WASHER v. BANK OF AMERICA NAT TRUST SAVINGS ASS ET AL

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District Court of Appeal, First District, Division 1, California.

WASHER v. BANK OF AMERICA NAT. TRUST & SAVINGS ASS'N ET AL.

Civ. 11728.

Decided: August 28, 1942

William H. Mackay, of San Francisco, for appellant. Louis Ferrari, G. D. Schilling, and Kenneth M. Johnson, all of San Francisco, for respondents.

Plaintiff appeals from a judgment for defendants entered after an order sustaining their general and special demurrers to the second amended complaint without leave to amend. The sole question involved is the correctness of this ruling.

The complaint consists of two counts, the first for slander and the second for libel. The first cause of action is based upon the following oral statement alleged to have been made to several newspaper reporters by a vice–president and personnel director of the respondent bank in commenting upon a decision of the National Labor Relations Board which ordered the bank to reinstate plaintiff, he having been theretofore discharged according to the bank's answer before the board so set forth in the decision, on grounds including alleged insubordination and falsification of an expense account: “We cannot see how this institution could possibly reinstate anybody who had admitted he had falsified his expense account, who has been guilty of flagrant insubordination.” The second cause of action is based upon the same statement allegedly given the press in written form, with the request that it be printed. Attached to the complaint, and by reference made a part thereof is the decision of the National Labor Relations Board. The relief sought is the payment to plaintiff of $125,000 as special damages, $100,000 as general damages and $250,000 as exemplary damages.

Appellant's statement of the question involved is whether the complaint shows certain alleged defamatory statements, uttered and published by respondents, to be false and unprivileged.

In support of the action of the trial court in sustaining the demurrers to the second amended complaint, the respondents urge that the complaint, taken as a whole, and including the Labor Board's decision incorporated as part thereof, shows the truth of the alleged defamatory language, or at least its substantial truth, which is all that need be shown; that it was privileged, making falsity and malice immaterial, or, at least, it was qualifiedly privileged and that malice in fact has not been pleaded. Finally, respondents contend the existence of malice is negatived by the complaint itself when considered in connection with the National Labor Board's decision.

Turning to the language charged to be slanderous and libelous, the word “falsify” may be defined as “to tamper with, to alter” (Webster's New International Dictionary (2nd Ed.)); “to make deceptive, endow with an appearance contrary to fact or truth” (Funk & Wagnall's New Standard Dictionary). The word is sometimes used to characterize a criminal act involving the perpetration of fraud. It has been said that it is a word of double import (Moulor v. American Life Ins. Co., 111 U.S. 335, 4 S.Ct. 466, 28 L.Ed. 447) in that it may be used to convey two distinct meanings––either that of being intentionally or knowingly untrue, made with intent to defraud, or mistakenly and accidentally untrue. Fouts v. State, 113 Ohio St. 450, 149 N.E. 551; North American Acc. Ins. Co. v. Tebbs, 10 Cir., 107 F.2d 853. To say that an employee has falsified an account may mean that such falsification was with intent to defraud or that the falsified statement of account was mistakenly and therefore honestly made. If the account did not set forth the truth, it would in fact be false. The complaint read in conjunction with the exhibit demonstrates a third distinct meaning, namely, not an accidental but an intentional act of falsification, without, however, an intent to defraud.

It should be noted that the alleged slanderous and libelous language is not a direct accusation that plaintiff was guilty of falsification, but is a statement that an employee “had admitted he had falsified his expense account.” Whatever definition may be given to the word “falsified” as used under other circumstances, in view of the fact that it was used in reference to the Labor Board's decision, we must assume for the purpose of this case, that it meant an intentional falsification without intent to defraud. The language does not in fact even indirectly make an accusation, but charges only the admission of a falsification. Under such circumstances, assuming the denial by answer of the alleged slanderous and libelous language, the primary issue to determine would not be actual, intentional falsification without intent to defraud, but whether plaintiff admitted such fact. Assuming, as we must on demurrer to the complaint, that a statement in the language alleged was in fact uttered, such language may not be construed as libelous per se in view of its susceptibility to an innocent interpretation.

It is of course the contention of appellant that by charging an admission of falsification as one of the grounds for his discharge, defendant in effect charged the actual falsification of the expense account to the extent of being “guilty of the crime of embezzlement.” A copy of the decision of the National Labor Relations Board, as we have seen, is attached to the amended complaint as an exhibit “and made a part hereof.” That complaint alleged that the statement made was a comment upon the decision. The decision by its incorporation became a part of the amended complaint and may be considered in determining whether the complaint states a cause of action. Georges v. Kessler, 131 Cal. 183, 63 P. 466; 1 Bancroft on Code Pleading, § 218; People v. Reid, 195 Cal. 249, 232 P. 457, 36 A.L.R. 1435; Holly Sugar Corp. v. Johnson, 18 Cal.2d 218, 115 P.2d 8; Bashford v. A. Levy & J. Zentner Co., 123 Cal.App. 204, 11 P.2d 51; National Pavements Corp. v. Hutchinson Co., 132 Cal.App. 235, 22 P.2d 534.

In setting forth the issues to be passed upon, the National Labor Relations Board noted as one of the reasons assigned by the bank for the discharge of Washer “his making a false expense claim against the respondent.” Thereafter the Board found that Washer was not dishonest, but noted “that the filing of a false expense claim was not assigned * * * as a reason for Washer's discharge.” The Board found, as stated, that Washer was not dishonest, but did not find that he had not filed a false expense claim. The truth of the “admission,” and the truth of the alleged “falsification” may be reasonably and definitely inferred (Gallagher v. California Pac. T. & T. Co., 13 Cal.App.2d 482, 57 P.2d 195) from the contents of the exhibit. “This is not a case where the plaintiff has pleaded too little, but where he has pleaded too much” and by pleading the exhibit has refuted his own allegations. Simmons v. Peavy–Welsh Lumber Co., 5 Cir., 113 F.2d 812, 813.

The National Labor Relations Board found that upon plaintiff's presenting to the bank, his employer, an expense account in the amount of $15.12, of which $6.12 was represented to be railroad fare and $9 meals and lodgings, he was requested to itemize it. Thereupon plaintiff wrote the bank that he was “writing off as a loss the $15.12 I considered nominal.” The bank in reply wrote plaintiff that there was no complaint as to the “amount” involved and requested the return of the statement. A check for the $15.12 was then sent plaintiff, together with a new statement containing a purported itemization of the expenses, which plaintiff was requested to sign and return. Plaintiff then wrote his employer stating that his failure to itemize the expenses in the first instance was due to the fact that he had stayed with friends and as a result had not incurred a hotel bill; that, however, he had thus become obligated to his friends and had reciprocated by entertaining them. He returned the bank's check with the following communication: “* * * if after reading this letter you are convinced of the fairness of the account as rendered. * * * If you do not consider the accounting satisfactory you may forget the entire matter.” The account was approved by the bank and the check returned to plaintiff.

From the above recital of the facts as they appear in the decision of the Board, it may be reasonably and definitely determined that by his silence in the “first instance,” plaintiff attempted to deceive the bank to the extent of setting forth “meals and lodgings” instead of “entertainment.” In this action for slander and libel, the truth of the admission of the alleged falsification appears in plaintiff's pleadings and must be determined from the language used in the exhibit. Mortensen v. Los Angeles Examiner, 112 Cal.App. 194, 296 P. 927; Grand v. Dreyfus, 122 Cal. 58, 54 P. 389; Noral v. Hearst Publications, Inc., 40 Cal.App.2d 348, 104 P.2d 860; Western Broadcast Co. v. Times–Mirror Co., 14 Cal.App.2d 120, 57 P.2d 977; Hearne v. De Young, 119 Cal. 670, 52 P. 150, 499.

The statement alleged in the complaint as false is in fact true as appears in the exhibit.

In Chavez v. Times–Mirror Co., 185 Cal. 20, 21, 195 P. 666, 667, the court said: “As the truth of the charge is a complete defense in a civil action for damages for libel, it is plain that, if the complaint itself shows the truth of the charge, the demurrer was properly sustained.” “In determining whether the publication is libelous, resort is first had to the publication itself. If it is not libelous, the fact that it is unpleasant is of no moment, and the question of libel or no libel is primarily for the court to determine. If the publication is not libelous, neither inducement nor innuendo can make it so. * * * Again, if the article published is substantially true and is inaccurate only as to details which it relates, it is not libelous.” Mortensen v. Los Angeles Examiner, supra, 112 Cal.App. 202, 203, 296 P. 931. In Newby v. Times–Mirror Co., 173 Cal. 387, 160 P. 233, Ann.Cas.1917E, 186, the complaint contained six counts. The appeal was from the judgment for defendant and from the order denying plaintiff a new trial. The judgment was reversed upon the theory that certain counts set forth libelous matter, but in reference to the first count, the facts––upon which there was no substantial conflict––were that the plaintiff, an attorney, had directed the judgment–book clerk in the county clerk's office to alter a public record. The commission of such an act is a felony. Penal Code, §§ 113, 114. Plaintiff in that case was “equally responsible therefor with said deputy.” Pages 392, 393 of 173 Cal., page 236 of 160 P., Ann.Cas.1917E, 186. We quote further from the case (page 393 of 173 Cal., page 236 of 160 P., Ann.Cas.1917E, 186): “It was but an irregular method of effecting a righteous result. * * * The intent is immaterial. The act itself, without intent other than that of doing it, constitutes the offense, regardless of the object. * * * Therefore, although the plaintiff was guilty of no moral wrong or bad intent in the matter, it was technically true that he was accused of the commission of a felony. * * * In so far as the publications assert that the plaintiff was accused of the commission of a felony, confined as they all are to the act of crossing out the entry of satisfaction of the judgment * * * the defense of truth is established by the evidence, although the offense was entirely technical, was without moral guilt * * *. The truth of this part of the matter complained of, however, does not establish a defense to the other libelous publications concerning plaintiff” “* * * the truth, whenever discovered, is a complete defense to the defendant.” Davis v. Hearst, 160 Cal. 143, 195, 116 P. 530, 552.

It has been held that it is sufficient if the gist of the alleged libelous charge is justified. Heuer v. Kee, 15 Cal.App.2d 710, 59 P.2d 1063; Hearne v. De Young, supra; Skrocki v. Stahl, 14 Cal.App. 1, 110 P. 957. The complaint herein alleges: “Said statement was made by Fenton [[[[an officer of the bank and a defendant in this action] with malice, for the purpose of injuring, disgracing and defaming plaintiff, and interfering with his ability to obtain employment. It was false and known by Fenton to be false at the time it was made and Fenton did not have probable cause or any cause for believing it to be true.” In so far as the truth is concerned, this allegation does not strengthen appellant's position. The allegations of malice may be considered in determination of the question of privilege, but that phase of the complaint and the demurrer thereto need not be considered if the complaint upon its face shows the truth of the alleged libelous statement. “* * * allegations of malice will not avail the pleader, if the character of the publication complained of is inconsistent with such allegations.” Morcom v. San Francisco Shopping News, 4 Cal.App.2d 284, 290, 40 P.2d 940, 942. “Since a libel is ‘a false and unprivileged publication’ (section 45), it follows that the publication must be both false and unprivileged in order that it shall constitute an actionable libel. The allegation and proof that it is true in the sense intended constitute one defense. Allegations and proof that it was privileged upon any of the grounds set forth in section 47 also constitute a defense. The defense of privilege under subdivision 3 of section 47 does not depend at all on the truth of the defamatory charge. With respect to that form of qualified privilege the Code does not require that the publication shall be true in order to bring it within the protection of the privilege. The language of the Code clearly implies that the publication may be privileged, although it is untrue. To hold that it is necessary to allege and prove the truth of the charge in order to establish the defense that it was privileged under this subdivision would destroy the distinction between the defense of truth and the defense of privilege, and would render the defense of privilege entirely useless, since the proof that it was true would be a complete defense without proof of any other facts, and without proving the absence of actual malice.” (Second italics added.) Snively v. Record Publishing Co., 185 Cal. 565, 574, 198 P. 1, 4; see, also, Maher v. Devlin, 203 Cal. 270, 263 P. 812; Draper v. Hellman Com. T. & S. Bank, 203 Cal. 26, 263 P. 240.

The second part of the alleged slanderous and libelous statement declares the impossibility of the bank reinstating one “who has been guilty of flagrant insubordination.” It is alleged that the statement was made “in commenting upon a decision of the National Labor Relations Board.” We turn therefore to the decision. It appears therefrom that it was the intention of the bank to give plaintiff experience in branch banking. After a consideration of various of its branches, that of Chico was finally decided upon. The decision sets forth the following: “Prior to that time Washer had refused (italics added) to be transferred to branches as he did not wish to live in a small town.” “Washer protested and did not conceal his dislike for his transfer to Chico, describing it as ‘Siberia.’ Washer told Kieferdorf [senior trust officer and executive vice–president of respondent bank] that he did not want to go there because he did not want to become a ‘yokel.’ Kieferdorf stated that the assignment there was only temporary and gave Washer the impression that he would be transferred to the San Francisco office before the end of the year. At Chico, Washer remained dissatisfied with his transfer. He wrote to Bardt [vice–president and trust officer of the Los Angeles main branch] that he hated ‘this hell–hole’ and asking for the position of assistant comptroller in the Los Angeles main office.”

In company with others, plaintiff caused to be mailed to approximately 5,000 employees of respondent bank, a circular letter as to which the decision of the National Labor Relations Board states: “The latter cast aspersions upon the respondent as a bank.” The decision holds: “It is true that in writing letters from which we have quoted Washer did not observe the usual business amenity.” As an example, the following was addressed to a vice–president and senior trust officer of the bank: “Your letter appears to me to be one of a series of petty annoyances I expect to be subjected to because of my failure to accept your advice to resign because of my Union activity. I can see no other reason for correspondence regarding such a petty detail by the Vice President and Senior Trust Officer of one of America's largest banks. ‘Kind regards' to you too.”

We are not concerned here in determining fair or unfair labor practices, or whether the conduct was mere or gross insubordination, or excusable conduct. In this action for damages for libel and slander, the question is, does the complaint show the truth of the alleged libel, namely, “flagrant insubordination.” The perusal of the complaint and its annexed exhibit discloses insolence and flagrant insubordination in refusal to accept directions to report to designated branch offices, from those for whom plaintiff contracted to work. A careful reading of the language used by the personnel officer of the bank in each particular, and charged to be slanderous and libelous, shows that it was justified by the facts.

This action was brought after the effective date of section 472c, Code of Civil Procedure, and hence the question whether the court abused its discretion in not granting leave to amend is open on appeal. Appellant has not suggested any amendment, and in view of the allegations of the complaint, including the exhibit, it appears impossible to amend.

The judgment is affirmed.

It is well settled that to be actionable an alleged defamatory statement must be false, and that a showing of the truth of the alleged defamatory words is a complete defense. In the present case it definitely appears from the facts set forth in the second amended complaint that the alleged defamatory statement, upon which plaintiff bases his causes of action, was not false; and that being so the defendants were clearly entitled to have their demurrer to said complaint sustained without leave to amend. According to the allegations of the complaint the circumstances out of which the action arose were these: The plaintiff was dismissed from his employment with the defendant bank and he took the matter before the National Labor Relations Board. The proceedings before the board involved a large number of issues which are entirely foreign to the present case; and after a lengthy hearing the board ordered plaintiff reinstated in his employment. A full and comprehensive report and decision was filed by the board containing a discussion of the matters with which the board had been dealing, and its conclusions and findings. The complaint alleges on information and belief that the defendant Fenton in commenting on the report and decision of the board made the following statement, upon which the causes of action of libel and slander are based: “We cannot see how this institution could possibly reinstate anybody who had admitted he has falsified his expense account, who had been guilty of flagrant insubordination.” Attached to the complaint and made part thereof is a copy of the report, decision and order of said board. It covers some 32 typewritten pages of the transcript, and it definitely appears therefrom that plaintiff admitted he had filed with the bank an expense account containing a false item. By said item he represented that he had expended a certain amount of money for meals and lodgings, and when the bank questioned the form of the expense account he admitted that he had not paid out anything for lodgings––that he had stayed at the home of friends; and he withdrew the item. It is true that the National Labor Relations Board in determining the issue before it gave it as its conclusion that plaintiff had not intended to defraud the bank, and it stated that the filing of the expense account containing the false item was not one of the reasons for plaintiff's dismissal from his employment. However, we are not here concerned with the question of whether plaintiff intended to defraud the bank or the reasons for his dismissal. The precise and only question here presented is whether it appears from the face of the complaint that the alleged defamatory words were true, and as will be seen, it does so appear.

Certain innuendoes are pleaded in the complaint concerning the meaning of the word “falsified”; but it is well established that the office of the innuendoes is merely to explain; and the authorities agree that they cannot be used to aver a fact, introduce new matter, or alter, extend or restrict the import of the language theretofore set out; and that if the words complained of are not in fact actionable, no innuendoes can make them so. Mellen v. Times–Mirror Co., 167 Cal. 587, 140 P. 277, Ann.Cas.1915C, 766; 33 Am.Jur. 220. It follows, therefore, in the present case that since it appears from the face of the complaint that the words claimed to be defamatory were true, they are not actionable and the innuendoes pleaded by plaintiff cannot have the effect of making them so.

As to the truth of the remaining portion of the alleged defamatory statement, I have nothing to add to the views expressed in the main opinion.

I dissent.

The complaint in this case charges that defendant Fenton, while acting in the course and scope of his employment as personnel director and vice–president of defendant bank, in commenting on a decision of the National Labor Relations Board ordering plaintiff reinstated in defendant bank's employ, made the following statement, both orally and in writing, of and concerning the plaintiff: “We cannot see how this institution could possibly reinstate anybody who had admitted he had falsified his expense account, who has been guilty of flagrant insubordination.” The trial court sustained a demurrer without leave to amend. The main and concurring opinions hold that the complaint, as a matter of law, alleges the truth of the charges contained in the alleged slanderous and libelous statement. So far as the charge that plaintiff admitted he had falsified his expense account is concerned, the main and concurring opinions hold that the decision of the labor board, attached as an exhibit to the complaint, as a matter of law, shows that plaintiff had made such an admission. This conclusion is reached by giving the word “falsified,” which admittedly has several meanings, one of which involves the intent to defraud, an interpretation most favorable to defendants, and by completely disregarding other interpretations of the term. This astonishing and erroneous rule of construction is applied although the complaint expressly charges that the defendants used the term intending to convey, and did convey, to their listeners the meaning that plaintiff had admitted committing a criminal act. This rule of construction is applied to the complaint although the opinion of the labor board demonstrates to a certainty that the bank used the term “falsified” in connection with the expense account charge in the proceedings before the board to mean that plaintiff had committed a dishonest act. The opinion of the labor board shows indisputably that the board found as a fact that plaintiff had committed no criminal or wrongful act.

As to the balance of the charge––that plaintiff, as an employee, had been guilty of flagrant insubordination––the main opinion holds that the decision of the labor board demonstrates, as a matter of law, that plaintiff had been guilty of flagrant insubordination. This conclusion is reached in spite of the fact that the labor board expressly determined on the evidence recited, as a matter of fact, that plaintiff had not been guilty of insubordination. The concurring opinion is discreetly silent on this phase of the case. Under such circumstances, there is no legal justification for the conclusions reached by the majority. In my opinion, there can be no reasonable doubt but that plaintiff has stated good causes of action.

The complaint, after setting forth the allegedly libelous and slanderous statement, alleges that the statement was made to newspaper reporters and others solely for the purpose of having it printed, and Fenton requested that it be printed; that in making such statement he “intended to convey to his listeners and all who should read the statement the idea that plaintiff was a dishonest, unsatisfactory, inefficient and insubordinate worker in his profession and trade as a bank employee, and as a lawyer, and to further convey the impression that he was guilty of the crime of embezzlement, and was dishonest, and had misappropriated and failed to properly account for funds entrusted to him. Plaintiff is informed and believes that said ideas actually were conveyed to said listeners and readers by said statement as intended by Fenton, and such ideas were reasonable conclusions to be drawn from said words”; that the “statement was made by Fenton with malice, for the purpose of injuring, disgracing and defaming plaintiff, and interfering with his ability to obtain employment. It was false and known by Fenton to be false at the time it was made”; that “Immediately prior to the making of said statement by Fenton, plaintiff had an excellent reputation in the banking business as a man of integrity, honesty and efficiency as a bank employee and as an attorney.

“Proximately because of the making of said statement, plaintiff's reputation was materially damaged, and particularly was damaged among bank and trust companies. On or about September, 1939, plaintiff applied for employment at various banks in the State of California and was refused said employment. Plaintiff is informed and believes and therefore alleges that said refusals of employment were solely caused by and were the proximate result of the making of the said statement, and solely by reason of the making of said statement he will be unable to secure employment at his trade or profession in any bank in California or the United States, and therefore he will continue to suffer loss of earnings until an indefinite time in the future solely by reason of the making of said statement.”

As already pointed out, the decision of the labor board is pleaded as an exhibit. It shows that plaintiff was employed by the bank and then discharged by the bank because of his union activities; that plaintiff instituted an action before the labor board to secure his reinstatement; that the bank's main defense was that as a national bank it was not subject to the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., and was not engaged in interstate commerce. These contentions are found by the board, at some length, to be unsound. Then the opinion of the board states that the bank also claimed, in justification for its discharge of plaintiff, that his services were unsatisfactory and that he was not qualified for the position in question. It is held that this defense “is unsupported by the evidence,” and the evidence is recited that refutes it. It is then stated that another defense of the bank was that Washer made “a false expense claim against” the bank. This defense, the board holds, “is not borne out by the evidence.” The board recites the evidence, part of which is set forth in the main opinion, and states that the bank claims that this incident shows that Washer was “dishonest.” The board's opinion continues: “We find no merit in this contention.” It is expressly held that the evidence shows that Washer was not “dishonest.” The board's opinion also states that the bank charged that Washer was guilty of “insubordination and insolence toward his superior officers,” and finds that this defense “is not supported by the evidence.” The opinion sets forth in detail the correspondence between Washer and Kieferdorf, some of which is summarized in the majority opinion, and also points out that the evidence shows a close friendship between the two men and holds that, properly interpreted, the letters merely showed that Washer was being familiar with Kieferdorf, in a friendly way. After a review of all the evidence, the board holds that none of the charges against Washer is supported by the evidence; that the bank unjustly and improperly discharged Washer because of his union activities and the order is that Washer should be reinstated.

It is this pleading, with its exhibit, that the main and concurring opinions hold alleges that the charges made by the bank were truthful, as a matter of law. Stated another way, the main and concurring opinions hold that the complaint and its exhibit plead, as a matter of law, that Washer had admitted that he had falsified his expense account, and the main opinion holds that the complaint shows on its face that Washer was guilty of flagrant insubordination. These conclusions are arrived at in spite of the fact that the complaint alleges that the charge that he had admitted that he had falsified his expense account was untrue, and was known by the bank to be untrue; in spite of the fact that the complaint alleges that the charge that he was guilty of flagrant insubordination was untrue and known to the bank to be untrue; and in spite of the fact that the very charges had been passed upon by the labor board and found by it to be unsupported and untrue!

The reasoning by which the main opinion arrives at its conclusion is clearly unsound. It points out that the word “falsify” has several possible meanings; that it is sometimes used “to characterize a criminal act involving the perpetration of fraud,” and sometimes used to convey the thought of being “mistakenly and accidentally untrue”; that it is a word of “double import” and may convey the meaning “of being intentionally or knowingly untrue.”

The opinion then creates what purports to be a third meaning––“intentional act of falsification, without, however, an intent to defraud,” and holds that for the purposes of this case, this court, as a matter of law, must conclusively presume the term was so used by the bank in making the charge here involved. In this connection the main opinion states: “Whatever definition may be given to the word ‘falsified’ as used under other circumstances, in view of the fact that it was used in reference to the Labor Board's decision, we must assume for the purpose of this case, that it meant an intentional falsification without intent to defraud.” No authority is or can be cited for such a definition. To say that a person had admitted falsifying his accounts, either means he admitted that he attempted to defraud his employer or that he accidentally or mistakenly, without intent to defraud, admitted filing an incorrect account. The evidence recited in the Labor Board's opinion demonstrates, and that court found, that, at most, Washer made an innocent mistake. That opinion clearly holds that Washer committed no dishonest act in connection with his expense account. Yet the main opinion holds that from “the above recital of the facts as they appear in the decision of the Board, it may be reasonably and definitely determined that by his silence in the ‘first instance,’ plaintiff attempted to deceive the bank * * *.” This inference is indulged in as a matter of law in passing on the sufficiency of a pleading, although other inferences are possible, and a court––the Labor Board––has determined that such inference is not possible under the facts. The Labor Board expressly held that no dishonest intent existed.

If the main opinion is to be interpreted as meaning that Washer admitted before the Labor Board that he was guilty of a dishonest act, then the main opinion misstates the facts. The complaint and its exhibit demonstrate that he made no such admission. On the other hand, if the main opinion is to be interpreted as holding that Washer admitted before the board that he was guilty of an innocent mistake, and that the bank intended to convey that thought when they used the term “falsified” in the allegedly libelous and slanderous statement, the answer is that the board's opinion, which the main opinion holds must be read as part of the complaint (and therefore must not only be read against plaintiff but also, where proper, in his favor), holds unequivocally that before the board the bank used the word in the sense of dishonest. The board holds that Washer was not dishonest. That this holding is supported by the evidence is amply demonstrated by the facts recited in the board's opinion. Moreover, the complaint alleges that in using the term the bank intended to mean, and did convey the thought, that Washer had admitted doing a dishonest act. Under such circumstances, to hold that the bank, as a matter of law, intended to convey the thought that Washer had admitted he had been guilty of an innocent act, is not only to do violence to the obvious meaning of the term, to do violence to the board's opinion where it is disclosed how the bank used the term, to contradict directly the allegations of the complaint, but also to state a principle of law that finds no support in any decided case. Such a construction of the statement would mean that in the case of ambiguous words, as a matter of law they are not libelous if capable of an innocent meaning. That is not the law. Words are to be construed according to the meaning that they would normally convey to those to whom they are published. See cases collected 16 Cal.Jur., p. 57, § 29. The rule that, in libel or slander cases, when words have two meanings, they are to be taken in their milder sense has never been adopted by the courts of this country. See cases collected 33 Am.Jur., p. 97, § 84. A forced construction is not to be placed on words in order to relieve the defendant of liability. The effect and tendency of the language used are the criteria by which to determine the actionable quality of words. 36 Corpus Juris, p. 1153, et seq. In each case the intent with which words are used and understood are questions of fact and not questions of law.

It is apparent that the main opinion must be construed to hold either of two things, both of which are wrong. If it holds that, as a matter of law, the bank used the word “falsified” to indicate that Washer had admitted that he had been guilty of an innocent mistake in filing an expense account, the holding is correct only insofar as it holds that Washer admitted such innocent mistake. It is clearly incorrect insofar as it holds that the bank, as a matter of law, used the term in its innocent sense. Such holding is contrary to the proper rule to be applied in interpreting allegedly slanderous and libelous words, contrary to the obvious meaning intended to be conveyed, contrary to the positive allegations of the complaint, and contrary to the sense in which the bank used the term in the proceedings before the board. If the main opinion is to be interpreted as meaning that the complaint shows, on its face, that Washer admitted before the board that he had been guilty of a dishonest act in filing his account, then the opinion not only is contrary to the holding of the board, but misinterprets the facts set forth in the board's opinion. In either event, the main opinion is predicated on incorrect premises and reaches an incorrect result.

So far as the second charge is concerned––that the bank could not possibly reinstate a person “who had been guilty of flagrant insubordination”––there is no justification at all for the holding in the main opinion that the pleading discloses the truth of that charge. The main opinion holds that the evidence recited in the board's decision, as a matter of law, demonstrates that Washer was guilty of flagrant insubordination, even though the board held that such evidence showed no such thing. The majority opinion necessarily holds that, as a matter of law, the board's decision was wrong. While it is true that the board's opinion is not res judicata in this proceeding, and that on the trial, if one be had, the superior court could come to a conclusion contrary to that reached by the board, the effect of the main opinion is to hold, in passing on the sufficiency of a pleading, that such pleading, as a matter of law, demonstrates the truthfulness of a charge which another court, as a matter of fact, found to be unsupported. What the main opinion has done is to take the evidence recited in the board's opinion most damaging to plaintiff and accept it as true, to disregard completely evidence favorable to plaintiff, to disregard completely reasonable inferences from that evidence favorable to plaintiff, and to indulge in unwarranted and unfavorable inferences, and to disregard completely the holding of the board. The main opinion treats the whole controversy as if it were an appeal by plaintiff from a judgment for defendant after a trial on the merits, instead of from a judgment entered after the sustaining of a demurrer without leave to amend.

There are other points urged by the appellant for a reversal. I have considered each of such points and find them to be without merit. No useful purpose would be served by discussing them in this dissent.

It is my view that the judgment appealed from should be reversed.

WARD, Justice.