Western Union Telegraph Co. v. Way

CLOPTON, J.

— The appellee brings the suit, to recover damages for the alleged negligent omission to forward a message addressed “Victoria, Bremen,” which he delivered at the office of the appellant in Montgomery, June 14, 1884, . for transmission. The message was intended for Johannes Eoth, who resides in Bremen, Germany, Victoria being a cipher used to represent his name; and was a responsive acceptance of an offer to buy cotton, made by a cablegram which plaintiff received from him on the same day.

The grievance complained of is, that by reason of the negligence of the defendant’s agents, the message was not forwarded, and plaintiff lost the benefit of the sale.

The complaint, as originally filed, contained but one count. More than a year after the commencement of the suit, it was amended by the addition of two other counts, to the first of which the defendant pleaded the statute of limitations, basing the defense on the ground that the count introduced a new cause of action. The original complaint alleges, that Both’s offer was to buy one thousand bales of cotton, but was intended to be, and was in fact, an acceptance of a previous proposition made by plaintiff to sell thirty-five hundred bales. The amendment avers a direct and positive offer to purchase thirty-five hundred bales. The message in response, and in acceptance of the offer, and the failure to forward which constitutes the causes of action, is substantially the same as set forth in both the original and amended complaint. The difference in the counts consists in the mere manner of stating Both’s proposal, which was the inducement to sending the message. There are also averments of other and additional special damages. The cablegram containing the offer does not enter into, nor constitute a part of the real cause of action, and is only material as affecting the amount of recovery, not the right to recover. The amendment varies the descriptive allegations of matter alleged as inducement, but does not introduce new matter, or a cause of action not already in issue. It was allowable under our statute, and related to the commencement of the action. — Ala. Gr. So. R. R. Co. v. Arnold, 80 Ala. 600.

2. The cablegram was delivered to plaintiff as coming from Victoria. Its delivery by defendant is the equivalent of an admission that Victoria was the sender; and, in connection with proof that Victoria is the cipher name of Both, is prima facie sufficient to show, as against the defendant, that it was sent by him. The general rule, that secondary evidence of the contents of a writing is inadmissible unless the absence of the original is accounted for, is applicable to cablegrams. It is immaterial in this case which is considered the original — the message delivered by the sender to the forwarding office, or the telegram delivered by the company to the sendee at the point of destination. If the message delivered by Both to the office in Bremen be the original, it is without the jurisdiction of the court; if the cablegram delivered to the plaintiff be regarded the original, the preliminary proof of loss was, prima facie, sufficient. In either case, the secondary evidence of the contents was propperly admitted. — Whilden v. Planters & Merchants’ Bank, 64 Ala. 1.

3. It is well settled, that an agent has no power to bind his principal by admissions, unless they come within the scope of his authority, and are so proximate to the main fact in point of time as to be regarded a part of the “res gestae,” serving to elucidate or explain the nature and character of the transaction. — Ala. Gr. So. R. R. Co. v. Hawk, 72 Ala. 112. For the purpose of showing that the message was not forwarded, the plaintiff was permitted, against the objection of defendant, to testify to a conversation in reference thereto with "Winter, an agent of defendant, and also to introduce a letter to Winter and his reply. At the time of the conversation, and of writing the letter, Winter was not in the performance of any duty relating to the transmission of the message, and had no authority to bind the defendant in the premises. They were merely narrations of a past transaction.

4. The lines operated by defendant do not extend to Bremen, and messages to be transmitted in that direction were delivered, in Nova Scotia, to a connecting cable line. The defendant is not compelled by any duty to the public to receive for transmission, or to secure the transmission of messages, .beyond its own lines; and if such service be undertaken, may fix terms, conditions and regulations, not contrary to law or public policy, on which it will receive and undertake to secure the transmission of cablegrams to points of destination in foreign countries. Cablegrams were required to be written on forms used by the company, on the back of which were printed the terms and conditions on which they would be received, sent forward on its lines to the terminus thereof, and there delivered to the next connecting company. The message delivered by plaintiff was written on one of these forms, and signed by him. Immediately preceding the message the following is printed: “Send the following message, subject to the terms and conditions printed on the back hereof, which are agreed to.” Several of the pleas of the defendant are founded on these terms and conditions. Those set out in the pleas, and specially relied on, are: that the company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery to the next connecting telegraph company, of any unrepeated message, beyond tbe amount of tbe charge which may or shall accrue to the company; nor for errors in cipher or obscure messages; nor for damages in any .case where the claim is not presented in writing, within sixty days after the sending of the message.

A repetition of the message was not required or requested; it was in cipher; and a written claim for damages was not presented within sixty days after the failure of the company to forward it. It was never forwarded, but by some inadvertence was placed in the receptacle of messages sent, and was checked as such. It is contended that the reception of the message for transmission was matter of contract, the terms and conditions of which regulate the duty and measure the liability of defendant; and that the company being in the performance of a duty voluntarily undertaken, and the negligence not being gross nor willful, the terms and conditions exonerate the defendant from liability for damages beyond the amount of the charge. Many authorities are cited by counsel to sustain the reasonable character of these, and similar terms and conditions, which, however, it is unnecessary for us to consider; for, if their reasonableness be conceded, before this arises another question — whether, on a proper construction, they govern and measure the liability of the company under the circumstances shown by the record in this case.

A telegraph company is engaged in a public calling, exercises important rights and powers, and owes corresponding duties to the public. By the established doctrine of this State, a carrier can not stipulate for exemption from liability for negligence, whether gross or willful, or otherwise. — East Tenn., Va. & Ga. R. R. Co. v. Johnson, 75 Ala. 596. The same rule has also been applied to telegraph companies. Sweatland v. Ill. & Miss. Tel. Co., 27 Iowa, 433. On well settled principles, founded on public policy, a telegraph company can not contract to be relieved from the exercise of due care and diligence in the transmission of telegrams to a point of destination over its own lines; and when it undertakes to secure the transmission of a message to a point of destination beyond the terminus thereof over connecting lines, the same rule applies as to transmission to the terminus of its own lines. A construction that the terms and conditions secure immunity from the consequences of the fault or neglect of the company’s officers or agents, would condemn the contract as contrary to law, and deny it any force or effect. Ayer v. W. U. Tel. Co., 10 An. Rep. (Me.) 495; Gray’s Com. by Tel., 49. Under tbe influence of tbe rule, that when a contract is reasonably susceptible of two constructions —one contrary, and the other agreeable to law — that construction should be adopted which will uphold the contract and give it operation, we construe the terms and conditions as only undertaking to exonerate the defendant from liability for errors which may be committed in the transmission of cipher or obscure messages, not caused by neglect, and for mistakes or delay in the transmission or delivery, or for the non-delivery of unrepeated messages, which may be caused by any of the disturbing or obstructing agencies to which transmission by electricity is subject — generally, it may be said, in all cases where the negligence of the company is not the cause of the error, mistake or delay, or non-delivery. They have no operation, and are inapplicable, when the message is never started from the receiving office in the course of transmission. A failure to start the message is not an error, mistake or delay in its transmission or delivery, or a non-delivery, as employed in the terms and conditions, but is a breach of the entire contract. A stipulation, that when there is no effort to forward the message, the company should only be liable for repayment of the charge, would be, in effect, to release the company from all obligation to perform the contract, because released from all liability for an entire breach — tantamount to its rescission. — Birney v. N. Y. & Wash. Tel. Co., 18 Md. 341; Sprague v. Wes. Un. Tel. Co., 6 Daly, 200.

6. The limitation as to the time in which a claim for damages must be presented, is in the nature of a condition subsequent, thenon-performence of which operates a forfeiture of all damages. A condition operating a forfeiture, not being favored, will not be extended beyond the express or clearly implied terms. The terms and conditions do not contemplate that the company’s agents would wholly fail to send a telegram in the regular and usual course of business, and do not provide, when there is no effort to forward the message, for immunity from damages by reason of omission to present the claim within the contractual period of limitation. By the express words of the contract, the limitation does not commence to run, until and from the time the message is started — “after the sending of the message”. There can arise no implication from these words that it was meant and intended that the limitation should begin to run from any date prior to the sending of the message, from the time it is received for transmission. It has no operation, unless there has been a partial performance by forwarding the message. When there is no attempt to start it, no effort to perform the contract, the right of action is not barred, unless the period prescribed by the statute of limitations has expired.

7. The next most important question relates to the measure of damages. It is manifest that, if the message was received and not forwarded, the plaintiff is' entitled to recover at least the amount paid for its transmission. For this reason, if no other, the affirmative charge requested by the defendant was properly refused. But the material question is, what, beyond this charge, constitutes recoverable damages ? It is insisted that the only damages recoverable are such as were in the contemplation of the parties at the time the contract was made; and that the message being in cipher, and its purport and importance not having been communicated, no damages in excess of the charge paid could have been in their contemplation. Counsel claim that such is the import of the rule established in Hadley v. Baxendale, 9 Exch. 341, and cite many authorities to support their contention. " That case was fully considered and reviewed in Daughtery v. American Union Telegraph Company, 75 Ala. 168. This decision is now assailed as unsupported by the weight of authority, and as not founded on reason,and right. The contention is based on a misunderstanding of the rule intended to be declared in the Hadley case, and of the effect of the ruling in the Daughtery case. We do not understand the latter as intending to depart from the principle declared in the former, when properly understood and applied. That principle as declared was construed by this court in reference to the facts of the case and the questions involved, which called for the declaration of a rule applicable to recoverable damages arising from special circumstances. The principle, as thus construed, is, that special circumstances which take the contract out of the usual course of things, must be communicated, in order to become an element of the duty in reference to which the parties are presumed to contract, and if unknown, damages suffered by reason of the existence of such special circumstances are not recoverable; but that, in all cases, the damages which would naturally, generally, and proximately result from a breach of the contract, “ according to the usual course of things,” are recoverable ; whether or not actually contemplated by the parties, the law conclusively presumes them to have been in their contemplation. Such, as this court understands, is the proper construction to be placed on the Avords, “ in the contemplation of both parties at the time they made the conract,” as- employed in the statement of recoverable damages in Hadley v. Baxendale. It is true the opinion in Daughtery's ease criticised this phrase, so often used as generally expressive of recoverable damages, as . inapt and misleading, subjecting the rule to misapplication; but, beyond this criticism of the mere language, no attack was made on Hadley v. Baxendale. The contention in Daugtiteri/s case was, as in this, that in respect to telegraph messages in cipher, the contents of which are not communicated, only the damages that were in the contemplation of the parties are recoverable. The ruling was, that the liability of 'the telegraph company for damages does not depend on the knowledge the operator may have of the contents of the message. The argument sustains the conclusion, and relieves any necessity of a re-discussion. We adhere to the doctrine declared, and hold that, on the facts shown by the record, if the message was not sent, and the failure to send it was in consequence of the fault or neglect of the company’s agents, as to which we intimate no opinion, the plaintiff is entitled to recover the damages which, according to the usual course of things, naturally grew out of such failure ; but not damages arising from any special circumstances, the same not having been communicated.

9-10. In estimating the damages, the contract AAdth Roth, as it would have been made had the message of acceptance been delivered, must be regarded as an entirety. The plaintiff can not accept a part of the contract, and claim its benefits, and reject another part, and avoid its burdens. The offer contained a condition, that Roth should be authorized to purchase, for account of plaintiff, November contracts in New York, at the closing quotations of the day previous. It is undisputed that plaintiff would have sustained losses on such contracts. The net profits which would have been realized from the contract as an entirety, constitute the actual damages suffered by plaintiff. There is, however, a modification of this rule. As soon as he was informed the message had not been sent, it became the duty of plaintiff to take, within a reasonable time, steps to prevent further loss. If he had the cotton to deliver, or had arranged to procure it for delivery, he should have made an effort to sell it; and if he made future contracts for its purchase, for the purpose of fulfilling his contract of sale, he was not authorized to extend them from month to month on a declining market, and fasten the loss on defendant. — Daughtery v. Am. U. Telegraph Co., supra.

11-12. Under the rule we have declared as regulating the measure of damages, the losses on account of the future contracts carried by plaintiff from the business of the previous season, and of the cotton bought from Clisby, can not be regarded or estimated as elements of recoverable damages; and the evidence showing such losses was irrelevant. They are uncommunicated special circumstances. Neither was the .evidence relevant which tended to show the embarrassed financial condition of plaintiff. It raised-a remote collateral issue, on which neither the liability of the defendant, nor the proper ascertainment of the damages depends.

13. But, as data from which to ascertain the amount of damages, the court, on the evidence, submitted to the jury as an inference of fact, whether there was an arrangement between the parties by which the cablegram was understood to mean, and did mean, a purchase of thirty-five hundred bales of cotton, and whether Both would have been bound to accept that number of bales. The evidence on which the construction of the contract was thus left to the jury, consists of a previous correspondence between the parties by mail, the cablegram, and the message delivered by plaintiff at the office of defendant. It is as follows: In May, 1884, plaintiff received a letter from Both, proposing to buy cotton, the contents of which are not made known. About the last of the same month, plaintiff wrote Both rejecting his offer, and proposing to sell him from 3,500 to 5,000 bales, if he would take the pence price in Europe, and November contracts in New York on the day the trade is made, as the basis. On June 14th, thereafter, Both sent plaintiff a cablegram in cipher, which is translated as follows: — “We offer firm for 1000 bales average middling, nothing under low middling, at 6-8 d. cost, insurance and freight and six per-cent., prompt shipment by steamer, price 1-32 of a penny more, September delivery, provided give us authority to buy, at yesterday's closing quotations, November, New York, for your account." In response the plaintiff delivered, for transmission to Both, the following message :-<-“Accept the offer. How much?” In view of the fact that the proposition of the plaintiff was to sell from 3,500 to 5,000 bales, the inquiry “How much,” indicated that plaintiff did not understand the cablegram to be an offer to purchase any definite number. If the construction of the contract was properly submitted to the jury, and the cablegrem can be reasonably construed as an acceptance of the previous proposition of plaintiff, no specific quantity of cotton was agreed on, and there was no operative sale.

But, was the construction of the contract properly submitted to the jury ? When the legal effect and operation of a written instrument depends upon evidence of collateral facts “in pais," the inference of fact may, and should be submitted to the jury; but when the evidence consists wholly of writings, and the legal effect and operation solely depend upon the meaning-and construction of the words employed, it is the province and duty of the court to construe written instruments and declare their legal effect. — Boykin v. Bank of Mobile, 72 Ala. 262. The evidence on which the construction of the contract was submitted to the jury, consists wholly of written instruments; being an offer of undisclosed terms to purchase, its rejection, accompanied by a counter proposition to sell, which, without more, is followed by the cablegram, and the acceptance of the offer thereby made. There is nothing indeterminate or obscure; nothing for construction, or requiring the aid of extrinsic evidence. The cablegram varies the terms of plaintiff’s proposition, not only as to the number of bales, but also as to the price at which the November contracts should be purchased; the proposition being, that the basis should be the prices on the day the trade is made, and the cablegram being the closing quotations of the previous day. On no principle of legal construction can an offer to purchase a specified number of bales on specified terms be regarded an acceptance of a proposition to sell a larger and indefinite number on different terms. Had Roth’s offer been accepted, he would not have been bound to take any number other than that stated in the cablegram. The court should have construed the writings, and instructed the jury that had the contract been completed, it would have been for the sale of one thousand bales and no more.

14. The record does not make a case for the allowance of exemplary damages. The operator was not cognizant of the contents or importance of the message. The evidence does not tend to show that there was any negligence, wanton or willful, or so gross as to evince an entire want of care, and to raise the presumption of “a conscious indifference to consequences.” — Leinkauff v. Morris, 66 Ala. 406; Ala. Gr. So. R. R. Co. v. Arnold, supra. Under the circumstances disclosed by the evidence, the plaintiff is only entitled to a just compensation for the actual loss sustained, if the failure to send the message was the result of negligence. The actual loss is the profits which he would have made had the contract of sale been perfected. In order to determine the profits, the difference between the contract price and what it would have cost plaintiff to procure the cotton and deliver it in Bremen in time for the September delivery, must be first ascertained. From this difference must be deducted the amount of the losses which plaintiff would have sustained, had the November contracts been purchased on the closing quotations of the day previous. The remainder, with the amount of the charge paid by plaintiff for the transmission of the message, with interest, is the measure of recoverable damages. On the other hand, if the completion and performance of the contract, regarded as an entirety, would have resulted in loss to the plaintiff; that is, if the losses on the November contracts would have exceeded the gains on the sale to Both; he is not entitled to recover any damages, as growing out of the mere failure to complete the contract, other than nominal.

15. The cablegram purporting that plaintiff should procure the cotton in this country, for shipment to Bremen, evidence of the price of cotton in Liverpool is irrelevant, there being no proof of an influencing or regulating relation, or of a mutual dependence, between the markets; and all evidence relating to gains or losses should be excluded, which does not tend to afford proper data from which to ascertain the actual gain or loss arising from the contract on the principles herein declared.

16. Evidence was introduced in reference to the character of the contracts. The defendant had the full benefit of the defense of illegality on the trial. There being no evidence tending to show that there was to be no delivery of the cotton, we need not consider the sufficiency of the pleas based on the gambling character of the contract. "We may observe, however, that the pleas do not aver any law of Germany, where performance was to be made, which declares such contracts illegal, and we are without presumption. Castleman v. Jeffries, 60 Ala. 380. And there is no immediate or dependent connection between the offer of Both and the future contracts of purchase made previously to the offer. These, we have already said, are not to be regarded as elements of damage.

17. By usage, Eoth was not bound by the acceptance of his offer, unless it was delivered to him within twenty-four hours after the receipt of the offer. It was delivered to the telegraph company for transmission, late on Saturday, and, to come within the required time, the delivery to Eoth would have been on Sunday. On this ground, the defendant contends that plaintiff’s act, sending the telegram, is illegal, and therefore he eould not have been legally damaged by the failure of the company to forward it. Ordinarily, a contract by telegraph is complete when a telegram of acceptance, the offer not having been withdrawn, is placed by the offeree with the telegraph company for transmission, the parties having adopted such mode of communication in making the contract. All that the plaintiff could reasonably have done to complete the contract, was done on Saturday. A delivery within the limited time would have related back, and constituted a complete contract from the time the telegram of acceptance was deposited in the Montgomery office. By statute, contracts made on Sunday, and not within the statutory exceptions, are void. — Code, § 2138. The contract to transmit the message was wholly made on Saturday, and its validity is not destroyed nor impaired by a condition, that in order to bind the offeree it must be delivered within a limited time, though compliance therewith may require delivery in Bremen on Sunday. The mere delivery of a telegram on Sunday is not an act prohibited by either statutory or common law; and in the absence of proof, we can not presume that such delivery is prohibited by the laws of Germany. The condition that the acceptance must be delivered within a specified time is a’ condition in favor of the offeree, and may be waived by him. The defendant can not set up that a compliance with the con-' dition would necessitate a delivery on Sunday, to avoid the consequences of an entire breach of a valid and legal contract.

Other questions presented become, under the views we have taken of the case, unimportant and immaterial, and their consideration is unnecessary.

Eeversed and remanded.

SOMEEYILLE, J.

— I do not concur in the rule announced in the case of Daughtery v. Amer. U. Tel. Co., 75 Ala. 168, and affirmed in the foregoing opinion, relating to the proper measure of damages for neglecting to transmit or deliver cipher dispatches, or such as are wholly unintellible to the agents of the telegraph company, upon whom the duty of transmission devolves. In my judgment, the rule which is best supported by reason, which more fairly comports with the ends of justice, and is sustained by the overwhelming weight of authority, limits the measure of damages in such cases to such as are nominal, or, at most, the price paid for sending the message. With due deference for the opinion of my associates, it seems to me that this is the necessary and logical result of the rule declared in Hadley v. Baxendale, 9 Exch. 341 (s. c., 23 L. J. Ex. 179), which comes to us with the enlightened sanction of the civil law, and is now so firmly incorporated into our common-law system of jurisprudence as "no longer to be doubted, or even modified in the accepted interpretation which has, almost with one voice, been imputed to it by the most learned law-writers, and eminent jurists of the present century. This rule has been universally accepted to mean, that liability for damages, in cases of mere breach of contract, must have some necessary relation to what may natually be expected to follow its violation, or to such results as may be fairly supposed, in the eye of the law, to have entered into the contemplation of the parties when they made the contract. The knowledge which is the basis of this liability, and which imputes notice of the object of the contract, can be derived only in one of two ways: (1) from the face of the message itself; or (2) from extrinsic information imparted by the sender. Unintelligible, or cipher messages, give no clue as to the special damage that may result from negligence in transmitting them, and afford no ground fpr the company to suppose that any loss other than nominal can follow from a failure to send them. The wisdom and justice of the rule is nowhere better illustrated than in the transmission of such dispatches. When the sender elects to studiously conceal/ from the operator the contents or nature of the message, he thereby deliberately puts the telegraph company in the dark-; ness of ignorance as to the character of the duty imposed upon it, or the magnitude of its liability. The company can not know, therefore, whether the breach of the obligation will probably be followed by a hundred, or hundred thousand dollars damages. This is both unreasonable and unjust, for the reason that telegraph companies are not common carriers, or insurers, but their liability, like that of ordinary bailees, is based upon the degree of care or negligence exercised by them in tbe discharge of their duties. The care and diligence must, then, upon every well settled principle of our jurisprudence, be in proportion to the duty in hand, varying according to the magnitude and nature of the subject-matter of the bailment. — Birney v. N. Y. Telegraph Co., 18 Md. 341; s. c., 81 Amer. Dec. 607, 614, note. Nothing is more important or just, in this view of the subject, than that the law should require the sender at his hazard to disclose the meaning or nature of the message, in order that the company may observe such precautions as may be necessary to guard itself against the risk incident to the duty to be performed. — U. S. Telegraph Co. v. Gildersleve, 29 Md.; s. c., 96 Amer. Dec. 519. The contrary rule, moreover, opens wide the door for the perpetration of unlimited frauds and perjuries, especially where, as now under the statutes of this State, parties to suits are permitted to testify without regard to the degree of interest they may have in the results of the pending litigation. The policy of the rule adopted in Daughters ease would seem, therefore, to be most pernicious in its tendencies.

In addition to these considerations, the rule, allowing only nominal damages in cases of this kind, is sustained, as I have said, by the overwhelming weight of authority in this country, as well as in England. 1 am opposed to any departure from this salutary and settled rule, based, as I believe it to be, upon the broad foundations of justice, fair dealing, and sound public policy. I need but refer to the following authorities in support of these views-Baldwin v. U. S. Telegraph Co., 45 N. Y. 744; s. c., 6 Amer. Rep. 165; Allen’s Tel. Cases, 613; Landsberger v. Magnetic Tel. Co., 32 Barb. 536; Daniel v. W. Un. Tel. Co., 61 Tex. 452; s. c., 48 Amer. Rep. 305; U. S. Tel. Co. v. Gildersleve, 96 Amer. Dec. 519; First Nat. Bank v. Tel. Co., 30 Ohio St. 555; s. c., 27 Amer. Rep. 486; Stevenson v. Montreal Tel. Co., 16 U. C. (Q. B.) 530; Gray on Communication by Telegraph (1885), §§87-97; W. Un. Tel. Co. v. Martin, 9 Brad. (Ill. App.) 587; 3 Suth. on Damages, 298-300; Wood’s Mayne on Damages, §§ 35, et seq.; Sanders v. Stuart, 45 L. J. C. P. 682; s. c., Moak’s Eng. Rep. 286; Beaupre v. Pac. & A. Tel. Co., 21 Minn. 155; Mackey v. W. Un. Tel. Co., 16 Nev. 222; Candee v. W. Un. Tel. Co., 34 Wis. 471; s. c., 17 Amer. Rep. 452; Camp v. W. Un. Tel. Co., 71 Amer. Dec, 472, note; 1 Sedgwick on Dam. (7th Eel.), 228, note; W. Un. Tel. Co. v. Hall, 124 U. S. 444.

The only other courts of last resort that have taken an opposite view touching this subject of liability for-cipher dispatches, so far as I have been able to discover, are those of Virginia and Florida, and these decisions are by divided courts. — W. Un. Tel. Co. v. Reynolds, 77 Va. 173; s. c., 46 Amer. Rep. 716; W. Un. Tel. Co. v. Hyer, Sup. Ct. Fla., 1886, 1 So. Rep. 129.