On appeal from the Superior Court, Law Division, Ocean County.
For reversal -- Chief Justice Vanderbilt, and Justices Case, Oliphant, Burling and Ackerson. For affirmance -- Justice Wachenfeld. The opinion of the court was delivered by Case, J.
The complaint sued for compensatory and punitive damages grounding in the slander of plaintiff's products, the hiring away of plaintiff's employees and the solicitation of plaintiff's customers. All of the defendants answered denying the allegations, and Millside Farms, Inc., counterclaimed for compensatory and punitive damages grounding in a libel upon its products as well as in slanders upon it and its products. The jury brought in a verdict of $25,000 for compensatory damages and $5,000 for punitive damages in favor of the plaintiff and against the defendants and a verdict of no cause for action on the defendant's counterclaim. A motion for a new trial was seasonably made and was denied by the court upon the condition that the plaintiff accept the reduced verdict of $9,000, consisting of $7,500 compensatory damages and $1,500 punitive damages. Plaintiff did so consent, and the judgment was amended accordingly. Shortly thereafter defendants made, and were denied, a further application for a new trial resting on recently discovered testimony. The appeal is from the judgment and the subsequent orders and is brought here on our own motion.
Millside Farms, Inc., is a pasteurizer of milk and a dealer at wholesale and retail in milk, cream, butter, eggs and other dairy products. The two individual defendants were employees of Millside. Plaintiff is a subdealer or retailer of
milk products who, from 1940 to April, 1947, bought his goods from Millside and sold them on Long Beach Island and the nearby mainland. About April 1, 1947, plaintiff notified Millside that he had chosen a new source of supply and, effective April 26, 1947, would no longer use defendant's products. Millside thereupon sought to retain, by direct sales, the Ocean County consumers of its products who had theretofore bought those products from plaintiff. There resulted a tense and bitter contest from which grew this litigation.
On April 18, 1947, plaintiff distributed through the mail, over his signature, to approximately 710 customers (users of Millside dairy products) a multigraphed letter which said in part:
"During the past year we have received an alarming increase in complaints on the part of our customers as to the deterioration of the quality of our milk, the trouble experienced in whipping the cream, and also that the tops of the bottles were not properly protected against outside contamination.
We have naturally noticed these failings ourselves and have tried by all means short of changing our source of supply to overcome them. However, these conditions continue to exist, and in order to maintain our reputation for high quality, and to prevent the loss of many of our best accounts we have finally been forced to change the source of our supply."
The letter did not mention the Millside name, but the identity of that company as the former supplier to Klein was known to the customers because its name was on all of the bottles and on every container that held its products.
Plaintiff's complaint contained four counts. The first count charged Millside with a malicious effort to destroy plaintiff's business by soliciting for the benefit of Millside, through the co-defendants and others, the business of plaintiff and by making false statements about plaintiff and his products and, further, by luring away and utilizing, in its efforts, plaintiff's employees. The second and third counts were against Millside's employees, Mahoney and Greenwood, respectively, and made comparable charges against them. The
fourth count brought in all three defendants, with like accusations, on a charge of conspiracy. The defendants answered, denying the charges, and Millside counterclaimed, charging that the letter of April 18 was a willful and a malicious libel upon defendant's products and that following the libel plaintiff disseminated further false charges against defendant and its products. Plaintiff answered the counterclaim by denying the ...