I am constrained to dissent from the opinion of my learned colleagues for the following reasons:
*19This action is not an action upon contract, nor an action in tort growing out of contract, but is an action in tort for damages resulting from the gross negligence of the defendant in sending an nnanthorized telegraph message to an addressee in Brazil, purporting to have been sent by the plaintiffs, the sending and delivery of which, at the time it was sent, was in direct disregard of specific notice given by the plaintiffs to the defendant that the message must not be transmitted or delivered. The rule, therefore, that, for a failure to exercise reasonable care in the authorized sending and delivery of a cipher message, the company is only liable for nominal damages, whether the action be brought on the contract or in tort, unless the defendant had notice of the meaning and importance of the message, is not applicable. The tort in such cases grows out of the contract, and the damage is measured by what was in contemplation of the parties making the contract. In this case, there is no con-tract. The evidence shows that, so far as the original message delivered by plaintiffs to defendant was concerned, it had been withdrawn, and the contract for its transmission and delivery, as between the plaintiffs and defendant, had, by mutual consent, been canceled, the plaintiffs having notified the company not to deliver the message, the company having consented to stop the delivery thereof, and having subsequently notified the plaintiffs that the message had been stopped.
The suggestion that there was a new contract made to stop delivery, and that this action is for negligence in performing that- contract, is without merit. The appellant denies the making of any such new contract. There is no evidence that it was the intent of the parties to make any charge therefor, on the one hand, or to. make any payment therefor, on the other, hi or is there any evidence to support the contention that the message was delivered by the mistake of some distant agent of a connecting line. The only evidence on this point is defendant’s letter subsequently written to plaintiffs, which justifies the inference that the wrongful transmission and delivery of the message was due to the *20gross negligence of the defendant’s authorized agents in its home office, acting within the scope of their authority.
“ Whether it be in contract or in tort, the proper measure of damages, except where punitive damages are allowable, is a just indemnity to the party injured, for the loss which is the natural, reasonable and proximate result of the wrongful act complained of, and which a proper degree of prudence, on the part of the complainant, would not have averted.” Baker v. Drake, 53 N. Y. 211, Rapallo, J., writing the opinion.
This rule, of course, is subject to the modification that, in actions on contact, the damage is further measured by what was expressly or impliedly within the contemplation of the parties.
“ The general rule in actions for torts is that the wrongdoer is liable for all injuries resulting directly from the wrongful acts, whether they could or could not have been foreseen by him.” 13 Cyc. 28, citing Eten v. Luyster, 60 N. Y. 252.
It is urged that the message was not signed with the name of the plaintiffs; but defendant had knowledge that the sending of a message in the form of the message in question would be construed by the addressee as a message sent by the plaintiffs.
In Elwood v. Western Union T. Co., 45 N. Y. 549, 556, a telegraph message was sent in the name of the cashier of a bank at the request of a party who was thereby held out as entitled to credit for a large amount, without any evidence of his authority to use the name of the cashier. In affirming a judgment in favor of the plaintiff therein, the court (Bapallo, J., writing the opinion) say: “ That the sending of such a message in the name of the cashier of a bank, at the request of the party who was thereby held out as entitled to credit for a large amount, without any evidence of his authority to use the name of the cashier * * * was an act of gross negligence, is too clear to admit of argument. The act was done in the direct course of the employment of the agent. The agent was placed in the office, and in the control of the instruments, to use them in transmitting *21messages for a compensation. If the agent performed that duty in a negligent manner, whereby the plaintiff was injured, the principal is clearly liableIn the case at bar the defendant had actual knowledge that the message was unauthorized, so that there is here no question of the exercise of reasonable care to discover whether the message was authorized, but a flagrant neglect of duty resulting in damage to the plaintiffs. The utter failure on the part of the defendant to notify plaintiffs of the wrongful sending of the message, after it had been withdrawn by plaintiffs, and its delivery stopped, constituted further negligence of the grossest character/ for which defendant would be liable. See 37 Cyc. 1673, citing Laudie v. Western Union Tel. Co., 126 N. C. 431.
While it would seem that, where the action is based upon a gratuitous, independent tort, the defendant’s liability for all the direct consequences thereof would be the same, whatever the degree of negligence, some of our courts have directly held, and others strongly intimated, that a greater degree of liability' would follow where the negligence is gross. From the very nature of the business, few instances arise of gross negligence on the part of a telegraph company, and there does not seem to be any reported case analogous with the case at bar.
But it is well settled by numerous recent authorities in this state that a telegraph company, as a quasi public corporation, cannot, even by express contract, limit its liability where gross negligence is shown, such as an absolute failure to perform its duty or to exercise any degree of care, manifesting utter recklessness as to consequences.
In Postal Tel. Cable Co. v. Robertson, 36 Misc. Rep. 185, the court say: “ The rule is that a telegraph company may, by contract, limit its liability for mistakes or delays in the transmission and delivery, or non-delivery, of messages, caused by negligence of its servants, if the negligence is not gross * * * but such company cannot by notice limit its liability in this respect, by any form of contract, when its negligence is gross or its conduct willful.”
This statement of the rule has been cited with approval *22in Will v. Postal Tel. Cable Co., 3 App. Div. 22; Dixon v. Western Union Tel. Co., id. 61-64; Empire Roller Rink Co. v. Western Union Tel. Co., 75 Misc. Rep. 567-568; Weld v. Postal Tel. Cable Co., 199 N. Y. 88.
In Weld v. Postal Tel. Cable Co., 199 N. Y. 88, the court say: “ It is, therefore, but right that telegraph companies should have the power to limit their liability in cases where mistakes occur through no fault on their part, or for such mistakes of their employees as will occur through ordinary negligence in spite of the most stringent regulations or the most vigilant general oversight. Bub manifestly this power cannot be extended without placing the public absolutely at the mercy of those engaged in transmitting telegraph messages. This is the reason of the rule, long since established in this state, that individuals and corporations engaged in this quasi public business, cannot contract to absolve themselves from liability for. their own willful misconduct or gross negligence. They may protect themselves by contractual limitations, * * * but beyond that they may not __;; go.
In this case it is conceded by both sides that there is no clause in the original contract, which, if it were still existent, would bring the parties within the rule permitting telegraph companies to limit their liability by express contract.
An absolute failure to perform a duty, or an utter disregard of an express injunction not to transmit or deliver a message, is a conseious_ disregard of consequences and constitutes gross negligence. See Elwood v. Western Union Tel. Co., supra; 37 Cyc. 1673; Railroad Co. v. Lockwood, 84 U. S. 376-382; Kiley v. Western Union Tel. Co., 109 N. Y. 231; Western Union Tel. Co. v. Way, 83 Ala. 543.
It is true that the authorities cited hold only that a telegraph company cannot, by express contract, relieve itself of full liability for gross negligence; but as such decisions are based upon the broad principle that it would be against public policy and manifestly unjust to permit a quasi public corporation, for any reason whatever, to avoid such liability, it must be assumed that the rule of law invoked by the appellant herein is an established rule of law only as to cases *23where only ordinary negligence is established, and is not a rule of law as to cases involving gross negligence.
The contention that quasi public corporations, though denied the right, by one well established rule of law, to limit their liability for gross negligence, even by express contract, shall be permitted to accomplish the same result by invoking another rule of law applicable only where ordinary negligence is involved, even though the courts have everywhere declared that to permit such freedom from liability is against public policy and “ cannot be extended without placing the public absolutely at the mercy of those engaged in transmitting telegraph messages,” is not worthy of serious discussion. What the law forbids by direct action, it surely will not permit by indirection.
A rule of law is not an arbitrary thing, like a statute, but must be founded in good reason and justice. Where the reason no longer exists, or where it would be manifestly unjust or against public policy to apply such a rule, the rule is deemed not to exist. See Fitzwater v. Warren, 206 N. Y. 355-358.
In this case, gross negligence has been established, taking the case out of the rule. But, irrespective of the distinction which may be drawn between cases of ordinary negligence and gross negligence on the part of quasi public corporations, this case does not come within the rule invoked by the appellant, for the reason that the contract had ceased to exist, and the unauthorized sending and delivery of the message constituted an independent, gratuitous tort, which would render the defendant liable for all the direct and proximate damages resulting therefrom. ■
The judgment should be affirmed, with costs to the respondents.
Judgment modified, and, as modified, affirmed, with costs to appellant.