Western Union Telegraph Co. v. Nester
309 U.S. 582 (1940)

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U.S. Supreme Court

Western Union Telegraph Co. v. Nester, 309 U.S. 582 (1940)

Western Union Telegraph Co. v. Nester

No. 597

Argued March 8, 1940

Decided April 22, 1940

309 U.S. 582




A telegraph company undertook to transmit a money order, the contract providing that it should not be liable for damages for delay or nonpayment, though due to negligence,

"beyond the sum of five hundred dollars, at which amount the right to have this money order promptly and correctly transmitted and promptly and fully paid is hereby valued."

Held, that the sum specified was not intended to prescribe a definite liability (liquidated damages),

Page 309 U. S. 583

but is a limitation upon the maximum permissible recovery for actual loss or damage properly alleged and shown by evidence. P. 309 U. S. 587.

106 F.2d 587 reversed.

Certiorari, post, p. 643, to review the affirmance of a judgment against a telegraph company in an action for breach of a money order contract. 25 F.Supp. 478.

MR. JUSTICE McREYNOLDS delivered the opinion of the Court.

Respondents, Nester and Charles, are partners in mining operations near Aramecina, Republic of Honduras. September 1, 1937 at Los Angeles, California, petitioner, the Telegraph Company, in the ordinary course of business, received from Nester one hundred and fifty dollars for transmission by unrepeated message and delivery to Charles at Aramecina. It failed so to do.

In a "Complaint for damages for breach of duty" filed against petitioner in the District Court, Southern District, California, respondents claimed the failure to deliver resulted from gross negligence, and that, as a direct consequence, they suffered specified losses amounting to $7,600. For that sum they asked judgment.

Petitioner denied liability, and, as an affirmative defense alleged:

"The money order referred to in the plaintiff's complaint was delivered to and accepted by the defendants subject to the terms of the standard money order contract of The Western Union Telegraph Company, a copy of which is hereto annexed. "

Page 309 U. S. 584

It is not now denied that this standard form had been duly filed with the Federal Communications Commission, and was treated by the parties as a statement of the contract between them. Certain of the conditions contained therein are printed below. 309 U. S. S. 585

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