I found a copy of the actual review in Pajiba in an article by Dustin Rowles. Skilfully written it is obviously intended to be provocative from its opening sentence:
The owners of a child star are like leaseholders — their property diminishes in value every year.
The review continues in an overtly sexual manner describing Temple:
Miss Shirley Temple’s case, though, has peculiar interest: infancy with her is a disguise, her appeal is more secret and more adult. Already two years ago she was a fancy little piece – real childhood, I think, went out after The Littlest Rebel. In Captain January she wore trousers with the mature suggestiveness of a Dietrich: her neat and well-developed rump twisted in the tap-dance: her eyes had a sidelong searching coquetry. Now in Wee Willie Winkie, wearing short kilts, she is a complete totsy. Watch her swaggering stride across the Indian barrack-square: hear the gasp of excited expectation from her antique audience when the sergeant’s palm is raised: watch the way she measures a man with agile studio eyes, with dimpled depravity. Adult emotions of love and grief glissade across the mask of childhood, a childhood skin-deep.
It is clever but it cannot last – middle aged men and clergymen – respond to her dubious coquetry, to the sight of her well-shaped and desirable little body, packed with enormous vitality, only because the safety curtain of story and dialogue drops between their intelligence and their desire.
Temple was 9 when the review was written in 1937. The sexual descriptions of a child, far beyond innuendo, are offensive. Greene may have intended to be tongue-in-cheek but he has attacked the reputation of an innocent child.
The sexual implications culminate in the word “totsy”. In the blog spacebeer there is an explanation of the meaning of the word:
But back to totsy: what on earth does it mean? Where did it come from Well, I went to the source (the Oxford English Dictionary) and its earliest use of the term is by Greene in his 1938 book Brighton Rock: “The atmosphere of innumerable roadhouses, of totsies gathered round swimming pools.” In case you are wondering the word is related to the British slang term “totty,” which started as a diminuitive for “tot,” then gained the secondary meaning of a “good-time girl” and currently can be used for any group of “people (esp. women) collectively regarded as objects of sexual desire.”
(Lacking a subscription to the OED I rely upon the quote though the first use was obviously not in Greene’s book but in the review which was written in 1937.)
I consider calling a child a “good time girl” and “an object of sexual desire” an actionable attack on her character and morals. Her reputation has been defamed.
Twentieth Century Fox was also a plaintiff in the lawsuit. Its claim principally flows from the opening sentence which ties the film maker to deliberately making the 9 year old Temple a sexual object.
Greene in his book, Ways of Escape, described Twentieth Century Fox’s claim against him:
I kept on my bathroom wall, until a bomb removed the wall, the statement of claim – that I had accused Twentieth Century Fox of “procuring” Miss Temple “for immoral purposes” ……
The case report in The Times Law Reports which Greene published in Ways of Escape sets out the publishers settled the action admitting liability rather than proceed to a trial.
The case report stated:
On October 28 last year Night and Day Magazines, Limited, published an article written by Mr. Graham Greene. In his (counsel’s) view it was one of the most horrible libels one might imagine.
Counsel further described Night and Day as a “beastly” publication.
Counsel was Sir Patrick Hastings, one of England’s greatest barristers who was also involved with the stage including writing plays.
Counsel for the Defendants, including Greene, offered full apologies.
Damages were agreed at 2,000 pounds for Temple, 1,000 pounds for the film corporation and 500 pounds for the film company. It was recognized the damages were symbolic and not reflective of the actual libel.
Though the damages were modest for the companies, Greene who agreed to pay 500 pounds of the settlement, struggled to raise the money.
Lord Chief Justice Hewart rather ominiously asked if Greene was within the jurisdiction of the Court. His counsel said he did not know. His Lordship went on to say:
The libel is a gross outrage, and I will take care that suitable attention is directed to it.
Greene was already in abstentia, having fled to Mexico on a "writing assignment" before Court after hearing reports papers had been delivered to the Director of Public Prosecutions about the review.
I expect a libel action would be equally successful today for Temple but not necessarily Twentieth Century Fox.