# Liquid Veneer Corporation v. Smuckler > Court of Appeals for the Ninth Circuit · May 10, 1937 · 90 F.2d 196 URL: https://www.frixlaw.com/law-library/cases/9638610 ## Case - **Full name:** Liquid Veneer Corporation v. Smuckler - **Court:** Court of Appeals for the Ninth Circuit - **Decided:** May 10, 1937 - **Citations:** 90 F.2d 196; 1937 U.S. App. LEXIS 3786 - **Precedential status:** Published - **Opinion:** Dissent by Wilbur - **Judges:** Wilbur and Mathews, Circuit Judges, and Neterer, District Judge - **Cited by:** 26 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9638610 ## Opinion text WILBUR, Circuit Judge (dissenting). The complaint in this action sets forth a letter of June 2, 1931, as constituting a libel. The complaint, however, in addition, alleged that for a long time prior to the date of this letter the defendant “caused letters to be mailed to various customers of this plaintiff for the purpose of destroying the business relations that existed between plaintiff and her customers, and that said letters were written for the purpose of wilfully and maliciously injuring the good name of the plaintiff,” etc. It alleged, “that by reason of said false and malicious letters aforementioned, said Young’s Market and other numerous customers of the plaintiff, refused to carry on or do any business with the plaintiff.” Plaintiff also alleged that the statements contained in the communications addressed by the defendant, Liquid Veneer Corporation, were “false, malicious and untrue, and were made only for the purpose of destroying the good name and reputation and business of this plaintiff, and that by reason of the said false, malicious and defamatory publication aforesaid, plaintiff has 'been damaged * * * in the sum of $100,000.” Early in the trial of the case the plaintiff sought to introduce evidence of damages resulting from letters other than the one to the Young’s Market set forth in the complaint. The defendant consistently objected to such evidence, but the court construed the complaint as broad enough to include damages resulting from letters written .prior to June 1, 1931. The situation at the time of the trial may be illustrated by one or two quotations from the record. When the objection was first made that damage resulting from other letters could not be shown, the court very properly said: “My view is you may set out a million charges of libel but unless you attribute your damage to them you cannot claim damage because of them. You can show motive and all that, but in your paragraph IX it is a question whether you have not confined yourself to the one letter of 1931.” To this the plaintiff replied: “Well, clearly we have not, your Honor. ‘That the statements contained in the communications addressed by the defendant, Liquid Veneer Corporation.’ Now, if you refer back to paragraph VI we say ‘Letters.’ We do not say ‘Letter.’ ” Alter further discussion the court said: “In the absence of a specific objection heretofore made as to what was included, or an analysis of this complaint, I would feel compelled to say that the basis, of damage may reasonably be held to include all of the previous letters. Undoubtedly, I think that was the intention. “Mr. Balter: That was the intention.” On this basis the court overruled the objection and received evidence of damages resulting from letters written to the May Company as early as 1928. In this connection it should be observed that the statute of limitations of California runs against a libel after the expiration of a year. Code Civ.Proc.Cal. § 340. The defendant had not pleaded the statute of limitation and did not make that specific objection, but if the objection made was well taken it was unnecessary either in pleading or in objection to raise the question that evidence concerning damages which had accrued more than a year before the bringing of the action was inadmissible because barred by the statute of limitations. The difficulty I find in agreeing that the error in admission of evidence as to damage from previous letters was cured by the instruction of the court that they should only consider evidence of damages resulting from the letter of June 2, 1931, set out in the complaint, results from the fact that there is no attempt in the evidence to segregate damages resulting from prior letters and damages resulting from the letter sued upon and no basis upon which the jury could intelligently separate damages which had accrued because of other libels and damages resulting from the libel sued upon. This situation will be illustrated through excerpts from the testimony. Plaintiff testified that originally she had about 2,000 customers in Oregon, Washington, and California, and that when “they started getting these threatening letters my business just fell down to prac *208 tically nothing. I decided to stay right in California and then when the California customers got those letters they fell off one at a time.” She stated that before the customers began to fall away she had a mail order business in California of between 25 and 50 letters a day. She testified that for the first few years she was in California her business amounted to about $1,000 a month; that her product cost only one-fifth the sales price; that her gross business in the year 1928 was “between three and four hundred- dollars a month, and then in 1929 it had fallen down, and in 1930 and 1931 it had almost completely fallen down.” She stated she made trips to all the Southern California counties and that “up until the year about 1930 * * * 1929 and 1930, and then when I would go out and these customers would say, ‘I can’t buy,’ I just lost heart in it and I just quit because -it is an expense to travel when you are not making anything.” As far as appears from the record the only direct results from the libelous letter addressed to Young’s Market was the cessation of business with that customer. There is no evidence as to the extent of this business except the general statement of witness William P. Waddington that: “I have never at any time found anything that came onto the market as quickly as this French Veneer. * * * At the time we received this threatening letter our sales on French Veneer were far out-selling any other polish that we had in the house, and it just was like cutting it off with a knife; it stopped all at once as a result of this letter.” It is clear that the jury could not estimate the damages to the plaintiff- resulting from the letter to Young’s Market without some evidence as to the volume and extent of the business. In other words, there must have been some proof of the loss. -The appellee does not attempt by her brief to estimate the amount of damages due to the letter of June 1, 1931, but makes a general charge of damage due to the destruction of her entire business. I quote from the brief in that regard as follows: “ * * * this case will go down in the .annals as one of the most vicious examples of a planned and malicious program of destruction by a large influential business concern of a weak competitor who because she had a good product and worked hard was able to corner for herself a tiny share of the business which defendant could not bear to see taken from it by honest means.” In view of the failure of the evidence to segregate the damages due to the letter of June 1, 1931, from that resulting from the other letters introduced in evidence, I cannot see how an instruction to the jury that they should disregard the evidence of damages resulting from the other letters introduced in evidence would cure the error. Moreover, the instructions permitted the jury to give punitive damages. The evidence regarding the damage suffered by reason of the prior sales was not clearly and definitely withdrawn from the jury in their consideration of punitive damages, as will appear from additional instructions as to damage, stated in the margin. 1 The amount of damages awarded by the jury is disproportionate to the injury claimed to have resulted from the specific letter set up in the complaint. It is difficult to avoid the conclusion that the jury was attempting to make an award for the *209 loss of her business and that while not making the award which would compensate for the loss of net revenue of $7,200 a year, it had reduced the amount of damages because the depression began the latter part of 1929 and continued during the period involved in this action. I do not believe the appellant had a fair trial on the question of damages in view of the contradictory ruling of the trial judge on that subject. I think the judgment should be reversed. “With respect to damages the law provides that for the breach of an obligation not arising from contract — that in this case, what the plaintiff claims to be — the measure of damages is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not. In other words, the damages must T>e such, in the event you' should find a. ver-dict for the plaintiff, that are proximately, that is, directly, caused by the acts of the defendant. “In addition thereto, however, gentlemen, the law in this state and, I guess in every state, provides for what are known as exemplary damages that mean something different from actual damages. “In an action for the breach of an obligation not arising from contract, such as is charged in this case, where the defendant has been guilty of oppression or fraud or malice — and in this case it would mean express malice — the plaintiff in addition to actual damages may recover damages for the sake of example and by way of punishing the defendant. “If, now, you think that this method used by the defendant was engendered and rested in the purpose to destroy the business of the plaintiff, was done and made with ill-will toward the plaintiff, or accompanied and did itself consist in an act of oppression, then you are at liberty to award exemplary damages; that is, exemplary as opposed to. compensatory. *209 meaning damages that are to reimburse for actual loss suffered, and you may award exemplary damages, that is, damages by way of example. “You take the ease with you. You are not controlled by any opinion that the court directly or inforentially may have expressed. You are not to be governed by passion nor prejudice, but consider the case carefully, gentlemen, and if, in the event you find for the plaintiff, you may consider those two features and fix the amount at such as you think in the one case she has actually suffered, and in the other case that she should be awarded by reason of and in the way of exemplary damages.” (Italics ours.) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9638610. Public record. Not legal advice.