Stewart v. Nation-Wide Check Corporation

Annotate this Case

182 S.E.2d 410 (1971)

279 N.C. 278

Adolphus Jackson STEWART v. NATION-WIDE CHECK CORPORATION, a corporation.

No. 47.

Supreme Court of North Carolina.

July 30, 1971.

*413 B. Kermit Caldwell, Charlotte, for plaintiff appellant.

Wardlow, Know, Caudle & Wade, Lloyd C. Caudle and Carpenter, Golding, Crews & Meekins, by John G. Golding, Charlotte, for defendant appellee.

BOBBITT, Chief Justice.

The question of law presented by defendant's motion for a directed verdict under Rule 50(a), G.S. § 1A-1, is whether plaintiff's evidence was sufficient for submission to the jury. Kelly v. International Harvester Co., 278 N.C. 153, 157, 179 S.E.2d 396, 398 (1971).

"On a motion by a defendant for a directed verdict in a jury case, the court must consider all the evidence in the light most favorable to the plaintiff and may grant the motion only if, as a matter of law, the evidence is insufficient to justify a verdict for the plaintiff." 5 Moore's Federal Practice, § 41.13(4) at 1155 (2d 1969). Accord: Kelly v. International Harvester, supra.

*414 In a defamation action qualified privilege is an affirmative defense. Ordinarily, it must be specially pleaded. Bouligny, Inc., v. United Steelworkers, 270 N.C. 160, 173, 154 S.E.2d 344, 356 (1967); Annot., 51 A.L.R.2d 552, 567 et seq. (1957). The burden is on defendant to establish facts sufficient to support this plea. Where qualified privilege exists, plaintiff cannot recover absent actual malice; and the burden of proving actual malice rests on plaintiff. Ponder v. Cobb, 257 N.C. 281, 126 S.E.2d 67 (1962), and cases cited.

Defendant did not allege qualified privilege in its answer proper or in its further answer and defense. The trial judge denied defendant's motion for leave to amend. In the Court of Appeals, defendant again moved to file an amendment to its pleading and allege qualified privilege. Under authority of Rule 20(c) of its Rules of Practice, the Court of Appeals allowed defendant's motion. Although the record before us does not contain such amendment, the decision of the Court of Appeals assumes qualified privilege was properly pleaded pursuant to its allowance of defendant's motion.

In affirming the judgment of the superior court, the Court of Appeals held: (1) The defamatory words attributed to Gormley were actionable per se; (2) plaintiff's evidence established that these alleged defamatory statements were qualifiedly privileged; and (3) that plaintiff offered no evidence of actual malice.

According to plaintiff's evidence, Gormley, defendant's agent, in conversations with Daughety and with plaintiff's relatives, made false statements which, in effect, charged plaintiff with the crime of embezzlement. A false and unprivileged charge of the crime of embezzlement is actionable per se. 50 Am.Jur.2d Libel and Slander § 44 (1970); 53 C.J.S. Libel and Slander § 68 (1948); Beck v. Bank, 161 N.C. 201, 206, 76 S.E. 722, 724 (1912). Defamatory charges which are actionable per se raise a prima facie presumption of malice and a conclusive presumption of legal injury and general damage, entitling plaintiff to recover nominal damages at least without specific allegations or proof of damages. Badame v. Lampke, 242 N.C. 755, 89 S.E.2d 466 (1955); Kindley v. Privette, 241 N.C. 140, 84 S.E.2d 660 (1954); Roth v. Greensboro News Co., 217 N.C. 13, 6 S.E.2d 882 (1940); Flake v. Greensboro News Co., 212 N.C. 780, 195 S.E. 55 (1938); Broadway v. Cope, 208 N.C. 85, 179 S.E. 452 (1935).

Ordinarily, the court may not direct a verdict for the defendant when the evidence tends to show the publication by the defendant's agent of false statements of and concerning the plaintiff which are actionable per se. See Gillis v. Great Atlantic & Pac. Tea Co., 223 N.C. 470, 27 S.E.2d 283, 150 A.L.R. 1330 (1943), where it was held that such evidence required the denial of the defendant's motion for judgment of involuntary nonsuit under the (repealed) statute formerly codified as G. S. § 1-183.

"Whether the occasion is privileged is a question of law for the court, subject to review, and not for the jury, unless the circumstances of the publication are in dispute, when it is a mixed question of law and fact." Ramsey v. Cheek, 109 N.C. 270, 13 S.E. 775 (1891). Accord, 50 Am.Jur. 2d Libel and Slander § 200; Hartsfield v. Harvey C. Hines, Co., 200 N.C. 356, 361, 157 S.E. 16, 19 (1931).

On this appeal, decision turns upon whether plaintiff's evidence discloses the defamatory statements, although actionable per se, were qualifiedly privileged. The Court of Appeals answered, "Yes." We take a different view and reverse.

"Conditional or qualified privilege is based on public policy. It does not change the actionable quality of the words published, but merely rebuts the inference of malice that is imputed in the absence of privilege, and makes a showing of falsity *415 and actual malice essential to the right of recovery.

"A qualified or conditionally privileged communication is one made in good faith on any subject matter in which the person communicating has an interest, or in reference to which he has a right or duty, if made to a person having a corresponding interest or duty on a privileged occasion and in a manner and under circumstances fairly warranted by the occasion and duty, right, or interest. The essential elements thereof are good faith, an interest to be upheld, a statement limited in its scope to this purpose, a proper occasion, and publication in a proper manner and to proper parties only. The privilege arises from the necessity of full and unrestricted communication concerning a matter in which the parties have an interest or duty." 50 Am.Jur.2d Libel and Slander § 195 (1970). Accord: 53 C.J.S. Libel and Slander § 89 (1948); Hartsfield v. Harvey C. Hines, Co., supra at 361, 157 S.E. at 19.

Both Gormley and Daughety had an interest and duty with reference to the status of Daughety's indebtedness to defendant. Hence, statements by Gormley relating to an unreported payment of one hundred dollars by Daughety to plaintiff to apply on Daughety's debt to defendant were qualifiedly privileged. However, Daughety had no interest or duty with reference to what plaintiff did with funds other than those collected from him. Hence, the statement made by Gormley, according to Daughety's testimony, that "this still doesn't get Mr. Stewart off the hook because he has misappropriated funds other than this amount," was not qualifiedly privileged.

There remains for consideration the statements which, according to plaintiff's evidence, were made by Gormley to the McQueens, aunt and uncle of plaintiff, and to Claude M. Stewart, Jr., plaintiff's first cousin.

Generally, communications made by a third person to relatives of the person defamed on a subject in which the person communicating has an interest, or in reference to which he has a duty, are qualifiedly privileged if made to a relative having a corresponding interest or duty. The duty need not be legal. It is sufficient if it is a moral or social duty. This is true as long as the communications are made in good faith and without malice. 50 Am.Jur.2d Libel and Slander §§ 203-204 (1970); Annot., "Libel and Slander; Defamation of one relative to another by person not related to either, as subject of qualified privilege," 25 A.L.R.2d § 1388 (1952). Whether this general rule applies depends upon various factors, e. g., the age of the person allegedly defamed, his place of residence, his relationship to the person(s) to whom the communication is made, such person's responsibility, if any, for him, etc. Suffice to say, the general rule has no application to the factual situation now under consideration.

Plaintiff went to live with his aunt and uncle in 1948. He was then seventeen years old. He did not live with them in July, 1968, but stayed overnight in their home when he was in the Fayetteville area. In July, 1968, he was approximately thirty-seven years old, married and lived in Charlotte.

It may be conceded that Gormley's statement to Mrs. McQueen, in reply to her questions, that plaintiff had a financial problem with defendant involving one hundred dollars, did not charge plaintiff with the crime of embezzlement.

In Mrs. McQueen's absence, Claude M. Stewart, Jr., plaintiff's cousin, answered the phone simply to take a message. Gormley's statements went beyond those necessary to advise Stewart that plaintiff should contact him immediately. According to Stewart, Gormley stated that "his home office had advised him not to bother trying to contact Jack anymore. * * * *416 That they were going to put out an APB or state alert and have him picked up. * * *" This, together with his other statement that "for all we know, Jack might be in Mexico now with the money," could reasonably be interpreted as accusing plaintiff of misappropriating funds belonging to defendant.

Gormley's statement to Mr. McQueen, "that it was urgent that he find Jack Stewart and that he had a man in Kinston who had receipts to prove that he had paid Jackie several thousand dollars that he was short. That it was urgent that he get ahold to him at once because he had thirty thousand dollars worth of negotiable funds with him and he didn't know what amount he might have spent of that," substantially charged plaintiff with the misappropriation of defendant's funds. There is no evidence that McQueen made any inquiry as to why Gormley wanted to contact plaintiff or that he persisted in questioning him in any manner.

In summary, we hold that plaintiff's evidence refutes rather than supports any claim that either Claude M. Stewart, Jr., or Mr. McQueen had any interest or duty with reference to the subject of Gormley's statements which would render qualifiedly privileged Gormley's accusations that plaintiff had misappropriated funds belonging to defendant.

Since plaintiff's evidence does not establish that the defamatory statements attributed to Gormley in his conversations with Daughety and with the relatives of plaintiff were qualifiedly privileged, proof of actual malice was unnecessary to withstand defendant's motion for a directed verdict. However, it is noted that proof of actual malice (as distinguished from imputed malice) is prerequisite to the recovery of punitive damages. Roth v. Greensboro News Co., supra, 217 N.C. at 16, 6 S.E.2d at 887, and cases cited; Bouligny, Inc., v. United Steelworkers, supra, 270 N.C. at 170, 154 S.E.2d at 354; Woody v. Catawba Valley Broadcasting Co., 272 N.C. 459, 463, 158 S.E.2d 578, 581-582 (1968).


MOORE, J., did not participate in the consideration or decision of this case.

HIGGINS, J., concurs in result.