Western Union Tel. Co. v. Hall - 124 U.S. 444 (1888)
U.S. Supreme Court
Western Union Tel. Co. v. Hall, 124 U.S. 444 (1888)
Western Union Telegraph Company v. Hall
Argued November 30, 1887
Decided January 30, 1888
124 U.S. 444
The damages to be recovered in an action against a telegraph company for negligent delay in transmitting a message respecting a contract for the purchase or sale of property are, by analogy with the settled rules in actions between parties to such contracts, only such as the parties must or would have contemplated in making the contract, and such as naturally flow from the breach of its performance, and are ordinarily measured by actual losses based upon changes in the market values of the property.
And accordingly, where such an action was brought to recover damages caused by a delay in the transmission of a message directing the person to whom it was addressed to purchase property in the open market cm behalf of the sender, by means of which delay that person was prevented from making the purchase on the day on which it was sent, and it appearing that he did not make the purchase on the following day in consequence of an immediate large advance in price, nor at any subsequent day, and it not appearing further either that the order to purchase was given by the sender in the expectation of profits by an immediate resale or that he could have sold at a profit on any subsequent day if he had bought, held that the only damage for which he was entitled to recover was the cost of transmitting the delayed message.
The case as stated by the Court was as follows:
This was an action at law brought in the Circuit Court of Polk County, Iowa, by George F. Hall against the Western Union Telegraph Company, and by the defendant removed, on the ground of citizenship, to the Circuit Court of the United States for the Southern District of Iowa. The action was for the recovery of damages for alleged negligence on the part of the defendant in delaying the delivery of a telegraphic message received by it from the plaintiff at Des Moines, in the State of Iowa, to be delivered to the party to whom it was addressed at Oil City, in the State of Pennsylvania. The cause was submitted to the court, a jury having been waived in writing. A judgment was rendered in favor of the plaintiff for the sum of $1,800. The cause is brought here by a writ of error upon a certificate of a division of opinion between the judges upon certain questions which arose during the course of the trial, which questions, together with the facts necessary for their determination, are certified to us as follows:
"The court finds the following as the material facts in the case:"
"The plaintiff at eight o'clock A.M., November 9, 1882, furnished to the defendant, a telegraph company engaged in the business of receiving and sending telegraph dispatches at its office in Des Moines, Iowa, a message in the following form, and plainly written on one of the usual blank forms furnished by the company:"
"Form No. 2"
"THE WESTERN UNION TELEGRAPH COMPANY"
" All messages taken by this company are subject to the following terms:"
" To guard against mistakes or delays the sender of a message should order it repeated -- that is, telegraphed back to the originating office for comparison. For this, one-half the regular rate is charged in addition. It is agreed between the sender of the following message and this company that said company shall not be liable for mistakes or delays in the transmission or delivery or nondelivery of any
unrepeated message, whether happening by negligence of its servants or otherwise, beyond the amount received for sending the same, nor for mistakes or delays in the transmission or delivery, or for nondelivery, of any repeated message beyond fifty times the sum received for sending the same, unless specially insured; nor in any case for delays arising from unavoidable interruption in the working of its lines, or for errors in cipher or obscure messages, and this company is hereby made the agent of the sender, without liability, to forward any message over the lines of any other company when necessary to reach its destination. Correctness in the transmission of message to any point on the lines of this company can be insured by contract in writing, stating agreed amount of risk and payment of premium thereon at following rates, in addition to the usual charge for repeated messages, viz., one percent for any distance not exceeding 1,000 miles, and two percent for any greater distance. No employee of the company is authorized to vary the foregoing. No responsibility regarding messages attaches to this company until the same are presented and accepted at one of its transmitting offices, and if a message is sent to such office by one of the company's messengers, he acts for that purpose as the agent of the sender. Messages will be delivered free within the established free delivery limits of the terminal office; for delivery at a greater distance, a special charge will be made to cover the cost of such delivery. The company will not be liable for damages in any case where the claim is not presented in writing in sixty days after sending the message."
"NORVIN GREEN, President"
"THOS. T. ECKERT, General Manager"
"Receiver's No. ___. Time filed, 8 A.M. ___ check."
" Send the following message, subject to the above terms, which are agreed to."
" To Chas. T. Hall, Exchange, Oil City, Pa.:"
" Buy ten thousand if you think it safe. Wire me."
"GEO. F. HALL"
" Read the notice and agreement at the top."
"The same being furnished and received by the defendant for immediate transmittal to Charles T. Hall at Oil City, Pa., the usual and ordinary charge therefor being paid by plaintiff. Through the negligence and want of ordinary care on part of defendant's employee at Des Moines, the message so received was forwarded to Oil City, Pa., in an imperfect condition in this, that the name of the party to whom it was addressed was wholly omitted. The message was received at Oil City, Pa., at 11 o'clock A.M., November 9th."
"The operator of defendant at Oil City sent the message to the building known as the 'Exchange,' which was used by a board of trade engaged in the business of buying and selling petroleum, the hours of business extending from 10 A.M. until 4 P.M. The officers of the exchange or board of trade refused to receive the dispatch in question, and thereupon the operator at Oil City telegraphed to Des Moines for the purpose of ascertaining to whom the dispatch should be delivered, and thus ascertaining for whom it was intended, delivered it to Charles T. Hall at six o'clock P.M., November 9, 1882. Had it not been for the error in sending the dispatch without including the name of Charles T. Hall, it would have been delivered to him at Oil City at 11:30 A.M. November 9, 1882. The meaning of the dispatch was to direct Charles T. Hall to buy ten thousand barrels of petroleum, if, in his judgment, it was best to do so. Had the dispatch upon its first receipt at Oil City, Pa., been promptly delivered to Charles T. Hall, he would, by twelve M. of November 9th, have purchased ten thousand barrels of petroleum at the then market price of $1.17 per barrel for the plaintiff. When the dispatch was delivered to Charles T. Hall, the exchange had been closed for that day, so that said Hall could not then purchase the petroleum ordered by plaintiff. At the opening of the board the next day the price had advanced to $1.35 per barrel, at which rate said Charles T. Hall did not deem it advisable to make the purchase, and hence did not do so. It is not disclosed in the evidence whether the price of petroleum has advanced or receded since that date, November 10, 1882. The operators acting for the defendant had no
other knowledge of the meaning or purpose of the dispatch than is to be gathered from the message itself."
"The plaintiff brought this action to recover damages for the failure to properly and promptly transmit the dispatch in question, in the Circuit Court of Polk County, Iowa, the original notice being served upon the defendant on the twenty-second day of December, 1882. Under the statutes of Iowa, actions in the courts of that state are commenced by serving upon the defendant an original notice, which is signed by the plaintiff or his attorney and is addressed to the defendant. No summons or writ under the seal of the court is issued. The notice in this case was addressed to the defendant, and, after entitling the cause, proceeded as follows:"
" You are hereby notified that on or before the twenty-second day of December, 1882, the petition of plaintiff in the above-entitled cause will be filed in the office of the Clerk of the Circuit Court of the State of Iowa in and for Polk County, Iowa, claiming of you the sum of fifteen hundred dollars, as money justly due from you as a loss and damage suffered by the plaintiff by reason of your negligent failure to send and deliver a telegram, as set forth in said petition, on November 9, 1882, from plaintiff to Chas. T. Hall at Oil City, Pa., and that unless you appear thereto and defend before noon of the second day of the January term, A.D. 1883, of the said court, which will commence on the second day of January, A.D. 1883, default will be entered against you and judgment rendered thereon. Crom. Bowen and Whiting S. Clark, Attorneys for Plaintiff."
"No other presentation of the claim was made by plaintiff. Upon the foregoing facts, it is the opinion of the presiding judge that the law is with the plaintiff, and that he is entitled to judgment in the sum of eighteen hundred dollars, and it is so ordered as the judgment of the court."
"The judges holding said circuit court, and before whom said cause was tried, hereby certify that on said trial of said cause they were divided in opinion, and were unable to agree upon the following questions of law arising on said trial and necessary to be determined in order to finally determine said cause, to-wit: "
"1st. Can the defendant, having in the usual line of its business accepted said message from plaintiff for transmittal to the party named therein at Oil City, Pa., and having received its usual charge for such service, be heard to say that it was not bound to exercise ordinary care in transmitting the same, and that it is only liable to the plaintiff in damages in case of gross negligence on its part?"
"2d. Under the contract legally existing between the plaintiff and defendant whereby the latter assumed the duty of forwarding said message, the same being an unrepeated message, was the defendant bound only to the exercise of slight care or to the exercise of ordinary care?"
"3d. Under the contract legally existing between plaintiff and defendant, whereby the defendant assumed the duty of forwarding said message, the same being an unrepeated message, can the defendant in any event be held to respond in damages beyond the amount paid to the company for forwarding the said dispatch?"
"4th. Admitting the liability of defendant to respond in damages beyond the sum paid for forwarding the message, what rule is to govern in ascertaining the same? Are the damages merely nominal, or is plaintiff entitled to the difference in value of the oil at the time it would have been purchased for plaintiff had the massage been properly forwarded and the value at the time it could have been purchased after the actual delivery of the message to Charles T. Hall at Oil City, Pa., it being admitted that he did not make the purchase for the reason that, in his judgment, the price on the morning of November 10, 1882, was too high to justify purchasing?"
"5th. Was the message so obscure and uncertain on its face that the defendant should not be held to know that it pertained to a transaction involving loss and damage if the message was not properly and promptly forwarded?"
"6th. Was the service of the original notice in this cause a sufficient compliance with the clause in the contract providing that"
"the company will not be liable for damages in any case where the claim is not presented in writing within sixty days
after sending the message?"
"If not, is the right of recovery barred by the failure to present the claim in writing? "