Gambar halaman
PDF
ePub

the cylinders were to rest upon bedrock, and in carrying out the contract it was the duty of the plaintiffs so to place them. Upon that point there is no dispute between the parties. The real controversy is whether or not by its contract the state, and hence by its contract with the plaintiffs, which incorporated the state contract, the defendant, made representations respecting the depth of the bedrock, which constituted a warranty by it upon which the plaintiffs had the right to and did reasonably rely. Plaintiffs were to be paid, not a lump sum for each cylinder, but at a stipulated rate per linear foot, so that depth is material only in case of substantial increase or decrease of construction cost. They contend that there was such a war-ranty of depth; that, as actually found, the bedrock, though at some points higher, was at other points much deeper than it was represented to be; and that for this additional depth construction was substantially more expensive, entitling them to a higher rate, as for extra work.

There is no stipulation or phraseology in the contract proper or in the specifications respecting the elevation of the bottom of the cylinders or of the bedrock, and plaintiffs rely exclusively upon certain lines and figures exhibited upon one of the drawings or diagrams attached to the contract, particularly a broken line on exhibit numbered 53, connecting hatchings at the three points where test pits had been sunk. Where a contract is written in words of common use and is free from ambiguity, it is for the court without testimony to declare its meaning, and for the jury to accept the construction put upon it by the court. But where technical terms of science, art, or trade are employed, or common words are used in an unusual sense, or where as here symbols, lines, or marks are used, the significance of which is not commonly understood, testimony may be received from persons familiar with such use to explain the meaning, and if the testimony is conflicting it is for the jury in the light of the testimony to determine the real understanding and agreement of the contracting parties. Having in mind this principle, both parties here produced as witnesses engineers and contractors to testify touching the significance of the lines and symbols in question, and, their testimony being measurably conflicting, the question is submitted to you.

It is not contended by the plaintiffs that the state or the defendant in fact knew the elevation of the bedrock at any points other

than the three places where test pits were sunk, or that they withheld from plaintiffs any facts pertaining thereto within their knowledge, or willfully or fraudulently made any misrepresentations of fact, but only by putting on the drawing the broken line referred to they agreed that in making their bid plaintiffs should assume that such was the elevation. If, from the testimony before you, given by those engaged in that line of work and having experience in reading and interpreting plans and drawings, you believe that the broken line, considered together with the other lines, figures, and marks upon the drawings, and all the provisions of the contract and specifications, was in good faith and reasonably so understood by plaintiffs, then it would be your duty so to construe the contract, and to hold that for sinking the cylinders below the line plaintiffs were entitled to receive such additional compensation as would represent the difference between the cost of doing the work below the line and the cost above the line, and further that, if such difference in cost was substantial, plaintiffs were not bound to proceed without appropriate authorization, as provided in the contract, for extra work.

If, on the other hand, you believe from the testimony that, knowing as they did that neither the state nor the defendant had any information touching the elevation of the bedrock other than such as was disclosed upon the surface of the ground and in the three test pits, all of which was available to them, the plaintiffs realized or reasonably should have realized that the broken line could represent nothing more than a prophecy or the judgment of the state engineer and the defendant as to approximately where the bedrock would, in the progress of the work, probably be found, and understood, or reasonably should have understood, that the line was intended as nothing more than an expression of such judgment or prophecy, and was not intended as a positive representation or warranty that the bedrock would be found at the elevation of such line, then you should hold that the plaintiffs were not justified in demanding additional compensation, or in declining to proceed until provision was made for paying such compensation.

In deciding this issue, and getting at the real intent and understanding of the parties, you should consider, not only the testimony of the witnesses respecting the significance of the drawings and the lines and marks thereon, but the surrounding circumstances

20 F.(2d) 763

in evidence, and all the provisions of the con-
tract and specifications, inclusive of the ex-
press statement in the specifications that "it
is understood and agreed that the contractor
has by careful examination satisfied himself
as to
the intent of these specifi-
cations, the detail of the plans, the nature of
the work, the conformation of the ground,
the character of the material to be encoun-
tered, and the quantities as shown on the
plans, profiles, and cross-sections are ap-
proximate only."

While this provision would not be binding on the plaintiffs to the extent of defeating the right to recover, if in fact defendant warranted that the bedrock would be found at the elevation of the broken line, you may consider it, together with the fact that defendant had no information other than that which was available to the plaintiffs, in determining whether in truth they understood the line to be a warranty of the exact elevation of the bedrock, or only an expression of opinion upon the probability of its approximate location.

Upon this ground the judgment must be reversed. We find no other prejudicial error, and in all other respects we concur in the conclusions of Judge GILBERT. Costs to plaintiffs in error.

RUDKIN, Circuit Judge, concurs with DIETRICH, Circuit Judge.

4. Libel and slander 21-A libelous article need not necessarily name party libeled. should be named in libelous article; the question whether an article is libelous, and whether it has application to a particular plaintiff, being entirely distinct.

It is not necessary that party libeled

5. Libel and slander 80-Complaint alleging that "defendants falsely and maliciously published certain false and libelous printed statements in reference to plaintiff and plaintiff's certain product," etc., held to sufficiently show application of defamatory matter to plaintiff, in view of Missouri statute (Rev. St. Mo. 1919, § 1263).

In action for libel by manufacturer of motor fuel, consisting of gasoline and benzol, allegation that defendants "falsely and maliciously published certain false and libelous printed statements in reference to plaintiff and plaintiff's certain product, consisting of a mixture of gasoline and benzol as a motor fuel, in the following manner," etc., held sufficient to show application of defamatory matter to plaintiff, in view of Rev. St. Mo. 1919, § 1263, declaring it unnecessary to state in petition any extrinsic facts showing application to plaintiff of the defamatory matter out of which the action arose.

6. Libel and slander 123(5)-Whether alleged libelous statements refer to plaintiff and its motor fuel held under evidence for jury.

printed statements refer to plaintiff and plain

Question whether alleged false libelous

tiff's motor fuel held, under evidence, for jury. 7. Libel and slander 9(7), 89(1)—Printed statements condemning mixture of benzol and gasoline as motor fuel, as applied to manufacturer of such fuel, held not libelous per se, nor actionable, in absence of allegation and proof of special damage,

Printed statements, published and circulated by gasoline manufacturer, condemning

NATIONAL REFINING CO. v. BENZO GAS mixture of gasoline and benzol as motor fuel,

[blocks in formation]

2. Libel and slander 73-Published false statements may constitute libel per se against corporation.

Published false statements may constitute libel per se against a corporation as against an individual.

3. Libel and slander 73-Libels against corporation are confined to attacks injuring property, credit, or business.

Legal principles constituting the law of libel are the same, whether corporations or individuals are involved, except that libels against a corporation are confined to attacks which injure the property, credit, and business thereof. *Rehearing denied September 14, 1927.

and pointing out bad effects which would follow
from its use, as applied to corporation manu-
facturing a benzol gasoline motor fuel, held
not libelous per se, nor actionable, unless spe-
cial damages were alleged and proven.
8. Libel and slander 9 (7)-Defamatory
statements affecting goods of tradesmen are
classified (1) as statements including matter
libelous to vendor or producer; (2) state-
ments merely as to quality of goods of an-
other; (3) statements amounting only to as-
sertion of superiority of one's goods over
rival's.

English and American courts recognize three different classes of defamatory statements in reference to goods or products of tradesmen: (1) Statements in reference to in reference to vendor or producer, and impute goods or products, which include libelous words to him fraud, deceit, dishonesty, or reprehensible business methods; (2) statements where alleged libelous matter is made merely as to quality of goods or product of another; (3) statements amounting to no more than assertions by one tradesman that goods are superior to those of his rival.

9. Libel and slander 9(7)-Statement dl- The complaint alleged in substance as folrected against goods of corporation will not lows: That plaintiff was, and for several be held libelous per se as to corporation, unless alone it imputes fraud, deceit, dis- years prior to September 1, 1924, had been, honesty, or reprehensible conduct to cor- engaged in Jackson county, Missouri, and poration. elsewhere, in the business of producing and selling a motor fuel consisting of a mixture of benzol and gasoline, under the trade-name of "Benzo Gas"; that plaintiff during said times was the only producer and seller of such a mixture in Kansas City and vicinity, in; that about September 1, 1924, at Kansas and had built up a profitable business thereCity, defendant maliciously published certain false and libelous statements in reference to plaintiff and plaintiff's said product; that

Where alleged libelous publication on its face is directed against the goods or product of a corporate vendor or manufacturer, it will not be held libelous per se as to the corporation, unless by fair construction and without extrinsic evidence it imputes to corporation fraud, deceit, dishonesty, or reprehensible conduct in its business in relation to such product. 10. Libel and slander 123(2)-Construction of unambiguous words in alleged libel is for court.

Construction of unambiguous language con

tained in alleged libelous statement is for the publication was made by distributing to

court.

11. Libel and slander 19-Unambiguous

numerous users of motor fuel a leaflet, a copy of which was attached to the complaint (the

words, contained in alleged libel, should be leaflet is set out in the margin 1); that cergiven ordinary meaning.

Unambiguous words, contained in alleged libelous statement, should be given their plain, ordinary meaning.

Lewis, Circuit Judge, dissenting.

In Error to the District Court of the United States for the Western District of Missouri; Albert L. Reeves, Judge.

Action by the Benzo Gas Motor Fuel Company against the National Refining Company. Judgment for plaintiff, and defendant brings error. Reversed, and cause remanded.

I. J. Ringolsky, of Kansas City, Mo., T. H. Hogsett, Frank H. Ginn, and W. B. Cockley, all of Cleveland, Ohio, and M. L. Friedman and Wm. G. Boatright, both of Kansas City, Mo. (Tolles, Hogsett & Ginn, of Cleve land, Ohio, Ringolsky, Friedman & Boatright, of Kansas City, Mo. and W. B. Cockley, of Cleveland, Ohio, on the brief), for plaintiff in error.

1 "This Will Interest You!

"[During the period of the recent war, the Government urged the conservation of gasoline, and advised that benzol, which was being manufactured from coal, be mixed with gasoline so as to conserve the gasoline, which would be used in the aeroplanes, motor trucks, and armored cars operated in conducting the war. (Take note that the Government would not use

anything but pure gasoline. They would not use benzol.)]

"Germany had plenty of Benzol manufactured from coal, but no gasoline. The failure of their aeroplanes and motor-driven implements of war was due to the fact that they had no gasoline and depended upon Benzol.

"Straight benzol, or [a mixture of benzol and gasoline or a mixture of benzol and kerosene oil is not a proper fuel for an automobile, tractor or truck for the reason that when benzol is ignited by the electric spark, it explodes instantaneously. The entire power of the explosion being instantaneous, it is delivered on one spot of all the bearings in the motor and acts the same as if a sledge hammer were taken and a severe blow delivered on one spot

at the rate of from twelve hundred to three

Blatchford Downing, of Kansas City, Mo. thousand sledge hammer blows per minute. (H. L. McCune and R. B. Caldwell, both of The result is that the bearings become eggKansas City, Mo., on the brief), for defend-shaped, resulting in repairs in the form of new bearings.

ant in error.

Before LEWIS and BOOTH, Circuit Judges, and PHILLIPS, District Judge.

BOOTH, Circuit Judge. This is a writ of error to a judgment entered after verdict against plaintiff in error, hereafter called defendant. The action was originally brought in the state circuit court of Jackson county, Missouri, and was duly removed to the United States District Court for the Western District of Missouri on the ground of diversity of citizenship. The action was one for damages on account of an alleged libel published by defendant.

"The contrary takes place if White Rose When White Rose Gasoline is received in the Gasoline, or any other pure gasoline is used.] cylinder of a motor, and is ignited, it burns practically the length of the stroke, delivering power from the start until the stroke of the motor is finished, in that way delivering the force of the explosion on fifty per cent. of the surface of the bearings, so that the bearing is not impaired.

"[Benzol, or a mixture of benzol and gaso

line, or a mixture of benzol and kerosene,
causes corrosion and pitting of the cylinders
and valves, likewise overheats the engine, caus-
ing the valves to become exceedingly hot, neces-
sitating frequent grinding of the valves in order
ing and warping.]
to get proper compression due to the corrod-

"[These mixtures, used in cold weather,

20 F.(2d) 763

tain statements therein contained (those inclosed in brackets, except the italicized words, in the marginal leaflet) were false; that the statements were published maliciously by defendant for the purpose of discouraging users and prospective users of plaintiff's product from purchasing and using the same, and for the purpose of injuring plaintiff and its said product, and the reputation they had acquired by reason of the excellence of said product; that by reason of the premises plaintiff had been damaged in its business and reputation and the reputation of its product in the sum of $25,000; and, because the statements were maliciously made, plaintiff was entitled to punitive damages in the further sum of $50,000.

The amended answer alleged the truth of

cause trouble in the gasoline running from the supply tank to the carburetor. Unmixed benzol starts to flake and congeal at 40 temperature, and if mixed with kerosene oil or gasoline, forms flakes in the small delivery pipe to the carburetor, often causing it to plug up.]

"You have none of these bad effects when White Rose Gasoline is used. It is a pure gasoline, made with a view of furnishing the greatest power in a motor, with no ill effects, and all engineers who have designed motors for automobiles, tractors, aeroplanes, etc., have built the motors, having in mind the use of only pure gasoline.

"No engineer has designed a motor for burning anything other than gasoline. Therefore, why go contrary and use other fuels for which the motor was not designed?

"Dopes advertised to increase the efficiency of gasoline, to prevent the formation of carbon and other claims are nothing but dopes and should not be used. They are harmful to the motor. They do not increase the efficiency of good gasoline, and even when used with mixtures of gasoline and kerosene or low grade gasolines, they are more harmful than the material used. You can take several different acids and introduce them in a motor, and they will eat the surface of the iron until it is clean and bright, but they are destroying the motor.

"For a period of forty-two years, we have manufactured White Rose Gasoline, first for the gasoline stove, then the gasoline flare torch, and lights; later for the automobile, aeroplane or tractor. It is an honestly made gasoline, and the reputation of the company is back of it and has been back of it for a period of forty-two years.

"We know that if you will use White Rose Gasoline, not only will your car perform better and deliver more horsepower, but it will reduce the cost of repairs and depreciation of the car. If you save a few cents per gallon in buying gasoline, you will pay many times as much as you should in repairs.

"Use White Rose Gasoline for a month. You will prove what we have said above. You will find that you will use no other gasoline after giving it a thorough trial. Spark plugs will not have to be cleaned. The power is delivered on one-half of the surface of the bearings. The motor will respond more quickly, In fact, White Rose Gasoline is the last word in power

the statements mentioned, and denied the other allegations of the complaint. At the trial plaintiff introduced its evidence and rested. Defendant demurred to the evidence. The demurrer was overruled. Defendant stood on its demurrer, and declined to introduce any evidence, but requested an instruction directing a verdict for defendant. This was refused. The jury returned a verdict of $1 actual damages and $10,000 punitive damages.

The evidence introduced by plaintiff tended to prove the following facts:

Plaintiff owned 4 or 5 filling stations in Kansas City where it sold Benzo Gas; also gasoline, oils, and naptha. It also sold Benzo Gas to upwards of 70 filling stations in and around Kansas City. It made the Benzo Gas

and economy for use in an automobile, tractor, truck, aeroplane or gas engine.

"When only the price of gasoline is considered, and a poor or low grade gasoline used, it is the most expensive. It is more expensive than White Rose Gasoline. Poor or low grade gasoline is not entirely consumed in the motor. When it is taken into consideration that a motor makes from twelve hundred to three thousand revolutions per minute a part of the poor or low grade gasoline is not consumed. Consequently, no benefit is derived but much damage done by the heavy ends being forced down the sides of the cylinders, which dilutes the lubricating oil in the crank case, killing its lubricating properties, and that which does not pass down the cylinders is either thrown out of the exhaust or collects on top of the cylinders, forming carbon.

"Every bit of White Rose Gasoline that is taken into the cylinders furnishes power, and is all consumed.

"The next thing to be considered is the proper lubrication of the motor. An engineer recently, writing for a magazine, estimated that on account of inattention to the proper kind of gasoline used and the proper kind of lubricating oil, there were expended during the period of one year, in repairs, over four hundred million dollars. The figure is appalling, and yet, when it is considered how absolutely necessary it is to have proper lubrication, so that the bearings of the motor will not wear and so that the rings will not wear and reduce the compression, and how little attention is paid to the kind of oil that is used or the kind of gasoline, four hundred million dollars in repair bills do not look so much out of the way.

"Enarco Motor Oil has forty-two years of experience back of it by laboratories and workmen that know how to build the best lubricant there is. We put our name to it, which means our reputation, and the use of Enarco Motor Oil will insure absolutely proper lubrication.

"Have the oil changed in the crank case of the motor every five hundred miles.

"We do this free at any White Rose Gasoline station, charging only for the Enarco Motor Oil used.

"You will be pleased with this service. "The National Refining Co. "42 Years' Experience."

which it sold. There was no secret and no patent process in making Benzo Gas. It was simply a mixture of benzol and gasoline in varying proportions, and usually a small quantity of naptha. Benzol is a product ordinarily derived from the distillation of bituminous coal. Such mixtures have been in common use for some years in certain parts of the United States, and are known under various names, such as "Benzoline" and "Benzol Gasal." Plaintiff was the only producer of the product in the vicinity of Kansas City. Defendant was in the business of selling petroleum products, such as gasoline, kerosene, and oils. White Rose gasoline was one of the products. It had refineries in Ohio and Kansas. It did business in upwards of 20 states. Its home office was in Cleveland, Ohio. It was operating at the time of the alleged libel 20 or 30 filling stations in Kansas City.

The leaflet constituting the alleged libel was prepared by the president of defendant company as part of an educational campaign by defendant. About 150,000 of the leaflets were printed. They were distributed by salesmen of the company at the various filling stations of the company in the territory mentioned, including the filling stations at Kansas City. One of the filling stations in that city was just across the street from a Benzo Gas filling station. The statements in the leaflet were composed by the president of defendant company from his own information, derived from forty years experience in the oil business, from talks with automobile drivers, and from reading numerous articles on the effects of the use of benzol and gasoline mixtures in internal combustion engines. He had had no personal experience with benzol or benzol and gasoline blends. Shortly after the leaflet was distributed in Kansas City, plaintiff published an advertisement in one of the city papers, referring to the leaflet, denying its statements, and offering to participate in a test to be proposed by defendant, to determine the truth or falsity of the statements. In default of such a test, a retraction of the statements was demanded. A copy of this advertisement was mailed to the local manager of defendant at Kansas City. No answer was received.

The evidence of plaintiff further tended to prove that the statements above mentioned contained in the leaflet, except possibly the first, were untrue. The assignment of errors covers a number of points, but the ones most strongly stressed by defendant are, (1) that the statements complained of were not libelous per se; (2) that if the statements, though not libelous per se, were nevertheless

actionable, yet recovery could be had only by alleging special damages in the complaint and proving the same, neither of which requisites was fulfilled; (3) that a judgment for punitive damages could not stand unless a cause of action was established for actual damages. The second and third propositions are not seriously contested by plaintiff, if we understand its position; but the first proposition is strenuously denied. The vital question in the case, therefore, is: Were the statements libelous per se? The complaint was evidently drawn on the theory that they were; and such was the contention of plaintiff, both in the court below and in this court. [1,2] It is apparent from the statement of facts that the dispute narrows itself down mainly to a discussion of the question: under what circumstances a defamatory publication concerning the goods or product of a vendor or manufacturer may also constitute a libel per se concerning the vendor or manufacturer himself. We shall assume without discussion that a corporation may maintain an action for libel; also that published false statements may constitute libel per se against a corporation. The authorities cited hereafter in which corporations were plaintiffs show that these propositions are no longer open to question.

[3] Furthermore, the legal principles constituting the law of libel are the same whether corporations or individuals are involved. But there are recognized distinctions between the application of those principles to individuals and their application to corporations, growing largely out of the differences between natural and artificial persons. For example, a corporation is incapable of committing certain acts, especially some crimes, which an individual would be capable of committing; and again, a corporation has no merely personal reputation in the sense that an individual has. Libels against a corporation are, therefore, confined to attacks which injure the property, the credit, the business of the corporation. South Hetton Coal Co. v. Northeastern News Ass'n, 9 R. 240; Memphis Tel. Co. v. Cumberland Co. (C. C. A.) 145 F. 904, 906; Security Benefit Ass'n v. Daily News Pub. Co., 299 F. 445 (C. C. A. 8), and cases cited; Erick Bowman Remedy Co. v. Jensen Salsbery Laboratories, 17 F. (2d) 255 (C. C. A. 8).

While the instant case illustrates those distinctions to some extent, yet its determination is not vitally dependent thereon. Defendant contends that the statements in the leaflet do not constitute a libel per se against plaintiff (a) because nowhere in the leaflet is

« SebelumnyaLanjutkan »