creditors other than the mortgagee, but, if fairly and honestly made, it is neither an unjust nor unlawful interference with the rights of others, within the terms of a statute making conveyances void if intended to hinder or delay creditors: Sabin v. Columbia Fuel Co., 25 Or. 15, 42 Am. St. Rep. 756. Chattel mortgages executed at the same time by an insolvent debtor to certain of his creditors, giving them priority, but not allowing them to prorate, if made in good faith to secure bona fide debts, will not constitute a fraudulent assignment for the benefit of creditors preferred as against those not preferred, although such mortgages cover all the assets of the mortgagor: Note to Monaghan Bay Co. v. Dickson, 39 Am. St. Rep. 708.

DEBTOR AND CREDITOR-PARTNERSHIP PREFERENCES. While a partnership is in the active management of its affairs, the members thereof may prefer one of their creditors to others, or in the absence of statutory prohibitions, execute a formal assignment for the benefit of their creditors, in which some of such creditors may be preferred to others: Note to Smith v. Smith, 43 Am. St. Rep. 373.

GRAY V. TIMES NEWSPAPER COMPANY.

[74 MINNESOTA, 452.]

LIBEL-RETRACTION-BURDEN OF PROOF.-If, in an action for newspaper libel, the defense is, that the article was published in good faith, and that the defendant published a full and fair retraction as provided by statute, the burden of proof is upon him to establish such defense.

LIBEL BY NEWSPAPER-GOOD FAITH-MISTAKE.-In an action to recover for a newspaper libel, the question of good faith of defendant, and whether the falsity of the published article was due to his mistake of the facts, is for the jury to determine, unless the evidence to establish the defense is undisputed, and there is no reasonable ground for drawing different conclusions therefrom.

LIBEL BY NEWSPAPER-RETRACTION.-If, in an action for newspaper libel, the defense of a retraction is set up, the question whether the published retraction was full and fair, as required by statute, is ordinarily one of law for the court.

LIBEL-RETRACTION-WHAT IS NOT.-A published retraction of an original libelous newspaper article which does not refer thereto, nor admit, nor even suggest, that the defendant ever published it, or that he desires to or does retract it, or that he ever had any part in giving publication to the defamatory statements, is not a fair and full retraction, as required by statute, and is not a defense to an action for libel founded on the original libelous article nor does such retraction bar the recovery of compensatory damages.

LIBEL.-THE RETRACTION OF A LIBELOUS NEWSPAPER ARTICLE required by statute to constitute a defense, must clearly refer to and admit the publication of the article complained of, and directly, fully, and fairly, without any uncertainty, evasion or subterfuge, retract the alleged false and defamatory statements therein.

H. V. Mercer, for the appellant.

A. B. Jackson, for the respondent.

454 START, C. J. The defendant is the proprietor and publisher of the "Minneapolis 455 Times," a daily newspaper hereinafter designated as the "Times," and this is an action for publishing therein a libel of the plaintiff.

The record discloses substantially these facts: The plaintiff James E. Gray, a young man of good reputation, about 10 o'clock on the evening of August 10, 1897, was riding his bicycle along the boulevard near Lake Calhoun, in the city of Minneapolis, when he was stopped by two men waiting by the roadside, holding wheels, who shot him through the arm, knocked him senseless, robbed him of his money, and left him lying unconscious across his wheel, where he was afterward found and cared for. The defendant next morning published in the "Times" an account of the robbery, which was substantially correct. But on August 19th it published in the "Times" another article, which, so far as it related to the plaintiff, was this:

"FAKING THE HOLD-UPS.

"Police Have Enough to do Without This Annoyance. "Two or Three Cases Where Robberies Were Complained of, and Never Occurred.

"Fake hold-ups seem to be the regular order of the day now. The police are considerably disgusted, for, fake or no fake, they receive the usual amount of roasting from the public, who argue that the policemen and detectives are not doing their full duty.

"Within the past few days the first fake case of note was that of a young man named Gray, who claimed to have been held up by two men on bicycles while he was riding his wheel on Lake Calhoun boulevard, shot in the arm, sandbagged, and robbed of about $5. Gray's case bore evidence of sincerity, yet upon looking it up the police believe that no hold-up took place; their real theory being that Gray was shot in a row over a woman with whom he was bicycle riding. Detective Hoy has a witness who claims to have seen the whole affair.

"If the department can find a way to do it, it is not improbable that some people who claim they are held up on the street and robbed, when a robbery or attempted robbery never occurred at all, may be made an example of, as a warning to others."

The plaintiff served notice upon the defendant, specifying the statements therein which he claimed to be false and defamatory. The defendant in the next issue of its paper published an article of the purport following:

456 "CRY FAKE' TOO QUICK.

"Police Discredit Stories Which They Cannot Fathom. "A Glaring Illustration Furnished by the Case of James E. Gray. "Considerable criticism has grown out of the apparent freeness with which the police cast discredit upon every unusual hold-up or robbery, and at once assume that anything which they cannot trace is a fake, because they cannot fathom it. Unless every detail is as plain to them as the nose upon each individual face, and the clearest motive is attributable to a robbery or hold-up, there is always at hand a cry of 'fake' to be hurled at the complainant.

"One case of this kind is the case of James E. Gray, the young man who, on the night of Tuesday, Aug. 10, was held up by two men, sandbagged, shot in the arm, and robbed of some $5 or $6, while bicycle riding on Calhoun boulevard.

"Mr. Gray is a young man, well connected and respectable. He formerly resided in Fergus Falls, and during his residence in Minneapolis has roomed at the Y.M.C.A. Building. Mr. Gray's story of the robbery and assault, as it occurred, was published the morning after the robbery, and was soon followed by the usual innuendo, because it was the first bicycle robbery which the police had had to deal with, and was a novelty, and not understood. . . . .

"A report was circulated among the police that there was a woman in the case, and as Mr. Gray has many friends, not only in Minneapolis, but all over the state, the report embarrassed him considerably, inasmuch as it was without foundation. The case was one of highway robbery and assault, pure and simple." The article also contained a correct account of the assaulting and robbing of the plaintiff. No other retraction was published by the defendant. Thereupon this action was brought.

The defense was substantially that the defendant published the alleged libel in good faith, and that it published a full and fair retraction thereof, in accordance with the statute.

On the trial, evidence was introduced by both parties on the issue of the good faith of the publication, and the defendant gave in evidence the article published after the service of the plaintiff's notice.

At the close of the evidence the trial court directed the jury to return a verdict for the defendant, which was done, and the 457 plaintiff appealed from an order denying his motion for a new trial.

The trial court, in granting the defendant's motion to direct a verdict for it and in denying the plaintiff's motion for a new trial, necessarily held, as a matter of law, that the defendant published the article complained of in good faith, and that it published a full and fair retraction thereof. This ruling is assigned as error.

The newspaper libel retraction statute (Gen. Stats. 1894, secs. 5417, 5418) provides that before any action shall be brought for a newspaper libel the aggrieved party shall serve a notice upon the publisher, specifying the statement therein claimed to be false and defamatory. "If it shall appear, on the trial of said action that the said article was published in good faith, that its falsity was due to mistake or misapprehension of the facts and that a full and fair retraction of any statement therein alleged to be erroneous was published in the next regular issue of such newspaper, or, in case of daily papers, within three days after such mistake or misapprehension was brought to the knowledge of such publisher or publishers, in as conspicuous a place and type in such newspaper as was the article complained of as libelous, then the plaintiff in such case shall recover only actual damages; provided, that nothing in the provisions of this act shall be held to apply to any libel published of or concerning any female." Section 5418 defines the term "actual damages" as used in the statute.

... ·

Good faith on the part of the publisher, and the publication of a full and fair retraction, are made a defense by this statute, as against all damages except actual damages as defined therein. The burden is upon the publisher to establish such defense.

The question of good faith, and whether the falsity of the article was due to mistake of the facts, is always one of fact for the jury, unless the evidence to establish the defense is undisputed, and there is no reasonable ground for drawing different conclusions therefrom.

What constitutes "good faith," as the term is used in this statute, was defined in the case of Allen v. Pioneer Press Co., 40 Minn. 117, 12 Am. St. Rep. 707, to the effect that mere belief on the part of the publisher in the truth of the publication is not alone sufficient, 458 but it must have been honestly made in the belief of its truth, and upon reasonable grounds for the belief, after the exercise of such means to verify its truth as would be taken by a man of ordinary prudence under like circumstances. The evidence in this case was not so conclusive of the defendant's good faith, as so defined, as to justify the trial court in treating

it as a question of law, and directing a verdict. The question should have been submitted to the jury as a question of fact.

On the other hand, the question whether the retraction in a given case is a full and fair one, within the meaning of the statute, is ordinarily a question of law for the court, because it involves the comparison and construction of two written instruments. In this particular case the question whether the alleged retraction was a compliance with the statute was clearly a question of law, for a comparison and construction of the two articles did not in any way depend on extrinsic evidence, disputed or otherwise.

The statute does not require the retraction to be in any particular form. It must, however, clearly refer to and admit the publication of the article complained of, and directly, fully, and fairly, without any uncertainty, evasion, or subterfuge, retract (that is, recall) the alleged false and defamatory statements therein.

It is necessary that the retraction should refer to the original publication in order to be fair, because the purpose of the statute in requiring a publication of the retraction in the next issue of the newspaper after service of the notice, and in as conspicuous a place and type as was the article complained of, is to eradicate, so far as possible, from the minds of the persons who read the libel the false and unfavorable impressions of the plaintiff engendered thereby. To accomplish this result the retraction must be identified with and follow the libel as quickly as practicable, so that the truth may overtake the libel. How would it be possible to recall the libel without referring to and admitting its publication in the newspaper in which the retraction was published?

The publication complained of in this case was not privileged, and was libelous per se; for it, in effect, charged the plaintiff with fabricating the story of his assault and robbery for the purpose of 459 accounting for his wounds received in a row over a woman. A simple comparison of this article with the so-called retraction is all that is necessary to demonstrate that, as a matter of law, the latter is not a full and fair recall or retraction of the libel, within the rule stated. It does not refer to the original article, or admit or even suggest that the defendant ever published it, or that it desires to or does retract it, or that the defendant ever had any part in giving publication to the defamatory statements.

In effect, the supposed retraction was a criticism of the police