National Refining Co. v. Benzo Gas Motor Fuel Co.

20 F.2d 763, 55 A.L.R. 406, 1927 U.S. App. LEXIS 2636
CourtCourt of Appeals for the Eighth Circuit
DecidedMay 23, 1927
Docket7563
StatusPublished
Cited by46 cases

This text of 20 F.2d 763 (National Refining Co. v. Benzo Gas Motor Fuel Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Refining Co. v. Benzo Gas Motor Fuel Co., 20 F.2d 763, 55 A.L.R. 406, 1927 U.S. App. LEXIS 2636 (8th Cir. 1927).

Opinions

BOOTH, Circuit Judge.

This is a writ of error to a judgment entered after verdict against plaintiff in error, hereafter called defendant. The action was originally brought in the state circuit court of Jackson county, Missouri, and Was duly removed to the United States District Court for the Western District of Missouri on the ground of diversity of citizenship. The action was one for damages on account of an alleged libel published by defendant.

The complaint alleged in substance as follows: That plaintiff was, and for several years prior to September 1, 1924, had been, engaged in Jackson county, Missouri, and elsewhere, in the business of producing and selling a motor fuel consisting of a mixture of benzol and gasoline, under the trade-name of “Benzo Gas”; that plaintiff during said times was the only producer and seller of such a mixture in Kansas City and vicinity, and had built up a profitable business therein; that about September 1, 1924, at Kansas City, defendant maliciously published certain false and libelous statements in reference to plaintiff and plaintiff’s said product; that the publication was made by distributing to numerous users of motor fuel a leaflet, a copy of which was attached to the complaint (the leaflet is set out in the margin i********1); that eer[765]*765tain statements therein contained (those inclosed in brackets, except the italicized words, in the marginal leaflet) were false; that the statements were published maliciously by defendant for the purpose of discouraging users and prospective users of plaintiffs product from purchasing and using the same, and for the purpose of injuring plaintiff and its said product, and the reputation they had acquired by reason of the excellence of said product; that by reason of the premises plaintiff had been damaged in its business and reputation and the reputation of its product in the sum of $25,000; and, because the statements were maliciously made, plaintiff was entitled to punitive damages in the further sum of $50,000.

The amended answer alleged the truth of the statements mentioned, and denied the other allegations of the complaint. At the trial plaintiff introduced its evidence and rested. Defendant demurred to the evidence. The demurrer was overruled. Defendant stood on its demurrer, and declined to introduce any evidence, but requested an instruction directing a verdict for defendant. This was refused. The jury returned a verdict of $1 actual damages and $10,000 punitive damages.

The evidence introduced by plaintiff tended to prove tbe following facts:

Plaintiff owned 4 or 5 filling stations in Kansas City where it sold Benzo Gas; also gasoline, oils, and naptha. It also sold Benzo Gas to upwards of 70 filling stations in and around Kansas City. It made the Benzo Gas [766]*766which it sold. There was no secret and no patent process in making Benzo Gas. It was simply a mixture of benzol and gasoline in varying proportions, and usually a small quantity of naptha. Benzol is a product ordinarily derived from the distillation of bituminous coal. Such mixtures have been in common use for some years in certain parts of the United States, and are known under various names, such as “Benzoline” and “Benzol Gasal.” Plaintiff was the only producer of the product in the vicinity of Kansas City. Defendant was in the business of selling petroleum products, such as gasoline, kerosene, and oils. White Rose gasoline was one of the products. It had refineries in Ohio and Kansas. It did business in upwards of 20 states. Its home office was in Cleveland, Ohio. It was operating at the time of the alleged libel 20 or 30 filling stations in Kansas City.

The leaflet constituting the alleged libel was prepared by the president of defendant company as part of an educational campaign by defendant. About 150,000 of the leaflets were printed. They were distributed by salesmen of the company at the various filling stations of the company in the territory mentioned, including the filling stations at Kansas City. One of the filling stations in that city was just across the street from a Benzo Gas filling station. The statements in the leaflet were composed by the president of defendant company from his own information, derived from forty years experience in the oil business, from talks with automobile drivers, and from reading numerous articles on the effects of the use of benzol and gasoline mixtures in internal combustion engines. He had had no personal experience with benzol or benzol and gasoline blends. Shortly after the leaflet was distributed in Kansas City, plaintiff published an advertisement in one of the city papers, referring to the leaflet, denying its statements, and offering to participate in a test to be proposed by defendant, to determine the truth or falsity of the statements. In default of such a test, a retraction of the statements was demanded. A copy of this advertisement was mailed to the local manager of defendant at Kansas City. No answer was received.

The evidence of plaintiff further tended to prove that the statements above mentioned contained in the leaflet, except possibly the first, were untrue. The assignment of errors eovers a number of points, but the ones most strongly stressed by defendant are, (1) that the statements complained of were not libelous per se; (2) that if the statements, though not libelous per se, were nevertheless actionable, yet recovery could be had only by alleging special damages in the complaint and proving the same, neither of which requisites was fulfilled; (3) that a judgment for punitive damages could not stand unless a cause of action was established for actual damages.

The second and third propositions are not seriously contested by plaintiff, if we understand its position; but the first proposition is strenuously denied. The vital question in the ease, therefore, is: Were the statements libelous per se? The complaint was evidently drawn on the theory that they were; and such was the contention of plaintiff, both in the court below and in this court.

It is apparent from the statement of facts that the dispute narrows itself down mainly to a discussion of the question: under what circumstances a defamatory publication concerning the goods or product of a vendor or manufacturer may also constitute a libel per se concerning the vendor or manufacturer himself. We shall assume without discussion that a corporation may maintain an action for libel; also that published false statements may constitute libel per se against a corporation. The authorities cited hereafter in which corporations were plaintiffs show that these propositions are no longer open to question.

Furthermore, the legal principles constituting the law of libel are the same whether corporations or individuals are involved. But there are recognized distinctions between the application of those principles to individuals and their application to corporations, growing largely out of the differences between natural and artificial persons. For example, a corporation is incapable of committing certain acts, especially some crimes, which an individual would be capable of committing; and again, a corporation has no merely personal reputation in the sense that an individual has. Libels against a corporation are, therefore, confined to attacks which injure the property, the credit, the business of the corporation. South Hetton Coal Co. v. Northeastern News Ass’n, 9 R. 240; Memphis Tel. Co. v. Cumberland Co. (C. C. A.) 145 F. 904, 906; Security Benefit Ass’n v. Daily News Pub. Co., 299 F. 445 (C. C. A. 8), and eases cited; Erick Bowman Remedy Co. v.

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Bluebook (online)
20 F.2d 763, 55 A.L.R. 406, 1927 U.S. App. LEXIS 2636, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-refining-co-v-benzo-gas-motor-fuel-co-ca8-1927.