Halsted v. Postal Telegraph-Cable Co.

Woodward, J.:

The plaintiffs in this action'were engaged in manufacturing beef cotton bags. They wrote a letter to the Cannon Manufacturing Company at Concord, N. C., asking for prices upon a line of cotton goods by telegraph. The Cannon Manufacturing Company, in response to this request, delivered a message to the defendant to be forwarded to the plaintiffs in the city of New- York, which message was in words and figures as follows: “ Concord, N. C., July 27th, 1903’. E. S. Halsted & Co., 75 Pearl St., New York, N. Y. Deliveries commencing about August fifteenth. Light narrow two eighty wide Tln'ee eighty'net. Paid. Cannon Mfg. Co.” The message as received by. the plaintiffs, aside 'from the' address, read as follows : “ Delivered commencing about August fifteenth light narrow two eighth wide three eighth net.”

Hpon receiving this message the plaintiffs, construing it to. offer the kind of goods they desired at two and one-eighth and three, and oné-eighth cents per yard respectively, entered into a' contract with Armour &' Co., of Chicago, for a large quantity of beef cotton bags, basing their figures upon the prices sujyposed to have been quoted. They ordered the required quantity of raw material of the Cannon Manufacturing Company, and it was only upon the latter Company receiving, the order that it was discovered that the juices really quoted were $0.028 and $0.038 per yard instead of those contained in the message as delivered, and it is hot 'disputed that the difference between the prices as intended to be quoted, and as actually received by the plaintiffs, makes a difference equal to the amount of the verdict involved in. the judgment, appealed from.

A number of more or less interesting questions are discussed in the elaborate briefs of counsel, but as we are of ojnnion that the judgment cannot be sustained because of a fundamental defect in the action, it will he unnecessary to prolong the discussion beyond .the single point suggested. The-telegram here under, consideration, and which forms, the basis of' the plaintiffs’ claim for 'damages, was sent by., the Cannon Manufacturing Oomjjany at the request of the plaintiffs upon a , blank furnished by the defendant.. The language of the blank, in so far as it is material here, is as follows : “ Send the following message subject to the terms- on back hereof, which are hereby agreed to. * * * Bead the notice and agreement on back.”' This was signed by the sender, who was acting at the request of the plaintiffs and might properly be regarded as the plaintiffs’ agent for such purposes,’if it was important to consider this view of the case. On the bade of the blank was the provision that “all messages taken by this company are subject to the following terms : To guard against mistakes or delays the sender of a message should order it repeated ; that .is, telegraphed back to the originating office for comparison. For -this, one-half the regular rate- is charged in addition. It is agreed between the sender of the following message and this Company that said Company shall not be ■ liable for mistakes or delays in the transmission or delivery, or for non-delivery, of ány unrepeáted message, beyond the amount received for sending the same,”-etc. It is not disputed that the message here idvolved was an unrepeated message, and the learned court charged the jury that, as between the sender and the company this was a valid and lawful limitation by contract, but he charged that it did not limit the rights of the plaintiffs, evidently upon the theory that the action being one sounding in tort, the defendant was liable to the plaintiffs for the actual damages sustained, and it is this broad question, going to the substance of the action, which we believe constitutes the fatal error in this case. .

It is true that in the case of Pearsall v. W. U. Tel. Co. (124 N. Y. 256), chiefly relied upon by the respondents to support the judgment, it was held that where the company received a message for transmission without conditions, it became liable under "the common law for the damages suffered by reason of errors in transmission, but the same case distinctly approves the doctrine of Ellis v. Amer. Tel. Co. (13 Allen, 226), the leading Massachusetts case upon the question involved in this appeal, and Clement v. Western Union Telegraph Co. (137 Mass. 463, 466, citing Grinnell v. Western Union Telegraph Co., 113 id. 299, 303), where the facts are not distinguishable in principle from thos'e involved in this action, and the court held squarely that an action on the part of the person receiving the message, sounding in tort, would not lie for an amount in excess of the amount received for the service, where the message was an unrepeated message, and no other negligence was established than that of errors in transmission not due to -fraud or gross negligence. In the leading Massachusetts case cited, and which we believe lays down the law of this case, the message . was written upon a blank substantially the same as the one here under consideration,, and the error in transmission consisted in changing “twenty-five” to" “seventy-five” dollars, upon a contract involving the price to he allowed for ten men for some service, and this was clearly as important an error, so far as it -would appear from the message itself, as the one in the case at bar. In discussing the regulation adopted by the company, the .court say: “ There is nothing in this regulation which tends to embarrass'- or hinder the free usé of the telegraph, or to impose on those having occasion .to transmit or receive messages any onerous or impracticable duty. The repetition of a message may bo unimportant. A mistake in its transmission might occasion no serious damage or inconvenience to the parties interested. Whether it would do so of not would be within the knowledge of the sender or receiver, rather than within that of the operator who transmitted it. The latter could rarely be expected to know what would be the consequences of an error in its transmission. It is, therefore, a most reasonable requisition that it should be left to those who know the occasion and-the subject of the message, and who can best judge, of the consequences attendant' .upon any mistake- in sending fit, to determine whether it is of a nature to render a repetition necessary to ascertain its accuracy, instead of throwing this burden-on the owner or conductor of' the telegraph, who cannot be supposed to know the-effect of a mistake, or the consequences in damages .of -a failure to transmit it correctly. ISTor can we see any good reason why, on similar grounds, it would not be a just and proper exercise of the right to' establish regulations for the conduct of such business to require that persons transmitting or receiving messages should make known the extent and nature-of the risk to-be assumed by the conductor of owner of the telegraph, if, in case of failure to transmit them accurately, a pecuniary -loss would be involved, for which he might be held liable. By no other means could they be certain of obtaining a compensation proportionate to the risk to be assumed, or an opportunity of exercising unusual diligence to protect themselves against %e chances of mistake or miscarriage. * * * ■The defendants were. entitled to insist on a compliance with that part of their regulations which required that the message should' be repeated, and that the-extent of the risk should be made known to them if they were to be held to insure the safe and correct transmission of the message, or, in-case .of failure, to be responsible for all the damages consequent ón delays or errors. . Of this regulation the plaintiff had notice. Although he entered into no express contract with the defendants, and cannot be held to have made any special stipulations with them by which’ he is. bound, he did consent to receive at their hands a message which he alleges it was their duty to deliver to him. It is on this undertaking by the defendants, and for the'breach of duty of which he alleges they are guilty, that he seeks to hold them in this action. It may, therefore, be a sufficient answer to such a claim that, according to the reasonable regulations by which they were governed in the performance of their undertaking towards the plaintiff, and of which he had notice, they have committed no breach of duty for which they can be held "liable -to him. Besides, it is difficult to see how the plaintiff, who claims through the contract entered into by the sender of the message with the defendants, which created the duty and obligation resting on the defendants, can claim any higher or different degree of diligence than that which was stipulated for by the parties to the contract. Certainly a derivative or incidental right -cannot be greater or more extensive than that which attached to the principal or source whence such right accrued of was derived.”

It might have been said, with equal force, that as the regulation was a reasonable one on the part of the conqiany, and it was not obliged to accept the duty of transmitting the same except lipón a compliance with such regulation by the sender, no higher obligation, could be predicated in favor of the plaintiff than that which the company accepted. If the defendant in the case at bar had been obliged to accept and transmit the message, without regulations, then it would assume its common-law obligations; but having the right to make regulations, and being under no obligatipns to accept the message for transmission unless the parties interested agreed to abide by such reasonable regulations, and it appearing that the sender did sign the blank provided' by the company, and" which contained the limitations above mentioned, it must be presumed that the company undertook the duty only as thus limited by its reasonable regulations, and whether the action is deemed to rest upon the contract of the sender, or to result from a breach of duty, the limitation upon the amount of damages to be recovered being reasonable, the plaintiffs have no standing to maintain this action unless they are the real principals in the transaction, and then only to the extent of the amount paid for- the transmission of the message. ' ,

We find', no authority .binding upon this court which- lays down any different doctrine than that .of the leading Massachusetts' case, of which our Court of Appeals in Pearsall v. W. U. Tel. Co., (supra) says that 11 the reasons are clearly and satisfactorily stated . for the existence , of the rule • that telegraph companies .are not,. unless they so expressly contract, held to warrant or insure the accurate transmission or prompt delivery of messages, and are only liable for negligence,” which clearly refers-'to. negligence going to the essence of-the contract or duty, and not to mere errors in trans-. mission, where the company has' stipulated that it will not be liable for .such errors. except Under the conditions which it names, andwhich the courts have held to be reasonable regulations. The right to make a reasonable regulation is- a right on the part of a public or 'quasi-public corporation to refuse to perforin a duty eicept upon compliance. with such regulations, and while' the defendant might waive such regulations, and accept the duty of transmitting ines-sages under its common-law liabilities, where it provides blanks and accepts messages only under such regulations, it owes no' duty higher than that provided in its regulations. •'

The judgment and order appealed from should be reversed, with costs.

Hirsohberg, P. J., and Jerks, J., concurred; Gaykor and Hooker, JJ., dissented. > '