Crane v. Bennett, 177 N.Y. 106 (1904)

In libel cases, the falsity of the libel is sufficient evidence of malice to allow a jury to consider awarding punitive damages; this decision is not taken away from the jury even if the defendant presents evidence showing a lack of actual malice.

Summary

Crane, a New York City magistrate, sued Bennett, the owner of the New York Herald, for libel based on articles published about Crane’s official conduct. After each article, Crane requested a retraction, but Bennett’s manager published more articles instead. Crane then sued, and the jury awarded damages. Bennett appealed, arguing he wasn’t liable for punitive damages because the publications were made by his employees in his absence, and there was no proof of his personal malice. The New York Court of Appeals affirmed the lower court’s decision, holding that the falsity of the libel was sufficient evidence of malice to warrant the jury’s consideration of punitive damages.

Facts

The plaintiff, Crane, was a magistrate in New York City.
The defendant, Bennett, owned the New York Herald newspaper but resided in France, delegating management to employees.
The newspaper published four articles in August 1899, alleging misconduct by Crane in his official duties.
Crane informed Bennett’s manager that the articles were untrue and requested a retraction after each publication.
Instead of retracting, the newspaper published further articles on the same subject.
Crane sued Bennett for libel in November 1899.
The articles were proven false, and no retraction was ever made.

Procedural History

Crane sued Bennett in a lower court and won a jury verdict.
Bennett appealed to the Appellate Division, which affirmed the lower court’s judgment (77 App. Div. 102).
Bennett appealed to the New York Court of Appeals.

Issue(s)

Whether the proprietor of a newspaper is liable for punitive damages when libelous material is published by their employees in their absence, without proof of the proprietor’s personal ill-will or hatred.
Whether the falsity of a libel is sufficient evidence of malice to allow a jury to award exemplary damages, even if the defendant presents evidence of no actual malice.

Holding

Yes, because a principal who surrenders their entire business to another is held to the same responsibility as if they personally directed it, as to all matters within the scope of the manager’s authority.
Yes, because the falsity of the libel is sufficient evidence of malice to allow a jury to consider awarding punitive damages and that decision is not taken away from the jury because the defendant presents evidence showing no actual malice.

Court’s Reasoning

The Court reasoned that the proprietor of a newspaper is responsible for the content published, even if done by employees in their absence. The liability stems from the proprietor’s responsibility for the acts of the publisher. When a principal delegates their business to a manager, they are responsible for how the business is conducted. The Court distinguished this from negligence cases, stating the rule for punitive damages differs in tort cases involving personal wrong.

Regarding the issue of malice and punitive damages, the Court addressed a perceived misinterpretation of its prior decision in Krug v. Pitass. The Court clarified that the falsity of a libel is sufficient evidence of malice for the jury to consider punitive damages. It cited the dissenting opinion in Samuels v. Evening Mail Assn., which the Court of Appeals had previously adopted, stating, “the falsity of the libel was sufficient evidence of malice… The plaintiff in an action of libel gives evidence of malice whenever he proves the falsity of the libel.” The Court emphasized the jury’s discretion in awarding punitive damages when malice is established, even if the defendant presents evidence to negate actual malice.

The Court noted that the jury could have reasonably found the publications were not only false but also recklessly and wantonly made in bad faith and continued even after the defendant was aware of their falsity. Quoting Hotchkiss v. Oliphant, the court stated, “the case rises to one of premeditated wrong, one of determined malignity towards the plaintiff, which should be dealt with accordingly… and the charities of the law give way to such a prostitution of the public press.”