Hibbard v. Western Union Telegraph Co. , 33 Wis. 558 ( 1873 )

Cole, J.

The facts of this case upon which the questions of law arise, are few and undisputed. The plaintiffs, who were engaged in buying and selling grain in Milwaukee, through their agent, on tbe 6th of May, 1872, at Port Huron, Michigan, delivered, at about 7: 25 P. M., to the defendant company for transmission over its line, a message directed to their agent at Milwaukee, in the following language; “ Buy twenty thousand, seller June, pay telegraph there.” This message was written upon one of the printed blanks furnished by the company for the transmission of night dispatches and was sent by the company to its agent at Milwaukee during the night of the 6th, and could have been delivered to the agent of the plaintiffs by 9 A. M. of the 7th, but was never delivered, and was lost. On the trial no explanation was given, nor excuse shown, on the part of the company, to account for the nondelivery of the dispatch. It is admitted that the message meant, and would have been' understood by plaintiffs agent as directing him to buy twenty thousand bushels of No. 2 wheat, deliverable during the month of June, and that he was to pay the expense of sending the dispatch. If the agent had received the dispatch on the 7th, when it should have been delivered, he could and would have purchased wheat at Milwaukee for the market price of $1.48 per bushel. Wheat advanced in the market on the 8th to $1.55 per bushel, when the agent sold some at that price. The agent received from the plaintiffs on the 8th, in the afternoon, a letter advising him of the sending of the dispatch. Erom the 8th of May to the 29th -of June wheat fluctuated in price, and on the last named day, being Saturday and also being the last day the seller would have had for the delivery of the wheat had a contract been entered -into according to the dispatch, its market price was $1.23 3-4 per bushel. The contemplated bargain or transaction was what is termed in the chamber of commerce of Milwaukee “ buying on option,” which means that the seller should deliver the wheat sold at any time at his own option in the month of June. The plaintiff’s agent, on the receipt of the letter on the 8th of May, took no steps to make the purchase, and no purchase was in fact ever made as intended when the dispatch was delivered to the company for transmission. The action is brought to recover damages alleged to have been sustained by the plaintiffs in consequence of the nondelivery of the dispatch.

The blanks furnished by the company for night dispatches, and subject to which the message in question was sent, provide that the company will receive messages for all stations east of the Mississippi river, to be sent during the night, at one-half of the usual rates, on condition that “ the company shall not be liable for error or delay in the transmission or delivery, or for nondelivery, of such messages, from whatever cause occurring, and shall only be bound in such case to return the amount paid by the sender.”

It is now claimed on the part of the defendant that this stipulation restricting its liability is valid, and exonerates it from payment of all loss or damage which may result from errors or delay in the transmission or delivery, or for the nondelivery, of a night message, from whatever cause occurring. The plaintiffs, it is said, were competent to assent to this stipulation, and did assent to it and are therefore bound by it, having chosen themselves to take the risk of the dispatch reaching its proper destination. If they were not willing to take that risk, it is said, they should- have paid the higher rate and sent the dispatch under the contract for transmitting day messages, in which case the company would have been responsible for the correct transmission and prompt delivery of the dispatch to their agent.

In the case of Candee against this same defendant, decided at the present term,^* 'the validity of this condition exempting the company from liability on account of the negligence of its servants in the performance of their duty, was considered. It was there held that such a regulation, adopted for the purpose of protecting the company against the consequences of the negligence or fraud of its agents, was an unreasonable condition, and was void, as against sound public policy. The course of reasoning by which this conclusion was reached, will be seen on reference to the opinion in that case ; and no attempt will be made to fortify or add to that reasoning here. It is sufficient to say that upon the admitted facts there was a clear breach of duty by the company in failing to deliver the message which it had undertaken for a valuable consideration to transmit and deliver, and that it must be held responsible therefor. The message was received in Milwaukee, and might and should have been delivered to the agent of the plaintiffs by 9 A. M. of the 7th, if the employees of the company had exercised due care and attention to the business which • they had undertaken to prosecute. Eor, in the language of the court in Baldwin v. The United Slates Telegraph Co., 45 N. Y., 744-751, “while telegraph companies are not insurers, and do not guaranty the delivery of all messages with entire accuracy, and against all contingencies, they do undertake for ordinary care and vigilance in the performance of their duties, and to answer for the neglect and omission of duty of their servants and agents; ” and this degree of liability the law imposes upon them as well in the transmission and delivery of a night as of a day dispatch. The defendant company was therefore responsible for the neglect or default of its servants to deliver the message, and must respond for whatever damages the plaintiffs have sustained by reason of such negligence.

And this brings us to a consideration of the important question as to the proper rule of damages applicable to the case. The court below found as a conclusion of law, that no injury had been sustained by the plaintiffs for which the court could compute damages, and ordered judgment for the defendant. In this we think the court was clearly wrong, because the plaintiffs were entitled to recover nominal damages, at least, as the consequence of the breach of contract on the part of the company in failing to deliver the message. But are they further entitled to recover the profits on the expected bargain or purchase which was never made, but which, it is claimed, might have been consummated, had the dispatch been properly delivered? It is argued in their behalf, that the company is bound to pay for its default the profit which they might have realized, providing their agent had purchased the twenty thousand bushels of wheat for $1.48 per bushel on the 7th of May, and resold the same on the 8th, when wheat was worth $1.55 per bushel. Is this the true rule of damages applicable to the facts ? It seems to us not.

It is a most material fact to be kept in view, that no purchase or bargain for wheat was ever made. On the 8th of May, when the agent was informed of the sending of the dispatch, he confessedly took no steps to make the purchase. If the dispatch had been properly delivered on the 7th, and he had made the purchase according to the order of his principals, they would have lost heavily on the contract had they not resold before they actually had the wheat in possession. Eor, on the 29th day of June, when the vendor might have delivered on the contract, wheat was worth in the market 24 1-4 cents on a bushel less than when the agent would have purchased. Now, suppose the company had said to plaintiff’s agent on the 7th : “ Such a dispatch has been received at the Milwaukee office, and has been mislaid or lost through the carelessness or fault of our employees, but we will assume the contract you were ordered to make, and deliver the twenty thousand bushels of wheat to your principals, of the designated quality, for $1.48 per bushel, at our option, in June.” What would have been the measure of damages, if the company had made 'default in the performance of this contract ? Mr. Sedgwick lays down the rule on the subject as follows : “ When contracts for the sale of chattels are broken ,by the vendor failing to deliver the property according to the terms of the bargain, it seems to be well settled, as a general rule, both in England and the United States, that the measure of damages is the difference between the contract price and the market value of the article at the time when it should be delivered, upon the ground that this is the plaintiff’s real loss, and that with this sum he can go into the market and supply himself with the same article from another vendor. It follows from this rule, that, if at the time fixed for the delivery, the article has not risen in value, the vendee, having lost nothing, can recover nothing.” Sedgwick on Damages, p. 260. So that it appears, if the company itself stood in the place of the vendor of the wheat, and failed to fulfill its contract, the plaintiffs could recover nothing, because they could purchase the wheat on the 29th of June, at 24 1-4 cents on the bushel less than they had agreed to pay. They would therefore not have been injured by the company’s default to deliver the wheat on its contract Now, what ground is there for saying that the defendant is in a worse position on account of its failure to deliver the message than it would have been if it had itself assumed the contract as of the time the dispatch should have been delivered ? We confess we see no satisfactory reason for extending the liability of the company beyond what it would have been had a contract for the purchase of the wheat been actualty made with it, and if it really stood in the place of the vendor. But it is argued, if the message had been promptly delivered, the agent might have made the purchase on the 7th, and resold on the 8th, and thus have realized a profit on the speculation. Even if the company were the vendor of the wheat, the plaintiff could not recover this loss of profits on a resale. That question was expressly so decided in Williams v. Reynolds, 18 Eng. C. L., 493 ; and we consider that as a strong authority adverse to the claim of the plaintiffs. That was an action on a contract for the sale of cotton by the defendants to the plaintiff, at the price of 16 3-4 d. per pound, to be delivered in the month of August. The plaintiff contracted to sell the same quantity of cotton, to be delivered in the month of August, at 19 3-4 d. per lb. The defendants failed to deliver the cotton sold by them, and the plaintiff was consequently incapacitated from performing Iris subcontract for the sale at a higher price. He claimed damages for a breach of the contract by the defendants, including the loss of profit which he would have realized on the resale. But the court held that the proper measure of damages was the difference between the contract price (16 3-4 d. per lb.) and the price (18 1-4 d. per lb.) on the last day of deliver}’-, and that the plaintiff was not entitled to recover damages for the loss of profit on his subcontract. Such damage, the judges in that case say, does not naturally flow from the breach of the contract to deliver ; nor is it such as must be deemed within the contemplation of the parties at the time the contract was entered into, in case of a breach of it. The case of Hadley v. Baxendale, 9 Exch., 341, is cited as laying down the true rule ; a case which this court referred to with approbation in Shepard v. Milwaukee Gas Light Co., 15 Wis., 318. In the Shepard case, Mr. Justice Paine refers to a class of cases where parties contract for articles with reference to use or sale on some particular occasion, and where, by reason of want of time, or their situation with reference to the market, they are unable to supply themselves for that occasion in case of failure to deliver, where the difference between the contract price and market price at the time when they ought to have been delivered does not completely indemnify the injured party. See Richardson v. Chynoweth, 26 Wis., 656. But the general rule is — where the action is brought by the vendee for a failure to deliver — the difference between the price agreed'to be paid and the market price of the article on the day delivery should have been made on the contract. Havermyer v. Cunningham, 35 Barb., 515; Hamilton v. Ganyard, 34 id., 204. Now, applying the rule laid down in Williams v. Reynolds and Hadley v. Baxendale, how can it be said that the loss of profit upon a contract which the agent of the plaintiffs might possibly have entered into, but which he never did, naturally resulted from a failure to deliver the message, or could reasonably be supposed to be within the contemplation of the parties as a probable result of such failure, when the dispatch was left with the company to be sent over its line ? If the agent had received the dispatch so as to make the purchase on the 7th, what presumption is there that he would have resold at a profit ? None whatever. “ Selling at a profit is not the natural result of buying with an intention to resell.” Shee, J., Williams v. Reynolds. Eor “that depends on circumstances altogether out of the ordinary course of things.” And therefore, if we presume that the agent would have made the purchase according to the order if the dispatch had been delivered, we can not presume that he would have sold the next day so as to realize a profit. The breach of contract complained of is the failure to deliver the message, and the recovery should be limited to an indemnification of the plaintiffs for actual loss sustained. Profits upon a contract never made are quite too remote and uncertain to be taken into consideration. Nor can it be said that the “ parties may fairly be supposed to have contemplated ” such profits as an element in the damages which might result from the failure to deliver the dispatch.

Since this opinion was prepared, my attention has been called to the decision of the court of appeals of New York, in Baker v. Brake (published in The Alb. Law Jour., Nov. 29,1873), which in its general reasoning supports the result reached in this case.

It is apparent that in this case there was a technical breach of contract on the part of the company, for which the plaintiffs were entitled to recover nominal damages. But this would be the extent of the recovery. A judgment for nominal damages would not have carried costs, because the action might have been brought in a justice’s court. The dispatch was to be paid for on delivery in Milwaukee; but, as it was never delivered, the plaintiffs were at no expense for its transmission. And while the county court was wrong in not rendering judgment for the plaintiffs for nominal damages, yet in a case like the present, this constitutes no ground for a reversal of the judgment. This point was so ruled in Laubenheimer v. Mann, 19 Wis., 519; and the doctrine of that case was approved in Eaton v. Lyman, 30 Wis., 41, and in Jones v. King, ante, p. 422. According to the rule laid down and approved in these decisions, the judgment in the present case must be affirmed.

By the Court. —It is so ordered.

* Tbe case bere referred to was beld on a motion for a rehearing, and will be reported as of tbe January term, 1874. Rep.