Hamilton Employment Service, Inc. v. New York Telephone Co.

For several years plaintiff was a subscriber to defendant's telephone service in New York city. It occupied a main office in Church street and a branch in Madison avenue with separate numbers assigned to it by the telephone company. During those years plaintiff's numbers appeared correctly listed in defendant's directory. In the volume issued for December, 1928, the number for its main office was omitted and the one for the branch office incorrectly listed. The mistakes do not appear other than unintentional. As a result of these omitted and incorrect listings, plaintiff expended moneys in advertising in newspapers, issuing circulars and employing solicitors in order to communicate with its customers and it brings this action to recover damages for the breach of contract in failing to publish the correct numbers. In the absence of reasonable contract stipulations limiting liability for omissions and errors, defendant might perhaps be liable for breach of contract. Courts in other jurisdictions have so held or, at least, intimated. (Masterson v. Chesapeake Potomac Tel. Co., 299 Fed. Rep. 890; Baldwin v. Chesapeake Potomac Tel. Co., 156 Md. 552;Schwanke v. Wisconsin Tel. Co., 227 N.W. Rep. 130.) Telephone companies are, no more than telegraph companies, insurers, but they are bound to exercise adequate diligence. (Weld v. PostalTelegraph-Cable Co., 199 N.Y. 88.)

As part of the contract of service, appears a condition or regulation as follows: "No liability for damages arising from errors or omission in the making up or printing of its directories shall attach to the company, except in the case of charge listings, in connection with which its liability shall be limited to a refund at the monthly rate for each listing for the time an error or omission continues after reasonable notice in writing to the company." Unless this condition is reasonable, it is not binding upon plaintiff. The preparation and delivery of a directory is not a primary part of the business of a telephone company. It is wholly subordinate to the main transaction of transmitting messages. A directory may be compared to a railroad time table. Courts do not hold a carrier to the same degree of liability for mistakes in time tables as for negligence in operation of trains. The principle of Weld v. PostalTelegraph-Cable Co. (199 N.Y. 88, 98) seems to support the proposition that the regulation at bar in so far as it does not seek immunity from gross negligence or willful misconduct, is reasonable. While holding that a telegraph company is without power to limit its liability for gross negligence or willful misconduct, this court citing many precedents has gone on record to the effect that those who are not insurers "have the power to limit their liability in cases where mistakes occur through no fault on their part, or for such mistakes of their employees as will occur through ordinary negligence in spite of the most stringent regulations or the most vigilant general oversight." The complaint before us alleges negligence without characterizing it as gross or stating facts from which gross negligence could be inferred. Perhaps the reason for defendant's errors will never be known. Certainly, in the absence of an allegation of gross negligence or willful misconduct, nothing worse will be inferred than ordinary negligence such as some unaccountable mistake by an employee who could not be entirely controlled by any regulation however stringent. In the crowding and rush of preparing a volume containing hundreds of thousands of names and numbers, complete freedom from error is practically impossible. In view of the language of the limiting regulation, the right to make reasonable regulations and the absence of an allegation of gross negligence or willful misconduct, the dismissal of the complaint must be upheld.

The judgment should be affirmed, with costs.

CARDOZO, Ch. J., POUND, CRANE, LEHMAN, KELLOGG and HUBBS, JJ., concur.

Judgment affirmed.