True v. International Telegraph Co. , 60 Me. 9 ( 1872 )

Kent, J.

On the 12th of January, 1870, the plaintiffs received a telegram from a firm in Baltimore, offering to sell them a cargo of corn at ninety cents per bushel. Whereupon one of the plaintiffs went to the office of the defendants and asked for one of the 'night message blanks,’ and wrote thereon the following telegram, addressed to the said firm, and paid forty-eight cents, the sum demanded. ‘ To Radcliff & Patterson, Baltimore; — Ship cargo named at ninety; if you can secure freight at ten, wire us result. Geo. W. True & Co.’

It is admitted that the telegram was never delivered to Radcliff & Patterson. It is also admitted that the message was sent the same night to Boston, which is the western terminus of defendants’ line, and was thence forwarded by the Franklin Telegraph Company, with which the defendants have a business connection, making them responsible for the whole distance; the lines of the Franklin company extending through Baltimore to Washington. No reason is assigned for the non-delivery of the message.

1. The defendants admit their liability for the mistake or delay in the transmission, and for the non-delivery of the telegram. This is an important fact, and relieves the case of any difficulty in determining this primary and fundamental point of actual liability.

2. The defendants claim that this liability is limited to the repayment of the forty-eight cents. The plaintiffs claim damages for losses sustained by them, beyond this small sum, by reason of the non-delivery of the message.

3. This claim of exemption, on the part of the telegraph company, is based upon a special condition, contained in the paper, on which the message, signed by the plaintiff, was written.

That paper, called a ‘ Night Message Blank,’ contained, above the written message, several printed specifications of the terms and conditions on which these night messages would be received and forwarded. The last one was in these words:

‘ And it is agreed between the senders of the following message and this company, that the company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery of any message, beyond the amount received by said company for sending the same.’

Then follows, next above the written message, the words, ‘ Send the following _ message, subject to the above terms, which are agreed to.’

There can be no doubt that the above condition, with the assent signified by the signature of the plaintiffs, covers this, and all other cases of mistake or non-delivery. The question is whether the contract can legally be thus limited, and the defendants be thereby exonerated for all liability, to the extent claimed.

There has been much discussion in various cases, as to the nature of this comparatively new contract for the transmission of messages, by means of electricity; and the liabilities, limitations, and qualifications of this undertaking. It has been likened to the case of a common carrier, and it is contended by many, that all the strictness of the common law, applicable to carriers, is to be applied to telegraph companies. On the other hand, it is contended that they are but simple bailees for hire, to do a certain specified thing, —‘ looatio operis faoiendi.’ It is clear that telegraph corporations or companies exercise a public employment, or as said by C. J. Bigelow, 13 Allen, 226 (Ellis v. A. Telegraph Co.), a quasi public employment; certainly as much so as express companies, or stagecoaches, or railroads. They often invoke the exercise of the right of eminent domain. They everywhere announce a readiness to transmit messages for all applicants, at fixed rates. The nature of their undertaking is analogous to that of carriers. One assumes to transmit a letter, the other a larger, sealed package, to a given destination. Both are bound by certain rules of law, and held to a faithful and exact performance of a specified duty. So far as public policy is concerned, there seems to be but little reason for not holding both to the same rules. It might be interesting to follow out these analogies, and to enter upon the discussion of various questions, touching the extent of the common law and statute liabilities of these companies, and the extent of the right and power of these companies, to limit their liabilities by notice or conditions, apparently assented to by the other party.

But the case before us does not require this extended examination. It presents to us the single question, whether this condition is one which the company could rightfully impose upon its undertaking.

We are satisfied that telegraph companies, like all other corpor- ' ations and individuals, may prescribe, adopt, and enforce reasonable rules and regulations for the convenient and prompt and satisfactory performance of their duties and obligations, not inconsistent with that performance. We think they may go further, and establish stipulations and regulations, to some extent restraining and limiting their common-law liabilities, made known to, and directly or indirectly assented to, by those employing them.

We are equally well satisfied, that there is a limit to this power of avoidance of legal liabilities. It does not rest with such companies to fix these conditions absolutely, by which they may avoid duties and responsibilities, by their mere will, or by their views of self-interest, or desire to shield the company or its officers from the direct consequences of neglect or carelessness.

The public and those who employ these agencies to perform important services, have rights, which cannot be ignored or avoided by stipulations made by interested parties. When a company as sumes the position of offering its services generally, to all who may apply, under its character of a public corporation, it does not stand exactly in the same position as private individuals contracting in a single matter, on terms and conditions mutually agreed upon for that particular case.

The discussions in the text-books and in the decided cases have led to the conclusion, that whilst, in the first instance, the company may make its rules for the regulation of its business, and for the limitation of its liability, those rules must be reasonable, in view of all the circumstances, and of the nature of the business, its risks and responsibilities, the necessity of securing to the public, who may have Occasion to use this means of transmission, a reasonable protection against neglect or fraud or want of due care and effort, to perform punctually and correctly the act undertaken.

The company is not the ultimate judge of the reasonableness of an adopted rule. And in this single proposition, lies the gist of the whole matter. The court must determine in every case, when the question is directly raised, whether the particular restriction or qualification is a reasonable exercise of the powers residing in the company.

Several questions, as to reasonableness, have arisen under different conditions made by telegraph companies, and have been considered by the courts. One of them has arisen under a condition, which is found in the general blank of the defendant company, by which it is stipulated that the company will not be responsible, for more than the sum received, for mistakes or delays, or for non-delivery of any message, unless requested to repeat it on payment therefor, nor for more than fifty times the sum received for any repeated message, unless paid for insuring it.

It seems to be held, that however it may be in cases where the error causing the injury was occasioned by not repeating, or would have been manifestly prevented or avoided by repeating, yet this condition could not cover and excuse negligence or delay in delivering a message received, or any other nonfeasance or misfeasance not imputable to or excused by not repeating. Graham v. Western Union Telegraph Company, recently decided by the supreme court of Colorado, Am. Law Register, May 10, 1871; Burney v. N. York & Washington Telegraph Company, 18 Md. 341.

In the case at bar, no such question arises. No such condition is found in the ‘night message blanks’ of the company. These messages are of a special class, and are made subject to their own rules, as printed on the blanks. The charge for transmission of these night messages is considerably less than on those in the general business of the company, and, perhaps for this reason chiefly, the whole provision relating to repeating is omitted, and the sweeping and comprehensive provision by which in effect ail liability, beyond the price paid, is avoided is substituted. It is clear that a mere change of rates or prices cannot avoid legal liability. The duty and responsibility of the company cannot properly be measured by the price paid for the duty undertaken.

The single question on this part of the case is whether the stipulation, recited in full at the commencement of this opinion, is a reasonable one, or one which the company could lawfully impose as a condition of the contract.

After a careful reading, it seems difficult to give any other construction to this clause than a general and unlimited exemption from all and any liability beyond the sum paid. It is not limited to those cases where reasonable care and attention might not prevent mistakes or delays. It makes no reference to the subtle and mysterious agency employed in the transmission of messages, or to the peculiar liability to error in the work of the operator. As before stated, this provision, in relation to night messages, does not require the repeating of telegrams sent, before a liability should attach. It simply and nakedly exonerates the company from all liability (except for the fee paid) for any and all mistakes in the transmission of the message — and for all delays in transmitting — and all delays in delivery, or even non-delivery of the telegrams. These items seem to include all the cases of neglect, want of care or attention of which the company can be guilty, in reference to the performance of their duties and obligations under the contract. Even gross negligence and the want of the lowest degree of care are protected from complaint, although affirmatively proved by the other party. The operator may, from sleepiness or haste to close for the night, prefer to pay back the trifle paid, and leave the message unsent. Or a message may have been carelessly or even wantonly thrown into the waste basket, and never sent, or if sent it may have been treated in the same manner at the office of reception, and never delivered to a carrier, or if so delivered, it may have been thrown aside or destroyed by the carrier to save himself labor or trouble. And the sender, under this rule, must be debarred from all remedy beyond a repayment of the few cents paid. This is not the establishment of a rule or rules for the management of the business which are reasonable and proper for the orderly conducting of its business, or to protect the company against unfair or unreasonable claims. In this case no attempt is made to excuse the non-delivery; but a liability is admitted.

We think this stipulation is not reasonable, for it does not come within any established principle, applicable to employments of this nature, whether called public or private. It goes altogether too far in attempting to cover all possible delinquencies. ‘ A party cannot in such a way protect himself against the consequences of his own fraud or gross negligence, or the fraud or -gross negligence of his servants and agents.’ Ellis v. The American Tel. Co., 13 Allen, 234. In the case of Birney v. New York & Wash. Tel. Co., 18 Md. 341, the court say that ‘ courts and legislatures have been liberal in allowing companies to provide against such risks as arise out of atmospheric influences and kindred causes. At this point they have properly stopped. To permit them to contract against their own negligence would be to arm them with a most dangerous power; one, indeed, that would leave the public almost remediless. It must be borne in mind that the public have but little choice in the selection of the company which is to perform the desired service. They do not select the agents or employees, nor can they remove them. They are bound to take the company as they find it, and to commit to its agents their messages, however valuable they may be. Such being the case, public policy, as well as commercial necessity, require that companies engaged in telegraphing should be held to a high degree of responsibility.’

We restate our propositions and conclusions on this part of the case in order to p^svent any misapprehension of the extent and limitations of the rules laid down.

1. This company, and all others of a like nature, offering and undertaking to perform acts or services for all applicants, at fixed rates, exercise at least a quasi public employment.

2. Such company may adopt and enforce reasonable rules and regulations for the convenient and prompt and satisfactory performance of the act or duty undertaken.

3. This right in the company is not absolute and unlimited; but such rules are subject to the test of reasonableness in view of the rightful claims of public policy and private rights, and the enforcement of the obligation of good faith and honest effort to perform.

4. The test must be applied by the court, whenever the question arises on the validity of any such regulation, according to the rule before stated.

5. A rule, or stipulation, like the one in question, which covers all possible delinquencies, mistakes, delays, or neglects in transmitting or in delivering, or not delivering a message, from whatever cause arising, is not, for the reasons before stated, a reasonable regulation within the legal rule.

6. Such a rule is not saved from these objections, by the condition of a liability to repay, if required by the sender, of the trifle paid to them. It is a mere evasion of the legal liability and is never the measure of damages for non-performance of a contract'of this kind.

It is an insufficient and, therefore, an unreasonable stipulation, and cannot save the otherwise clearly objectionable condition of which it is a part.

Another question is presented relating to the rule of damages. It is agreed, according to the report of the case, that ‘ if the plaintiffs are entitled to recover a greater sum (than thirty-eight cents) as special damages upon the facts aforesaid, this court is to determine the rule upon which damages shall be assessed.

The measure of damages in cases of this kind has been much discussed in the text-books and decisions in this country and in England. It would seem to be impracticable to attempt to lay down any single and simple rule, which can be made to apply, without qualification, to every case. There are, however, certain general principles, which may be considered as applicable, gen-, erally, to these cases, and to be now quite well established.

Before considering these principles, with these qualifications and limitations, it may be well to examine the character and exact extent of the message in the case before us. We may then be better able to apply the rules, established or admitted, to this particular case. For it is the rule for this case, that we are called upon to define.

We assume that the plaintiffs can prove that the firm in Baltimore, to whom the telegram was addressed, had offered and agréed to sell a cargo of corn at ninety cents per bushel to the plain.tiffs ; that the telegram contained notice of acceptance of the proposition; that the condition named, ‘if you can secure freight at ten ’ (cents), could have been complied with, if the message had been delivered when it should have been; that, if it had been thus delivered, the bargain would have been closed, and the plaintiffs would at that moment have obtained the cargo at ninety cents per bushel, with freight at ten cents.

The pecuniary value, then, of this telegraphic message was in this, that it contained a part of a contract, and that the final and binding and effectual act, by which the bargain would become operative and complete. It seems clear, that such a message has a distinctive and clear pecuniary value, and demands of the party, who, for a reward, undertakes to convey it, knowing its contents, the same care and diligence; and that he is subject, at least, to like rules and liabilities, as if he (not being a common carrier), had undertaken to transport an article of merchandise.

On its face it gives clear intimation that it is of a business character, relating to a distinct and specific contract, and that, according to the well-known custom of merchants, it must have been understood by the operator or agent as an acceptance of an offer to sell a cargo at the price named, if freight at ten cents could be procured.

In this respéct it differs from a class of cases to be found in the reports, where the message wrns so brief or enigmatical, or so obscure, that it gave the operator no notice that it was of any value pecuniarily.

It differs also from another class in this, that it is not a general order to buy, if thought best, or if market had an upward tendency, or if there was a probable chance of profit, or any like condition. This telegram is a distinct acceptance of an offer, at a fixed price, of a cargo. Its binding efficacy was not dependent upon any contingency, or rise or fall in the market. If it had been duly delivered, the plaintiffs would have been, at that moment, the purchasers and owners at Baltimore of a cargo of corn at ninety cents, with freight at ten cents.' It was not delivered, and the plaintiff's were not at that time and place such owners, as between the plaintiffs and defendants, the plaintiff's were entitled to be, at such price. They would have been such, but for the neglect of the defendants. What is the measure of damages ? Clearly not the price paid for the transmission only. Paying that back would be rather in the nature of a rescission of the contract, than damages for its non-performance. And we have before determined, that the special condition was not binding so as to exonerate from all other damages occasioned by neglect or want of common care and attention in the performance of the contract and duty assumed.

A more difficult question arises in fixing an exact rule in determining the amount of damages in this case.

The general rule is familiar, and is among the rudimental axioms of the law.

In this State, the general doctrine was laid down at an early day in Miller v. Mariner's Church, 7 Greenl. 51, in an opinion of the court drawn by Mr. Justice Weston in his usually clear, discriminating, and accurate style, and precision in use of language. ‘ In general, the delinquent party is holden to make good the loss occasioned by his delinquency. But his liability is limited to direct damages, which, according to the nature of the subject, may be contemplated or presumed to result from his failure. Remote or speculative damages, although susceptible of proof, and deducible from the non-performance, are not allowed. And if the party injured has it in his power to take measui’es by which his loss is less aggravated, this will be expected of him. If the party entitled to the benefit of a contract can protect himself from loss, arising from a breach, at a trifling expense, or with reasonable exertion, he is bound to do so.’

The above extract, as it seems to us, contains the substance of the whole law applicable to this subject, and the germ from which long chapters and long opinions have been expanded. It is constantly cited as an early and authoritative statement of the legal rule on this subject.

The principles and rules laid down in this case have been reaffirmed in our court in many cases. In Berry v. Dwinel, 44 Maine, 255, it is held that ‘ remote and consequential damages, possible gains, and contingent profits are not allowed.’ The rule was applied in this case to possible or actual loss to plaintiff in the future, which the defendant set up as a defense to recovery of damages, for nondelivery of logs at a stipulated price and time.

Perkins v. P. S. & P. R. R., 47 Maine, 592; Ripley v. Mosely, 57 Maine, 70, and cases there cited. In that case it was held, that when the loss is not speculative nor dependent upon contingencies, but is one of the natural and direct results of the act, it may be recovered. But loss of probable profits is too uncertain and problematical to be a basis for estimation of damages.

In an English case, Hamlen v. G. N. Railway, 1 H. & N. 408, it is laid down as a general principle, that no damages can be given on contracts, which cannot be stated specifically.

Redfield, in his chapter on Telegraph Companies, § 1896, thus states it as applicable to such companies: ‘ The company must make good the loss resulting from any default on their part.’ But what loss ? Can a .party recover for every loss, or injury which he can show, by facts subsequently occurring, did in truth result to him from the failure of duty on the part of the other party ?

The clear preponderance and weight of the decisions are, that the qualification, which was thought formerly to be sufficient to meet all cases, is not satisfactory. That qualification was, that the injury must be the ordinary, natural, or even necessary result of the breach, But loss of profits may be clearly shown to have been occasioned by the failure, and from no other cause. So injury and loss may be directly traced to the same cause, when" the party is prevented from availing himself, by this breach of one contract, of some other collateral and indépendent contract entered into with other parties. Or where a party has been prevented from doing some act, or making some investment in his own business, not necessarily connected with the agreement in question.

These damages are disallowed, not because they cannot be traced directly as the immediate and undoubted effect of the breach, but because they are in their nature uncertain and contingent, and, perhaps more decidedly, because they are not such as would naturally flow from such a breach; and could not fairly be considered as having been within the contemplation of the parties at the time of entering into the contract. This rule necessarily excludes all remote, speculative, and uncertain results, as well as possible profits, advantages; and other like consequences which might have arisen, or which it can be shown would have arisen from the performance of the contract. This seems to be the doctrine in other States and in England. Squire v. Western Union Telegraph Co., 98 Mass. 232; Griffin v. Colver, 16 N. Y. 490; Leonard v. N. Y. Tel. Co. 41 N. Y. 565; Freeman v. Chute, 3 Barb. 426; Blanchard v. Ely, 21 Wend. 342; The Sch. Lively, 1 Gall. 315; Graham v. Western Union Tel. Co. (Colorado), before cited; Hadley v. Baxendale, 26 Eng. L. & Eq., a leading case on resulting damages. Other English and American cases might be cited, bearing' more or less directly on the subject. They can be found collected in. Sedgwick on Damages, and other text-books.

But the negation of certain elements still leaves the true rule-undetermined. This, we think, is to be found in the application of the principle, which, excluding all uncertain, problematical, and contingent profits, holds the party liable for the immediate and necessary result of the breach, and which may fairly be presumed, to have been in contemplation of the parties at the time, and" are-capable of being definitely ascertained by reference to established! market rates.

Now,, in-the case before us, the plaintiffs should have had, at the time when the dispatch should have been delivered, a cargo at ninety cents and freight at ten cents. The natural consequence of this neglect, one which might well be anticipated or be in contemplation of the parties, was that the bargain would be lost, and that the cargo might be sold to other parties, or the seller would decline to accept a repetition of the offer, afterwards at same price. Plaintiffs wanted the cargo and had a right to have it at the price named. What was the damage ?

Here comes in the second proposition in Miller v. Mariner's Church, viz., that the party should not at once abandon all attempts to procure the corn, and rest upon a claim for indefinite and possible profits which he might have made by a rise in the market, if he had obtained the article at the time, but must use reasonable diligence, after notice of the failure, to procure the same quantity, and the lowest freights, at the then market rates.

The sum, therefore, which would be a compensation for the direct loss and injury sustained by the non-delivery of this message, is the difference (if at a higher0rate) between the ninety cents named and the sum which the plaintiffs were or would have been compelled to pay at the same place, in order, by due and reasonable diligence, after notice of the failure of the telegram, to purchase the like quantity and quality of the same species of merchandise, and the same rule applies to any increase of freight from the sum named, if it be shown that the corn could have been shipped by the sellers, at that rate, if the telegram had been duly received.

The case of Squire v. W. U. Tel. Co., 98 Mass. 232, adopts this view, in a case very nearly resembling this in its facts.

Rittenhouse v. In. L. of Tel., 1 Daly, N. Y., where the operator made a mistake in the article ordered, it was held that the company must make good the difference between the price of the article actually ordered, at the time when ordered, and the price of the same article, if purchased as soon as the mistake was discovered.

U. S. Tel. Co. v. Wenger, 55 Penn. An order to buy stocks; mo reason given why not delivered; a case of negligence; stocks ordered not bought on the day ; they would have been, if telegram had been received, but were purchased three days afterwards at an advance. That difference, the court say, is undoubtedly the damages the plaintiff has sustained and is entitled to recover. ‘ The dispatch was such as to disclose the nature of the business to which it related, and that loss might be very likely to occur if there was a want of promptitude in transmitting it.’ Leonard v. N. Y. Tel. Co., 41 N. Y. 565, before cited, a case of mistake; Griffin v. Culver, 16 N. Y. 490; DeRulte v. N. Y. & Al. and B. R. Tel., 1 Daly, 547; Parks v. Alta Cal. Tel. Co., 13 Cal. 422.

In our own State, in the case of Berry v. Dwinel, before cited, the rule, in an analogous case, is thus stated; ‘ When a party contracts to deliver goods at a particular time and place, and no payment has been made, the true measure of damages is the difference between the contract price and that of like goods at time and place where they should have been delivered.’

And so it has been held that a common carrier, who unreasonably delays to transport or deliver goods intrusted to him, will be held to pay the difference between the market value at time and place when and where they ought to have been delivered, and the market value at that place on day of actual deliveiy. And this although no special contract as to time, and no special intended use, and no deterioration in the quality of the article. Cutting v. G. T. R. R., 13 Allen, 381. The same decision has been made by this court in Ball v. Railroad—not reported. See Weston v. G. T. R. Co., 54 Maine, 376.

Case remanded to the superior court, the damages to be assessed by the presiding judge of that court, upon further hearing, according to agreement of parties, and the rule of damages given in the opinion in the case.

Cutting, Walton^ Barrows, and Danforth, JJ., concurred.