Western Union Telegraph Co. v. Sweeney ( 1934 )

On September 7, 1932, H. B. Sweeney purchased 100 shares of General Motors stock, for $18.50 per share, amounting with certain service charges included to $1,887.50. A cash payment of 415 was made, and the contract, which was in writing, obligated the purchaser to pay the remainder in installments of $73.60 on the 6th day of each month thereafter, beginning with October 6, 1932, together with interest, etc. The contract further obligated the purchaser in the event the market price of the stock depreciated 10 per cent., or more, to pay Pulliam Co., the sellers and brokers, a satisfactory sum to cover such depreciation, and in the event of failure to do so the brokers had the right and option, without notice, to cancel the purchase agreement and terminate all rights thereunder. In pursuance of the last-named provision, Pulliam Co., wired Sweeney on September 13th, as follows: "Further sharp declines in market necessitate you forwarding Three Hundred Dollars to protect contract advise by wire." This telegram was received at the Western Union's local office in Knox City at 10 o'clock a. m., and delivered at 1 o'clock p. m. of the same day. Promptly upon delivery Sweeney wired the brokers as follows: "Mailing check this eve sell contract when it reaches nineteen." When this telegram was received the brokers had already sold the stock at $15 per share. Sweeney could have, within three or four days after his stock was sold, repurchased the same at from $15 per share to $14.75 per share, but failed to do so. Had he bought it at that price and held same until on or about September 25, 1932, when the price was $19, or more, he would have made enough to offset his loss.

This suit was brought by Sweeney against said Telegraph Company to recover damages for alleged negligence in the failure to promptly deliver said telegram. Upon a nonjury trial the court gave plaintiff judgment for $402.50 with interest from September 13, 1932, at the rate of 6 per cent. per annum. The defendant Western Union Telegraph Company has appealed

The appeal presents the single question of whether or not under the facts above stated the duty of plaintiff to exercise reasonable care to mitigate the damages resulting from defendant's negligent failure to deliver said telegram within a reasonable time included, as a matter of law, the duty to repurchase the stock sold, such stock being obtainable at, or below, such sale price. The trial court having resolved this question, along with defendant's negligence, against the defendant, the judgment of the court below cannot be disturbed unless it appears as a matter of law that the plaintiff was under the legal duty to repurchase said stock in an endeavor to prevent or minimize the damages.

The duty with which it is sought to charge the plaintiff, and the failure to perform which is relied upon to relieve the defendant from the consequences of its negligence, is variously stated, but sufficiently so in Tex.Jur., as follows: "It is a fundamental rule that one who is injured in his person or property by the wrongful or negligent acts of another, whether as the result of a tort or a breach of contract, is bound to exercise reasonable care and diligence to avoid less or to minimize the consequences of such injury; he must protect himself from the injurious consequences if he can do so by ordinary effort and care and at a moderate expense." 13 Tex.Jur. p. 99. We are impressed with the logic of the view expressed by Mr. Williston, as follows: "It is usually said that the plaintiff is under a duty to mitigate damages; but the truth seems rather to be that damages which the plaintiff might have avoided without loss to himself are not really caused by the defendant's wrong, and therefore are not to be charged against him" Williston on Contracts, p. 2412, § 1353. If that were a correct statement of the principle, the burden of proof would be upon the plaintiff to negative negligence on his part in failing to prevent or mitigate damages. Evidence relating to such duty, and the breach thereof, would be developed under the plaintiff's pleading of the amount of damages. But the law is not so interpreted by the courts of this state. As said in Gulf, C S. F. Ry. Co. v. McMannewitz, 70 Tex. 73, 8 S.W. 66, 67: "This is but a branch of the doctrine of contributory negligence." In Belcher v. Missouri, K. T. Ry. Co., 92 Tex. 593, 50 S.W. 559, 561, the Supreme Court said: "If the plaintiff showed negligence on the part of the defendant, he was prima facie entitled to recover all of the damages sustained, and the burden of proof rested upon the defendant to prove the negligence by which plaintiff enhanced the amount of the damage or failed to prevent the injury, as well as the extent to which such damages were enhanced, or to which they might have been lessened by the use of ordinary care on the part of the plaintiff."

As in the case of ordinary contributory negligence, the burden of tendering the issues by proper pleadings is upon the defendant. 13 Tex.Jur. 335, § 187; Porter v. Burkett, 65 Tex. 383; Baker v. Cobb, (Tex. Civ. App.) 221 S.W. 314; World's Special Films Corp. v. Fichtenberg (Tex. Civ. App.) 176 S.W. 733; Amarillo Oil Co. v. Ranch Creek Oil Gas Co. (Tex. Civ. App.) 271 S.W. 145; Denby Motor Truck Co. v. Mears (Tex. Civ. App.) 229 S.W. 994; Panhandle S. F. R. Co. v. Norton (Tex. Civ. App.) 188 S.W. 1011; Missouri, K. T. R. Co. v. Smith,49 Tex. Civ. App. 610, 108 S.W. 1195. Of course, it necessarily follows that the burden of proof is upon the defendant. In addition to cases already cited, see Austin N.W. R Co. v. Anderson, 85 Tex. 88, 19 S.W. 1025; Stanley Manly Boys' Clothes, Inc., v. Hickey, 113 Tex. 482, 259 S.W. 160; Pandhandle S. F. R. Co. v. Norton, supra; Houston, E. W. T. R. Co. v. Browder (Tex. Civ. App.) 265 S.W. 227; Denby Motor Truck Co. v. Mears, supra; International G. N. R. Co. v. Sandlin, 57 Tex. Civ. App. 151,122 S.W. 60. It is believed that the only respect in which the principle in question differs from contibutory negligence in the applicability of any rule of law, including matters of procedure, is that while the latter is a defense against liability, the former is a defense pro tanto against the amount of damages. As in contributory negligence proper, the issue is ordinarily one of fact for the determination of the jury. Cooper v. City of Dallas, 83 Tex. 239, 18 S.W. 565, 29 Am. St. Rep. 645; St. Louis S.W. R. Co. v. Ricketts, 96 Tex. 68, 70 S.W. 315; Galveston, H. H.R. Co. v. Crispi, 73 Tex. 236, 11 S.W. 187; Western Union Tel. Co. v. Johnsey, 49 Tex. Civ. App. 487, 109 S.W. 251; Western Union Tel. Co. v. Bryson, 25 Tex. Civ. App. 74, 61 S.W. 548; Waco Artesian Water Co. v. Cauble, 19 Tex. Civ. App. 417, 47 S.W. 538. Also, as in contributory negligence the question becomes one of law only when the facts are undisputed and reasonable minds can draw but one conclusion therefrom. Galveston, H. H.R. Co. v. Crispi, supra

The issue of plaintiffs negligence in failing to prevent or mitigate the damages was, under the law as declared in these decisions, very defectively pleaded. Apparently, it was thought that if within three or four days after plaintiff had notice that the stock had been sold, the price had not advanced beyond that at which the sale was made, plaintiff's failure to purchase back the stock would be at least presumptively negligence. It was not alleged that he was financially able to repurchase the stock. Such fact was not sufficiently shown by the allegation that he had sent $300 to cover margins. No fact was alleged to show that plaintiff knew that by a repurchase of the stock he could prevent or mitigate the damages. That was a thing plaintiff could not know.

However, since no question is made regarding the sufficiency of the pleadings, we shall dispose of the appeal upon the assumption that plaintiff's negligence in failing to prevent or mitigate damages was sufficiently pleaded. Doe, the evidence show conclusively as a matter of law that plaintiff failed to exercise ordinary care to mitigate his loss by failing to repurchase the same amount of stock at $15, or less, per share? We are inclined to think that the evidence shows conclusively that he was not negligent. By the defendant's negligence, for which damages are sought, plaintiff lost an investment. Was he under duty to make another investment in an effort to save the defendant from loss? This question seems to have been considered by the Supreme Court in the case of Western Union Tel. Co. v. Sheffield, 71 Tex. 570, 10 S.W. 752, 755, 10 Am. St. Rep. 790, wherein it was held: "A party is not required to invest further, in order to secure himself against the consequences of a breach of a contract by which he suffers injury." The investment was of a speculative character. Its nature was unmistakably disclosed in the telegram. The message itself charged the defendant with the knowledge that the value of the investment was not necessarily controlled by temporary depreciations in the price of the stock. Conceding the fact, which the evidence does not show, that plaintiff was able to repurchase the same or a like amount of the stock at the depreciated price, he could not know, at least he could not know with reasonable certainty, that he would thereby recoup even in part the loss he had sustained. Suppose plaintiff had purchased $300 worth of the stock at $15 on a margin basis, and by subsequent declines that had been lost. Would the defendant be justly chargeable therewith as a part of the damages ? Unless it would, then the duty of plaintiff to make the purchase did not exist. If the exercise of reasonable care on plaintiff's part to mitigate the threatened damage required him to expend $300 in the repurchase of stock, and then if that too was lost he could, unless precluded for some other reason, recover the amount as damages. Wichita Valley R. Co. v. Wallace (Tex. Civ. App.) 17 S.W.2d 150.

It is, however, unnecessary for us to rest our decision solely upon the conclusion that as a matter of law the evidence showed no negligence on the part of the plaintiff. If plaintiff was not negligent as a matter of law, then there can certainly be no doubt, we think, that the issue was one of fact which is concluded by the findings of the trial judge.

Being of the opinion that no error is shown, and that the judgment of the court below should be affirmed, it is accordingly so ordered.