Case ID: mich_215/html/0030-01.html
Source: Caselaw Access Project
Author: {"author": "Fellows, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

GRAND RAPIDS SHOW CASE CO. v. POSTAL TELEGRAPH-CABLE CO.
    1. Courts — Construction of Federal Statute by Federal Supreme Court Binding Upon State Courts.
    The construction placed upon a Federal statute hy the Supreme Court of the United States is binding upon the State courts. •
    2. Commerce — Interstate Commerce — Telegraphs and Telephones.
    By an amendment to the commerce act (36 U. S. Stat. j>. 544 et seq.), congress has placed telegraph and telephone companies engaged in interstate business under Federal control, and State control and State statutes creating liability are superseded hy said act.
    3. Same — Rates—Provision Limiting . Liability for Mistake Binding Upon Sender.
    Where a telegraph company, engaged in interstate business, with, the approval of the interstate commerce commission, approved a certain rate for unrepeated interstate messages, limiting its liability for mistakes therein, the same was binding upon the sender whether it knew of and assented to such limited liability or not, since the purpose of the Federal statute regulating same was to fix a uniform rate and a uniform liability, and assent thereto by the sender was unnecessary. Western Union Telegraph Co. v. Esteve Bros. & Co., U. S. Adv. Ops. 1920-21, 653 (41 Sup. Ct. 584).
    Error to Kent; Barton (Joseph), J., presiding.
    Submitted April 20, 1921.
    (Docket No. 30.)
    Decided July 19, 1921.
    Case by the Grand Rapids Show Case Company against the Postal Telegraph-Cable Company for an error in the transmission of an interstate message. Judgment for defendant non obstante veredicto. Plaintiff brings error.
    Affirmed.
    
      Knappen, Uhl & Bryant, for appellant.
    
      Louis T. Herman (William K. Clute, of counsel), for appellee. .
   Fellows, J.

Plaintiff claims to have suffered damages in the sum of $371.65 by reason of an error in the transmission of an interstate message sent by defendant for it from the Grand Rapids office to Worcester, Mass., and brings this action to recover such damages. The message was an unrepeated night lettergram and was telephoned by one of plaintiff’s employees to the Postal office. The error in transmission is not denied. While the record discloses that plaintiff did a large amount of telegraphing, its business with defendant alone running between $100 and $200 monthly, and while it admits that it kept telegraph blanks in its, office, we think there was some testimony in the case that it was unfamiliar with the regulations, etc., found on the back of these blanks and that it made a case for the jury under the holding of this court in Carland v. Telegraph Co., 118 Mich. 369 (43 L. R. A. 280).

Since that decision, however, the congress of the United States by an amendment to the commerce act (act of June 18, 1910, 36 U. S. Stat. p. 544 et seq.) has placed telegraph and telephone companies engaged in interstate business under federal control. It was the contention of the defendant in the court below, and here is, that by entering the field the congress by its action excluded State control of such companies, that State statutes creating liability are superseded and wiped out by this act, and that it must now be taken as the measure of liability of such interstate companies. The trial judge accepted this view of the law and although he submitted the case to the jury, he reversed the question under the Empson act (3 Comp. Laws 1915, § 14568 et seq.), and upon motion entered judgment for the defendant non obstante veredicto.

Upon the back of all the blanks used by defendant for night letters appears the following: ,

“THE POSTAL TELEGRAPH-CABLE COMPANY (Incorporated.)
TRANSMITS AND DELIVERS THE WITHIN NIGHT LETTERGRAM SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:
“The Company will receive, not later than midnight, NIGHT LETTERGRAMS, written in plain English, to be transmitted only for delivery on the morning of the next ensuing business day, at rates still lower than its standard night message rate, as follows: * ❖ *
“1. The Company shall not be liable for mistakes or delays in the transmission or delivery, or for nondelivery, of any UNREPEATED message, beyond the amount received for sending the same; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any REPEATED message, beyond fifty times the sum received for sending the same, UNLESS SPECIALLY VALUED; nor in any case for delays arising from unavoidable interruption in the working of its lines; NOR FOR ERRORS IN CIPHER OR OBSCURE MESSAGES.”

It is the contention of the plaintiff that it is not bound by the terms and limitations appearing on the back of these blanks because it did not write out the message in question on one of these blanks, that it telephoned the message in and' was not responsible for the fact that it was written out on one of these blanks by defendant’s employee, that the act of congress is not effective in granting exclusive Federal control, and that if it is, there is no evidence in the case that defendant has filed with the interstate commerce commission its rates, rules and regulations. Defendant replies that the act does give exclusive Federal control, that to transact business for plaintiff in any other manner or with any greater or different liability than with the public generally would work discrimination contrary to and in violation of the provisions of the commerce act, and that the act in question does not require the filing of its rates, rules and regulations with the interstate commerce commission.

It is true as contended by plaintiff’s counsel and as pointed out by the interstate commerce commission in its report to congress (1911, I. C. C. Report, page 5) that the legislation assuming Federal control of interstate telegraph and telephone companies is somewhat inapt, incomplete and wanting in details. Some State courts of last resort and some inferior Federal courts have sustained plaintiff’s contention. But the act before us is an act of congress, a Federal act, and if it has been passed upon and construed by the Federal court of last resort, that construction must be followed by us.

Postal Telegraph-Cable Co. v. Lumber Co., 251 U. S. 27 (40 Sup. Ct. 69), Western Union Telegraph Co. v. Boegli, 251 U. S. 315 (40 Sup. Ct. 167), and Clay County Produce Co. v. Telegraph Co., 44 I. C. C. 670, strongly support the contention of defendant’s counsel, and the recent decision of the Supreme Court of the United States in Western Union Telegraph Co. v. Esteve Bros. & Co., Adv. Ops. 1920-21, 653 (41 Sup. Ct. 584), handed down June 1st, is decisive in his favor. An examination of the case as reported in 268 Fed. 22 will more fully disclose the facts. It will suffice for the purpose of this opinion to say that Esteve Bros. & Co. had suffered a loss of $31,095 by an error of the telegraph company in the transmission of a message. The message originated at Barcelona, Spain, and was correctly sent over the Spanish government and French government lines to Havre. Here it was received by the telegraph company with no accompanying contract or limitations and was correctly cabled to its New York office; from there it was sent over its land lines to New Orleans. In this transmission the error occurred. Liability of the telegraph company was sustained by the United States district court for the eastern district of Louisiana and the circuit court of appeals, fifth circuit. In reversing the case Justice Brandéis, speaking for the court, said:

“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. * * * In the third paragraph of section 1 of the amended act, congress provided that messages might be ‘classified info day, night, repeated, unrepeated, letter, commercial, press, Government, and such other classes as are just and reasonable, and different rates [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. * * * 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. d
“The act of 1910 introduced a new principle into the_ legal relations of the telegraph companies with, their 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 as 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. * * * 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 the commission. Telegraph companies may initiate rates without filing tariffs with the commission {Clay County Produce Co. v. 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 Tate 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 section 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.”

This opinion from which we have quoted at considerable length is decisive of every contention of plaintiff’s counsel.

The judgment must be affirmed.

Steere, C. J., and Moore, Wiest, Stone, Clark, Bird, and Sharpe, JJ., concurred.