## Facts

- Plaintiffs manufactured and sold paraffin oil and competed in the lamp-oil market with sellers of an American kerosene/paraffin oil.
- Defendant, a broker, circulated an advertising circular for American oil and attached an expert report comparing that oil to plaintiffs’ “Scotch” paraffin oil.
- The report described the American oil as superior and described plaintiffs’ oil as inferior in color, thickness, odor, and (at least after some burning) illuminating power.
- Plaintiffs sued for “libel in the way of trade,” alleging the circular was published falsely and maliciously to divert customers.
- Plaintiffs alleged special damage in the form of lost customers and sales.
- The pleading did not expressly allege that the disparaging comparative statements about plaintiffs’ oil were false; it focused on allegedly false praise of the American oil.

## Issues

1. Whether false and malicious disparagement of another’s goods in the course of trade is actionable upon proof of special pecuniary damage, even without any imputation on the trader’s personal or professional character.
2. Whether a declaration states a claim for trade libel/product disparagement when it alleges malice and special damage but does not allege falsity of the disparaging statements concerning the plaintiff’s goods.

## Decision

- The Queen’s Bench sustained the defendant’s demurrer and entered judgment for the defendant.
- The Exchequer Chamber affirmed.
- The court indicated that a cause of action may exist for false and malicious disparagement of goods causing special damage, even absent personal defamation.
- The plaintiffs nonetheless lost because the declaration failed to plead that the disparaging statements about plaintiffs’ oil were false.

## Legal Principles

- A tort may lie for commercial disparagement (trade libel/slander of goods) where a defendant, in the course of trade, makes false statements derogating a claimant’s goods and causes special pecuniary loss.
- The claim is distinct from personal defamation; it targets injury to the vendibility of goods rather than reputation.
- Special damage (pecuniary loss such as lost sales) is an essential element.
- Pleading and proof must address falsity in the disparaging statements “of and concerning” the plaintiff’s goods; it is insufficient to allege only that the defendant’s competing goods were falsely praised.

## Conclusion

The courts recognized in principle that false, malicious disparagement of another’s goods causing specific pecuniary loss can be actionable, but held the plaintiffs’ pleading defective because it did not allege falsity in the statements disparaging the plaintiffs’ product, leading to judgment for the defendant on demurrer, affirmed on appeal.


Young v. Macrae, 3 B. & S. 264 (Q.B. 1862), aff'd (Exch. Ch. 1862)