Scottish Court of Session Decisions

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Cite as: [1904] ScotLR 42_37, [1904] SLR 42_37

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SCOTTISH_SLR_Court_of_Session

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Court of Session Inner House First Division.

Tuesday, November 1 1904.

[ Lord Kincairney, Ordinary.

42 SLR 37

A B

v.

C D.

Subject_1Reparation
Subject_2Slander
Subject_3Statement Injurious in Relation to Position of Person Spoken of
Subject_4Allegation that Country Solicitor had Lost his All.
Facts:

A solicitor in a country town holding several public appointments of trust brought an action of damages for defamation, averring that the defender had stated that the pursuer was cleaned out and had lost his all, and that this statement had injured him in his reputation and business.

Held that having regard to the position of the pursuer the alleged statement might, on a reasonable construction, have injured his credit and reputation, and accordingly that the pursuer's averments were relevant to entitle him to an issue.

Headnote:

A B, a solicitor in the country town of S., brought this action of damages for slander against C D, manufacturer there.

The pursuer averred that he was a partner of a firm who had for many years carried on business as solicitors in S., and that he held several important public appointments of trust in S. “(Cond. 3)
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After his return from a holiday the pursuer discovered that an extraordinary story of the most damaging character had been put into circulation by the defender of and concerning the pursuer, and had thereby gained currency in and around S., to the effect that the pursuer had lost his whole means by speculating, and that the pursuer was a ruined man. (Cond. 4) In particular, in a compartment of the railway train which left S. for Glasgow at 8˙33 a.m. on Thursday 14th April 1904 the defender, in presence of” certain persons named “stated that the pursuer was cleaned out and had lost his all by speculation, and that he was a ruined man, or used words of the like import and effect.”

The pursuer further averred—“(Cond. 6) The said statements made by the defender as aforesaid were of and concerning the pursuer, and were false and calumnious. They were intended by the defender to represent that the pursuer was a speculator; that by his speculation he had lost his whole means; that he was a ruined man who as a professional man was discredited, and whom it would be unsafe to trust with money, or with the investment of clients' means or management of their affairs involving trust. The pursuer has among his clients several well-to-do farmers and other residents in the country districts, to whom the idea of speculation … is repugnant. Moreover, owing to the occurrences recently in the West of Scotland (where S. was situated) of cases in which clients have sustained heavy losses through defalcations by solicitors, who had been engaged in speculation, in which they had lost their means, public opinion is very sensitive to any suggestion that a solicitor has incurred such losses, and a charge of the kind is seriously detrimental to him in his profession. (Cond. 7) By and in consequence of the said false and slanderous statements the pursuer has suffered greatly in his feelings and reputation. The defender's statement has also injured him in his reputation and business, and he has thereby been subjected to annoyance and loss in connection with his business as a professional man. Already the rumour put into circulation by defender has, as a direct and natural consequence of his action, obtained great publicity, and many of the pursuer's clients in S. and in the surrounding districts have been seriously alarmed.… The story has been so persistently circulated and has got such a deep hold in the district from which the pursuer derives his practice that it has been found almost impossible to remove the unfavourable impression which it produced.” …

The defender denied the pursuer's material averments, and stated that in the course of casual conversation in the railway compartment the defender remarked—“Have you heard the latest”—meaning the latest gossip of S.—that on being asked by one of the occupants of the carriage compartment what it was he replied, “It is reported that wee B. has lost his all,” that the other replied, “That will be nonsense,” to which the defender answered that he had heard it from one or two people, or words to that effect, that the subject then dropped, that no reference was made by the defender to speculation or any other cause whereby the pursuer might have lost money, that what was said was not stated as fact but merely as rumour and interrogatively, and the matter was dealt with in the most incidental way, and that the defender was not actuated by any ill-feeling towards the pursuer, and merely repeated, as he stated, what he heard.

The defender pleaded, inter alia—“(1) The action is irrelevant. (2) The defender not having slandered the pursuer, the action should be dismissed with expenses.”

On 5th July 1904 the Lord Ordinary ( Kincairney) approved the following issues and appointed them to be the issues for the trial of the cause:—“(1) Whether on or about 14th April 1904, in a carriage of a railway train between S. and Glasgow, in presence and hearing of” certain persons named “or one or more of them, the defender falsely and calumniously stated of and concerning the pursuer that he was cleaned out and had lost his all, or used words of like import and effect, to the loss, injury, and damage of the pursuer? (2) Whether on or about 14th April 1904, in a carriage of a railway train between S. and Glasgow, in presence and hearing of” certain persons named “or one or more of them, the defender falsely and calumniously stated of and concerning the pursuer that he was cleaned out and had lost his all by speculation, or used other words of the like import and effect, to the loss, injury, and damage of the pursuer?”

The defender reclaimed, and argued—There was no defamatory matter, as the alleged statement of the defender did not imply either (1) that the pursuer lost his money in any discreditable way, or (2) that he was unable to pay his debts. In the absence of either of these imputations, the words alleged to have been used by the defender were not injurious. It was not a sufficient basis for an action of defamation that the pursuer averred injury— M'Laren v. Robertson, January 4, 1859, 21 D. 183; Outram v. Reid, February 28, 1852, 14 D. 577; Wright & Greig v. Outram & Co., July 17, 1889, 16 R. 1004, 26 S.L.R. 707; Macrae v. Sutherland, February 9, 1889, 16 R. 476, 26 S.L.R. 335; Anderson v. Hunter, January 30, 1891. 18 R. 467, 28 S.L.R. 324; Bruce v. Leisk, February 20, 1892, 19 R. 482, 29 S.L.R. 412. [ Lord Kinnear referred to Erskine's Institutes, iv, 4, 81.]

Argued for the pursuer and respondent—A statement was defamatory if it affected a man's commercial credit and injured him in his business. The statement of the defender here did both. It was out of the question to dissociate the position of the pursuer here from the effect the words would naturally have. The other side assumed an innocent construction of the words, and argued that on that construction there was nothing defamatory in
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them. But if words were capable of an injurious as well as of an innocent interpretation, and if the injuriousness or innocence of the words depended on the relation between the words and the situation of the person of whom they were spoken, it was eminently a question for a jury. It would, of course, lie on the pursuer to prove that he had suffered injury. Reference was made to Cox v. Lee, 1869, L.R., 4 Ex. 284.

Judgment:

Lord President—It appears to me that both issues proposed by the pursuer should be allowed.

In considering whether the use of particular words may or may not have an injurious effect on the character of a person, it is very material to have regard to the position of the person in regard to whom the words were used and the business he is carrying on. If the pursuer had been living on his private means, the statement in a railway carriage that he was reported to have “lost his all” might have excited compassion but it would not have injured him in his public reputation or purse. But the case is very different when the man is carrying on a business or profession by which he lives, and which requires that he shall possess such a character that people may safely trust him with their money. We know the nature of the business of a writer in a country town. It is quite common for women and other clients, where property belonging to them has been sold or a bond paid up, to leave the price or the money paid up in the hands of their law-agents until another investment is found for it. In other words, local solicitors frequently act as practically the bankers of their clients. Now, the question is whether it is so certain that to say of a man in that position that he was cleaned out and had lost his all could not damage him that we should not allow the pursuer an opportunity of proving that it could and did. If it were proved that as a result of the statements made clients removed their money from his keeping or took their papers out of his hands this would show very distinctly that the words were injurious. I am of opinion, then, that the pursuer should have an opportunity of proving his averments of injury.

What I have said with reference to the first issue applies a fortiori to the second issue. Experience proves that where an agent loses his own money in speculation he not infrequently uses his client's money in the same way, no doubt generally intending to replace it, but not infrequently being unable to do so. I therefore think that the issues should be allowed.

Lord Adam—The words complained of as being defamatory are that the pursuer “was cleaned out and had lost his all.”

I agree with your Lordship that these words may not be libellous in certain circumstances, and in other circumstances may be extremely injurious. In this case the person of whom the words were spoken is a writer in S. holding several important public appointments of trust. The pursuer avers that the statement has injured him in his reputation and business, that many of his clients were seriously alarmed by the rumours put into circulation by the defender, and that these things were the natural and direct results of the defender's statement. The question is whether the pursuer should be allowed to prove this if it is the fact. Mr Jameson says that there is nothing defamatory in the actual words. But the passage from Erskine, referred to by Lord Kinnear, is authority for the view that to impute bankruptcy to a man is a ground of action, not because it reflects on his moral character, but because such an imputation may have the effect of ruining his credit. That is exactly the position here, and accordingly I think the issues should be allowed.

Lord M'Laren—There is no doubt that in the law of Scotland defamatory words affecting the credit of the person spoken of are actionable—that is, the law recognises that injury to commercial credit is a wrong for which reparation is granted. If authority were needed, the passage in Erskine, to which Lord Kinnear called attention, is sufficient. It is not necessary to lay down a criterion as to what words fall within this character and what words would fall outside. It has been decided that it is defamatory to say of a trader—or indeed of any person—that he is “insolvent.” It has not been decided that you may make statements affecting the financial credit of an individual if you stop short of attributing insolvency. The distinction between an imputation of insolvency or bankruptcy and the present case is a very thin one. In the case of a writer or a merchant, to say that he had lost all his money would certainly be injurious to his credit. No solicitor can carry on a business worth having without credit, because in the ordinary course of business clients' money necessarily comes into his hands. To say of a solicitor that he was “cleaned out” and had lost his all is certainly calculated to injure his business. It is for a jury to say whether the words have had an injurious effect in this case.

If these words were not actionable, I fail to see how the addition of the words “by speculation” would make a difference. Speculation is a word of very indefinite meaning. There is legitimate and illegitimate speculation. Thus in my view the one issue is merely a variation of the first.

Lord Kinnear—I agree. I should assent to Mr Jameson's observation that it is not a sufficient reason to ground an action of defamation that the pursuer alleges injury. That is not enough if in the opinion of the Court it is clear that the words are not calculated to cause such injury. But then the pursuer describes his position as a professional man in S., so that his means of subsistence are dependent on the confidence of his neighbours in his capacity and credit as a man of business. It is not an unreasonable construction of the words used to say that they may have injured his

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means of subsistence and credit, and that being so he is entitled to an issue.

The Court adhered.

Counsel:

Counsel for the Pursuer and Respondent— Shaw, K.C.— J. R. Christie. Agents— Macpherson & Mackay, S.S.C.

Counsel for the Defender and Reclaimer— Jameson, K.C.— Scott Brown. Agents— Lister Shand & Lindsay, S.S.C.
1904