Appeal from the Circuit Court for Montgomery County (SHOOK, J.).
The cause was argued before Brune, C.J., and Henderson, Hammond, Horney and Marbury, JJ.
HAMMOND, J., delivered the opinion of the Court.
Appellants, claiming they had been libelled by the appellee, a mercantile credit rating agency, by matter set out in reports to it customers, sued to recover damages. The jury returned a verdict for the credit agency and, in their appeal to this Court, the claimants urge the Judge Shook erred twice in her charge to the jury -- first, in not instructing that since the alleged libelant had not pleaded justification "there is a legal presumption of falsehood which arises upon proof of the publication of the defamatory matter; and the jury is bound by this presumption, that the defamatory matter is false," and second, in instructing on damages.
Edith Wetherby and Mary Eileen Dunnigan, who were engaged in the real estate and mortgage business, lived with another single woman in a house in Bethesda. They desired to take out life insurance for business purposes and were turned down by several companies, apparently as a result of reports on them which Retail Credit Company had sent insurance companies at the companies' requests. Investigators of the credit company interviewed
neighbors of the appellants and, from the information received, prepared the reports which suggested that the ladies gave loud and boisterous parties at which there was considerable drinking and, on occasions, "brawls," that neighbors have been led to strong suspicions "of Lesbian action between those women" and said that "[i]nformants will not come out and state that they think the applicant [Wetherby] is 'Lesbian' but hint and hedge around and do everything but state it, saying that they definitely do not act like the feminine sex if they are."
The appellants hired a man for $400 to procure copies of the reports and he did so, apparently by breaking into the office of the credit company, where they were kept under lock, and stealing them. The libel suit for damages followed.
At the trial it was stipulated (a) that the credit company, as a mercantile rating agency, had a qualified or conditional privilege to fairly publish to its own legitimately interested business customers the information it received in the course of its investigations, without being liable for defamatory matter therein, provided it did not exceed or abuse the privilege; (there appears to be a sound basis for this concession by the appellants; see Trussell v. Scarlett, 18 F. 214 (Cir. Ct. D. of Md., Morris, J.); Petition of Retailers Commercial Agency, Inc. (Mass.), 174 N.E. 2d 376; Annotation 30 A.L.R. 2d 776; Fresh v. Cutter, 73 Md. 87; Simon v. Robinson, 221 Md. 200); (b) that the libels complained of were all based on reports made by the credit company in the regular course of its business and sent only to its own customers and revealed to no one else; (c) that the files containing the results of the investigations leading to the reports and the copies of the reports were kept locked in the credit company's office.
The case was tried on the premises, understood by the judge and the lawyers for both sides, that there had been sufficient publication, the statements suggesting that the appellants were Lesbians were libelous per se and that the truth or falsity in fact of the suggestions was not material and not, as such, an issue in the case. On the question of liability, the case was tried and went to the jury on the narrow issue of whether the credit company had abused or exceeded its qualified privilege.
The testimony adduced on both sides was largely as to the methods employed in making the investigations, the people interviewed, the facts assembled, and the method of reporting these facts to the customers of the credit company. The appellants attempted to show that the writers of the reports had been unfair and, in effect, either had not believed the truth of what they reported or had shown a callous disregard as to whether the matters specified or suggested in the reports were or were not true. However, the appellants themselves elicited from their neighbors, whom they called to the stand, that they had told the investigators of the drinking bouts and brawls and of the Lesbian tendencies they attributed to the appellants, and, on the other hand, in response to their lawyer's question, appellants denied they were Lesbians.
Judge Shook instructed the jury as to publication, as to what constituted defamatory matter (later instructing that to refer to a person as a Lesbian or as having Lesbian tendencies is libelous per se), that there ...