United States Telegraph Co. v. Gildersleve

29 Md. 232, 1868 Md. LEXIS 75

• Court: Court of Appeals of Maryland
• Decided: June 24, 1868
• Status: Published

Opinion

Alvey, J.,

delivered the opinion of the court.

This was an action, ex contractu, instituted by the appellee against the appellant, to recover of the latter damages resulting from its failure to transmit and deliver a telegraphic dispatch to certain stock brokers in New York.

The dispatch directed to be transmitted was'as follows:

“No. 15. Broker’s Telegram Line, 4.

People’s Telegraph Lines,

No. 23 South street, and Barnum’s City Hotel, Balt.

Send the following message, without repeating it, subject to the conditions endorsed on the back.

Dated Baltimore, March 9, 1865.

To Dibble & Cambloss, N. Y.

Sell fifty (50) gold. Words 3, col. 70.

Geo. Gildersleeve.”

It is alleged that this dispatch was an order to the brokers in New York, to sell for the appellee fifty thousand dollars of gold, -which order the brokers would have obeyed, but the appellant neglected to telegraph such' dispatch, whereby the appellee was greatly damaged, by reason of the decline in the market price of gold. The appellant pleaded, not indebted as alleged ; with an agreement that such plea should be received, and that all errors in pleading, should be mutually waived, and that either party might rely on any claim or defense, to which he or it would be entitled, if specially declared on or pleaded.

At the trial below the appellee offered one prayer to the court, which was granted; and the appellant offered six prayers; of which the first five were rejected, and the sixth was granted. And it was to the granting of the appellee’s prayer, and the refusal of those on the part of the appellant, that the first exception was taken.

On this exception, four questions arise:

1. Whether the appellee can maintain this action, and recover more than nominal damages for the default of the appellant.

*2. Whether the contract for transmission of the message was subject to the terms and conditions printed on the back of the dispatch, or to other similar terms and conditions prescribed by the rules and regulations of the appellant’s office.

3. To what extent, if the contract be subject to such terms and conditions, can the appellant claim to be exonerated from liability thereunder.

4. To what measure of damage is the appellant subject, if the contract be broken.

1. It appears- that the appellee was a broker in Baltimore, and that Dibble & Cambloss were his correspondents and agents in New York, through whom he was in the habit of buying and selling stocks and gold in the latter city. That A. B. Patterson, also a broker in Baltimore, was appellee’s customer, for whom the appellee was in the habit as broker, of buying and selling gold and stock in New York, through the agency of Dibble & Cambloss. That, by arrangement previously- made between appellee and Patterson, for the purpose of saving trouble, to them both, instead of ■ Patterson being required to give orders to the appellee for such purchases and sales, and the appellee being required to send them to his correspondents, Patterson was authorized to send orders in the appellee’s name, and on his responsibility and account, to Dibble & Cambloss, for the purchase or sale of "stock or gold; and that, by this arrangement, the appellee was entitled t'o his commissions on purchases and sales made in compliance with such orders, and the rights and liabilities of the appellee and Patterson respectively, in reference to the orders so sent, were in all respects the same as if Patterson had given the orders to the appellee, and the latter had transmitted or undertaken to transmit them to Dibble & Cambloss, in his own name; Patterson not being known to, and having no connection with Dibble & Cambloss, except through the appellee. That, under said arrangement, on the 9th March, 1865, at about 3.40 P. M., the message in question, addressed to Dibble & Cambloss, was left by Patterson's direction, at ^appellant’s office, in Baltimore, and that the appellant, by its agents, undertook to send and deliver it to the parties to wdiom it was addressed. That the message was sent to the office without the knowledge or special direction of the appellee, but that he was soon after informed of it, and fully sanctioned it. The appellee also testified that he was not interested in this transaction, and had not paid any loss to Patterson, and did not consider himself liable to Patterson, unless he recovered in this suit, in which event anything that was recovered was to be paid over to Patterson. .It was also proved that appellee had, on the day of the date of the message, $200,000 of gold to his credit with Dibble & Cambloss, and of that sum, as between appellee and Patterson, $95,000 belonged to the latter.

Upon such state of facts, the appellee was clearly the agent of Patterson, and, as such agent, held and controlled the gold of his principal. Tt was embraced in the appellee’s account, and he had credit for it, in the books of his correspondent, and no other person than himself could have withdrawn it or disposed of it. And, apart from the fact that he had a special property or interest in the gold of his principal thus at his disposal, he was beneficially interested, at the time of the order given, to the extent of commissions on the sale. And where an agent is thus interested, as for commissions, or by reason of special property in the subject matter, and the contract, in reference thereto, is made in his name, it is perfectly competent for him to sue and maintain an action in his own name, as if he were the principal. This is so in the case of a factor, or a broker, or a 'warehouseman, or carrier, or auctioneer, a policy broker whose name is on the policy, or the captain of a ship for freight. So where a contract is in terms, as in this case, made with an agent personally, he may sue thereon; and if an agent in his own name carry on a business for his principal, and appear to be the proprietor, and sell goods in the trade as such apparent owner, he can sustain an action in his own name for the price. 1 Chit. Pl. 8; Joseph v. Knox, 3 Camp. *320; Gardiner v. Davis, 2 C. & P. 49; Dancer v. Hastings, 4 Bing. 2. And where A., for his own account and risk, carried on trade in the name of B., it was held, that an action for goods sold, in the course of such trade, was properly brought in the name of B. Alsop v. Caines, 10 John. 396. And so again, where goods are consigned by A. to B., the former, in contemplation of law, is the agent of the latter, for the purpose of contracting for the carriage; and where a bill of lading stated that the goods were shipped, and their freight paid by the consignor, it was held to establish a privity of contract between the consignor and shipowner, which would entitle the former to recover against the latter for non-delivery of the goods; the damages so recovered being held by the plaintiff in trust for the consignee, Joseph v. Knox, 3 Camp. 320; Broom on Parties, 49. And if, in the instances mentioned, the agent can sue and recover the full measure of damages, we can see no reason why the appellee, looking to his relation to this transaction, may not recover the full amount of damages resulting from a breach of the contract with the appellant. He, of course, sues and recovers as .trustee for his principal. The court below was therefore right in rejecting the appellant’s third and fourth prayers, which raised the question of the right of the appellee to recover more than nominal damages.

2. Next, as to what terms and conditions, if any, the contract was subject.

The appellant had a clear right to protect itself against extraordinary risk and liability by such rules and regulations as might be required for the purpose. It would be manifestly unreasonable to hold these telegraph companies liable for every mistake, miscarriage, or accidental delay that may occur in the operation of their lines. From the very nature of the service, while due diligence and good faith may be required at the hands of the company and its agents, accidents, delays and miscarriages may occur that the greatest amount of caution cannot avoid, Hence in England, and in many of the American States, provision lias been made by statute, authorizing *these companies to prescribe rules and regulatioñs whereby they may be protected against extraordinary liability. In this State, by Art. 26, sec. 117, of the Code, while impartiality and good faith are to be observed, the dispatches are to be received and transmitted under such rules and regulations as may be established by the companies. And the appellant, availing itself of this power, appears to have adopted rules and regulations for its protection. This appears from the evidence offered by both appellee and appellant. And the appellant having adopted rules and regulations as authorized by law, according to the decision of this court in Birney v. N. Y. & Wash. Tel. Co. 18 Md. 341, the appellee was bound to know that the engagements of the company were controlled by them, and did himself, in law, en-graft them in his contract, and is bound by them. This would be the case, whether the dispatch offered for transmission, be expressly declared to be subject to the terms and conditions prescribed or not. Those dealing with the company must be supposed to know its rules and regulations, and their contract must be taken to have reference to them, unless otherwise provided by special contract. In this case, however, the appellee proffered, with the dispatch, his own terms. The dispatch was written on the blank of another company, which happened to be in the possession of Patterson, but the terms and conditions printed on the back of it, and to which the dispatch was already made subject, so far as the question in this case is concerned, were substantially the same, though differing in words, as those of the appellant. And, even in the absnce of rules and regulations of the appellant’s office, it was certainly competent for it to accept the terms and conditions proffered with the message. As, however, the terms and conditions of the appellant, and those printed on the back of the dispatch of the appellee, were, so far as the present question is concerned, substantially the same, it is immaterial in what manner the contract became subject to such terms and conditions. It is enough that they were incorporated in it,, and are to be taken as forming part of it.

*3. Then, as to the extent that the appellant can claim to be exonerated from liability under such terms and conditions thus incorporated into the contract. And, in reference to this question, it is to be observed that the message was not to be repeated; nor was there any special agreement for an insurance of its transmission and delivery. It was sent to the office of the appellant to take its turn, and under the terms and conditions to which it was subject, good faith and due diligence in dispatching, transmitting and delivering it, were all that could be required. The appellant could not, by rules and regulations of its own making, protect itself against liability for the consequences of its own willful misconduct, or gross negligence, or any conduct inconsistent with good faith; nor has it attempted, by its rules and regulations, to afford itself such exemption. It was bound to use due diligence, but not to use extraordinary care and precaution. The appellee, by requiring the message to be repeated, could.have assured himself of its dispatch and accurate transmission to the other end of the line, if the wires were in working condition; or by special contract for insurance, could have secured himself against all consequences of non-delivery. He did not think proper, however, to adopt such precaution, but chose rather to take the risk of the less expensive terms of sending his message. And, having refused to pay the extra charge for repetition or insurance, we think he had no. right to rely upon the declaration of the appellant’s agent that the message had gone through, in order to fix liability on the company. McAndrew v. Tel. Co., 33 Eng. L. & Eq. 187.

If, then, the appellant dispatched the appellee’s message in due course, and with the ordinary care to secure its safe and correct transmission, and was guilty of no negligence in regard to its delivery to the party to whom it was addressed, the obligation under the contract was performed, and the onus of proof was upon the appellee to show affirmatively that there had been negligence, or want of good faith, either in * dispatching the message or in regard to its delivery. Steam Nav. Co. v. Bank, 6 How. 384; Beardslee v. Richardson, 11 Wend. 25; Story on Bailm. sec. 213. Negligence of the appellant is the gist of this action, and unless it be established, there can be no recovery; and, as the first and second prayers of the appellant were founded upon this assumption, we tjfinlc, when taken in connection with the sixth prayer, that there was error committed by the court below in refusing to grant them.

4. Lastly, as to the measure of damages, if there be a breach of the contract. This is a subject about which there has been a considerable diversity of opinion, and great want of precision in the attempts to define rules of general application. But, by the latest and best considered cases upon the subject, the rule seems to be now pretty well established, that a party can only be held responsible for such consequences as may be reasonably supposed to have been in the contemplation of both parties at the time of making the contract, and that no consequence, which is not the necessary or ordinary result of a breach, can be supposed to have been so contemplated, unless full information be imparted to the party sought to be held liable at the time of entering into the engagement. This is the rule furnished by the case of Hadley v. Baxendale, 9 Exch. 341, 354, and which has been recognized and approved in Fletcher v. Tayleaur, 33 Eng. L. & E. 187-191, and other cases, as being in all respects the most correct and precise. The case of Hadley v. Baxendale was this: The plaintiffs, owners of a steam mill, broke a shaft, and" desiring to have another made, they left the broken shaft with the defendant, a carrier, to take to an engineer to serve as a model for a new one. At the time of making the contract, the defendant’s clerk was informed that the mill was stopped, and that the plaintiffs desired athe broken shaft to be sent immediately. Tts delivery was delayed, however, and the new shaft kept back in consequence. The plaintiffs brought their action for a breach of this contract with the carrier, and they *claimed, as special damages, the loss of profits while the mill was kept idle. But because it was not made to appear that the, defendant was informed that the want of the shaft was the only thing that was keeping the mill from operating, it was held that he could not be made responsible to the extent claimed. And the court, in delivering its judgment, said: “ We think the proper rule in such a case as the present, is this — where tw'O parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be, either such as may fairly and substantially be considered as arising naturally, i. e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result of the breach of it. Now, if the special circumstances under which the contract was actually made, were communicated by the plaintiff to the defendant, and thus known to both parties, the damages resulting from the breach of such a contract which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of a contract under these special circumstances so known and communicated.

But on the other hand, if those special circumstances were wholly unknown to the party breaking the contract, he, at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally, and in the great multitude of cases, not affected by any special circumstances for such a breach of contract. For, had the special circumstances been known, the parties might have expressly provided for the breach of contract by special terms as to the damages in that case, and of this advantage it would be very unjust to deprive them.”

The same rule has been adopted, and is now regarded as established in the. courts of New York, as will appear from Griffin v. Colver, 16 N. Y. 489, and Landsberger *v. Tel. Co. 32 Barb. 530. And, believing it to be obviously just and reasonable, we take it to be the true rule upon the subject. And applying it to this case, the prayer of the appellee, which was granted, is clearly incorrect. For while' it was proved that the.dispatch in question would be understood among brokers to mean fifty thousand dollars of gold, it was not shown, nor was it put to the jury to find that the appellant’s agents so understood it, or whether they understood it at all. “ Sell fifty gold,” may have been understood in its literal import, if it can be properly said to have any, or was as likely to be taken to mean fifty dollars as fifty thousand dollars, by those not initiated. And if the measure of responsibility at all depends upon a knowledge of the special circumstances of the case, it would certainly follow that the nature of this dispatch should have been communicated to the agent at the time it was offered to be sent, in order that the appellant might have observed the precautions necessary to guard itself against the risk. But without reference to the fact as to whether the appellant had knowledge of the true meaning and character of the dispatch, and thus enabled to contemplate the consequences of a breach of the contract, the jury were instructed that the appellee was entitled to recover to the full extent of his loss by the decline in gold. In thus instructing the jury, we think the court committed error, and that its ruling should be reversed.

As to the fifth prayer of the appellant, we think the court below was right in rejecting it. It was certainly the right of the appellee to convert his gold coin into currency, and if he lost an advantage in having it done, in consequence of a breach of contract by the appellant, it was a loss for which the former would be entitled to recover damages to the extent of indemnity.

The second bill of exception was taken to the refusal of the court to entertain a prayer, on the part of the appellant, offered after previous prayers had been argued and disposed of, and the jury instructed.

*The rules of court, set out in the record, fully justified the court in refusing to entertain the prayer, under the circumstances, and its ruling in this respect, being in the exercise of its discretion, is not the subject of review by this court.

Differing with the court below in regard to the appellee’s prayer, and the first and second prayers of the appellant, we must reverse its judgment.

Judgment reversed and procedendo awarded.