A company engaged in transmitting telegraphic messages in this
country and by cable between here and France established a tariff
offering a lower rate for unrepeated and a higher rate for repeated
messages, and limiting its liability for mistake in transmitting
unrepeated messages to the tolls accruing to it therefrom, and
filed the tariff with the Interstate Commerce Commission under the
Interstate Commerce Act, as amended June 18, 1910, c. 309, § 7, 36
Stat. 539; an unrepeated message sent by plaintiffs from Spain
passed over other line to Havre, where it was received by the
company
Page 256 U. S. 567
and sent to New Orleans, an error being introduced on the land
lines in this country which caused the plaintiffs heavy loss. The
provision limiting liability was not expressed on the blank used in
sending, nor did the senders know of its adoption and filing.
Held:
1. Whatever the legal incidents of the transmission over the
foreign lines, the company, in carrying the message over its own
lines from Havre, was governed by the Interstate Commerce Act, as
amended. P.
256 U. S.
570.
2. The senders of the message were bound as a matter of law by
the provision limiting liability, without regard to their knowledge
or assent, because it was a part of a lawfully established rate
which could not be departed from without creating an undue
preference or advantage in violation of § 3 of the statute. P.
256 U. S. 570.
Boston & Maine Railroad v. Hooker, 233 U. S.
97;
Galveston, Harrisburg & San Antonio Ry. Co.
v. Woodbury, 254 U. S. 357.
3.
Quaere whether the rule that carriers of goods, in
order to limit liability for negligence, must offer an alternative
rate attended by full liability (
Union Pacific R. Co. v.
Burke, 255 U. S. 317),
applies to telegraph and cable companies? P.
256 U. S.
574.
4. Where a cable company offered a lower rate, with limited
liability, for unrepeated messages, and a higher rate for repeated
messages, with a higher but still limited liability,
held,
that the senders of an unrepeated message who paid the lower rate
could not escape its attendant limitation upon the ground that
liability under the higher was also limited, since the latter
limitation, if invalid, would not bind those who used the higher
rate, and the question of its validity was not material in the
case. P.
256 U. S. 575.
268 F. 22 reversed.
Certiorari to review a judgment of the circuit court of appeals
affirming a judgment rendered against the present petitioner, by
the district court, in an action for damages resulting from a
mistake in a telegram. The facts are stated in the opinion.
Page 256 U. S. 568
MR. JUSTICE BRANDEIS delivered the opinion of the Court.
In September, 1917, the Western Union Telegraph Company
delivered to Esteve Brothers & Company at New Orleans,
Louisiana, an unrepeated cable message from the latter's main
office at Barcelona, Spain, directing a sale for future delivery of
2,000 bales of cotton. The message actually sent had directed the
sale of 200 bales. The error in transmission resulted in a loss to
Esteve Brothers & Company of $31,095. To recover compensation
for this loss they sued the Western Union in a state court of
Louisiana. The case was removed to the federal district court, and
there was tried by jury upon these additional stipulated facts:
The message was sent over lines of the Spanish government
telegraph from Barcelona to Paris, and thence over lines of the
French government to Havre. There it was delivered to the Western
Union, transmitted by its cable to New York City, and thence over
its land lines to New Orleans. The error in transmission occurred
on these land lines. The charge of $6.60, paid at Barcelona for
transmitting the message represented the sum of the local rates on
the several connecting lines. The Western Union's share was $4.65,
and of this $3.75 was apportioned to the cable system and 90 cents
to the land lines. This Western Union rate was established by its
tariff of telegraph and cable rates, in force since some time prior
to June 18, 1910. Under the act of that date, c. 309, 36 Stat. 554,
making telegraph and cable companies subject to the Act to Regulate
Commerce, this tariff had been filed with the Interstate Commerce
Commission in May, 1916, by its permission and pursuant to an
appropriate resolution of the company. The tariff so filed embodied
the long used classification of messages, rules and regulations,
including the provision that the company
"shall not
Page 256 U. S. 569
be liable for mistakes . . . in transmission . . . of any
unrepeated message, beyond the amount of that portion of the tolls
which shall accrue to it."
The plaintiffs did not in in fact assent to this limitation of
liability. They did not, in sending the message at Barcelona, use a
blank containing the provisions so limiting liability. They did not
have actual knowledge of the resolution of the company or of the
filing of the tariffs with the Interstate Commerce Commission.
The plaintiffs contended at the trial that in view of the above
facts they were entitled to a verdict for the full amount of their
loss. The company contended that, since the message had not been
repeated, the verdict should be limited to $4.65, the amount
received by it as tolls. A verdict was directed for $31,095, with
interest; judgment thereon was affirmed by the United States
Circuit Court of Appeals for the Fifth Circuit, 268 F. 22, and a
petition for writ of certiorari was granted, 254 U.S. 624. The sole
question presented for our decision is the amount of damages
recoverable.
For more than fifty years prior to the transaction here in suit,
the Western Union had maintained these two classes of rates for
general cable and telegraph service. The usual or basic rate was
for service practically at the sender's risk, liability being
limited to the amount of the toll collected. Another special rate
entitled the sender to have the message repeated back to the point
of origin and rendered the company liable in case of mistake or
nondelivery up to fifty times the amount of the extra charge. The
extra charge for this additional service was for telegrams one-half
and for cables one-quarter of the basic rate. In
Primrose v.
Western Union Telegraph Co., 154 U. S. 1, decided
in 1894, this classification of rates and the limitations upon the
company's liability were declared by this Court to be reasonable
and valid, in the absence of willful misconduct or gross
negligence. The
Page 256 U. S. 570
limitation upon the company's common law liability was held to
be in the nature of contract, and this liability, unlike that of a
common carrier, was not an insurer's. It was merely for the damage
flowing from failure to use due care in transmission.
Primrose
v. Western Union Telegraph Co., supra, 154 U. S. 14.
Since the limitation of liability was in the nature of contract,
the provision had to be brought home to the sender of a message in
order to be legally binding upon him. Assent by the sender was
ordinarily established, if the message was written upon one of the
company's blanks which set forth the limitation of liability.
Primrose v. Western Union Telegraph Co., supra,
154 U. S. 25.
Compare Cau v. Texas & Pacific Ry. Co., 194 U.
S. 427,
194 U. S. 431.
Whether, in view of long established practice, the mere sending of
a message, although not written on such a blank, imported assent to
the usual terms of the rate, involved, then, an issue of fact.
See New Jersey Navigation Co. v.
Merchant's Bank, 6 How. 344,
47 U. S. 383.
The question presented for our decision is whether, since the
amendment of June 18, 1910, to the Act to Regulate Commerce, the
sender is, without assent in fact bound as matter of law by the
provision limiting liability, because it is a part of the lawfully
established rate.
The Act of June 18, 1910, c. 309, § 7, 36 Stat. 539, 544,
broadened the scope of the Act to Regulate Commerce to include
"telegraph, telephone and cable companies (whether wire or
wireless) engaged in sending messages from [a] state . . . to any
foreign country." And whatever may have been the legal incidents of
transmitting the message from Barcelona to Havre under Spanish and
French law, the Western Union, in sending the message over its own
lines from Havre to New Orleans, was governed by the provisions of
that act.
Galveston, H. & San Antonio Ry. Co. v.
Woodbury, 254 U. S. 357. In
the third paragraph of § 1 of the amended act Congress provided
that messages might be
"classified
Page 256 U. S. 571
into day, night, repeated, unrepeated, letter, commercial,
press, government and such other classes as are just and
reasonable, and different rate [might] be charged for the different
classes of messages."
Acting, in May, 1916, under the authority of that provision, the
Western Union by appropriate action approved the tariff involved in
the present case, and by permission of the Interstate Commerce
Commission filed with it the tariff, including the provisions here
in question. The company was not required so to do by the terms of
the act or by any order of the Commission.
Compare 25th
Annual Report I.C.C. (1911), pp. 5, 6. But the rate, long before
established, then formally adopted and filed, was thereafter the
only lawful rate for an unrepeated message, and the limitation of
liability became the lawful condition upon which it was sent.
Postal Telegraph-Cable Co. v. Warren-Godwin, 251 U. S.
27,
251 U. S. 30;
Clay County Produce Co. v. Western Union Telegraph Co., 44 I.C.C.
670, 674.
The lawful rate having been established, the company was by the
provisions of § 3 of the Act to Regulate Commerce prohibited from
granting to anyone an undue preference or advantage over the public
generally. For, as stated in
Postal Telegraph-Cable Co. v.
Warren-Godwin Co., supra, 251 U. S. 30,
the "Act of 1910 was designed to and did subject such companies as
to their interstate business to the rule of equality and uniformity
of rates." If the general public, upon paying the rate for an
unrepeated message, accepted substantially the risk of error
involved in transmitting the message, the company could not,
without granting an undue preference or advantage extend different
treatment to the plaintiff here. The limitation of liability was an
inherent part of the rate. The company could no more depart from it
than it could depart from the amount charged for the service
rendered.
The Act of 1910 introduced a new principle into the legal
relations of the telegraph companies with their
Page 256 U. S. 572
patrons which dominated and modified the principles previously
governing them. Before the act, the companies had a common law
liability from which they might or might not extricate themselves
according to views of policy prevailing in the several states.
Thereafter, for all messages sent in interstate or foreign
commerce, the outstanding consideration became that of uniformity
and equality of rates. Uniformity demanded that the rate represent
the whole duty and the whole liability of the company. It could not
be varied by agreement; still less could it be varied by lack of
agreement. The rate became not, as before, a matter of contract by
which a legal liability could be modified, but a matter of law by
which a uniform liability was imposed. Assent to the terms of the
rate was rendered immaterial because, when the rate is used,
dissent is without effect. This principle was established in cases
involving the limitation upon a carrier's liability for baggage by
Boston & Maine Railroad v. Hooker, 233 U. S.
97, and
Galveston, Harrisburg & San Antonio Ry.
Co. v. Woodbury, 254 U. S. 357. In
the former case, it was said:
"If the charges filed were unreasonable, the only attack which
could be made upon such regulation [limiting liability] would be by
proceedings contesting their reasonableness before the Interstate
Commerce Commission. While they were in force, they were equally
binding upon the railroad company and all passengers whose baggage
was transported by carriers in interstate commerce."
So here, the limitation of liability attached to the unrepeated
cable rate is binding upon all who send messages to or from foreign
countries until it is set aside as unreasonable by the
Commission.
It is strongly argued that the rule is not applicable to the
situation before us, because of the difference in the provisions of
law which govern the establishment of railroad and of telegraph
rates. The railroad rate is established, and can only be
established, by filing the tariff with
Page 256 U. S. 573
the Commission. Telegraph companies may initiate rates without
filing tariffs with the Commission.
Clay County Produce Co. v.
Western Union Telegraph Co., supra. Plaintiffs insist that it
is the filing and subsequent publication of the railroad rate which
gives it the force of law and requires the shipper to take notice
of it. But the contention, by dwelling unduly upon the procedural
features of the act, would defeat the end which Congress had in
view. Both railroad and telegraph-cable rates are initiated by the
carrier. It is true that a railroad rate does not have the force of
law unless it is filed with the Commission. But it is not true that
out of the filing of the rate grows the rule of law by which the
terms of this lawful rate conclude the passenger. The rule does not
rest upon the fiction of constructive notice. It flows from the
requirement of equality and uniformity of rates laid down in § 3 of
the Act to Regulate Commerce. Since any deviation from the lawful
rate would involve either an undue preference or an unjust
discrimination, a rate lawfully established must apply equally to
all, whether there is knowledge of it or not. Congress apparently
concluded, in the light of discrimination theretofore practiced by
railroads among shippers and localities, that, in transportation by
rail, equality could be secured only by provisions involving the
utmost definiteness and constant official supervision. Accordingly,
by § 6 it forbade a carrier of goods from engaging in
transportation unless its rates had been filed with the Commission,
and it prohibited, under heavy penalties, departure in any way from
the terms of those rates when filed. In the case of telegraph and
cable companies, Congress appears to have considered that such
stringent provisions were not required to secure the end in view.
It did not make filing with the Commission a condition precedent to
the existence of a lawful telegraph and cable rate. When,
therefore, the Western Union initiated and established this
Page 256 U. S. 574
reasonable rate, the principle of equality and uniformity laid
down in § 3 required that it should have exactly the same force and
effect as the rate initiated by a rail carrier and filed according
to the provisions of § 6.
It was suggested that the attempted limitation of liability must
fail under the rule recently applied in
Union Pacific Railroad
Co. v. Burke, 255 U. S. 317,
because both the alternative rates offered in the Western Union
tariff for cable messages were for limited liability, and because,
therefore, no offer was made to the sender of a rate under which
the company would assume full liability for all losses suffered
through its negligence. It is by no means clear that the rule of
the
Burke case -- established for common carriers of goods
-- should be applied to telegraph and cable companies.
See
the
Primrose case,
supra, p.
154 U. S. 14. In
any event, it is not applicable here. The Western Union did not, as
in the case of telegrams, offer to send cable messages upon a
special valuation to be made by the sender and paid for by an extra
charge "based upon such value equal to one-tenth of one percent
thereof." But it offered alternative rates for repeated and for
unrepeated cable messages. This long established classification was
expressly recognized as just and reasonable for cable as well as
for telegraph messages in the amendment made by the Act of June 18,
1910, to § 1 of the Act to Regulate Commerce. The provision in the
terms offered by the company is:
"To guard against mistakes or delays, the sender of a cable
message should order it repeated, that is, telegraphed back to the
originating office for comparison. For this, one quarter of the
unrepeated message rate is charged in addition. Unless indicated on
its face, this is an unrepeated message, and paid for as such."
". . . . this company shall not be liable for mistakes or delays
in transmission or delivery . . . of any unrepeated
Page 256 U. S. 575
message, beyond the amount of that portion of the tolls which
shall accrue to this company, . . . [nor] of an repeated message,
beyond fifty times the extra sum received by this company from the
sender for repeating such message over its own lines. . . ."
The repeated rate, offering greater accuracy and greater
liability in case of error, was open to anyone who wished to pay
the extra amount for extra security. Whether the limitation of
liability prescribed for the repeated message would be valid as
against a sender who had endeavored, by having the message
repeated, to secure the greatest care on the part of the company we
have no occasion to decide, because it is not raised by the facts
before us. It is enough to sustain the limitation of liability
attached to the unrepeated rate that another special rate was
offered for messages of value and importance, and not availed of.
The fact that the alternative rate had tied to it a provision
which, if tested, might be found to be void is not material in a
case where no effort was made to take advantage of it.
Reversed.
MR. JUSTICE PITNEY and MR. JUSTICE CLARKE dissent.