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Hos. Care Corp. v. Commer. Casualty Ins. Co.

Supreme Court of South Carolina
Jul 1, 1940
194 S.C. 370 (S.C. 1940)


affirming the circuit court's order ruling that a small insurance company could not maintain a defamation action against defendants who published pamphlet stating that small insurance companies that had recently entered into the insurance business were inexperienced and financially unstable

Summary of this case from Garrard v. Charleston Cnty. Sch. Dist.



July 1, 1940.

Before DENNIS, J., Richland, November, 1939. Affirmed.

Three separate actions by the Hospital Care Corporation, by the National Hospital Service, Incorporated, and by the Security Indemnity Company, against the Commercial Casualty Insurance Company and another, for libel and for unfair competition. From orders sustaining demurrers to the complaints, plaintiffs appeal.

The order of Judge Dennis follows:

The complaint purports to state two causes of action. The first is based on the publication of a circular alleged to be libelous of plaintiff in its business. The second is predicated on the same publication of the same circular, by the same agent, but plaintiff contends that the gravamen of the second is unfair competition. The two defendants filed similar demurrers to both causes of action for insufficiency of facts.

There are two other complaints — by National Hospital Service, Inc., and Security Indemnity Company against the same two defendants — which are practically identical, except for the name of the plaintiff, and to which both defendants likewise demurred. The demurrers in the three cases were submitted on comprehensive briefs at the October term under agreement of counsel that the same decision should be made in each case; any reasons to be stated in this one, but considered as applicable to the others.

The demurrers to the first cause specify that the publication is not defamatory, either per se or per quod. The briefs exhibit no difference between counsel as to the controlling rules of law, but a wide divergence as to the application thereof and the construction of the circular thereunder.

A corporation may maintain an action for libel injuring it in its business, although it has no reputation or character in a personal sense and cannot suffer humiliation; so that, in determining whether a publication is defamatory of a corporation, it should be borne in mind that the injury must be one to its business, resulting in pecuniary loss. 37 C. J., 11; Memphis T. Co. v. Cumberland T. Co., 6 Cir., 145 F., 904. The definition of libel in this respect is applied as stated in Smith v. Bradstreet Co., 63 S.C. 525, 530, 41 S.E., 763, and approved in Hubbard v. Furman University, 76 S.C. 510, 511, 57 S.E., 478.

The demurrers to the first cause of action must be sustained under the authority of Hubbard v. Furman University, supra; McGregor v. State Co., 114 S.C. 48, 103 S.E., 84; Oliveros v. Henderson, 116 S.C. 77, 106 S.E., 855, and Duncan v. Record Publishing Co., 145 S.C. 196, 143 S.E., 31.

"The fact that supersensitive persons, with morbid imaginations, may be able, by reading between the lines of an article, to discover some defamatory meaning therein, is not sufficient to make it libelous." Reid v. Providence Journal Co., 20 R.I. 120, 37 A., 637.

"* * * A construction different from what they bear in their common acceptation and meaning cannot be placed upon the words. It is not the intention of the speaker or writer, or the understanding of any particular hearer or reader, that is to determine the actionable quality of the words. It is rather the meaning that the words in fact conveyed; rather the effect which the language complained of was fairly calculated to produce and would naturally produce upon the minds of persons of reasonable understanding, discretion and candor, taking into consideration accompanying explanations and the surrounding circumstances which were known to the hearer or reader. * * *" (Italics added.) Citing Pegram v. Styron, 1 Bailey, 595, 17 S.C.L., 595; Shecut v. McDowel, 1 Tread. Const., 35, 6 S.C.L., 35, 36 C.J., 1156.

A reasonable analysis of the circular, both as a whole and in its parts, impels the conclusion that it is an ordinary competitive advertisement and does not go so far as to injure plaintiff in its business. It refers generally to insurance companies throughout the United States and Canada as a class. The name of defendant company appears in the heading, claiming a reputation for dependable service; with the statement that it operates in 46 states and Canada and is licensed and bonded in this State for the protection of its policyholders; and there is nothing later in the circular to limit the scope thereof or the general class of insurance companies to which it refers.

The reasonable interpretation is that the circular is seller's talk. It praises defendant's policies and, in effect claims that these are amongst the best to be had. It also warns generally all purchasers of insurance to investigate and make sure that they get sound policies, and then suggests that purchasers may solve worries and doubts in this respect by taking policies from defendant. In so doing, by implication, although not expressly, defendants belittle by comparison the policies of their competitors, but the circular refrains from any defamatory charge or any false statement of fact concerning competitors, and is not defamatory.

From the general viewpoint, the circular is similar to the publication in the Hubbard case. There the publication praised what the college had to sell — it claimed that its new professor and the opportunities for musical education offered under him were the best available, and to that extent, by necessary implication, although not expressly, it belittled by comparison the plaintiff and the opportunities for musical education offered by him as a competitor. But the Court said: "Society advances by criticism, preference, and selection." 76 S.C. at page 515, 57 S.E., at page 480.

Our public policy is reflected by our statutes. Alderman v. Alderman, 178 S.C. 9, 181 S.E., 897, 105 A.L.R., 102. It is a matter of public interest that purchasers of insurance secure policies in companies that are financially sound and honestly and capably managed, as evidenced by the statutes regulating insurance companies. Every person has the right of fair comment and criticism in a matter of public interest; this stems from the constitutional guaranty of freedom of speech. Oliveros v. Henderson, supra. Defendants were not deprived of this right because the circular was primarily intended to promote the competitive sale of their insurance policies.

The construction of the circular contended for by plaintiff gives effect to every possible evil implication that may occur to a morbid imagination, renders the advertisement ambiguous, and makes the question of libel or no libel one for the jury. The adoption of such a rule would unreasonably limit the right of fair comment and go far toward abolishing competitive advertisement — a result not in the public interest, since competition is the life of trade.

A more detailed consideration of the language of the circular reaches the same result, bearing in mind that in deciding a demurrer the Court will take into consideration matters of which it has judicial notice. "Courts will not profess to be more ignorant than the rest of mankind, * * * and should take notice of whatever is or ought to be generally known within the limits of their jurisdiction." State v. Broad R.P. Co., 177 S.C. 240, 181 S.E., 41, 48, also last paragraph in McGregor case.

Plaintiff contends that the complaint alleges that the circular was devoted entirely to the discussion of hospital insurance. But the complaint (Paragraph 4) quotes the first page of the circular, claimed to contain the defamatory matter, and alleges that the balance of the circular refers exclusively to hospitalization insurance benefits offered for sale by defendants, and by a coupon invites inquiries to the Columbia office of defendants. There is no allegation that the portion of the circular not quoted limits the scope or affects the meaning of the language quoted from the first page thereof. The quoted portion of the circular carries the word "insurance" standing alone in two instances, "insurance business" in one, and "insurance experience" in another; neither the word "hospital" nor the word "hospitalization" appear therein.

Plaintiff further contends that the words "Ask your Insurance Department for the answer," found at the end of the first paragraph of the circular, limit the scope thereof to South Carolina. But the Court knows that every state in the Union has a department of its government known as the "Insurance Department," and these words are just as appropriate in a circular nationwide in its scope as they would be in one limited to South Carolina.

The statement of the first paragraph of the circular in ordinary type, in effect that several small insurance companies have defaulted during the past ten years, is a reference to the past as a matter of financial history throughout the United States and Canada, and not to any existing insurance company whatsoever. This is so, even if the statement can be construed as limited to South Carolina. It is a true statement of fact in either event, as the Court judicially knows, and is not defamatory of any existing insurance company.

The statements claimed to have injured plaintiff's business are found in the second paragraph in ordinary type, commencing "Today the market is flooded with circulars." The statement is made that these circulars are put out by small, inexperienced companies, recently entering the insurance business. The writer stipulates, as a part of this statement, that these companies "no doubt, mean well." It cannot be defamatory of plaintiff to say that it flooded the market with circulars or that it is a small, inexperienced company, recently entering the insurance business, in view of the allegations of Paragraph 3 of the complaint that plaintiff has from time to time since its organization issued advertisements and circulars, that it is a small stock company, that it was formed within the past four years and is a comparatively new company.

Libel is said to be found in the remaining portion of this paragraph, which advises purchasers of insurance "to find out the financial standing of the company in which they are to place their money"; to "investigate its assets and liabilities and years of insurance experience in order to determine if the company is able to carry out its obligations, especially in case of epidemics * * *." This admonition or advice is followed by the suggestion that worres and doubts in this respect may be relieved by taking a policy in the defendant company, with a statement that defendant's assets and financial responsibility are beyond question, and figures in support thereof.

The question of defamation turns on this admonition, or warning, or advice; it is not suggested that it is based on any factual statement. That plaintiff has seen fit to construe the circular as charging that plaintiff is insolvent, or in a financially shaky position, or in imminent danger of insolvency; that its management is incompetent, not to be trusted, and incapable; and that plaintiff will be unable to fulfill its obligations under policies of insurance, is of no effect even on the demurrer. There are mere conclusions of the pleader, which are not admitted by the demurrer, because they are not such inferences as may fairly and reasonably be deduced from the ordinary meaning of the language used. This innuendo cannot enlarge the meaning of the language used. Authorities cited; particularly Oliveros v. Henderson, supra, 116 S.C. at bottom of page 81 and top of page 88, 106 S.E., pages 857, 859.

The circular does not refer to plaintiff by name. Section 482 of the Code abolishes the old rule, whereby it was necessary to allege the extrinsic facts showing the application to plaintiff of a defamatory publication, which does not mention his name. "The change, however, does not obviate the necessity of setting out the facts which make language, not in itself defamatory, have that import." Hubbard v. Furman University, 76 S.C. 510, 57 S.E., 478.

When the words are not libelous per se, an inducement must be alleged showing that they are libelous per quod.

Plaintiff contends that an inducement is alleged in Paragraph 3 and also in Paragraph 4 of the complaint. But the only import and effect of the extrinsic facts alleged in Paragraph 3 are to show that the circulars were published of and concerning plaintiff. The facts alleged are that only three companies (including plaintiff) have been chartered by this State to write hospitalization insurance; that all three are engaged in the City of Columbia and in this State solely in writing hospitalization insurance; that they have issued advertisements and circulars; that they are small stock companies; that no company organized in this State within the past ten years for the purpose of writing this kind of insurance has failed; that plaintiff is a comparatively new company, but has built up a large and profitable business, etc.; that plaintiff's business is dependent upon the confidence and faith of the public. These facts may tend to show that the circular was published of and concerning plaintiff, and might have been omitted in view of Section 482 of the Code. They have no tendency to show that the language of the circular was understood in some other than its ordinary meaning.

The latter portion of Paragraph 4 of the complaint alleges plaintiff's construction of the circular. It is the innuendo, which has already been considered. Such an innuendo cannot be construed as an inducement, for the reasons stated.

If the circular carries any libelous imputation, it is defamatory of a class and not of plaintiff as a member of that class. The pertinent rule is stated in the first sentence of Section 26, 36 C.J., 1161: "Where a publication affects a class of persons without any special personal application, no individual of that class can sustain an action for the publication; and it has been held that, where defamatory statements are made against an aggregate body of persons, an individual member not specially imputed or designated cannot maintain an action * * *."

Also in the first sentence of Section 337 of Newell's Slander and Libel, 4th Ed., 373: "Where defamatory words reflect upon a class of persons impartially, and there is nothing to show which one is meant, no action lies at the suit of a member of the class * * *."

The cases are collected in notes in 5 L.R.A. (N.S.), 480, 23 L.R.A. (N.S.), 726, 25 L.R.A. (N.S.), 382, 42 L.R.A. (N.S.), 870, 48 L.R.A. (N.S.), 257, and 97 A.L.R., 284. Consideration has been given them, but detailed discussion would unduly prolong this opinion. No South Carolina case sufficiently in point to throw light on the question has been cited. Clark v. Creitzburgh, 4 McCord, 491, 15 S.C.L., 491; Miles v. Record Co., 134 S.C. 462, 133 S.E., 99, 45 A.L.R., 1112; Smith v. Spartanburg, Etc., Co., 156 S.C. 69, 152 S.E., 823, hold that a publication may be defamatory of a particular individual, although his name is not given provided that the libel directed at the particular individual and a description given of him which may be recognized by some reader.

The circular was issued by a company doing business throughout the United States and Canada, and the general portion thereof, giving the history of insurance companies, old and new, has reference to insurance companies as a countywide class, engaged in writing insurance of various kinds. The scope of the circular is disclosed by the first paragraph, together with the heading; and the reference in the second paragraph to "small, inexperienced companies, recently entering into the insurance business" is to them as a class of such insurance companies generally throughout the United States and Canada. And this paragraph, wherein the libel is claimed to be found, is not limited within itself or by any preceding or subsequent statement in the circular so as to refer particularly to South Carolina companies or to companies engaged solely in writing hospital insurance.

The Court cannot reasonably find in the circular any libel which has "any special, personal application" to plaintiff; any reflection is upon the class "impartially, and there is nothing to show which one is meant."

In all the phases of the consideration given the circular, the Court has had in mind that libel may be effected by indirection and suggestion as well as by direct charge. Duncan v. Record Publishing Co., supra. However, the libelous imputation must be an actuality and not wholly imaginary.

It is unreasonable, as a common sense proposition, to say that any average reader would find anything libelous of plaintiff in the circular, even should a reader be found having knowledge of every fact alleged in the complaint. The Court will not hunt for a forced and strained construction to put on ordinary words, but will construe them fairly according to their nature and reasonable import, in the plain and popular sense in which the average reader naturally understands them. There is no presumption of defamation.

Plaintiff does not seriously question that the second cause of action fails to allege a conspiracy because "it is incomprehensible that a single agent may, as the representative of his principal, conspire with himself as an individual, so that he and the principal should be convicted of a conspiracy" ( Goble v. Express Co., 124 S.C. 19, 25, 115 S.E., 900, 903; State v. Jackson, 7 S.C. 283, 24 Am. Rep., 476; and because, as recently said by the highest Court of Virginia, "To give action there must not only be conspiracy, but conspiracy to do a wrongful act. If the act is lawful, no matter how many unite to do it." Werth v. Fire, Etc., Bureau, 160 Va., 845, 171 S.E., 255, 259.

Plaintiff's argument is thus epitomized:

"* * * It cannot be seriously contended that one who deprives another of his expectation of custom, who diverts another's patronage or diverts his expectation of patronage by conduct which he knows will have that result, and which is intended to have that result, has not inflicted damage upon that other. Therefore, justification for such conduct would seem to be necessary if liability is to be avoided. Fair competition would, of course, be a sufficient justification; unfair competition could hardly be so regarded * * *."

"* * * The gravamen of the second cause of action is unfair competition and unlawful interference with the business of the plaintiff. Here conspiracy is of no moment, nor is it necessary to allege that the acts done amount to a libel. For, as is shown by the cases just discussed, the law has now reached the point where it recognizes unfair competition and unlawful interference with business as independent torts, whether or not the acts done amount to one of the old nominate torts. That is to say, one who lies about his competitor or misrepresents him is guilty of unfair competition which is actionable."

The two causes of action set forth exactly the same state of facts — the same acts of the agent, to wit, the composition and publication of the same circular, together with the same qualifications, that is, the same malice and purpose to injure plaintiff's business — and ask for the same relief, to wit, a judgment for money damages, actual and punitive. The same state of facts can give rise to but one cause of action — "`all damages from a single wrong, though at different times, make but one cause of action; * * *'" and plaintiff may not split a single cause of action. Floyd v. C.I.T. Corp., 191 S.C. 518, 5 S.E.2d 299, 300, filed November 1, 1939.

Since the facts alleged in both causes are the same, it is a legal impossibility to find in the aggregate statement but one cause of action, although the label thereof is of no consequence under our Code pleading. All that is necessary is a statement of facts showing that defendants have violated some legal duty owed plaintiff. If it is not "necessary to allege that the acts done amounted to a libel" in respect of the second cause of action, it was not necessary so to do in respect of the first, and the exhaustive effort of plaintiff's counsel to show that the publication constitutes a libel is entirely wasted.

The law gives a cause of action only for a legal wrong — that is, a violation of a legal duty; it has not yet gone so far as to impose liability for a moral wrong — the mere violation of a moral duty. The law does not give an action for every kind of lie in all circumstances, although it does for certain kinds of lies in certain circumstances. "However, the publication may have been false and malicious, and yet not actionable." McGregor v. State Co., supra, 114 S.C., at page 53, 103 S.E., at page 85.

In McMaster v. Ford Motor Co., 122 S.C. 244, 251, 115 S.E., 244, 246, 29 A.L.R., 230, the Court sustained a demurrer in a case involving the same general principle, and said in part:

"The next question, then, is: Did plaintiff state a cause of action at common law? In answering that question, we must consider the correlative rights and duties of the parties with reference to the facts and circumstances alleged, in the light of the applicable principles of law, and particularly with reference to the allegations that the acts complained of were done with the malicious intent to injure plaintiff, and in consummation of a conspiracy between defendants to accomplish that purpose.

"The law does not pretend to give indemnity for every harm done. There are some things which it permits a man to do without the fear of consequences, though he may know that in doing them he will damage his neighbor. For instance, he may build on his own land so as to destroy his neighbor's view, or cut off his light and air, or he may set up a business in competition with him and ruin him. He may or may not intend to cause the damage. But his motives may not be questioned, the law regarding his right to do those things as superior to any right of his neighbor to prevent his doing them.

"While there is some difference of opinion, the weight of authority is in favor of the general proposition that an act done in the exercise of a legal right cannot be treated as wrongful and actionable merely because a malicious motive prompted the exercise of the right. The proposition is variously stated thus: 'Whatever a man has a legal right to do, he can do with impunity, regardless of his motives'; and, `malicious motives make a bad case worse, but they cannot make that wrong which in its own essence is lawful.' * * *" (Citing authorities.)

In so far as the facts are ascertainable in the cases cited by plaintiff, it appears that defendant in each case was charged with legal wrongful acts, in addition to a campaign of defamation on plaintiff's business. They do not establish any new or novel theory of liability. Their doctrine seems summarized in the following statement in Union Car Advertising Co. v. Collier, 263 N.Y., 386, 189 N.E., 463, 469: "The thing the law looks for and seeks to redress when found is fraud, deceit, false charges made against the competitor." Where, as here, the wrongful act consists entirely of words spoken or written, these must be such as to constitute a legally wrongful act — that is, to amount to defamation in the law — before they are actionable; and the Court evidently meant this when it used "false charges."

In view of the above conclusions, it is not necessary to pass upon grounds Numbered 1 and 2-a of the demurrers to the second cause of action.

It is, therefore, ordered, adjudged and decreed:

1. That the demurrers of both defendants to the first cause of action be and they are hereby sustained.

2. That the demurrers of both defendants to the second cause of action be and they are hereby sustained as to grounds Numbered 2-b, 2-c, and 2-d, but overruled as to grounds Numbered 1 and 2-a.

3. That plaintiff have leave to file an amended complaint within twenty days, if it be so advised.

Messrs. Frank G. Tompkins, Frank B. Gary, Jr., C.T. Graydon, Carlisle Roberts, A.F. Spigner and John E. Edens, for appellants, cite: Libel: 76 S.C. 510; 57 S.E., 478; 114 S.C. 48; 103 S.E., 865; 145 S.C. 196; 143 S.E., 31; 63 S.C. 525; 41 S.E., 763; 148 S.C. 8; 145 S.E., 541; 1 Nott McCord, 290; 2 Rich., 573; 134 S.C. 462; 133 S.E., 99; 45 A.L.R., 1112; 134 S.C. 198; 132 S.E., 585; 46 A.L.R., 558; 36 C.J., 1167; 25 Cyc., 333; 23 C.J., 79; 17 R.C.L., 294; 105 N.W., 225; 110 A.S.R., 864; 5 Ann. Cas., 549; 2 L.R.A. (N.S.), 741; 96 S.W. 551; 8 L.R.A. (N.S.), 1023; 55 L.R.A., 214; 70 A.S.R., 756; 12 S.E., 874; 94 S.E., 4; 116 S.C. 77; 106 S.E., 865; 36 S.E., 80; 17 R.C.L., 376; 138 N.W., 312; 42 L.R.A. (N.S.), 870; 23 L.R.A. (N.S.), 726; 97 A.L.R., 284; 121 S.E., 912. As to two causes of action arising out of same publication: 191 S.C. 518; 5 S.E.2d 299; 86 F.2d 518; 55 F.2d 753; 287 U.S. 612; 77 L.Ed., 532; 87 F.2d 913; 162 S.C. 379; 160 S.E., 881; 80 S.W. 985; 142 N.W., 930; 69 N.E., 1085; 64 L.R.A., 260.

Messrs. J.B.S. Lyles, for respondent, Commercial Casualty Ins. Co., and Cooper Maher, for respondent, A.H. Sawyer, cite: Effect of demurrer in action for libel: 76 S.C. 510; 57 S.E., 478; 114 S.C. 48; 103 S.E., 84; 116 S.C. 77; 106 S.E., 865; 177 S.C. 240; 181 S.E., 41; 49 C.J., 438; 28 S.C. 388; 5 S.E., 831; 68 S.C. 99; 46 S.E., 556; 104 S.C. 311; 88 S.E., 801; 34 S.C. 67; 12 S.E., 815; 58 S.C. 56; 36 S.E., 437; 177 S.C. 219; 181 S.E., 56. Construction of libelous pamphlet: 5 L.R.A. (N.S.), 480; 97 A.L.R., 284; 48 N.W., 500; 23 L.R.A. (N.S.), 727; 97 Am. Dec., 605; 81 N.E., 459; 25 L.R.A. (N.S.), 381; 42 L.R.A. (N.S.), 871; 138 N.W., 111.

July 1, 1940. The opinion of the Court was delivered by

This appeal embraces three separate cases, all brought against the same two defendants. The complaints are identical, except for the name of the plaintiff and the differences in verbiage incidental thereto. The defendants demurred to each of the complaints, and the demurrers were heard by Honorable E.C. Dennis, while he was presiding in the Fifth Judicial Circuit. On November 24, 1939, Judge Dennis filed an order in each case sustaining the demurrers, filing a full and complete order in the case in which the Hospital Care Corporation is the plaintiff, and referred to this order in his orders in the remaining two cases. By agreement of counsel the pleadings and order in the Hospital Care Corporation case are printed in the record for appeal with the understanding that the decision of this Court is controlling in the three cases.

We are satisfied with, and concur in the result of Judge Dennis' order, which order is included as a part of this opinion, but a condensed statement of the pleadings is required as complementary to the said order.

The complaint contains two causes of action, the first charging libel based on certain statements in writing alleged to have been made of and concerning the plaintiff, now the appellant, in a pamphlet published and distributed by the defendants, the respondents, which statements were calculated to injure appellant's financial standing and business, and the second cause of action charging unfair competition in the publication and distribution of the pamphlet.

It is alleged in the first cause of action of the complaint that the respondent, Commercial Casualty Insurance Company, engaged in the insurance business in South Carolina, is a corporation organized under the laws of the State of New Jersey, and that the respondent, A.H. Sawyer, is a resident of Richland County, State of South Carolina, and is the agent of his co-respondent.

The appellant further alleges it is engaged in the business of writing hospitalization insurance and that there are only three companies chartered by this State to write this form of insurance, the three companies being, in addition to itself, National Hospital Service, Inc., and the Security Indemnity Company, each of which companies have their principal place of business in Columbia. The complaint further alleges that all three companies were formed in the last four years, are small stock companies and composed entirely of citizens of South Carolina. Appellant further says that although it is a new company it has built up a large and profitable business, and a steadily growing business "because of the faith and confidence of the people of South Carolina in the financial ability, integrity and management of plaintiff" and that the "nature of the plaintiff's business and is such that it is absolutely dependent upon the faith and confidence of the public in its financial standing and integrity and competent management, and in the belief and confidence of the public that its obligations will be promptly and fully met."

The appellant alleges in Paragraph four of the complaint that the respondent, Commercial Casualty Insurance Company, by and through its agent and co-respondent, A.H. Sawyer, did compose and publish a certain pamphlet containing false and defamatory matter, the composition and publication being done "maliciously and willfully and with evil intent to injure and destroy the business of plaintiff, and the other members composing the class of hospitalization insurance companies" referred to in the complaint. The alleged false and defamatory portion of the circular is quoted in the complaint and is as follows:

"Don't Worry! We'll Pay the Bills!

"Commercial Casualty Insurance Company.

"A Company with a Reputation for Dependable Service.

"Operating in 46 States and Canada. — Licensed and Bonded with the State of South Carolina for the protection of its Policyholders.

"During the past ten years several small mutual and Stock Companies were formed for the purpose of writing insurance, and who offered very attractive policies at unreasonably low rates only to soon find their liabilities about double the amount of their assets — and then what happened? The end came! Who lost? Ask your Insurance Department for the answer.

"Today the market is flooded with circulars and advertisements from small, inexperienced companies recently entering into the insurance business, who, no doubt, mean well. But the intelligent and thinking class of people must first realize the only safe, sound and sensible thing to do before they buy insurance of any kind, is to find out the financial standing of the company in which they are to place their money. Investigate its assets and liabilities and years of insurance experience in order to determine if the company is able to carry out its obligations, especially in case of epidemics when hundreds of claims are presented for payment daily.

"In order to relieve your worries and doubts as to the strength, age and financial responsibility, we offer you a policy with The Commercial Casualty Insurance Company, which is an affiliated company of the Loyalty Group and a sister company of the Metropolitan Casualty Insurance Company. The average age of the Loyalty Group is 71 years; with combined assets of over $43,000,000.00; a surplus to policyholders of over $20,000.00; claims paid to date in the amount of over $450,000,000.00; and with a field force and agency staff of over 25,000."

The appellant alleges that this circular was intended to destroy its business by conveying to the public the meaning that it and the other South Carolina Companies were uncertain financially, under incompetent management, could not and would not fulfil its contractual obligations, and that the publication was to not only persuade the public to refrain from purchasing hospital insurance from these companies, but was intended also to cause the policyholders to cancel their policies and replace the contracts with insurance with the respondents.

The second cause of action is mainly a repetition of the matters alleged in the first cause of action, the point of divergence coming in the allegations charging loss of business by reason of numerous cancellations of policies and the refusal of numerous persons to purchase contracts from appellant, all because of the publication of the pamphlet by respondents.

Respondents filed separate but identical demurrers, the verbiage differing only as to the identification of the respective respondents. The demurrers to the first cause of action specify that the publication is not defamatory either per se or per quod. That portion of the demurrer devoted to the second cause of action specifies the failure to allege any wrongful act on the part of either respondent causing injury or damage to appellant since the language of the pamphlet is neither libelous or defamatory per se or per quod, nor does the second cause of action allege the required elements of a conspiracy to accomplish an unlawful purpose or a lawful purpose unlawfully.

All exceptions are overruled; and the order of Judge Dennis will be reported.



Summaries of

Hos. Care Corp. v. Commer. Casualty Ins. Co.

Supreme Court of South Carolina
Jul 1, 1940
194 S.C. 370 (S.C. 1940)

affirming the circuit court's order ruling that a small insurance company could not maintain a defamation action against defendants who published pamphlet stating that small insurance companies that had recently entered into the insurance business were inexperienced and financially unstable

Summary of this case from Garrard v. Charleston Cnty. Sch. Dist.

observing "the second cause of action [failed to] allege the required elements of a conspiracy to accomplish an unlawful purpose or a lawful purpose unlawfully"

Summary of this case from Paradis v. Charleston Cnty. Sch. Dist.
Case details for

Hos. Care Corp. v. Commer. Casualty Ins. Co.

Case Details


Court:Supreme Court of South Carolina

Date published: Jul 1, 1940


194 S.C. 370 (S.C. 1940)
9 S.E.2d 796

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