Finnish Temperance Society Sovittaja vs. Raivaaja Publishing Company & another

Massachusetts Supreme Judicial Court1914-10-22

219 Mass. 28

Summary · law.co

Holding. The demurrer was properly sustained because equity courts lack jurisdiction to grant injunctions against libel or compel retractions; the exclusive remedy is a legal action for damages. The plaintiff may amend the bill into an action at law within a time set by the trial court, or face dismissal with costs.

A corporation sued in equity seeking damages and a mandatory injunction to force publication of a retraction following libelous newspaper articles. The defendants demurred to the complaint. Established precedent in this jurisdiction holds that equity courts lack authority to enjoin the publication of defamatory statements causing business injury; the proper remedy lies exclusively in a legal action for monetary damages.

The plaintiff argued that the corporate structure of the defendants—specifically, that they were interlocking entities with overlapping ownership and leadership, and that one company was created to shield the other from liability—warranted equitable relief. The court rejected this argument. Although acknowledging that piercing the corporate veil might be appropriate at trial if one company proved to be merely the instrument of another, the court found that the fundamental nature of defamation claims does not change based on corporate relationships. The wrong in defamation consists of malicious publication, and liability may be imposed jointly and severally on all parties working toward a common defamatory end.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether equity courts may enjoin defamatory publications or compel retractions
Whether corporate structure shields defendants from liability for defamation
Whether piercing the corporate veil affects the nature of a defamation claim
Proper remedy for injuries from libelous statements

Procedural posture

Defendants demurred to an equity bill seeking damages and injunctive relief, the trial court sustained the demurrer, and the case was reported to this court without entry of a decree.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Braley, J.

This is a suit in equity for the assessment of damages suffered by the plaintiff corporation from the publication of libels in a newspaper owned or controlled by the defendant corporations, with a prayer for a mandatory injunction to compel them to publish a retraction. The defendants, to whom we shall refer respectively as the first and second company, demurred to the bill, and the judge of the Superior Court, after sustaining the demurrer, reported the case to this court without entering a decree. R. L. c. 159, § 27.

It is settled by our decisions that where no breach of trust or of contract appears, a bill in equity will not lie to enjoin the publication of libellous statements injurious to the plaintiff’s business, trade or profession, or which operate as a slander of his title to property. Boston Diatite Co. v. Florence Manuf. Co. 114 Mass. 69. The remedy is by an action at law for damages. Raymond v. Russell, 143 Mass. 295, 296. As to the English rule since the judicature act of 1873, St. 36 & 37 Vict. c. 66, see Pom. Eq. Jur. § 1358, and cases cited in the note.

The plaintiff, however, urges that because of certain allegations in the bill these decisions are inapplicable, and relief should be decreed. But even if as alleged the defendants are interlocking corporations where the stockholders and boards of directors who control and direct the policy of each are substantially the same, and the first company was created by the second company, and the periodical formerly published by it in which the libels appeared was transferred for a nominal sum to the first company, which has no visible property, in order that the second company, which owns real and personal estate of great value, might escape liability in damages for the publications, the plaintiff does not make out a case in equity.

While the companies are distinct organizations, yet the wrong is to be established by the same evidence and degree of proof as at law. The essence of the defamation is the malicious publication of the libellous language and does not necessarily lie in the authorship of the articles or the ownership of the press which printed them. People v. Miller, 122 Cal. 84. If the defendants all worked for a common end which they accomplished by the publication of the libels, they are liable jointly as well as severally. Patten v. Gurney, 17 Mass. 182, 186. Miller v. Butler, 6 Cush. 71, 74. It also is plain that, if the trial in an action at law discloses that the first company is merely the creature or mouthpiece of the second company, its corporate form does not pre vent the plaintiff from reaching the real offender and actual instigator of the defamatory attacks. Ginn v. Almy, 212 Mass. 486, 505, 506, and cases cited.

G. E. Roewer, Jr., for the defendants.

M. C. Taylor, (M. M. Taylor with him,) for the plaintiff.

The demurrer therefore was sustained properly, and, if the plaintiff within a time to be fixed by the trial court and upon such terms as it may determine does not amend into an action at law as provided in R. L. c. 159, § 6, the bill is to be dismissed with costs.

Ordered accordingly.

Dubuque, J.