Case Name: HALSTED et al. v. POSTAL TELEGRAPH CABLE CO.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1907-06-07
Citations: 104 N.Y.S. 1016
Docket Number: 
Parties: HALSTED et al. v. POSTAL TELEGRAPH CABLE CO.
Judges: 
Reporter: West's New York Supplement
Volume: 104
Pages: 1016–1022

Head Matter:
(120 App. Div. 433)
HALSTED et al. v. POSTAL TELEGRAPH CABLE CO.
(Supreme Court, Appellate Division, Second Department.
June 7, 1907.)
Telegraphs—Transmission of Messages.
Where plaintiff wrote defendant, asking for quotations on certain goods by telegraph, and the message, which was an unrepeated one, was sent to plaintiff on a blank exempting the telegraph company from liability for mistakes in an unrepeated message, plaintiff was not entitled to recover in an action in tort for damages arising from a mistake in the message.
[Ed. Note.—For cases in point, see Cent. Dig. vol. 45, Telegraphs and Telephones, §§ 26, 43, 44.]
Gaynor and Hooker, J’J., dissenting.
Appeal from Trial Term, Kings County.
Action by Gilbert C. Halsted and another against the Postal Telegraph Cable Company. From a judgment in favor of plaintiff, and from an order denying a new trial, defendant appeals.
Reversed.
Argued before HIRSCHBERG, P. J., and WOODWARD, JENKS, HOOKER, and GAYNOR, JJ.
Charles F. Brown (Thomas B. Jones, on the brief), for appellant.
George D. Beattys, for respondents.

Opinion:
WOODWARD, J.
The plaintiffs in this action were engaged in manufacturing beef cotton bags. They wrote a letter to the Cannon Manufacturing Company, at Concord, N. C., asking for prices upon a line of cotton goods b) telegraph. The Cannon Manufacturing Company, in response to this request, delivered a message to the defendant, to be forwarded to the plaintiffs in the city of New York, which message was in words and figures as follows:
"Concord, N. C. July 27th, 1903.
"E. S. Halsted & Co., 75 Pearl St., New York, N. Y.: Deliveries commencing about August fifteenth. Light narrow two eighty wide three eighty net. Paid. Cannon Mfg. Co."
The message as received by -the plaintiffs, aside from the address, read as follows:
"Delivered commencing about August fifteenth light narrow two eighth wide three eighth net."
Upon receiving this message the plaintiffs, construing it to offer the kind of goods they desired at 2% and 3% cents per yard, respectively. entered into a contract with Armour & Co., of Chicago, for a large quantity of beef cotton bags, basing their figures upon the prices supposed to have been quoted. They ordered the required quantity of raw material of the Cannon Manufacturing Company, and it was only upon the latter company receiving the order that it was discovered that the prices really quoted were $0,028 and $0,038 per yard, instead of those contained in the message as delivered, and it is not disputed that the difference between the prices as intended to be quoted, and as actually received by the plaintiffs, makes a difference equal to the amount of the verdict involved in the judgment appealed from.
A number of more or less interesting questions are discussed in the elaborate briefs of counsel; but, as we are of opinion that the judgment cannot be sustained because of a fundamental defect in the action, it will be unnecessary to prolong the discussion beyond the single point suggested. The telegram here under consideration, and which forms the basis of the plaintiffs' claim for damages, was sent by the Cannon Manufacturing Company, at the request of the plaintiffs, upon a blank furnished by the defendant. The language of the blank, in so far as it is material here, is as follows:
"Send the following message subject to the terms on back hereof, which are hereby agreed to. Read the notice and agreement on back."
This was signed by the sender, who was acting at the request of the plaintiffs, and might properly be regarded as the plaintiffs' agent for such purposes, if it was important to consider this view of the case. On the back of the blank was the provision that:
"All messages taken by this company are subject to the following terms: To guard against mistakes or delays, the sender of a message should order it repeated; that is, telegraphed back to the originating office for comparison. For this, one-half the regular rate is charged in addition. It is agreed between the sender of the following message and this company that said 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," etc.
It is not disputed that the message here involved was an unrepeated, message, and the learned court charged the jury that as between the sender and the company this was a valid and lawful limitation by contract; but he charged that it did not limit the rights of the plaintiffs, evidently upon the theory that, the action being one sounding in tort, the defendants were liable to the plaintiffs for the actual damages sustained, and it is this broad question, going to the substance of the action, which we believe constitutes the fatal error in this case. It is true, in the case of Pearsall v. W. U. T. Co., 124 N. Y. 256, 26 N. E. 534, 21 Am. St. Rep. 662, chiefly relied upon by the respondents to support the judgment, it was held that, where the company received a message for transmission without conditions, it became liable under the common law for the damages suffered by reason of errors in transmission; but the same case distinctly approves the doctrine of Ellis v. American Telegraph Co., 13 Allen (Mass.) 226, the leading Massachusetts case upon the question involved in this appeal, Grinnell v. Western Union Telegraph Co., 113 Mass. 299, 303, 18 Am. Rep. 485, and Clement v. Western Union Telegraph Co., 137 Mass. 463, 466, where the facts are not distinguishable in principle from those involved in this action, and the court held squarely that an action on the part of the person receiving the message, sounding in tort, would not lie for an amount in excess of the amount received for the service, where the message was an unrepeated message, and no other negligence was established than that of errors in transmission not due to fraud or gross negligence. In the Massachusetts case cited-, and which we believe lays down the law of this case, the message was written upon a blank substantially the same as the one here under consideration, and the error in transmission consisted in changing "twenty-five" to "seventy-five" dollars, upon a contract involving the price to be allowed for ten men for some service, and this was clearly as important an error, so far as it would appear from the message itself, as the one in the case at bar. In discussing the regulation adopted by the company, the court say:
"There is nothing in this regulation which tends to embarrass or hinder the free use of the telegraph, or to impose on those having occasion to transmit or receive messages any onerous or impracticable duty. The repetition of a message may be unimportant. A mistake in its transmission might occasion no serious damage or inconvenience to the parties interested. Whether it would do so or not would be within the knowledge of the sender or receiver, rather than within that of the operator who transmitted it. The latter could rarely be expected to know what would be the consequences of an error in its transmission. It is therefore a most reasonable requisition that it should be left to those who know the occasion and the subject of the message, and who can best judge of the consequences attendant upon any mistake in sending it, to determine whether it is of a nature to render a repetition necessary to ascertain its accuracy, instead of throwing this burden on the owner or conductor of the telegraph, who cannot be supposed to know the effect of a mistake, or the consequences in damages of a failure to transmit it correctly. Nor can we see any good reason why, on similar grounds, it would not be a just and proper exercise of the right to establish regulations for the conduct of such business to require that persons transmitting or receiving messages should make known the extent and nature of the risk to be assumed by the conductor or owner of the telegraph, if, in case of failure to transmit them accurately, a pecuniary loss would be involved, for which he might be held liable. By no other means could they be certain of obtaining a compensation proportionate to the risk to be assumed, or an opportunity of exercising unusual diligence to protect themselves against the chances of mistake or miscarriage. The defendants were entitled to insist on a compliance with that part of their regulations which required that the message should be repeated, and that the extent of the risk should be made known to them, if they were to be held to insure the safe and correct transmission of the message, or in case of failure, to be responsible for all the damages consequent on delays or errors. Of this regulation the plaintiff had notice. Although he entered into no express contract with the defendants, and cannot be held to have made any special stipulations with them by which he is bound, he did consent to receive at their hands a message which he alleges it was their duty to deliver to him. It is on this undertaking by the defendants, and for the breach of duty of which he alleges they are guilty, that he seeks to hold them in this action. It may, therefore, be a sufficient answer to such a claim that, according to the reasonable regulations by which they were governed in the performance of their undertaking towards the plaintiff, and of which he had notice, they have committed no breach of duty for which they can be held liable to him. Besides, it is difficult to see how the plaintiff, who claims through the contract entered into by the sender of the message with the defendants, which created the duty and obligation resting on the defendants, can claim any higher or different degree of diligence than that which was stipulated for by the parties to the contract. Certainly a derivative or incidental right cannot be greater or more extensive than that which attached to the principal or source whence such right accrued or was derived."
It might have been said, with equal force, that as the regulation was a reasonable one on the part of the company, and it was not obliged to accept the duty of transmitting the same except upon a compliance with such regulation by the sender, no higher obligation could be predicated in favor of the plaintiff than that which the company accepted. If the defendant in the case at bar had been obliged to accept and transmit the message without regulations, then it would assume its common-law obligations; but having the right to make regulations, and being under no obligations to accept the message for transmission unless the parties interested agreed to abide by such reasonable regulations, and it appearing that the sender did sign the blank provided by the company, and which contained the limitations above mentioned, it must be presumed that the company undertook the duty only as thus limited by its reasonable regulations, and whether the action is deemed to rest upon the contract of the sender, or to result from a breach of duty, the limitation upon the amount of damages to be recovered being reasonable, the plaintiff has no standing to maintain this action unless he is the real principal in the transaction, and then only to the extent of the amount paid for the transmission of the message.
We find no authority binding upon this court which lays down any different doctrine than that of the leading Massachusetts case, of which our Court of Appeals says that "the reasons are clearly and satisfactorily stated for the existence of the rule that telegraph companies are not, unless they expressly contract, held to warrant or insure the accurate transmission or prompt delivery of messages, and are only liable for negligence," which clearly refers to negligence going to the essence of the contract or duty, and not to mere errors in transmission, where the company has stipulated that it will not be liable for such errors except under the conditions which it names, and which the courts have held to be reasonable regulations. The right to make a reasonable regulation is a right on the part of a public or quasi public corporation to refuse to perform a duty except upon compliance with such regulations, and while the defendant might waive such regulations, and accept the duty of transmitting messages under its common-law liabilities, where it provides blanks and accepts messages only under such regulations, it owes no duty higher than that provided in its regulations.
The judgment and order appealed from should be reversed, with costs.
HIRSCHBERG, P. J., and JENKS, J., concur.