Scottish Court of Session Decisions

On 2nd June 1905 Charles Agnew, insurance agent, 30 Hagg's Road, Pollokshaws, brought an action against the British Legal Life Assurance Company Limited, Glasgow, in which he sought to recover £300 as damages for slander. The pursuer had on 1st April 1905 been engaged by the defenders' district superintendent at Greenock, Thomas Ferguson, as a local agent and collector, and thereafter had accounted every Thursday afternoon for the premiums collected. On Thursday, Ilth May, he failed to appear and to account, having left Greenock and returned home on that day owing as he alleged to ill-health.

The pursuer averred—“(Cond. 4) On the forenoon of Saturday, 13th May 1905, the pursuer received by post from the said Thomas Ferguson the following letter, written on official notepaper bearing the name and address of the defenders' company printed at the top:— ‘ 12 th May 1905.” ‘Mr Charles Agnew, 36 Hagg's Road, Pollokshaws.

‘Dear Sir,—As you have failed to turn up here at your proper time, and, upon making inquiry at your lodgings, I find that you are reported to have left Greenock, and that you have been drinking, as you have failed to forward me your collections, I will give you till Monday morning, the 15th inst., to hand me every penny you have collected; failing this, I shall be obliged to report the matter to the authorities.—I am, yours, &c.,

‘T. Ferguson, Supt.’

On the afternoon of the same day, 13th May 1905, the said Thomas Ferguson called at the pursuer's house, 36 Hagg's Road, Pollokshaws, and was shown into the room where the pursuer was still confined to bed.

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In the presence and hearing of the pursuer and his wife the said Thomas Ferguson then stated in said house that the pursuer was the ‘ greatest liar and fraud that ever came into Greenock,’ and that if the pursuer did not settle with him (Ferguson) for the sums collected and in his hands by the beginning of the week he would give the pursuer ‘into the hands of the authorities,’ or used words to the like effect. (Cond. 7) The said letter of 12th May 1905, written and sent by the said Thomas Ferguson to the pursuer, and the said statements made by him as above set forth when visiting the pursuer … were written and uttered by him in the course of his employment with defenders, and as representing them, and as acting in their interests and for their benefit, and they were false, calumnious and malicious. By said letter and said statements the said Thomas Ferguson falsely and calumniously represented and intended to represent that the pursuer was guilty of dishonest misappropriation of the monies in his possession belonging to the defenders, and that his conduct was such as to make it necessary to place the matter in the hands of the criminal authorities. Said statements were entirely false and unwarranted, and were made recklessly and maliciously and without any inquiry whatever being made as to the cause of pursuer's delay in paying over said monies. Had Ferguson or any other person on behalf of defenders made any inquiry into the circumstances, he would have ascertained that there was absolutely no ground for making such a charge. Defenders, however, or Ferguson as representing them, took no such precaution and made no inquiry, and in ignorance of the facts they recklessly accused him of embezzling or dishonestly misappropriating said monies.”

The pursuer proposed the following issues:—“1. Whether Thomas Ferguson, the defenders' district superintendent at 45 Hamilton Street, Greenock, while acting within the course of his employment as a district superintendent of defenders' company, wrote and sent to the pursuer the fetter dated 12th May 1905 … and whether the statements contained in said letter falsely and calumniously represented that the pursuer was guilty of dishonest misappropriation of monies in his possession belonging to the defenders, and that his conduct was such as entitled the said Thomas Ferguson to place the matter in the hands of the criminal authorities, to the loss, injury and damage of the pursuer? 2. Whether on or about 18th May 1905, at or near the pursuer's house 36 Hagg's Road, Pollokshaws, the said Thomas Ferguson, while acting within the course of his said employment, falsely and calumniously stated to the pursuer, in the presence and hearing of the pursuer's wife, that the pursuer was ‘the greatest liar and fraud that ever came into Greenock, and that if the pursuer did not settle with him’ (Thomas Ferguson) ‘for the sums collected and in his hands by the beginning of the week he would give the pursuer into the hands of the authorities,’ or used words of like import and effect, representing thereby that the pursuer was guilty of dishonest misappropriation of monies in his possession belonging to the defenders, and that his conduct was such as might make it necessary to place the matter in the hands of the criminal authorities, to the loss, injury, and damage of the pursuer.”

The pursuer also made averments as to the superintendent Ferguson having called on one M'Dougall, from whom the pursuer had obtained a certificate of character, and having warned M'Dougall not to give any more certificates. This portion of the case, however, on which there was a third issue, was given up in the Division, such actings having been held, in the Outer House, to be plainly outwith the scope of the superintendent's employment.

The defenders pleaded—“(1) The pursuer's averments are irrelevant and insufficient to support the conclusions of the summons. (2) The alleged defamatory statements made by the said Thomas Ferguson not having been made in the course of his employment as a servant of defenders, they are not liable therefor.”

On 21st October 1905, the Lord Ordinary (Ardwall) pronounced this interlocutor—“Disallows the said issues; sustains the first plea-in-law for the defenders; dismisses the action; and decerns: Finds the defenders entitled to expenses; allows an account thereof to be lodged, and remits the same to the auditor to tax and report; and decerns.”

Opinion—“In this case I propose to inquire with regard to each of the alleged slanders complained of—first, whether the statements alleged to have been made by Thomas Ferguson, the defenders' superintendent, are slanderous; and second, whether, if any of them are so, the defenders are in law responsible for such slanders.

“With regard to the first slander alleged to be contained in the letter written by Ferguson on 12th May 1905,1 am of opinion that that letter is not slanderous in its nature, and will not bear the innuendo sought to be put on it by the pursuer. It does not contain a statement, nor, in my opinion, can it be justly innuendoed as containing a statement, that the pursuer had in point of fact dishonestly appropriated moneys in his possession belonging to the defenders. It seems to me to consist of two parts— first, a complaint of irregularities on the part of the pursuer, which complaint is not founded on as libellous; and second, a threat that if the pursuer would not account for all the money he had collected on behalf of the defenders on the following Monday, Ferguson would be obliged to report the matter to the authorities. This means that should the pursuer at a future date fail to hand over moneys in his hands admittedly belonging to the defenders, that would constitute an offence which Ferguson would be entitled to report to the criminal authorities. This threat, I think, Ferguson was perfectly entitled to make in the circumstances, and I also am

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of opinion that it would be extravagant to hold that a letter in these terms, written by an employer to an employee who was certainly behindhand in his payments, is in point of law a slanderous document. The reference to the criminal authorities, be it observed, was made not in view of past or present conduct on the part of the pursuer but in view of a future contingency which might never occur, and which in point of fact did not occur in the present case. I accordingly disallow the first issue.

“The second slander complained of was that alleged to have been uttered by Thomas Ferguson in the pursuer's house on 13th May 1905. The words alleged to have been used seem to me to be different in one important respect from those used in the letter, because the threat to give the pursuer into the hands of the authorities is alleged to have been prefaced by the statement that the pursuer was ‘the greatest liar and fraud that ever came into Greenock,' and, taking the utterance as a whole I am of opinion that if this action had been directed against Thomas Ferguson, the pursuer might be entitled to an issue with the innuendo proposed by him. But the question now occurs, are the defenders liable in respect of what Thomas Ferguson is alleged to have said on the occasion in question? I am of opinion they are not. It is no doubt the case that circumstances may occur in which a principal may be liable for slander uttered by an agent or servant in the course of his employment. Such circumstances were held by the jury to have occurred in the case of The Citizens Life Assurance Company, Limited, v. Brown, Ap. Cas. 1904, p. 423, and the Privy Council declined to disturb their verdict. On the other hand, there are circumstances in which the principal will not be so liable. Such circumstances occurred in the case of Cameron v. Yeats, 1 F. 456, and in the Outer House case of Eprile v. Caledonian Railway Company, 6 S.L.T. 65. I am of opinion that in this case the pursuer has failed to set forth averments relevant to infer liability on the defenders' part for what was said on the occasion in question by their superintendent Thomas Ferguson. To hold that a company or corporation or other large employer is liable for all or any libellous language rashly used by anyone in their employment in the course of such employment, would be to introduce an appalling extension of the law of defamation. I take it to be the sound rule that it is the person who utters or writes the defamatory matter who is alone responsible for it, and that it is only in very special circumstances that the principal may be held responsible for the language of his agent. In my opinion no such circumstances are set forth in the present action. As an illustration of how the liability of a slanderer is held by the law to be strictly personal, I may refer to the cases of Barr v. Neilson, 6 Macph. 651, and Milne v. Smith, 20 R. 95, in each of which cases the Court refused to hold a husband liable for slanders uttered by his wife. I therefore disallow the second issue.

“With regard to the third issue, I am of opinion that it appears from the pursuer's own averments that Thomas Ferguson in calling at James M'Dougall's shop and informing John M'Dougall that he wanted to warn his father against giving any further certificate of character to the pursuer, was not acting in the course of is employment at all, inasmuch as it was in no sense the business of the defenders to go and warn a man from whom they had received a certificate of character of a servant who had not turned out well, not to give further certificates of character to that person, which might possibly enable him to get employment from other members of the public. This I think abundantly plain. I accordingly disallow the third issue also.

“I may say that, had I been disposed to allow either the first or the second issue, I should have held that it was incumbent upon the pursuer to put malice into the issue, and it was held in the case of The Citizens Life Assurance Company, Limited, v. Brown that a corporation cannot be held to be incapable of malice so as to be relieved of liability for malicious libel when published by its servant, and for which libel they are in law responsible, and I am disposed to think that, whether he might be able to prove them or not, the pursuer has set forth facts from which malice on the part of Ferguson might be inferred. The principle of these are the language used on the occasion of his visit to Agnew's house and the steps he took against the pursuer in connection with the M'Dougalls. may further add that, if I had allowed issues in the case, I would have made several changes in the framework and wording of the issues.”

The pursuer reclaimed and argued—The letter and statements which were complained of clearly charged the pursuer with misappropriation, and if there was any doubt on the point it was for a jury to decide it. The Lord Ordinary would have allowed the second issue, but had held that the defenders were not responsible. In that he had erred. The case was ruled by Citizens Life Assurance Company v. Brown, [1904] AC 423, which case followed on— Barwick v. English Joint Stock Bank (1867), L.R. 2 Eq. 259, and was but an extension of the principles laid down in Houldsworth v. City of Glasgow) Bank, March 12, 1880, 7 R. (H.L.) 53, 17 S.L.R. 510. A master might be liable for his servant's slander within the scope of the employment, and the question of the scope of employment went to the jury— Ellis v. National Free Labour Association, May 12, 1905, 42 S.L.R. 495. It had been held that the master might be responsible even for an assault by his servant— Dyer v. Munday, [1895] 1 QB 742—and it was not necessary the servant should have been acting for the master's benefit— British Mutual Banking Company v. Charnwood Forest Railway Company, L.R. 18 QB D 714—though that was so here. Cameron v. Yeats, January 27, 1899, 1 F. 456, 36 S.L.R. 350, quoted for defenders, turned on the proof of an aver

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ment, and Eprile v. Caledonian Railway Company, June 21, 1898, 6 8.L.T. 65, on special regulations. Malice if required might be inserted in the issues, and there were sufficient facts and circumstances averred from which it might be inferred. The third issue was not insisted upon. (Odgers on Libel and Slander, 4th ed. p. 546, was also referred to.)

Argued for the defenders and respondents—The third issue having been given up, the questions now involved were whether the letter and statement to the defender himself were slanderous, and if so, whether the defenders were responsible. The letter containing no present charge could not bear the innuendo suggested, and was not slanderous in itself, and the statement to the pursuer and his wife was made in rixa, was merely abusive, and consequently was not slanderous and actionable— Macintosh v. Squair, July 3, 1868, Scot. Jur. 561. The term “liar” was not slanderous per se— Watson v. Duncan, February 4, 1890, 17 R. 404, 27 S.L.R. 319. But even if the letter and statement were slanderous the defenders were not responsible. An employer was not responsible for a verbal slander by his employee acting in excess of his duty— Eprile v. Caledonian Railway Company, cit. sup. He was only liable if he were benefited by the employee's act done within the scope of theemployment— Western Bank v. Addie, May 20, 1867, 5 Macph. (H.L.) 80, 4 S.L.R. 113; Clydesdale Bank v. Paul, March 8, 1877, 4 R. 626, 14 S.L.R. 403; Houldsworth v.The City of Glasgow Bank, March 12, 1880, 7 R. (H.L,) 53, 17 S.L.R. 510; Hockey v. Clydesdale Bank, November 25, 1898, 1 F. 119, 36 S.L.R. 119. That was not so here, and in this the case was distinguished from Citizens Life Assurance Company v. Brown and Dyer v. Munday, cit. sup. Were an issue to be allowed, malice would require to be inserted, but the malice of an agent could not be imputed to his principal, the malice must be on the part of both— Mackellar v. Duke of Sutherland, June 18, 1862, 24 D. 1124; Citizens Life Assurance Company v. Brown, cit. sup. Further, there were not sufficient facts and circumstances averred on record to infer malice, and these were necessary— Sheriff v. Denholm, March 4, 1898, 5 S.L.T. 346; Macdonald v. M'Coll, July 19, 1901, 3 F. 1082, 38 S.L.R. 781. Laidlaw v. Gunn, January, 31, 1890, 17 R. 394, 27 S.L.R. 317; and Farquhar v. Neish, March 19, 1890, 17 R. 716, 27 S.L.R. 549, were also referred to.

At advising—