Scottish Court of Session Decisions

The British Workman's and General Assurance Company, Limited, Birmingham, raised an action against James Stewart, managing treasurer of the City of Glasgow Friendly Society, 6 and 8 Richmond Street, Glasgow, concluding for £2000 as damages for slander. They also raised an action against Dr Robert Perry and others, the trustees of the City of Glasgow Friendly Society, concluding for £10,000 as damages for slander. The slanders which were

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alleged to have been uttered by the defenders in the two actions were of a similar character, reflecting upon the stability and financial soundness of the pursuers' company. In the action against Stewart the pursuers' averments, as they stood after amendments had been made, the nature of which it is unnecessary to describe, were to the following effect—That the pursuers and the City of Glasgow Friendly Society were competitors in business; that they, the latter society, had, in pursuance of a scheme for filching away the pursuers' business, published a circular, and had also through its agents circulated verbally slanderous statements to policyholders and others regarding the pursuers, which wrongful acts formed the basis of the action of damages against the society.

They further averred—“(Cond. 4) On 7th March 1896 a meeting of members of said society resident in Kilsyth and neighbourhood was held in the New Masons’ Lodge, Market Place, Kilsyth. This meeting was addressed by the defender, who, after giving statistics as to his own society, went on to attack pursuers in the following terms—‘Personally, I am satisfied that if the rival institutions which are represented in your town were subjected to the severe test which, of our own accord, we determined should be applied to the City of Glasgow Friendly Society, the majority would show as large if not a larger sum as deficiencies than we show as surpluses. I fear that with many of these institutions the determination arrived at before the work of valuation is fairly begun is that by hook or crook a surplus must be brought out. Such a result may have on the surface a satisfactory look, but if the methods are known by which the surplus is obtained, would the public feel satisfied in putting their trust in such offices? Better far to have a deficiency wrought out on honest lines than a surplus obtained by calculations which no actuary worthy of the name would justify. I have heard that rather peculiar means were resorted to by one of these institutions to obtain a surplus and so to quiet the poor policyholder. The actuary of the British Workman Company in a circular states that by special resolution of the directors he was authorised to make a valuation assuming the rate of interest at 3 1 2 per cent., but the results of this valuation were of so unpleasing a character that the manager instructed the valuer to take the 4 per cent. tables. After doing so, a deficiency of £69,360 was shown. Thereafter, the directors decided to deposit accounts with the Board of Trade, setting forth a surplus of £21,577 instead of the actual deficiency of £69,360, and the valuer was instructed to prepare those accounts. The valuer, with commendable honesty, refused to have anything to do with the making up and publication of valuation accounts calculated to deceive anyone not acquainted with the subjects. The directors thereafter wrote their valuer that as he had declined to act upon the instructions of the board, his services were no longer required. The public will not, I feel sure, consider that a valuation with a surplus obtained by the mere demand of the directors is worth the paper it is written on. It is to be hoped that few institutions are in such a pitiable plight as that to which I have just referred, but it must be admitted on the other hand that the City of Glasgow stands well in the forefront in the matter of industrial insurance, and with the growing intelligence of the working classes of the community I am sure that its superiority will be increasingly appreciated. The said speech was delivered by defender in the presence and hearing of, inter alios, James Good, chairman of the said City of Glasgow Friendly Society, William Fyfe, secretary of said society, Russell, of the board of management of said society, and A. Breton, the agent for the said society at Kilsyth. The statements in said speech of and concerning the pursuers were false and calumnious. Said speech represents, and was intended to represent, that the accounts of pursuers had been deliberately and dishonestly falsified or manipulated, and that their financial position was, at the date of the speech, unsound. The said speech is of and concerning pursuers, and is false and calumnious, and is to the loss, injury, and damage of the pursuers in their legitimate business as an insurance company, and was maliciously made by the defender for the purpose of injuring the pursuers' business.”

The pursuers averred further, that a report of this speech had been inserted in the Kilsyth Chronicle of 14th March 1896, with the approval and authority and at the instigation of the defender. There were also averments as to another speech made by the defender attacking the pursuers' company. The defender pleaded veritas.After various procedure, the following issues, inter alia, were in the Inner House adjusted for the trial of the case:—“(1) Whether on or about the 7th day of March 1896, at a meeting of members of the City of Glasgow Friendly Society, held in the New Masons' Lodge, Market place, Kilsyth, the defender, in the presence and hearing of James Good, chairman, William Fyfe, secretary, Russell, one of the board of management, and A. Breton, agent, all of said society, and of others, falsely and calumniously made the statements set forth in the first schedule appended hereto, or statements of similar import and effect, of and concerning the pursuers, and whether the said statements falsely and calumniously represent that the accounts issued by the pursuers had been falsified, and that their financial position was at the date of the speech unsound, to the loss, injury, and damage of pursuers? Damages laid at £400. (2) Whether the defender caused a report containing the statements set forth in the first schedule appended hereto to be published in the issue of the Kilsyth Chronicle of 14th March 1896, and whether the said statements are of and concerning pursuers, and falsely and calumniously represent that the accounts issued by the pursuers had been falsified, and that their financial position was at the

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date of their publication unsound, to the loss, injury, and damage of pursuers? Damages laid at £400.” The schedule referred to contained the speech set out above. The following counter-issues were proposed by the defenders.—“(1) Whether the pursuers knowingly deposited with the Board of Trade accounts and valuations which were calculated and intended to mislead the public? (2) Whether the pursuers' financial position is unsound?" To these counter-issues, when the case was before the First Division, the pursuers objected.

Argued for pursuers—The counter-issues did not meet any of the issues; they did not come up to the charge of “falsifying” contained in the first issue.

Argued for defenders—They were entitled to take a material part of the averments and justify it, and here they did deal with the substantive part— M'Neil v. Rorison, November 12, 1847, 10 D. 15, at p. 25.