the guise of legitimate advertising or freedom of speech, without subjecting the labor organization and the individuals to the penalty of law prescribed for fraudulent misrepresentations.
The violation of “freedom of speech” is not involved in this case, except upon the theory that the publishers of the newspaper article had reasonable cause to believe that it recited the truth. That was a question for the determination of the jury which was decided adversely to the defendants. The constitutional guarantee of freedom of speech, article 1, § 9, does not authorize a person, a corporation or an organization to wilfully or carelessly publish false statements which are intended to and do injure the business of another. False or maligning speech should be uttered with great caution.
We are of the opinion the language used in the published article is libelous per se. It was printed in a local union labor newspaper, circulated largely among union labor members and addressed particularly to them, urging them and all friends of union labor to boycott the Happyholme Dairy “because it has violated its signed agreement with Teamsters Local No. 439, hired non–union drivers and initiated a destructive labor policy.” The published article specified particularly that the Dairy Company violated the agreement and instituted a destructive labor policy in that it: (1) hired non–union drivers on July 1st; (2) compelled the drivers to furnish their own vehicles; (3) placed the drivers on a “straight commission plan”; (4) refused to guarantee minimum wages; (5) left unchanged “the status of the drivers as employees.” The article concluded by saying “All friends of labor * * * are urged to take their patronage elsewhere.”
The foregoing language certainly is plain and unambiguous. It requires no innuendo or explanation to understand the meaning or application of the language employed. It consists of plain statements of alleged facts. Such statements, if they are false and tend to injure or damage the respondents' business, are per se actionable. Schomberg v. Walker, 132 Cal. 224, 64 P. 290; Bates v. Campbell, 213 Cal. 438, 2 P.2d 383; Rosenberg v. J. C. Penney Co., 30 Cal.App.2d 609, 619, 86 P.2d 696; Harris v. Curtis Publishing Co., 49 Cal.App.2d 340, 121 P.2d 761; Axton–Fisher Tobacco Co. v. Evening Post Co., 169 Ky. 64, 183 S.W. 269, L.R.A.1916E, 667, L.R.A.1918F, 1205, Ann.Cas.1918B, 560; Consolidated Terminal Corp. v. Drivers, etc. Local Union 639, D.C., 33 F.Supp. 645; Newall on Slander and Libel, 2nd ed., 304, §§ 27, 28, et seq.; 33 Am.Jur. 83, § 67.
In the Axton–Fisher Tobacco Co. case, supra, the facts were very similar to those of the present action. That suit for libel was brought against the owner of a newspaper for publishing an article in which it was stated the Tobacco Company violated its agreement with the Union Labor organization by: (1) employing a Negro foreman; (2) procuring the printing of advertising cards in “scab shops”; (3) paying its employees less wages than were paid by other local tobacco industries; (4) maintaining in its shops unsanitary conditions. The article stated that the Axton–Fisher Tobacco Company had been or should be placed on the “unfair list.” No special damages were alleged. A demurrer to the complaint was sustained on the ground that the language did not constitute libel per se, and that the publication was therefore not actionable since special damages were not pleaded. On appeal the judgment was reversed. The reviewing court held that the language was actionable per se. In an elaborate opinion which reviews numerous other similar cases the court concludes that the language of the complaint stated a good cause for libel per se. It is there said [169 Ky. 64, 183 S.W. 278]:
“We may look to the matter set out as inducement in the petition for the purpose of showing the relation, in a business way, between the tobacco company and union labor; and to the innuendo for the purpose of showing the defamatory meaning and application of the publications as manifested by their effect upon members of labor unions in business dealings with the tobacco company and the consequent business injury suffered by the tobacco company. * * *
“We find therefore that, although these words standing alone would not be libelous per se, they are made by the inducement and the innuendo, both of which must be read and considered in connection with the words, not for the purpose of enlarging their meaning, but to show that under the circumstances they had a special meaning that was hurtful to the business of the tobacco company. We also think that if words are published of a business concern that have a direct tendency to alienate from it the good will and patronage of a large class of its customers, although others of its patrons may not take offense at them or withdraw their patronage, an action will lie, and the words will be treated as libelous per se.”
In the Consolidated Terminal Corporation case, supra, suit for damages was brought for libel and conspiracy in inducing customers to cease doing business with the corporation, and for “picketing” the plant for the alleged reason that the industry was “unfair to Drivers, Chauffeurs and Helpers Local Union No. 639.” Motion was made in the United States District Court of the District of Columbia to dismiss the suit on the ground that the complaint did not state facts sufficient to constitute libel per se, and that the cause was therefore not actionable. The motion was denied. The court said [33 F.Supp. 650]:
“It is urged by the defendants that the allegations do not show that the language used is libelous per se, and that the plaintiff has failed to set forth with sufficient particularity the special damages which it is claimed it has suffered.
“With these contentions, I do not agree. As has been pointed out, labor organizations should and do have a right peaceably to give publicity to labor disputes in which they are interested. * * * This right to publicize the facts concerning a labor dispute carries with it an obligation of self–restraint to prevent the publication of untruth. It cannot be doubted that the publication of a statement to the effect that a person or corporation, engaged in manufacture and sales to the public, is unfair to organized labor, if in truth and in fact such person or corporation is not unfair to organized labor, results in inevitable damage and loss to that person or corporation. In respect of inevitable damage, such a statement, if false and malicious, can be assimilated to those expressions which are well recognized in the law to be libelous per se, and to contend otherwise is to ignore the realities of present day economic life.”
We are convinced the language which was published in the present case is actionable per se.
The appellants may not complain of the fact that the court instructed the jury that the language did not constitute libel per se, for the reason that they were not prejudiced thereby. The appellants were not entitled to that instruction.
We are of the opinion the judgment is supported by the evidence.
There is ample proof of special damages in excess of the sum of $7,000 which was awarded by the judgment. The testimony of the witnesses, together with the natural inferences which must be drawn therefrom, leaves no reasonable doubt that the sudden loss of numerous wholesale and retail and individual customers was directly due to the published article in the Stockton Labor Journal to which most of them were subscribers. There is uncontradicted evidence that the loss of customers began from the very day after the publication appeared in the newspaper on September 30, 1938, and continued to the time of the trial in March, 1939. The bulk of the loss came from the fact that wholesale and retail stores discontinued their patronage. Each of the three distributors, Quast, Vanek and Nicewonger, together with Mr. De Carli, the sales manager of the dairy, testified to that fact which was corroborated by the route books which they kept. When customers stopped purchasing milk, they were personally interviewed by either the distributors or the sales manager, and often by both of them. Most of the customers admitted that there was no complaint as to the quality or distribution of the milk. The clear inference is that they were persuaded to and did discontinue their patronage on account of the influence of the labor union and of the false statements expressed in the published article.
The law presumes that actual damages result from the publication of a false and unprivileged article which is slanderous per se. The proof of such facts conclusively establishes a cause authorizing the jury in the exercise of sound judgment to award actual or compensatory damages in sums which are justified by the evidence. Clark v. McClurg, 215 Cal. 279, 91 P.2d 505, 81 A.L.R. 908; 16 Cal.Jur. 127, § 94. Exemplary damages may be allowed only when actual damages have been suffered. Mother Cobb's Chicken Turnovers, Inc., v. Fox, 10 Cal.2d 203, 73 P.2d 1185. In a suit for libel an award for compensatory damages may be supplemented by an allowance of punitive damages when it appears that the defendant acted with malice. Clark v. McClurg, supra; Lewis v. Hayes, 165 Cal. 527, 132 P. 1022, Ann.Cas.1914D, 148. Exemplary damages may be allowed in an action not arising from contract when the defendant is guilty of “oppression, fraud, or malice, express or implied.” (Italics ours.) § 3294, Civ.Code. Punitive damages are not recoverable under any circumstances as a matter of right. The award of punitive damages in a proper case is solely within the discretion of the trial judge or the jury. Lewis v. Hayes, supra; Davis v. Hearst, 160 Cal. 143, 116 P. 530. While it is true that punitive damages may be allowed only in cases where it appears that the defendant is guilty of oppression, fraud or malice, those elements may be inferred or implied from the language of the challenged publication if it be libelous per se, or from the conduct and declarations of the accused person. 16 Cal.Jur. 134, § 101. It has been held that when the published language is not libelous per se it is necessary to allege and prove special damages before punitive damages may be allowed. 33 Am.Jur. 191, § 202. When special damages are alleged and proved in a suit for libel, whether the published language is libelous per se or not, punitive damages may be allowed in the sound discretion of the jury.
In the present case special damages were alleged and proved. Punitive damages were therefore properly awarded in this case.
Upon our theory that the language of the published article in this case is actionable per se, malice on the part of the defendants is implied. The burden was on the defendants to rebut that presumption or inference. Moreover we are of the opinion the facts of this case affirmatively show malice on their part sufficient to support the implied findings of the jury that they were guilty of malice. The representatives of the labor council, with all of the facts before them, after a thorough investigation and repeated discussions with the representatives of the plaintiffs, insisted upon the rescinding of the sales of routes and delivery trucks. Mr. Conboy threatened respondents' business manager, Bailey Fairchild, saying, in effect, that if those transfers of the routes and trucks were not cancelled, “You will never sell much milk.” He added, “We are going to make them take them back.”
It is true that Mr. Bredsteen, one of the proprietors of the Stockton Labor Journal, did not himself write the article which was published in his newspaper. But his journal was conducted chiefly in the interest of the labor council. After the publication of the issue of September 30th, in which the article first appeared, he personally investigated the facts in controversy by talking with the representatives of the labor council, and then deliberately adopted and approved that publication by authorizing similar statements to be again printed and circulated in two subsequent issues of the paper. Davis v. Hearst, supra. Complaint of the libelous character of that article had been made to him, and he was thereby placed on notice and was bound to fully investigate the truth of the statements contained therein before he authorized it to be again published. We are of the opinion the evidence supports the verdict of the jury and the judgment against both the newspaper co–partnership and Mr. Bredsteen personally.
The defendants pleaded as special defenses to the alleged libelous publication that the newspaper article was privileged under subdivision 3 of section 47 of the Civil Code. That section provides in part:
“A privileged publication is one made * * *
“3. In a communication, without malice, to a person interested therein, (1) by one who is also interested, or (2) by one who stands in such relation to the person interested as to afford a reasonable ground for supposing the motive for the communication innocent, or (3) who is requested by the person interested to give the information.”
The court instructed the jury that the newspaper article was “qualifiedly privileged,” and that they could not find the publishers thereof guilty of libel unless they also found that it was “actuated by actual malice.” The jury was further instructed that the defense of privilege is unavailable when the publication is in fact false and is prompted by malice and bad faith.
In support of the judgment we are bound to assume the jury concluded that the article was printed and circulated through actual malice and in bad faith on the part of the publishers. Those findings are supported by the evidence as we have elsewhere stated in discussing the subject of malice.
In construing section 47 of the Civil Code, the authorities have distinguished between what is termed “absolute privileges” and “qualified or conditional privileges.” Subdivisions 1 and 2 of that section enumerate circumstances which are deemed to constitute absolute privileges. Proof of an absolute privilege is a complete defense to a charge of libel, regardless of whether it is actuated by malice, or not. Hale Co. v. Lea, 191 Cal. 202, 215 P. 900. Where the facts show there is a mere qualified privilege to publish the challenged statements, under the last three subdivisions of section 47, that doctrine is not a complete defense, provided actual malice is also proved. Such malice may be shown by direct or circumstantial evidence. One may be liable for damages for publishing a libelous article even though a qualified privilege to do so exists, when it appears that it is actuated by actual malice and bad faith. The burden is on the defendant to allege and prove the defense of a qualified privilege. He must establish at least a prima facie showing of lack of malice to entitle him to that defense, unless that fact is admitted by the pleadings or appears at the trial. Actual malice may be inferred when the facts do not constitute an absolute privilege under subdivisions 1 and 2 of section 47. Snively v. Record Publishing Co., 185 Cal. 565, 577, 198 P. 1. In support of the distinction between absolute and qualified privileges and the limitation of the application of qualified privileges as a defense to libel per se, the following citations are enlightening: Irwin v. Newby, 102 Cal.App. 110, 115, 282 P. 810, 283 P. 370; Gosewisch v. Doran, 161 Cal. 511, 119 P. 656, Ann.Cas.1913D, 442; Witkin's Summary of Cal. Law, p. 387(3); 12 So.Cal.L.Rev., p. 248.
The court properly admitted in evidence the publication of substantially the same alleged libelous matter recited in the complaint in two subsequent issues of the Stockton Labor Journal. That evidence was competent to show actual malice and knowledge of the libelous character of the charges contained therein. Newell on Slander and Libel, 4th Ed., p. 322, § 287.
It is true that the San Joaquin County Central Labor Council Local Number 439 would not be liable for damages unless it, as an organization, induced or procured the publication of the alleged libelous matter. Judgment for damages was rendered against that council, together with its secretary and managing agent personally and against the partnership and individual members of the firm which own and publish the Stockton Labor Journal in which the article was printed.
The complaint specifically alleges that the Stockton Labor Journal was published, circulated and devoted to the interests of organized labor and that it was so held out to the public and used by the defendant labor council to advance and represent its interests in San Joaquin County, and that “the defendants printed and published in said Stockton Labor Journal” the defamatory and libelous article wilfully and maliciously for the purpose of injuring and destroying plaintiffs' business. In neither the answer of the labor council nor in the briefs is it denied that the labor council or any of the other defendants procured the publication of the article. This amounts to an acknowledgment that the labor council and each of the other defendants actually induced and procured the publication of the article. The only reply in that regard to the charge of publishing the alleged libelous article which is contained in the answer of the labor council is that it was published without malice, with the sole object of furnishing members of the labor organization with the information or news which the article contained. In other words, the plea of the defendants was that the article was true and also that it was privileged.
It was therefore not necessary for the plaintiffs to prove that the labor council or the other defendants actually procured the publication of the article. The pleadings constitute an admission of that alleged fact.
In regard to the liability of joint tort feasors for the publication of a libelous article, it is said in Newell on Slander and Libel, 4th Ed., page 237, section 193: “Every one who requests, procures or commands another to publish a libel is answerable as though he published it himself. And such request need not be expressed, but may be inferred from the defendant's conduct in sending his manuscript to the editor of a magazine, or making a statement to the reporter of a newspaper, with the knowledge that they will be sure to publish it, and without any effort to restrain their so doing. And it is not necessary that the defendant's communication be inserted verbatim, so long as the sense and substance of it appear in print.”
In the present case it clearly appears that the information from which the article in question was written, was obtained and composed by a reporter representing the Stockton Labor Journal. He was present and listened to the proceedings which occurred at two meetings of the board of the labor council and he discussed the facts contained in the article with the officers of that organization. It satisfactorily appears that said officers knew the contents of that article and knew that the article was to be published. We must therefore assume the article was published with the knowledge and consent of the labor council, and that it would therefore be liable for damages on that account provided the judgment is otherwise adequately supported. Magill Bros., Inc., v. Building Service Employees' International Union, 20 Cal.2d 506, 127 P.2d 542; 1 Cooley on Torts, 3d Ed., 203, § 136.
The appellant labor council seeks to justify the publication of the newspaper article by arguing that even if the independent contractors to whom the routes were sold were not deemed to be employees of the Happyholme Dairy acting as hired milk truck drivers, still the article is true because Dean De Carli, who had been a business manager of the dairy company for more than five years, sometimes drove the milk trucks, and that he was not a member of the union. There is no merit in this contention. The record clearly shows that De Carli was not a driver of milk trucks. His particular business was sales manager of the dairy. The Teamsters Union had no jurisdiction over such officers. The labor council knew him and was familiar with the duties which he performed. He was never asked to join the union. No complaint was ever made on the ground that he was not a member of the labor union. The evidence clearly shows that he never drove milk trucks except occasionally in emergencies when “somebody was sick.” He had worked as a sales manager for the dairy for over five years. He was not hired as a driver nor did he serve as such except in emergencies. Clearly the published article did not have reference to him when it declared that non–union drivers had been employed who were compelled to furnish their own vehicles and were placed on a “straight commission plan.” The published article specifically states that on “July 1, * * * the management openly violated its word by hiring non–union milk wagon drivers.” That statement could not possibly refer to De Carli, for he was hired by the dairy company five years prior to that particular date, and with the knowledge of the labor council he had worked for that company continuously, not as a driver, but as a sales manager. The publication of the article may not be justified on the ground that De Carli, a non–union man, occasionally drove a milk truck in emergencies when regular drivers happened to be sick. The jury determined that question against the appellants.
Very clearly the published article had reference only to the three men who purchased the routes on July 1st, or soon thereafter. The entire controversy between the union and the dairy company was over the question as to whether these men actually purchased the routes and became independent contractors or whether the contracts of sales were fictitious and void, and constituted mere subterfuges to avoid paying them the guaranteed union wages of $160 per month “as hired milkwagon drivers.” Unless these contracts of sales were fictitious and void, the evidence is uncontradicted that the dairy company hired no non–union milk truck drivers; that none of their drivers had ever been placed on commissions in lieu of fixed wages; that none of their drivers had ever been required to furnish their own vehicles. If those contracts of sales were valid there is no evidence that any of the terms of the written agreement of November 1, 1937, between the dairy company and the union, were violated by the respondents. If that be true then the previously–challenged statements of the published article were false. A complete disclosure of all the documents and circumstances of those transactions was made and discussed with the officers of the labor union in the presence of a representative of the Stockton Labor Journal. The validity of those contracts of sales of milk routes was the chief issue at the trial of this case. The jury determined that the contracts of sales were valid, bona fide transfers of those routes, and that the purchasers were independent contractors, and not employees of the dairy company.
The appellants urge that plaintiffs' sales of its routes and trucks, which had the effect of changing the status of their drivers from employees to independent contractors, was a violation of section 16 of its contract with the International Brotherhood of Teamsters. That section provided: “No employee shall be required or permitted to make any written or verbal contract that will conflict with this agreement.”
Two of the purchasers of routes were not formerly employed by the dairy company. They had never been employees of the plaintiffs, and therefore could not possibly be affected by the preceding section of the contract. Mr. Quast, the third purchaser of a route, had previously been an employee of the plaintiff, and we must concede his status was changed from that of an employee to an independent contractor. It is not clear why the appellants assume that change of relationship of one driver from an employee to an independent contractor would justify them in publishing the alleged libelous article. We assume, however, they mean to assert that the gist of the published article is that plaintiffs violated their written agreement with organized labor and that the published statements were therefore true. This does not necessarily follow.
We are of the opinion the sale of a milk route and truck to Mr. Quast, a former driver for plaintiffs, was not a violation of the written agreement because the driver's status was thereby changed from an employee to that of an independent contractor. That sale did not “conflict” with either the letter or the spirit of the contract. A careful examination of that instrument discloses the unquestionable fact that it does not purport to prevent an employee from quitting his position or from changing his status by buying the property–right in a milk route and operating it as an independent contractor. Such a prohibitory clause in the contract would be contrary to public policy and void. 17 C.J.S., Contracts, p. 622, §§ 238–247. The evident and only purpose of that contract was to regulate the hiring and firing of employees as drivers, and to fix the wages, hours and conditions under which they worked while they remained as employees of the dairy company. There is no intimation or inference to be drawn from the subject–matter or language of the contract that will justify the construction that it was intended to prevent an employee from purchasing a milk route or truck from the plaintiff in his own right or from thus terminating his employment and assuming the status of an independent contractor. That contract contemplated no such unjust or illegal prohibition against the right to sell or acquire and operate a lawful business. That construction would be unwarranted and unreasonable. It was not the intention of the parties.
Moreover, the labor council recognized the fact that the contract did not prohibit a driver from changing his status from an employee to that of an independent contractor. The gist of the published article was not that an employee had violated the written contract by purchasing a milk route and becoming an independent contractor, or that the plaintiffs had sold the routes. It was just the contrary. The published article, and the conduct of the labor council throughout the controversy consistently contended that the status of the drivers had not been changed, but, on the contrary, that the pretended sales were mere subterfuges, and that the dairy company was violating the written agreement by hiring nonunion men; by refusing to pay their employees minimum wages; by compelling them to work for commissions in lieu thereof, and that “the status of the drivers as employees * * * remained unchanged.” The notice of the committee meeting served upon the plaintiffs' dairy company by the labor council to show cause why it should not be placed on the “unfair list” specified that the reason for such action was because “they had hired non–union drivers and were not guaranteeing any wage.” After that arbitration committee completed the evidence, the question which was presented to it for determination was the following, “Are present operators of Happyholme routes employees of Happyholme?” The appellants may not now contend for a construction of the written contract which is at absolute variance with its previous conduct and construction of that very instrument. There is no merit in their attack upon the validity of the sales of the routes on the ground that the plaintiffs were precluded by the written agreement from selling a milk route to a former driver of a truck. The verdict of the jury forecloses that contention.
The appellants contend that the contracts of sales of the routes and of the delivery trucks were fictitious and void for the chief reason that the written agreements contained clauses authorizing either of the parties thereto to cancel them upon giving the adverse party thirty days' notice thereof. Paragraph five of those agreements reads in part:
“Termination. This agreement may be terminated by either of the parties hereto upon thirty (30) days' written notice to the other and shall continue in effect until so terminated. Upon termination for any reason the Producer hereby agrees to immediately re–purchase the motor truck heretofore sold to the Distributor.”
There is no merit in that contention. That very question was determined adversely to the claim of these appellants in the case of Mountain Meadow Creameries v. Industrial Acc. Comm., 25 Cal.App.2d 123, 76 P.2d 724. That was a proceeding in certiorari to review the order of the Industrial Accident Commission granting an award compensating the driver of a milk wagon for injuries sustained in an accident. In that proceeding a contract for sale of a milk route was involved which was similar in every respect to the one which is the subject of this action, including the clause for cancellation by either party, upon notice. The commission held that the contract was void on that account, and granted the petitioner an award of damages on the theory that he was an employee. The District Court of Appeal reversed the award, holding that the contract was not void on that account or otherwise, and that it created a relationship of “independent contractor” which precluded the claimant from recovering damages under the Workmen's Compensation Act. Very convincing reasons for that decision are assigned by the court. That case appears to be determinative of the same issue in this case.
The contracts with the distributors were not void because they contained a clause authorizing either party to cancel them upon serving the adverse party with a thirty–day notice thereof.
The subject of the invalidity of a contract of sale or conveyance of property on account of a clause authorizing a cancellation thereof at will or upon notice is fully discussed in the case of County of Alameda v. Ross, 32 Cal.App.2d 135, at page 144, 89 P.2d 460, at page 464. In that case it was held that a contract amounted to a mere license and that it was not a conveyance of an easement because the instrument provided that it might be canceled by the Secretary of War at any time, at will, without notice, and that it was therefore void. That rule is announced in 1 Williston on Contracts, (Rev.Ed., § 43), at page 126, as follows:
“If one party to an agreement reserves an unqualified right to cancel the bargain no legal rights can arise from it while it remains executory.”
However the law does not favor arbitrary cancellation clauses based on the mere will or whim of a party independently of a breach of contract. The slightest restriction on the right to rescind may warrant the upholding of the validity of the contract. Slight evidence of the intention of the parties to permit a cancellation for cause only will suffice to uphold it. The intention must be ascertained by reading the contract as a whole. To that effect it is said in 1 Williston on Contracts (Rev.Ed.), page 365:
“Since the courts, however, do not favor arbitrary cancellation clauses, the tendency is to interpret even a slight restriction on the exercise of the right of cancellation as constituting such legal detriment as will satisfy the requirement of sufficient consideration; for example, where the reservation of right to cancel is for cause, or by written notice, or after a definite period of notice, or upon the occurrence of some extrinsic event, or other objective standard.” (Italics ours.)
The foregoing text is supported by numerous authorities.
In the present case the clause relied upon by the appellants authorizes cancellation thereof only after written notice to the adverse party for a period of thirty days. It also states that if the contract should be cancelled “for any cause” the Dairy Company will “repurchase” the motor trucks “heretofore sold to the distributor.” The entire transaction indicates bona fide sales of the routes and trucks. The plaintiff, George Emde, obligated himself by guaranteeing the promissory notes given to the bank by the purchasers for the money they borrowed with which to pay for the trucks. All receipts from sales of milk were deposited by agreement in the bank to be credited by it upon the obligations incident to the purchase of routes and trucks, as directed by the mutual consent of the parties. New trucks were later purchased by the distributors for the purpose of delivering the milk. The jury found that the agreements of sales were valid and genuine, and that the sales constituted the purchasers as independent contractors and not mere employees. Those findings are binding upon this court.
The appellants assert that the judgment is not supported by the evidence because respondents failed to prove the statements contained in paragraph VII of the complaint constituting the innuendo. We do not agree with that contention. The so–called innuendo does not purport to add to nor change in any respect the plain, unambiguous statements of the published article. It is a mere construction of the statements in other language. The innuendo is surplusage and may be disregarded. Moreover every statement contained in the innuendo appears to have been adequately proved by the evidence.
After quoting verbatim the published article, paragraph VII of the complaint alleges that the “defendants thereby meant” the plaintiffs violated their agreement with the labor council by: (1) employing non–union drivers; (2) placing the drivers on a commission basis; (3) failing to guarantee minimum wages; (4) compelling drivers to furnish their own vehicles; (5) operating a non–union business and thus being opposed to organized labor. It will be observed each of those statements is a mere reiteration of substantially the same charge which appeared in the printed article in plain language, requiring no explanation.
The principle is well established that language which is libelous per se does not require an innuendo. Innuendo is necessary only to interpret or explain language, the meaning of which may otherwise be obscure or uncertain. Grand v. Dreyfus, 122 Cal. 58, 54 P. 389; 16 Cal.Jur. 177, § 140; 12 So.Cal.L.Rev. 229. When language is actionable per se and requires no innuendo or explanation, such colloquium is surplusage and may be stricken from the pleading or disregarded. Wilson v. Fitch, 41 Cal. 363, 378; Ray v. Citizen–News Co., 14 Cal.App.2d 6, 57 P.2d 527; Newell on Slander and Libel, 4th ed. 599, § 546; 37 C.J. 147, § 671; 12 So.Cal.L.Rev. 230. In the Wilson case, supra, it is said: “In the present case the alleged libel is actionable on its face, and it was unnecessary to prove the colloquium.”
In Newell on Slander and Libel, supra, it is said in that regard: “He [[[[the defendant] can also plead that the words were true, either with or without the alleged meaning. It will then be for the jury to say from the proofs whether the plaintiff's innuendo is sustained. If not, the plaintiff may fall back upon the words themselves, and urge that, taken in their natural and obvious signification, they are actionable in themselves without the alleged meaning, and that therefore his unproved innuendo may be rejected as surplusage.” (Italics added.)
The foregoing language is appropriate to the present case. It is supported by numerous authorities. The succeeding section in Newell's textbook merely declares that a plaintiff may not be permitted, in the midst of a trial, to abandon his pleaded innuendo, and set up an entirely new colloquium different in meaning from his pleaded innuendo and in conflict with the alleged slanderous language which was used.
There is nothing in the cases of Gallagher v. Chavalas, 48 Cal.App.2d 52, 119 P.2d 408; Neblett v. Elliott, 46 Cal.App.2d 294, 115 P.2d 872; Noral v. Hearst Pub., Inc., 40 Cal.App.2d 348, 104 P.2d 860; Peabody v. Barham, 52 Cal.App.2d 581, 126 P.2d 668, or any of the other cases relied upon by the appellants, in conflict with the preceding declaration of law regarding the proving of an innuendo which is alleged in the pleading.
Actual and punitive damages were erroneously allowed against W. R. Tosh personally for the reason that he was neither served with process nor appeared at the trial in his individual capacity. Warner v. Southern Pac. Co., 113 Cal. 105, 45 P. 187, 54 Am.St.Rep. 327; Davis v. Hearst, 160 Cal. 143, 116 P. 530; 2 Sutherland on Damages, 3rd Ed., § 407. He did appear at the trial as a member of the newspaper copartnership and as such the judgment is binding.
Neither the actual nor punitive damages were so excessive as to satisfactorily indicate they were the result of passion or prejudice of the jurors.
We have carefully read the entire charge and we are of the opinion the jury was fully and fairly instructed on every essential issue in the case. Our attention has been called to no instruction which we deem to be erroneous or prejudicial. The appellants charge that the court erred in refusing to give to the jury two particular instructions. The rejecting of those instructions, in our opinion, was not erroneous. The first one complained of is argumentative and was properly refused. The other one is adequately covered by the charge which was given to the jury. Moreover, there is nothing in the record to indicate whether the challenged instructions were offered by the plaintiff or by the defendants. We must therefore presume they were given at the request of the appellants. They may not complain of instructions given at their own request or offered by the adverse party and refused. Bognuda v. Pearson, 71 Cal.App. 105, 110, 234 P. 857; Forbes v. Mattos, 35 Cal.App.2d 481, 484, 96 P.2d 166; Craig v. Boyes, 123 Cal.App. 592, 598, 11 P.2d 673; Fleming v. Flick, 140 Cal.App. 14, 25, 35 P.2d 210; 2 Cal.Jur. 870, § 509. Moreover, the appellants waived objections to the court's charge by failing to print in any of their briefs the instructions given or refused which bear upon the subject contained in the particular challenged instructions. Rule VIII, section 3 of Rules for the Supreme Court and District Courts of Appeal provides in part:
“Where instructions given to a jury are attacked as erroneous, all other instructions given, bearing upon that subject, must be printed in full in the appellant's brief.”
The appellants may therefore not question the instructions on this appeal.
The judgment is modified by striking out that portion which awards special and punitive damages against W. R. Tosh, as an individual. As so modified, the judgment and the orders are affirmed, respondents to recover costs on appeal.
ADAMS, P. J., and SCHOTTKY, J. pro tem., concurred.