Case Name: J. C. LEIGH v. WESTERN UNION TELEGRAPH COMPANY
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1925-12-16
Citations: 190 N.C. 700
Docket Number: 
Parties: J. C. LEIGH v. WESTERN UNION TELEGRAPH COMPANY.
Judges: 
Reporter: North Carolina Reports
Volume: 190
Pages: 700–707

Head Matter:
J. C. LEIGH v. WESTERN UNION TELEGRAPH COMPANY.
(Filed 16 December, 1925.)
1. Telegraphs — Error in Transmission — Negligence—Prima Facie' Case.
Where a telegraph company receives a message for transmission and delivers it with its wording or meaning changed, a prima facie case of negligence is made out against it, and casts upon the defendant the onus of showing to the contrary.
2. Telegraphs — Negligence—Error in Transmission — Contracts—Futures —Ratification.
Where a telegraph company accepts for transmission and delivery a message to cotton brokers to buy cotton for future delivery upon condition that an expected government report shows a certain shortage in crop, and the message is delivered omitting the condition of purchase, and the commission man buys at a price that is productive of loss to the sender of the message who thereafter with knowledge of the error accepts the purchase and orders his brokers to sell upon the open market to his loss, the resultant loss is not proximately caused by the negligence in the transmission of the message, and the seller cannot recover it from the telegraph company.
S. Same — Principal and Agent.
Where a telegraph company erroneously transmits and delivers to cotton exchange brokers a telegram to purchase cotton futures on the cotton exchange, the minds of the sender and the seller of the cotton do not come to an agreement necessary to a valid contract: Semble, a telegraph company is not the agent of the sender of a telegram so as to bind him to a contract that he has not made, through error in transmission.
Appeal by defendant from judgment of Superior Court of Mooee County, February Term, 1925, Bryson, J., presiding.
Reversed.
Action to recover damages, alleged to have been sustained by plaintiff, resulting from negligence of defendant in tbe transmission and delivery of a telegram. On 1 September, 1922, plaintiff delivered to defendant, at Hamlet, N. C., for transmission to tbe sendee, a-telegram addressed to Hubbard Brothers & Company, New York, and signed by plaintiff, reading as follows:
“If Government report fifty-six or under buy two hundred bales December one thousand dollars deposited Page Trust Company, Hamlet, N. Car., your credit. Answer.”
On same day, a telegram addressed and signed as above was delivered by defendant to Hubbard Brothers & Company, reading as follows:
“Fifty-six or under buy two hundred bales December one thousand dollars deposited Page Trust Company, Hamlet, N. Car., your credit. Answer.”
The words, “If Government report,” appearing in the telegram filed by plaintiff at Hamlet, N. C., with defendant, did not appear in the telegram delivered by defendant to Hubbard Brothers & Company in New York. Defendant’s agent at Hamlet failed to include said words in the telegram transmitted by him. No telegram including these words was transmitted and delivered to Hubbard Brothers & Company by defendant.
Hubbard Brothers & Company are brokers engaged in business in New York City. They buy and sell cotton, for customers, on commission, on the New York Cotton Exchange. On 1 September, 1922, a report on the condition of the cotton crop by the United States Government was expected. It is the custom of the Government to issue such reports from time to time. The price of cotton is usually affected by these reports. The telegram filed by plaintiff with defendant, at Hamlet, N. C., including the words, “If Government report,” preceding the words, “fifty-six or under,” was intended by plaintiff, and if same had been delivered to them by defendant, would have been understood by Hubbard Brothers & Company as an order that if the Government report, expected that day, showed the condition of the crop to be fifty-six per cent or under of the normal crop, they should buy for plaintiff two hundred bales of cotton to be delivered during the month of December following; the order to buy said cotton was conditioned upon the report- showing that the crop was fifty-six per cent or under of a normal crop.
Upon the opening of the market on 1 September, 1922, cotton for December delivery was selling at 22.85 cents per pound; the price fluctuated during the day between 22 and 23 cents. The telegram, which did not include the words, “If Government report,” before the words, “fifty-six or under,” was delivered to Hubbard Brothers & Company on the floor of the Cotton Exchange at 10:18 a. m.; they understood the telegram delivered to them to be an order from plaintiff to buy for him two hundred bales of cotton for December delivery at 22.56 cents per pound or under; they purchased said cotton for plaintiff at 22.50 and thereupon sent plaintiff a telegram by the defendant company as follows:
J. C. Leigh,
Hamlet, N. C.
Bought two December 22.50.
HuBBARD BROTHERS & COMPANY.
This telegram was delivered to plaintiff soon after its receipt at defendant’s office at Hamlet, at 11:27; at 12:17 p. m. plaintiff filed with defendant for transmission to sender, telegram as follows:
Hubbard Brothers & Company,
New York, N. Y.
My wire to you this morning was “if Government report was 56 or under buy two December.” Evidently error in your buying at 22.50. Advise. J. C. Leigh. (12:10 p. m.)
This telegram was received by Hubbard Brothers & Company in New York, who filed reply thereto as follows:
J. C. Leigh,
Hamlet, N. C.
Your order plainly read fifty-six or under buy two hundred December. You made no mention of Government. This was plainly a limited order which we executed at fifty. Hubbard Brothers & CompaNY.
This telegram was received at Hamlet, N. 0., at 12:47 and thereafter delivered to plaintiff.
The New York Cotton Exchange closed on Friday, 1 September, 1922, at 2 p. m., and did not open for business until Tuesday, 5 September (the intervening Monday being Labor Day, was observed as a holiday).
At 6:52 p. m. Hubbard Brothers & Company sent plaintiff a night letter as follows:
' J. C. Leigh,
Hamlet, N. C.
Naturally feel sorry that we did not interpret your order as you meant it but feel sure you accept our point of view. Have shown your order to several brokers and they all agree that it read to buy two December at a limit of fifty-six as nothing whatever was said about Government report, though you undoubtedly meant it when you wrote it out.
Hubbard Brothers & CompaNY.
Upon receipt of tbis nigbt letter, plaintiff learned for the first time tbat the words, “If Government report” were not included in the telegram delivered by defendant to Hubbard Brothers & Company, and that Hubbard Brothers & Company had bought the cotton pursuant to a telegram received by them from which said words were omitted. Plaintiff thereupon wrote a letter to Hubbard Brothers & Company, and sent same with copy of his telegram as filed at Hamlet by mail. By this letter he authorized Hubbard Brothers & Company to close out the contracts. This they did on Tuesday morning, upon the opening of the Cotton Exchange, at a loss of $850, which they charged to plaintiff’s account. They also charged to said account a commission of $50, and the war tax on the transaction, amounting to $4.36. The total amount thus charged was $904.36. Plaintiff testified that if the price of cotton had gone up he would have had the option of taking the cotton, or selling his contracts; that he would-have tried not to lose anything; that he was not in this business for his health.
The Government report on 1 September, 1922, showed that the condition of the cotton crop was 57.2. When the report was published at noon on that day, plaintiff left the telegraph office, because, as he said, he knew he had no order in to buy cotton.
Defendant, as a separate and partial defense to plaintiff’s action for damages, alleged that the message referred to in the complaint was delivered to and accepted by defendant subject to the terms of its standard message contract, by which defendant’s liability for damages resulting from mistakes, or delays in the transmission or delivery, or from nondelivery of any message received for transmission at the unrepeated message rate was limited to $500; that said message was received by defendant for transmission at the unrepeated message rate.
The issues submitted to and answered by the jury were as follows:
1. Did the defendant'negligently fail to properly transmit and deliver the telegram as alleged in the complaint? Answer: Yes.
2. If so, was plaintiff injured thereby? Answer: Yes.
3. Was said telegram sent under the terms of the contract and agreement as set out in the answer? Answer: No.
4. What damages, if any, is plaintiff entitled to recover? Answer: $904.36, and interest from 1 September, 1922.
From judgment upon this verdict, defendant appealed.
H. F. Seawell for 'plaintiff.
Q. W. Tillett and Bose & Lyon for defendant.

Opinion:
CoNNOR, J.
At the close of all the evidence, defendant renewed its motion for judgment as of nonsuit, first made at the close of plaintiff's evidence and tben overruled. C. S., 567. Defendant's first assignment of error is based upon exceptions to tbe refusal of the court to allow this motion. Defendant also, in apt time, requested in writing, that the court charge the jury, "That upon all the evidence, the jury should answer the second issue £No.' " The court refused to give this instruction, and defendant, having excepted to such refusal, assigns the same as error. Defendant thus presents its contention that in no event, upon the evidence, can plaintiff recover in this action the loss sustained by him upon the sale of the cotton purchased for him by Hubbard Brothers & Company.
There is no contention by defendant that it transmitted and delivered the telegram as written and filed by plaintiff at Hamlet, N. C. It is admitted that the telegram transmitted and delivered to Hubbard Brothers & Company, at New York, did not include the words, which made the telegram, as filed by plaintiff at Hamlet, a conditional order to the brokers to buy cotton. The words, "If Government report," before the words "fifty-six or under" were omitted from the telegram delivered to Hubbard Brothers & Company. The failure to transmit and deliver the telegram, ineluding these words, was evidence of negligence, sufficient to he submitted to the jury, upon the first issue. "It is well settled that where a telegraph company receives a message for delivery and fails to deliver it with reasonable diligence, it becomes prima facie liable, and that the burden rests upon it of alleging and proving 'such facts as it relies upon to excuse its failure." Hendricks v. Telegraph Co., 126 N. C., 309, cited and approved in Willis v. Telegraph Co., 188 N. C., 114; Strong v. Telegraph Co., 22 Anno. Cas., 1912A, 55.
Plaintiff, however, cannot recover of defendant the loss sustained by him, upon the sale of the cotton, unless the failure of defendant to transmit and deliver his telegram, containing a conditional order to buy cotton, was the proximate cause of such loss. The delivery by defendant to Hubbard Brothers & Company, of a telegram, which was a limited order to buy cotton and which plaintiff had not filed with defendant, did not authorize the brokers to buy cotton for plaintiff at 22.50 and plaintiff was not bound by the contract made by Hubbard Brothers & Company. The two hundred bales of cotton for December delivery bought by Hubbard Brothers & Company at 22.50 was not plaintiff's cotton until after full knowledge that defendant had failed to transmit and deliver his telegram, which was a conditional order to buy; he ratified the purchase by his brokers by authorizing them to sell the cotton for him. Starnes v. R. R., 170 N. C., 222. The loss sustained by him, upon the sale of the cotton, on Tuesday morning, was not the result of the failure of defendant to transmit and deliver the telegram, which included the words, "If Government report" before the words, "fifty-six or under," but was tbe result of plaintiff's acceptance of tbe cotton purchased by bis brokers for bim, without previous authority from him. It became bis cotton upon bis ratification of tbe act of bis brokers, and as be would have been entitled to any profit, which a rise in tbe price of cotton might have brought bim, be must sustain tbe loss resulting from a sale when tbe price of cotton bad gone down. Plaintiff entered upon tbe transaction, not "for bis health," but with full knowledge of tbe hazards incident to it. His loss was one of tbe casualties of tbe business.
Tbe facts which tbe evidence in this ease tend to establish are almost identical with tbe facts in tbe case of Cotton Oil Co. v. Telegraph Co., 171 N. C., 705. In tbe latter case, plaintiff delivered to tbe telegraph company at Mount Gilead, N. C., a message for transmission to John Kearns, at Wagram, N. C., offering twenty dollars per ton for cotton seed to be purchased by tbe said Kearns; tbe message delivered to Kearns included tbe word "two" after tbe word "twenty," making tbe offer "twenty-two dollars per ton" instead of "twenty." Acting upon tbe telegram delivered to him, Keams bought four car loads of cotton seed, paying for same a price which be would not have paid bad tbe offer in tbe telegram delivered to bim been "twenty" instead of "twenty-two" dollars per ton. Plaintiff discovered tbe error made by tbe telegraph company tbe next day and countermanded tbe order to Kearns. Plaintiff paid Kearns for tbe cotton seed purchased by bim prior to tbe discovery of tbe error, and then brought suit against tbe telegraph company for tbe amount paid Kearns in excess of tbe amount which it would have paid at twenty dollars per ton, claiming this amount as its damage, resulting from tbe erroneous transmission of its telegram.
This Court held, in tbe opinion written by tbe late Chief Justice Hoke, that tbe plaintiff could not recover of tbe telegraph company, as damages, tbe amount paid to Kearns in excess of tbe amount which it would have paid for tbe seed at twenty dollars per ton for tbe reason that plaintiff was not liable to Kearns for this amount, and that tbe payment to bim of said amount was voluntary and made after tbe discovery by plaintiff of tbe error in tbe telegram. Plaintiff was not liable to Kearns for seed purchased by bim under tbe telegram delivered to bim, containing an offer of twenty-two dollars per ton. Tbe seed so purchased were not plaintiff's seed until plaintiff, with full knowledge of tbe facts accepted them, and thereby ratified tbe offer of twenty-two dollars as contained in tbe erroneous telegram. Tbe error in tbe telegram as transmitted was not tbe proximate cause of loss to plaintiff, as alleged.
In bis opinion, Judge Hoke cites with approval tbe "learned and forcible opinion" of Judge Folkes, in Pepper v. Telegraph Co., 87 Tenn., 554. In that case, plaintiff, engaged in business as produce dealers at Memphis, Tenn., bad filed with tbe telegraph company a telegram to be transmitted and delivered to a broker at Birmingham, Ala., offering to sell a car of ribs at $6.60; in the telegram delivered to the broker, the price stated was $6.30; the broker accepted the offer made in the telegram as received by him and plaintiff skipped tke ribs, drawing on tke broker for $1650, tke price of tke car at $6.60. Tke broker refused to pay tkis draft, insisting tkat tke contract price was $6.30, as stated in tke telegram delivered to kim and not $6.60 as stated in tke telegram filed by plaintiff. Plaintiff accepted for tke car of ribs $1575 and sued tke telegraph company for $75, alleging said sum as kis damages resulting from tke negligent alteration of tke telegram by tke telegraph company. It was held tkat he could not recover tkis sum of defendant company, for tke reason tkat no contract between plaintiff and tke broker had resulted from tke telegrams, exchanged between them, tke plaintiff having made an offer to sell at $6.60 and tke broker having accepted an offer at $6.30. Their minds had not met. "Tke minds of tke party who sends a message in certain words, and of .the party who receives tke message in entirely different words, have never met. Neither can, therefore, be bound, tke one to tke other, unless tke mere fact of employment of tke telegraph company, as tke instrument of communication, makes tke latter tke agent of tke sender."
After a learned discussion of tke principles and an exhaustive examination of tke authorities, relied upon to support contrary views of tke proposition, he concludes tkat a telegraph company is not tke agent of tke sender of a telegram. Judge Hoke, approving tkis conclusion, says: "There is muck contrariety of decision on tke question whether a telegraph company may be properly considered tke agent of tke sender so as to bind kim by a contract made in kis name or for kis benefit by reason of a message which has been erroneously transmitted. In tkis jurisdiction it is held tkat tke company, in suck case and to tkat extent, is not tke agent of tke sender, tkat tke latter is not bound by tke terms of tke erroneous message, and unless otherwise in default may not be held responsible for tke effects of it." Pegram v. Telegraph Co., 100 N. C., 28. Tkis conclusion is reached upon tke principle tkat a telegraph company is a public service agency, and tkat neither tke sender nor tke sendee when in need or desirous of its service, has any choice in tke selection of tke means by which tke service may be procured. Tkis Court has adopted and followed tke English, rather than tke American, rule as to tke liability of a sender to thé sendee of an erroneous telegram. Judge Hoke says, in Cotton Oil Co. v. Telegraph Company, supra: "As now advised, we have no present disposition to question tke soundness of tke rule." See Jones on Telegraph & Telephone Companies, 2 ed., 1916, secs. 471 and 473. Tkis author says that tke states recognizing in some form tke English rule are Georgia, Massachusetts, Michigan, New Hampshire, North Carolina, Vermont and Wyoming.
Upon tbe facts presented in the instant case, however, it is immaterial whether the English or the American rule be applied to determine whether or not plaintiff was liable to Hubbard Brothers & Company for the cotton purchased by them upon the erroneous telegram. Plaintiff, with full knowledge that the cotton had been purchased, without regard to the condition named in his telegram, upon receipt by Hubbard Brothers & Company of the telegram, from which the words making his order conditional had been omitted, and that they had interpreted the telegram as received by them as a limited order, accepted the cotton, and took his chances of profit or loss, upon the rise or fall of the market. Defendant company cannot be liable for the loss, because of its failure to deliver the telegram as plaintiff wrote it.
In Shingleur v. Telegraph Company, 72 Miss., 1030, the facts were as follows: Plaintiff's cotton buyers, in Jackson, Miss.; wired their brokers in Boston, directing them to sell 500 bales of cotton at eight and one-half cents per pound. In the telegram delivered to the brokers, the price was stated as eight and five-sixteenths, instead of eight and one-half. The brokers sold at the price named in the telegram as received by them and notified plaintiffs. Plaintiffs, with full knowledge of the error made in the transmission of the telegram, ratified the sale and sued the telegraph company for the difference between what they would have received had the cotton been sold at the price named in their telegram as filed, and the amount they actually received for the cotton sold at the price named in the telegram as delivered to their broker. It was held that plaintiffs could not recover. Judge Whitfield, writing the opinion for the Court, says: "Plaintiffs had incurred no legal liability; they had merely to refuse to comply with the terms of a contract they had never made, and remit their brokers to their adequate remedy against the company. Their payment was voluntary and gratuitous, and cannot, on any sound or just principle, create for them a cause of action where none existed prior to such voluntary payment." See, also, Harper v. Tel. Co., (S. C.), 130 S. E., 119.
We therefore conclude, upon the authority of Cotton Oil Company v. Telegraph Co., supra, that plaintiff cannot recover of defendant the amount lost by him, as the result of the decline in the price of cotton between his ratification of the purchase made for him by his brokers, and the sale made by them, acting under authority from him. Having-reached this conclusion, it becomes unnecessary to consider or pass upon the other assignments of error. The assignments of error, based upon the refusal of the Court to allow the motion for judgment as of nonsuit under C. S., 567, must be sustained. There is no evidence from which the jury could find that plaintiff was injured by the negligence of defendant, as alleged. The judgment must be
Beversed.