plaintiff would never proceed with the execution against the defendant, had been taken by Mr. Quain, I think that we should have refrained from making the rule absolute so as to interfere with the execution; but he waives that point, and the question now is that which I have stated already. Our decision upon that ground must not be considered as establishing a precedent that we should interfere where the defendant simply fears that the plaintiff will proceed upon the execution against him (11). The question is of considerable importance, as it involves the necessity of giving our opinion upon the construction of section 3. of the 31 & 32 Vict. c. 104, but we must not avoid giving our opinion upon it. I am of opinion that it has not any retrospective effect. It is true that the 11th section may have such an effect, for it refers to affidavits, declarations and affirmations required to be sworn or made under the act now in question as well as under the Bankruptcy Act, 1861. But the 1st, 2nd, 3rd, 4th, 5th and 7th sections admit of no other construction besides this, that they are not intended to have a retrospective effect. I cannot find in the words used anything to shew that it was the intention of the legislature that they should have any such effect. -[His Lordship went through those sections, and then continued] -When we look to the 15th section we find that the act is to commence and take effect on the 11th of October, 1868, and if the contention of Mr. Harrison were correct it would be impossible to understand why that provision is inserted. I think, therefore, that the 3rd section cannot apply to any deeds except such as are executed after the 11th of October, 1868, when the act first takes effect.

HANNEN, J.-It a well-settled maxim that new legislation is to be construed as relating to future matters, and not to such as are past, unless there be very clear language to shew that the latter was the intention of the legislature. It has been contended that some of the provisions of the

(11) No reference was made by counsel to Harding v. Inskip, 4 Law Journal Notes of Cases, p. 9, where the Court of Exchequer discharged a rule on the ground that it was simply an application quia timet.-See the case post, Exch. 81. NEW SERIES, 38.-Q.B.

act are prospective, but that others are retrospective; and that even as to deeds which were executed before the act took effect, the amount to be reckoned in the computation of the requisite value of the creditors is to be so reckoned after deducting the value of the securities held by him on the debtor's property. But this would be so great a change that if it had been intended by the legislature they would not have left it to be inferred merely from vague legislation. The effect of such a construction would be not only to make some deeds valid which were invalid before the 11th of October, 1868, but also to make some invalid which previously had been valid, and it would be very strange if that could be done except by clear language. I think it is not made out that this was the intention of the legislature, and therefore I think that the rule must be discharged.

Rule discharged.

Attorneys-Neal & Philpot, agents for W. & A. Clare, Liverpool, for plaintiff; Roy & Cartwright, for defendant.

1869.

Feb. 11.

LAWLESS V. THE ANGLO-EGYPTIAN
COTTON AND OIL COMPANY.

Libel-Joint-Stock Company-Privileged Communication-Publication of Auditors' Report-Evidence of Malice.

The plaintiff was the agent of the defendants, a trading company, and it was part of his duty to furnish them with an account of his transactions, to enable them to prepare the balance-sheet for the inspection of the shareholders. This balance-sheet was prepared and duly referred to the auditors, who reported that there was a deficiency for which the plaintiff was responsible, and that his accounts had been badly kept. There was evidence that an explanation had been offered to the auditors, which they had disregarded; but no evidence that the directors had any knowledge of this explanation. The directors, after laying the accounts before a general meeting of the shareholders, caused a letter containing the part of the report which affected the character of the

S

plaintiff to be printed and forwarded to the absent shareholders :-Held, first, that this letter was published on a privileged occasion, as it was the duty of the defendants to communicate to all the shareholders any part of the report of the auditors which materially affected the accounts of the company; secondly, that there was no intrinsic or extrinsic evidence of malice to be left to the jury, as the report of the auditors was published without comment, and the explanations offered to the auditors did not come before the defendants; and that causing the letter to be printed was a reasonable and necessary mode of publishing it to the absent shareholders.

Declaration that, before and at the time of the committing of the grievances by the defendants hereinafter mentioned, the plaintiff had been and was manager of the company, at wages or salary payable to him in that behalf, and the occupation and business of a manager of companies used, exercised and carried on thereby, and derived great gains and profits, yet the defendants falsely and maliciously printed and published of the plaintiff, and of him as such manager of the company, in a printed report of the trade finances and affairs of the company, the words following (that is to say): "The shareholders will observe that there is a charge of 1,306. 1s. 7d. for deficiency of stock which the manager (meaning the plaintiff) is responsible for. His accounts. (meaning the plaintiff's accounts as such manager in the company) have been badly kept and have been rendered to us very irregularly," the defendants meaning thereby that the plaintiff, whilst he was so employed as such manager of the company, had been guilty of improper conduct as such manager in the company, and that by reason thereof the defendants had incurred and sustained loss to the amount of 1,306. 1s. 7d.; and further, that the plaintiff had, in breach of and contrary to his duties as such manager in the company, kept and rendered his accounts in a careless, irregular, inaccurate and improper manner. The declaration concluded by alleging special damage to the plaintiff in his occupation and business as manager.

Plea-not guilty, on which issue was joined.

At the trial, before Kelly, C.B., at the Lancashire Summer Assizes, 1868, it appeared that the defendants were a company established for the purpose of growing cotton in Egypt and shipping it to this country for sale. The plaintiff was the manager of their factory in Egypt; and it was part of his duty to send to the company an account of his transactions, so as to enable the directors to furnish the shareholders with an account of the profits of the undertaking. The libel complained of was an extract from the auditors' report to the company, annexed to the balance-sheet, ending March 31, 1867. This extract appeared in a letter addressed to the shareholders by the directors, calling their attention to the report of the directors at their annual meeting, the balance-sheet, and the report of the auditors. It was in the terms set out in the declaration: "We certify that the accounts as above stated are correct. The shareholders will observe that there is a charge of 1,306l. 1s. 7d. for deficiency of stock, which the manager is responsible for. His accounts have been badly kept and have been rendered to us very irregularly." This letter was printed by the authority of the board of directors and sent to each shareholder, together with the invitation to the annual meeting. appeared that there was no ground whatever for the charges against the plaintiff; and a Mr. Bell, who had been the assistant of the auditor of the company, stated that he had explained to the auditors that the alleged deficiency arose from a depreciation in the value of the company's stock in Egypt; but found it impossible to obtain a hearing. It also appeared that a meeting of the directors had resolved that the auditors' report and the balance-sheet should be printed and distributed among the shareholders.

It

It was objected by the counsel for the defendants, first, that there was no evidence of a publication of the libel, as the company appeared to have merely printed the letter and sent it to their shareholders. Secondly, that the letter was a privileged communication, as it was the duty of the company to inform the shareholders of any matter affecting the accounts of the undertaking. The Chief Baron expressed his opinion that there was sufficient evidence of the publi

cation of a libel, but reserved the points, giving the defendants leave to move, and the jury found for the plaintiff.

Pope having obtained, in Trinity Term, 1868, a rule calling on the plaintiff to shew cause why the verdict should not be set aside, and a nonsuit or verdict for the defendants entered instead, upon the ground, first, that there was no evidence of publication; secondly, that the communication was privileged,

Holker and Gorst shewed cause.-The plaintiff is entitled to maintain this action against the defendants. Admitting that the report affecting the plaintiff might have been published on a privileged occasion, there was evidence of malice for the jury, if the publication was made with a wanton and reckless disregard of the good name and reputation of the plaintiff-Addison on Torts, 2nd edit. 691. It makes no difference that the defendants are a corporation -Whitfield v. the South-Eastern Railway Company (1).

[MELLOR, J.-Did you submit to the Chief Baron that there was evidence of express malice?]

It would not have been proper to do so after his Lordship had ruled in the plaintiff's favour. There is, however, ample evidence of malice in the fact that the report was printed, which was an unnecessary mode of publication. And this evidence ought to have been left to the jury. The report ought merely to have been read at a meeting of the shareholders according to the law and practice of joint-stock companies. In the first schedule to The Companies' Act, 1862, 25 & 26 Vict. c. 89, containing regulations for the management of limited liability companies, it is provided (section 83), that once at least in every year the accounts of the company shall be examined, and the correctness of the balance-sheet ascertained by one or more auditors; and (section 94.) that the auditors shall make a report to the members upon the balancesheet and accounts; and in every such report they shall state whether the balancesheet is, in their opinion, a full and fair balance-sheet, &c.; and such report shall be read together with the report of the

(1) El. B. & El. 115; s. c. 27 Law J. Rep. (N.s.) Q.B. 229.

directors at the ordinary meeting. There is, therefore, a particular mode of presenting the report prescribed by the legislature, and if the company choose to depart from it they must abide by the consequences, just as in Cooke v. Wildes (2), where the defendant, who was deputy-clerk of the peace for the county of Kent, had written a letter to the finance committee of the county, giving reasons why he had taken away from the plaintiff the business of printing the register of voters for the county, instead of merely stating the facts; and it was held that the occasion of writing the letter rebutted the presumption of malice and rendered it a privileged communication; but that the concluding part imputing improper motives to the plaintiff ought to have been left to the jury as affording evidence of express malice. The same rule is laid down in Toogood v. Spyring (3), Blagg v. Sturt (4) and Jackson v. Hopperton (5).

Manisty (R. C. Fisher with him), in support of the rule.-There was no evidence of malice which the Chief Baron could have submitted to the jury. Affirmative evidence of malice must be given, and where the inference of malice from the publication of defamatory matter is rebutted the occasion is privileged. The report presented by the defendants was a communication made bona fide upon a subject-matter, in which the party communicating had an interest, or in reference to which he had a duty, and it was made to persons having a corresponding interest or duty. It was therefore privileged -Somerville v. Hawkins (6), the case of a memorial addressed to a Secretary of State.

[MELLOR, J.-Was there any extrinsic evidence of malice?]

There was no such evidence. The report was one which the auditors were bound by act of parliament to make, and printing the report is not a publication to those who

(2) 5 E. & B. 328; s. c. 24 Law J. Rep. (N.S.) Q.B. 367.

(3) 1 Cr. M. & R. 181; s. c. 3 Law J. Rep. Exch. 347.

(4) 10 Q.B. Rep. 899; s. c. 16 Law J. Rep. (N.S.) Q.B. 39.

(5) 16 Com. B. Rep. N.S. 826.

(6) 10 Com. B. Rep. 583; s. c. 20 Law J. Rep. (N.S.) C.P. 131.

print it. In Taylor v. Hawkins (7), where a master, who was about to dismiss his servant for dishonesty, called in a friend to hear what passed, it was held that the presence of the third person did not render the occasion unprivileged. In the present case there was every reason for presuming an absence of malice.

Holker was again heard.-The recklessness of the defendants in printing and publishing the report, after an explanation of the deficiency had been received, was evidence of express malice. In Manley Smith on the Law of Master and Servant, 2nd ed. p. 266, there is a note to two American cases- -Gassett v. Gilbert (8), where the publication by the directors of an incorporated society for promoting female medical education, in their annual report of a "caution to the public" against trusting a person who had formerly been employed to obtain and collect subscriptions in their behalf, but had since been dismissed, was held to be justified so far only as it was made in good faith, and required to protect the corporation and the public against false representations of that person; and that it was for the jury to say whether the directors had acted in good faith, and had not exceeded their privilege; and The Philadelphia, Wilmington and Baltimore Railroad Corporation v. Quigley (9), where a railroad corporation was held liable, in its corporate capacity, for a libel published by its agents in the course of its business and of their employment; and it was held to be within the course of its business and the employment of the president and directors for them to investigate the conduct of their officers and agents, and report the result to the stockholders. It was also held, that in the absence of malice or bad faith, a report to the shareholders was privileged, but that such privilege did not extend to the preservation of the report and evidence in a book for distribution amongst the persons belonging to the corporation; and the corporation was held liable in damages for publishing it in that form.

(7) 16 Q.B. Rep. 308; s. c. 20 Law J. Rep. (N.S.) Q.B. 313.

(8) 6 Gray's Rep. 94. (9) 21 How. Rep. 202.

MELLOR, J.-I think that the rule must be made absolute to enter a nonsuit or a verdict for the defendants. If I could see that substantial injustice was done by the omission to leave those questions to the jury which I think it would have been better to have put to them, I should be willing to have the case sent down for a new trial, on terms. But I think that there is nothing in the questions which it is said that the Chief Baron ought to have left to the jury. It appears that the defendants are a company established for the purpose of growing cotton in Egypt, and that the plaintiff was their manager in that country. It was the duty of the plaintiff to furnish the defendants with an account of his transactions to enable them to supply their auditors with a balance-sheet and the accounts relating to it. The auditors were of opinion and reported that a depreciation in the stock of the company was owing to the mismanagement of the plaintiff. It appears that they came to this opinion after hearing explanations which were offered to them by one Mr. Bell, but these explanations were offered to them only, and not to the directors. A general meeting of the shareholders was then summoned, and at this meeting the directors laid before the company a statement of the accounts, and in this statement repeated what had been reported to them by the auditors. There is nothing whatever to shew that they had any reason to doubt the truth of this report, nor is there in what happened at the meeting any extrinsic evidence of malice on their part. I think, therefore, that the Chief Baron was right in not leaving the question of malice to the jury. I think that no such evidence is to be found in the report itself. It was a report which the directors had a right to believe correct, and there is nothing to shew that they had any other object than a bona fide communication of the report of the auditors to the company. Now, it was ingeniously argued by Mr. Gorst that there is a rule prescribing the mode in which reports like the present one are to be made, because the company are directed to lay their statement before the company in general meeting. It is true that for certain purposes those persons who are absent from a meeting are bound by the acts of those who are present,

and a mode is therefore prescribed in which the report is to be made and acted upon. But all the shareholders are interested in the prosperity or adversity of the company. They are interested in any report touching the conduct of the officers of the company as upon their conduct the success of the company must depend. And I think that the printing of this report was a reasonable and proper mode of having it circulated among the members of the company, as there is no evidence of the number of the shareholders. The Chief Baron says that it was a report of the directors to a numerous meeting of shareholders, and that he was of opinion that it was not a privileged communication, independently of any evidence of malice which might appear in the document itself. But it appears to me that the case is not within the rule laid down in Cooke v. Wildes (10), though I was at first inclined to think that it was, because, in Cooke v. Wildes (10), what induced the Court to say that it was a question for the jury was that the letter contained defamatory expressions which were unnecessary for the purposes of the communication. It was quite proper and right in that case that the Justices of the Finance Committee and the Quarter Sessions should be judges of the facts, but the defendant was not content with stating them, or anything which he had heard, but made observations of his own, and put a gloss on the conduct of the plaintiff which was libellous and calumnious. This being so, there was in that case intrinsic evidence of malice, and that the communication was not made bona fide, and this evidence was proper to be left to the jury. But I think that the authorities cited by Mr. Manisty, the two judgments of Lord Campbell, in Somerville v. Hawkins (11) and Taylor v. Hawkins (12), shew that the case ought not to be left to the jury unless there be intrinsic evidence of malice in the document itself. If there be any such evidence it is for the jury to say whether the defendant was acting maliciously or not, but if

(10) 5 El. & B. 328; s. c. 24 Law J. Rep. (N.S.) Q.B. 367.

(11) 10 Com. B. Rep. 583; s. c. 20 Law J. Rep. (N.8.) C.P. 131.

(12) 16 Q.B. Rep. 308; s. c. 20 Law J. Rep. (N.S.) Q. B. 313.

the words are consistent with an absence of malice the Judge ought not to leave the case to the jury, unless there is in the document itself intrinsic evidence of malice, or unless there is some extrinsic evidence of malice. In this case I see nothing which is inconsistent with an absence of malice; and when you come to consider the circumstances, they negative malice on the part of the directors. So that, in the absence of intrinsic evidence, I am satisfied that there was nothing to go the jury. Assuming as we may from the terms of the reservation and the fact that there was no application to have questions left to the jury that the communication was bona fide, so far as the directors were concerned, I think that the printing of the report was a reasonably necessary mode of making a communication which, as it appears to me, they were bound to make to their shareholders. I think that we should be going against the progress of the age, if we were to hold that the necessary publication of the manuscript to the printer, from the fact that the directors in making this communication to the great body of the shareholders adopted printing instead of employing confidential clerks to write a letter to each shareholder, rendered the communication unprivileged. I am, therefore satisfied that there was no evidence of malice in the mode in which this communication was made. The only remaining question is, had the shareholders an interest in receiving this report? I think that there was a duty on the part of the directors to communicate it to them. I do not think that the report should be confined to the shareholders present at the meeting. Each shareholder has his interest in receiving the news, and the directors are justified in making it known to him. I am rather glad that Mr. Holker has drawn our attention to the American authorities on this subject, because, in one of those cases, it was held to be within the course of the business and employment of the president and directors, to investigate the conduct of their officers and agents, and report the result to the shareholders. It was also held that in the absence of malice and bad faith the report to the shareholders was privileged. So far therefore as it is necessary to go in this case, we appear to have