F. CHEMICAL MFG Co.) it was decided that the privilege attaching to a letter, written to a firm on a privileged occasion and containing statements defamatory of a third person, made without express malice, was not lost because the writer knew that it would probably be, as it actually was, first opened and read by a clerk.

This decision is in accord with other cases in which the rule has been recognized that a privilege is not lost so long as the occasion is used in a reasonable manner, and in the ordinary course of business. Applying this rule it has been held that the privilege is not lost by reason of the passing of the defamatory matter, in the usual course of business, through the hands of stenographers and clerks whether in the employ of the writer or the addressee. Cartwright-Caps Co. v. Fischel (1917) 113 Miss. 359, L.R.A.1918F, 566, 74 So. 278, Ann. Cas. 1917E, 985; Borsius v. Goblet Frères [1894] 1 Q. B. 842, 63 L. J. Q. B. N. S. 401, 9 Reports, 224, 70 L. T. N. S. 368, 42 Week. Rep. 392, 58 J. P. 670; Edmondson v. Birch & Co. [1907] 1 K. B. 371, 1 B. R. C. 444, 76 L. J. K. B. N. S. 346, 96 L. T. N. S. 415, 23 Times L. R. 234, 7 Ann. Cas. 192; ROFF v. British & F. CHEMICAL MFG. Co. (reported herewith) ante, 353.

In Borsius v. Goblet Frères [1894] 1 Q. B. 842, where a solicitor, acting for a client, dictated a letter containing a libel to a clerk, and it was copied into a letter book by another clerk, it was held that the occasion was privileged. Lord Esher said: "Then it is said that the solicitors cannot claim privilege as between themselves and the typewriting clerk who took down the letter and the copying clerk who copied it into the letter book. Such an argument requires consideration; but it seems to me to come to this. It is the duty of the solicitor to write and send this letter, and it is his duty to do that in the ordinary and reasonable way. The duties of a solicitor are not to one client only, but to all his clients, and he has to take measures to perform them with due diligence, and according to the necessary and reasonable method of conducting business in a solicitor's office. If a solicitor is instructed to write defamatory matter on a privileged occasion on behalf of a client, he must do this business as he does other business of the office, in the ordinary. way, and that involved his having the communication taken down or copied by a clerk in his office, and copied into the letter book... It: is necessary to keep a record of the transaction, one reason being that there may be a check on the bill of costs. Such a case seems to me to be distinguishable from that of a merchant who is writing a libel out of the course of his ordinary business, who, if he has the letter copied by a clerk, does this at his own risk. A solicitor, on the other hand, cannot otherwise perform his duty to his client, and it would be contrary to good sense to say that such a course is unjustifiable. Where what the solicitor does would be done as between himself and the person to whom he is writing, on a privileged

1

occasion, because the occasion would be privileged if the client were himself writing, giving a clerk a letter to copy is also an act done on a privileged occasion, and the solicitor is not liable unless malice. is shown."

And in Edmondson v. Birch & Co. [1907] 1 K. B. 371, 1 B. R. C. 444, 76 L. J. K. B. N. S. 346, 96 L. T. N. S. 415, 23 Times L. R. 234, 7 Ann. Cas. 192, where, on privileged occasions, an officer of a company dictated a letter and a telegram containing defamatory matter concerning the plaintiff to shorthand clerks and they were transcribed, the privilege was held to extend to the publication to the clerks, Collins, M.R., saying that the use of the ordinary and reasonable means of giving effect to the privilege did not destroy it.

And in Cartwright-Caps Co. v. Fischel (1917) 113 Miss. 359, L.R.A.1918F, 566, 74 So. 278, Ann. Cas. 1917E, 985, where libelous letters were dictated to a stenographer by the president of a corporation in the course of the business, it was held that the letters were privileged, and that there was not in a legal sense a publication.

And in Southern Ice Co. v. Black (1916) 136 Tenn. 391, 189 S. W. 861, Ann. Cas. 1917E, 695, which was an action for slander, a defamatory statement made by the defendant's manager to the plaintiff, a former employee, when he called at the office for settlement, was held qualifiedly privileged, and the privilege was held not lost because of the presence of the bookkeeper and his assistant.

II.

As above pointed out, the question whether the privilege attaching to a communication as between the author and the recipient thereof is lost, where it passes through the hands of an employee of either, is entirely distinct from the question whether a communication, which may or may not be privileged as between the author and recipient, may be considered as having been communicated to a clerk or stenographer upon a privileged occasion. In order to enable the reader to appreciate and observe this distinction, these cases are hereinafter set forth.

In Pullman v. Hill & Co. [1891] 1 Q. B. 524, where a libelous letter was dictated by a managing director of a company to a stenographer, and copied by a clerk in a press, and was opened and read by the plaintiff's clerks in the ordinary course of business, it was held that the publications were not privileged. Lord Esher said: "An occasion is privileged when the person who makes the communication has a moral duty to make it to the person to whom he does make it, and the person who receives it has an interest in hearing it. Both these conditions must exist in order that the occasion may b privileged An ordinary instance of a privileged occasion is in the giving a character of a servant. It is not the legal duty of the

master to give a character to the servant, but it is his moral duty to do so; and the person who receives the character has an interest in having it. Therefore, the occasion is privileged, because the one person has a duty and the other has an interest. The privilege exists as against the person who is libeled; it is not a question of privilege as between the person who makes and the person who receives the communication; the privilege is as against the person who is libeled. Can the communication of the libel by the defendants in the present case to the typewriter be brought within the rule of privilege as against the plaintiffs,-the persons libeled? What interest had the typewriter in hearing or seeing the communication? Clearly, she had none. Therefore, the case does not fall within the rule. Then again, as to the publication at the other end,-I mean when the letter was delivered. The letter was not directed to the plaintiffs in their individual capacity; it was directed to a firm of which they were members. The senders of the letter no doubt believed that it would go to the plaintiffs; but it was directed to a firm. When the letter arrived it was opened by a clerk in the employment of the plaintiffs' firm, and was seen by three of the clerks in their office. If the letter had been directed to the plaintiffs in their private capacity, in all probability it would not have been opened by a clerk. But mercantile firms and large tradesmen generally depute some clerk to open business letters addressed to them. The sender of the letter had put it out of his own control, and he had directed it in such a manner that it might possibly be opened by a clerk of the firm to which it was addressed. I agree that under such cirsumstances there was a publication of the letter by the sender of it, and in this case also the occasion was not privileged for the same reasons as in the former case. There were, therefore, two publications of the letter, and neither of them was privileged."

This case has been distinguished in later decisions on the ground that it was merely held that a privilege was held not to exist be

cause it was not the usual course in a merchant's business to write

letters containing defamatory statements and to communicate them to his stenographer. See Borsius v. Goblet Frères [1894] 1 Q. B. 842, 63 L. J. Q. B. N. S. 401, 9 Reports, 224, 70 L. T. N. S. 368, 42 Week. Rep. 392, 58 J. P. 670; Edmondson v. Birch & Co. [1907] 1 K. B. 371, 1 B. R. C. 444, 76 L. J. K. B. N. S. 346, 96 L. T. N. S. 415, 23 Times L. R. 234, 7 Ann. Cas. 192; ROFF V. BRITISH & F. CHEMICAL Co. (reported herewith) ante, 353.

The decision in Pullman v. Hill, supra, was held controlling in Morgan v. O'Regan (1907) 38 N. B. 189, subsequent appeal in (1908) 38 N. B. 399, where it was held that the publication was not privileged where it appeared that a merchant gave a draft of a letter containing defamatory matter to a confidential clerk for the purpose of having a copy made. The court reasoned that the

writing of defamatory statements was not within the ordinary business of a merchant, and that it was not reasonably necessary that he should have such a letter copied by a clerk.

Pullman v. Hill & Co. supra, was also followed in Puterbaugh v. Gold Medal Furniture Mfg. Co. (1904) 7 Ont. L. Rep. 582, 1 Ann. Cas. 100, in which the publication effected by the giving, by a foreman of a company, of a draft of a libelous letter, written in the interest of the company, but not connected with its ordinary business, to a clerk to make a typewritten copy, was held not to be upon a privileged occasion.

And in Gambrill v. Schooley (1901) 93 Md. 48, 52 L.R.A. 87, 86 Am. St. Rep. 414, 48 Atl. 730, the court relying on Pullman v. Hill, supra, held that there was an actionable publication, and impliedly denied the existence of a privilege where the defendant, apparently in the course of business, dictated a libelous letter to his stenographer.

And the Gambrill Case was followed in Ferdon v. Dickens (1909) 161 Ala. 181, 49 So. 888, where a libelous letter to a bank was dictated to a stenographer by a member of a firm, and it was held that there was a publication, and that it was not within the class of privileged communications. J. T. W.

[ENGLISH COURT OF APPEAL.]

WELD-BLUNDELL v. STEPHENS.

[1919] 1 K. B. 520.

Also Reported in 88 L. J. K. B. N. S. 689, 120 L. T. N. S. 494, [1919] W. N. 46, 35 Times L. R. 245, 63 Sol. Jo. 301.

Principal and agent - Confidential instructions — Duty of Secrecy. An agent is under a duty to his principal to take reasonable care that his confidential instructions containing statements libelous of third persons shall not be disclosed.

-Public policy.

It is not contrary to public policy to recognize and enforce an implied agreement on the part of an agent that he will use reasonable care to keep secret confidential communications to him by his principal in a matter connected with his employment, even though such communications show the principal to have committed an actionable wrong against a third person.

A chartered accountant who, being employed by one who had lent money to a company to look into its affairs, negligently left a letter

of instructions containing libelous statements concerning former officers of the company at the company's office, where it was found and read by the manager, who communicated its contents to the two persons defamed, who thereupon sued and recovered damages for libel against the writer, who was found by the jury in such actions to have been actuated by express malice,-cannot be required, though guilty of a breach of duty, to make good such damages, his principal not being entitled to be indemnified against the consequences of his own wrong. Scrutton, LJ., dissenting.

Costs-Judgment for nominal damages as carrying.

Where, in an action founded on contract in which the plaintiff claims a large sum, and in the result, though he establishes his contract and proves the breach, recovers only nominal damages, there is good ground for a special order as to costs.

(January 31, 1919.)

APPEAL from the judgment of Darling, J., reported [1918] 2 K. B. 742, 34 Times L. R. 564, 145 L. T. Jo. 235.

The plaintiff had in time past advanced and become liable for considerable sums of money to and at the request of a company known as the Float Electric Company, of which one Lowe was formerly the manager and one Comins the auditor. The defendant was an accountant who had long been known to the plaintiff and who had on former occasions advised him professionally in financial matters.

Early in the year 1915 one Hirst, who was then the manager [521] of the Float Electric Company, applied to the plaintiff for a further advance of money on behalf of the company. On May 4, 1915, the plaintiff wrote to the defendant asking him to look into the affairs of the company and see whether there was either "sense or safety in lending any more money or throwing good money after bad." In the course of his letter he said that Hirst's predecessor Lowe, "an ingenious thief with the help of the rest of the gang B., H.A., and C., managed by just the same maneuvers and pretexts to get two or three thousands."

The defendant on receiving this letter handed it to his partner, who went with it to the company's bankers and from thence to the office of the company. There he negligently left it. Hirst found it, read it, and communicated its contents to Lowe and Comins, who thereupon brought actions of libel against the plainIn each action the judge ruled that the letter was written

tiff.