Bank of Havelock v. Western Union Telegraph Co.

141 F. 522, 4 L.R.A.N.S. 181, 1905 U.S. App. LEXIS 4027
CourtCourt of Appeals for the Eighth Circuit
DecidedNovember 16, 1905
DocketNo. 2,143
StatusPublished
Cited by23 cases

This text of 141 F. 522 (Bank of Havelock v. Western Union Telegraph Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bank of Havelock v. Western Union Telegraph Co., 141 F. 522, 4 L.R.A.N.S. 181, 1905 U.S. App. LEXIS 4027 (8th Cir. 1905).

Opinion

SANBORN, Circuit Judge.

The plaintiffs constituted a copartnership under the. title of the “Bank of Havelock," and they sued the [524]*524Western Union Telegraph Company, a corporation, for damages in the sum of $3,500, because it received by telephone from some one at Denison, in the state of Iowa, who had no right to send it, and delivered to the plaintiffs, this telegram:

“Dated Denison, Iowa, Feb. 28, 1902.

“To tbe Bank of Havelock: We will pay Barnes’ draft for thirty-five hundred. Bank of Denison.

At the time this telegram was received the plaintiffs had a chattel mortgage on some cattle of the value of $3,500, which Barnes had bought, and they were induced by the telegram to lose their lien upon and to surrender the cattle to him. On March 25, 1902, Barnes made a draft on the bank of Denison in favor of the plaintiffs for $3,500, but the drawee refused to pay it. The Bank of Denison was a copartnership, composed of Leslie M. Shaw and Carl M. Kuehnle. These partners, Charles E. Voss, the cashier, and A. B. Lorenson, were the only persons who had authority to send such a telegram, or to act for the bank in any way. E. G. Lyman was the operator of the defendant at Denison, who received the telegram over the telephone and sent it to the plaintiffs. He had been in his position from February 5, 1902. He did not know the voice of the person who gave him the telegram, but took it for granted that it was the voice of some one who had the right to send it. He knew Voss, the cashier, and did not think that the voice was his. He subsequently became acquainted with Barnes, but could not say that he recognized the voice as that of Barnes. He did not know who gave him the message, because he did not recognize the voice which communicated it to him. The foregoing facts were proved at the trial, and there was no evidence tending to prove any other facts which were material to the decision of the case before us.

At the close of the evidence counsel for the defendant made a motion, which the court granted, for an instruction to the jury to return a verdict for their client upon the specific grounds that plaintiffs had never taken or expended anything for any draft in reliance upon the telegram, that the telegram was so indefinite that they had no right to rely upon it, and that the plaintiffs had no right to recover for the surrender of the cattle, or for the loss of their lien upon them, because the telegram contained no agreement to indemnify them against any such loss, nor was the release of such security within the contemplation of the parties. This ruling is assigned as error. It is true that the plaintiffs never paid out or lost anything by taking or relying upon any draft of Barnes, and that they were not entitled to recover at the trial upon that ground. But the Bank of Denison refused to pay the draft of Barnes on March 25, 1902, and it would not have paid it at any time after the telegram was delivered, if it had been presented. The telegram was not so indefinite or uncertain that reliance and action might not have been lawfully founded upon it, It contained a direct promise to pay Barnes’ draft for $3,500, and if it had been authorized by the Bank of Denison, and the plaintiffs had procured and paid value for a draft of Barnes for that amount, within a reasonable time after they received the telegram, they would have had a perfect cause of [525]*525action against the Bank of Denison for its amount. Coolidge v. Payson, 2 Wheat. 66, 4 L. Ed. 185; State National Bank v. Young (C. C.) 14 Fed. 889.

While the plaintiffs parted with no property in reliance upon the ■draft, they were induced by the telegram to surrender the cattle and to lose their lien by mortgage upon them, and they thereby lost $3,500 of their security for their claim against their debtor. Why were they not entitled to recover back this amount? Counsel for the telegraph •company answer (1) because the plaintiffs surrendered the security of the cattle in reliance upon the promise of Barnes to make his draft on the Bank of Denison, and not in reliance upon the telegram; (2) because the failure of Barnes to make his draft was, and the telegram was not, the proximate cause of the loss; and (3) because the plaintiffs had ample security for their debt after the loss of their lien upon the cattle bought by Barnes, so that they never sustained any damage. The evidence, however, does not sustain these positions. It is that the plaintiffs refused to surrender the cattle or their lien upon them for the promise of Barnes to make his draft, or for the draft itself, and that they were induced to lose their lien by the telegram in evidence only. The failure of Barnes to make his draft was not the proximate or other ■cause of the loss of the plaintiffs, because the proof is that they would not have surrendered the cattle or their lien upon them upon the faith of it, and that the Bank of Denison would not have paid it in any event, so that its execution and presentation would have been nothing but one of those idle ceremonies which the law never requires. The proof is clear and convincing that the telegram was the proximate cause of the loss. Without it the plaintiffs would never have lost their lien upon the cattle without payment of their purchase price, and would never have suffered the damages they claim.

It is conceded that, if the telegram had been genuine, the plaintiffs could not have recovered of the Bank of Denison, unless they had purchased or discounted a draft of Barnes upon that bank for value. This, however, is because their cause of action against that bank would have arisen upon contract, if at all, and that contract would not have been made until the plaintiffs had accepted the offer tendered by the telegram, according to its terms. The action in hand, however, against the telegraph company, is not an action upon a contract, but is an action for a tort. The gravamen of this suit is false representation and resulting damage, and the acceptance of the apparent offer which the Bank of Denison never made neither conditioned nor limited it. The facts that the telegraph company, in violation of its duty of reasonable care, falsely represented to the plaintiffs that the Bank of Denison had promised to pay the draft of Barnes for $3,500, and that the plaintiffs, in reliance upon the truth of that representation, surrendered its lien upon cattle of the value of $3,500, constituted a perfect cause of action, and entitled the plaintiffs to a judgment. One who wrongfully deceives or misleads another, to whom he owes the duty of truthful statement, to his damage, is liable for the natural and probable •consequences of his act. The natural and probable effect of the false telegram was the expenditure or the loss by the addressee of $3,500 [526]*526upon the faith of it, and this loss by the surrender of the cattle, or of a lien upon them, was not so remote as to be either an unnatural or improbable effect of it. ’ Marshall v. Buchanan, 35 Cal. 264, 95 Am. Dec. 95; Benton v. Pratt, 2 Wend. 385, 20 Am. Dec. 623; Rice v. Manley, 66 N. Y. 82, 23 Am. Rep. 30.

Nor can the defendant escape judgment for the loss inflicted because the plaintiffs have other security sufficient to satisfy their claim against the mortgagor. They had the right, as against the telegraph company, to all the security which they had obtained, and the depreciation or abstraction of any part of it by the latter was wrongful.

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Bluebook (online)
141 F. 522, 4 L.R.A.N.S. 181, 1905 U.S. App. LEXIS 4027, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bank-of-havelock-v-western-union-telegraph-co-ca8-1905.