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and Conditions on the Back of a Telegraph Message upon the Sendee

BY H. S. YOHE

Member of the Bar of the District of Columbia

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ITH a view to limiting legal liability for mistakes or delays in transmission or delivery of messages, or for failure to deliver messages, telegraph companies have printed on the reverse side of each telegraph blank certain stipulations or conditions, which they insist form part of the contract between the sender and themselves, and, are binding on both sender and sendee. Among these conditions the most important, and those concerning which there appears to be the most litigation, are the following: That all messages unless otherwise indicated on the face are unrepeated messages for which the company shall not be liable for mistakes or delays in transmission or nondelivery beyond the amount received for sending the same; that the company is not liable for mistakes, delayed delivery, or nondelivery, whether caused by the negligence of its servants or otherwise, beyond fifty times the repeated telegram rate, if sent as a repeated message, unless a greater value is stated and an additional sum paid; that the company is the agent of the sender; that the stipulations agreed to by the sender are binding on the sendee or addressee; and that the company shall not be liable for statutory penalties in any case where the claim is not presented in writing within a certain period, usually sixty days. It is our purpose to show, first, what effect these stipulations have on the right of the sendee to maintain an action; and, second, to what extent the sendee is entitled to recover.

The English Doctrine.

In England it is held that the obligation of a telegraph company to use due care and skill in the transmission of a dispatch is one arising entirely out of contract, and as there is ordinarily no contract between the person to whom a message is addressed and the messenger which undertakes its delivery, there can be no cause of action in the former's favor arising from the latter's negligence in performing the contract.1

In Dickson v. Reuter's Telegram Co. L. R. 3 C. P. Div. 6, it was stated that unless the sender is the agent of the sendee, or the altered message was an intentional fraudulent representation, the sendee is without remedy. The best statement of the English rule which has come to our attention is that made by the supreme court of Alabama in Postal Teleg. Cable Co. v. Ford, 117 Ala. 672, 23 So. 684, in which case it said: "In England it is held that the sendee, in the absence of such facts as make him a party or privy to the contract, has no right of action against the telegraph. company. In thus holding, the English courts apply to telegraph cases the principle established by them that no cause of action arises in favor of a stranger to a contract because of a breach of duty growing out of the contract. Winterbottom v. Wright, 10 Mees. & W. 107, 11 L. J. Exch. N. S. 415. The English doctrine, that the addressee cannot sue the telegraph company for error or negligence in transmission or delivery, springs from the con

1 Playford v. United Kingdom Electric Teleg. Co. L. R. 4 Q. B. 706, 10 Best & S. 759, 38 L. J. Q. B. N. S. 249, 21 L. T. N. S. 21, 17 Week. Rep. 968.

tract between it and the sender, to which the sendee is neither a party nor a privy." With this doctrine, few, if any, of the states in the United States agree.

The American Doctrine.

In this country the courts in the various states, in interpreting the effect on the sendee of stipulations on the reverse side of a telegraph blank, have with few exceptions held that such stipulations are not binding on the sendee, and consequently do not deny him a right of action. In arriving at this conclusion the courts have based their decisions on one or more of the following several reasons, which were tersely enumerated by the Iowa supreme court in Younker v. Western U. Teleg. Co. 146 Iowa, 499, 125 N. W. 577:

"1. A telegraph company is a public agency, and responsible as such to anyone injured by its negligence, or at least it is the common agent of the sender and receiver, and responsible to each for any injury sustained by them, respectively, by its negligence." 2

"2. When the receiver is the beneficiary of the contract, the injury, if any, caused by the company's negligence must be to him."3

"3. The message is the property of the consignee addressed in analogy to the consignee of goods."

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"4. When it appears upon the face of the message that the sender is the agent of the receiver, the latter, as the principal, may maintain an action for breach. of the contract, or for a tort if injury is done to him by negligence in perform ance of the duty contracted to be done." Practically the same reasons were given by the courts in Young v. Western U. Teleg. Co. 107 N. C. 370, 22 Am. St. Rep. 883, 11 S. E. 1044, 9 L.R.A. 669, and in McLeod v. Pacific Teleph. Co. 52 Or. 22, 94 Pac. 568, 95 Pac. 1009, 16 Ann. Cas. 1239, 1241, 15 L.R.A. (N.S.) 810, 18 L.R.A. (N.S.) 954.

In interpreting the effect on the

Western U. Teleg. Co. v. Allen, 66 Miss. 549, 6 So. 461; New York & W. Printing Teleg. Co. v. Dryburg, 35 Pa. 298, 78 Am. Dec. 338.

Frazier v. Western U. Teleg. Co. 45 Or.

sendee of stipulations made by telegraph companies on the back of the telegraph blank, Chief Justice Shepard, of the court of appeals of the District of Columbia, in Fererro v. Western U. Teleg. Co. 9 App. D. C. 455, 35 L.R.A. 548, in referring to the various rules laid down by the courts, said: "The majority of American courts rest the rule upon the idea that the telegraphic agency is engaged in the exercise of a public franchise, having relation to the commerce of and between the states; and in consequence owes to the sender of the message a double duty,-one by reason of the contract, and the other by virtue of the general obligation to perform the assumed undertaking; and to the person addressed a single duty by virtue of the same general obligation. Others take the ground that the person addressed may be the beneficiary of the contract made upon its delivery to the transmitter, and that his right of action does not depend upon whether the sender had been constituted his agent for the purpose, but upon the question who was to be served in the transaction and who has been damaged. Others assign for a reason that the act of the telegraph company in altering the message is the misrepresentation of a fact which, if reasonably resulting in injury to the receiver, entitles him to an action for his damages."

In Webbe v. Western U. Teleg. Co. 169 Ill. 610, 61 Am. St. Rep. 207, 48 N. E. 670, it was said: "Whatever may be the correct view of the conditions

printed by a telegraph company upon blank forms used for sending of despatches, as being regulations or contracts, when the controversy is between. the sender of the despatch and the telegraph company, we are of the opinion that the distinctions have no application when the controversy is between the company and the receiver; they afford no proof of contract between the tele

414, 78 Pac. 330, 2 Ann. Cas. 396, 67 L.R.A. 319; Western U. Teleg. Co. v. Adams, 75 Tex. 531, 12 S. W. 857, 16 Am. St. Rep. 920, 6 L. R. A. 844.

4 Milliken v. Western U. Teleg. Co. 110 N. Y. 403, 18 N. E. 251, 1 L.R.A. 281.

graph company and the person to whom the message is addressed, and he, there fore, may not be held bound by such conditions and stipulations."

From these citations it will thus be seen that while the English courts limit the right of action by the sendee to the question whether or not said sendee in any manner is a party to the original contract with the telegraph company, the American courts generally have construed the effect of the stipulations made by the companies more liberally. In some of the states where the courts were inclined to follow the English doctrine, the legislatures in recent years have passed statutes on the subject expressing the general trend of the majority of American decisions.

With regard to the stipulation requiring that the message be repeated to attach liability, it has frequently been held that this condition is invalid, and does not prevent a recovery for a negligent mistake or delay in transmission or nondelivery, on the ground that such stipulations are contrary to public policy.5

The weight of American authority is that the telegraph company owes to the addressee a duty to transmit the telegram correctly, and is liable, to him in tort for damages sustained through any breach on its part.

It seems, also, that proof that the message was incorrectly transmitted raises a presumption of negligence on the part of the company and throws upon it the burden of proof."

On whatever grounds a few of the courts have refused to permit the sendee of the telegram to recover, a careful study of those cases will reveal the fact that while the right of recovery was denied the sendee, yet in practically no case has this right been denied in toto,

5 Western U. Teleg. Co. v. Norris, 25 Tex. Civ. App. 43, 60 S. W. 982; Gillis v. Western U. Teleg. Co. 61 Vt. 461, 15 Am. St. Rep. 917, 17 Atl. 736, 4 L.R.A. 611; Baldwin v. United States Teleg. Co. 45 N. Y. 751, 6 Am. Rep. 165, 3 Mor. Min. Rep. 70.

Western U. Teleg. Co. v. Dubois, 128 Ill. 248, 15 Am. St. Rep. 109, 21 N. E. 4.

7 Reed v. Western U. Teleg. Co. 135 Mo. 661, 58 Am. St. Rep. 609, 37 S. W. 904, 34 L.R.A. 492.

8 Western U. Teleg. Co. v. Shotter, 71 Ga. 760; Western U. Teleg. Co. v. Flint River

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but usually intimated that a recovery might have been had under certain other conditions. Of all the states in the Union as late as 1911, Georgia alone held that the telegraph company is the agent of the sender and bound by the terms of the message, and to him alone must the sendee look for compensation for any damages he may have sustained by reason of any error or delay in transmission or nondelivery.

This rule in Georgia has since been changed by a statute so that the sendee can recover direct from the telegraph company. While Alabama denies the sendee the right of recovery on the contract unless the relation of principal and agent existed between the sendee and sender, the courts of that state do not deny a recovery if a suit is instituted by an action ex delicto. The Kentucky courts permit either sender or sendee to maintain an action on the contract if either has sustained damage.10

The courts of Illinois, Indiana, and Iowa all permit the sendee to recover in cases where he has sustained a loss through the negligence of the telegraph

company.

11

In Herron v. Western U. Teleg. Co. 90 Iowa, 129, 57 N. W. 696, an action was brought by the sendee for the failure of the company to deliver the message. The court in its opinion said: "There were no contractual relations between the company and the plaintiff, and some authorities hold that in such cases the person injured may not recover, but the rule which seems to prevail generally in this country is to allow the person to whom a despatch is sent, even though sent by a person under no obligation to send it, to recover of the telegraph company damages caused by the delay in transmission.'

Lumber Co. 114 Ga. 576, 88 Am. St. Rep. 36, 40 S. E. 815; Brooke v. Western U. Teleg. Co. 119 Ga. 694, 46 S. E. 826.

9 Ford v. Postal Teleg. Cable Co., 124 Ala. 400, 27 So. 409; Western U. Teleg. Co. v. Adams, 154 Ala. 657, 46 So. 228; Heathcoat v. Western U. Teleg. Co. 156 Ala. 339, 47 So. 139.

10 Chapman v. Western U. Teleg. Co. 90 Ky. 265, 13 S. W. 880.

11 Western U. Teleg. Co. v. Dubois, supra. Hadley v. Western U. Teleg. Co. 115 Ind. 191, 15 N. E. 845.

The same rule was announced in the following cases: Western U. Teleg. Co. v. Allen, 66 Miss. 549, 6 So. 461; Elsey v. Postal Teleg. Co. 15 Daly, 58, 3 N. Y. Supp. 117; McLeod v. Pacific Teleph. Co. 52 Or. 22, 94 Pac. 568, 95 Pac. 1009, 16 Ann. Cas. 1239, 1241, 15 L.R.A. (N. S.) 810, 18 L.R.A. (N.S.) 954; Western U. Teleg. Co. v. Woodard, 84 Ark. 323, 105 S. W. 579, 13 Ann. Cas. 354.

The theory that a telegraph company is liable to the sender because of a breach of public duty has been enunciated in the courts of Arkansas, Illinois, Indiana, Kentucky, New York, South Carolina, and Texas; the Illinois court in Western U. Teleg. Co. v. Hope, 11 Ill. App. 289, stating the rule thus: "A telegraph company in analogy to a common carrier is under the obligation and duty to the public to perform the service it undertakes in a prompt and skilful manner, and for any breach of such obligation and duty it is liable to the person injured."

Of late years the tendency of American courts seems to be that where it can be shown that the message was sent for the benefit of the addressee, the addressee is entitled to recover. In Barrack v. Postal Teleg. Co. 12 Ohio S. & C. P. Dec. 78, the court said, after stating the English rule as heretofore. heretofore stated: "But this view of law has never been adopted in this country, but the receiver or addressee always has been allowed to maintain his action where he could prove actual damages; the courts holding that the addressee, while not an actual party to the contract of sending, comes within the rule that when two parties contract for the benefit of the third, the third party may sue for damages resulting from the breach of the contract. The addressee is the beneficiary of the contract of sending, and is entitled to sue in his own right for damages when, by the negligence of the company, he is deprived of the benefit he would otherwise have received."

The following four cases show the divergent opinions of the courts with. respect to the effect of the stipulations

12 2 Shearm. & Redf. Neg. 5 ed. 543; Gray, Communication by Teleg. § 65; Thompson,

on the right of the sendee to recover for any loss sustained due to error or delay in transmission or nondelivery of a message by a telegraph company: Anniston Cordage Co. v. Western U. Teleg. Co. 161 Ala. 216, 135 Am. St. Rep. 124, 49 So. 770, 30 L.R.A. (N.S.) 1116; M. M. Stone & Co. v. Postal Teleg. Cable Co. 35 R. I. 498, 87 Atl. 319, 46 L.R.A. (N.S.) 180; Fererro v. Western U. Teleg. Co. 9 App. D. C. 455, 35 L.R.A. 548; Joshua L. Bailey & Co. v. Western U. Teleg. Co. 227 Pa. 522, 76 Atl. 736, 19 Ann. Cas. 895, 43 L.R.A. (N.S.) 502.

These cases we shall consider in their order: The Anniston Cordage Co. Case was an action brought by the sendee of a telegraphic message to recover damages of the defendant for a negligent mistake in transmission of the following message: "Offer thirty thousand three and four ply eighths sixteen half. Quick reply." The mistake in transmission of the message consisted in the substitution of "fifteen" for "sixteen." In this case the court said: "The first question presented by the record is the right of the plaintiff, sendee, who was not a party or privy to the contract in pursuance of which the message was sent, to maintain an action in tort for the error committed in transmitting the message.

We have examined them (authorities) and conclude the weight of authority is to the effect that the addressee of a message may sue the telegraph company in his own name and recover such damages as he may have sustained by reason of its negligence, when the message was intended for his benefit, and the company either had knowledge of that fact or had notice of such facts as would be the equivalent of knowledge."12

After citing the above reference, the court quoted the following from Frazier v. Western U. Teleg. Co. 45 Or. 414, 78 Pac. 330, 2 Ann. Cas. 396, 67 L.R.A. 319: "A telegraph company is not a common carrier in the sense that it is an insurer against mistakes in the transmission of messages, or delays in their prompt delivery; but it is an instrument of commerce and a public service corElectricity, § 427; Joyce, Electric Law, § 1008. 21 Enc. Pl. & Pr. p. 509.

poration. It therefore owes the duty to those for whose benefit it undertakes to transmit and deliver messages, to transmit and deliver them without unreasonable delay. For violation of this duty or a negligent performance thereof, it is responsible to the party for whose benefit the contract was made, whether it be the sender or the addressee. . . But the right of the addressee is necessarily grounded between the company and the sender, whether the action be in form technically for a breach of contract or one sounding in tort. Without the contract under which the message was forwarded as a foundation for the cause of action, no recovery whatever could be had. In order for the addressee to sue, it is essential, therefore, that it appear that he was to be benefited by the contract for sending the message, and that that fact was known to the company when it received the message for transmission, either from its language or otherwise.'

Continuing with the case at bar, the court said: "The question then arises: Is the language of the message sufficient to convey such information? We think it easy of demonstration that it is not; and it suffices to say that this court holds that the message, in its wording, is not such as would charge the transmitting company with the information that the sendee is the party for whose benefit it is sent."

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The result of this decision is that the Alabama court has finally recognized a right in the sendee to sue for damages occasioned by the negligent act of a telegraph company, but only to the extent that the right grows out of the contract itself, which must have been made for the benefit of the sendee, and that this fact must have come to the notice of the company. The court, however, exhibited its reluctance to give up the old rule denying a right to the sendee by holding that the message in question did not indicate to the company that it was for the benefit of the sendee, and therefore denied the right of recovery to the plaintiff. The injustice of this decision we shall show by later comparing it with the decisions in Fererro V. Western U. Teleg. Co. 9 App. D. C. 455, 35 L.R.A.

548, and Joshua L. Bailey & Co. v. Western U. Teleg. Co. 227 Pa. 522, 76 Atl. 736, 19 Ann. Cas. 895, 43 L.R.A. (N.S.) 502.

In M. M. Stone & Co. v. Postal Teleg. Cable Co. 35 R. I. 498, 87 Atl. 319, 46 L.R.A. (N.S.) 180, it was said that a message to a commission merchant stating "sell" two cars, and naming the price, or "packed" a certain quantity of apples, is not sufficient to notify the company of a possible loss in case of failure to deliver, so as to charge it with the loss which he suffers because he loses a sale which he had negotiated, and to fill which he sent an order for goods, which was accepted by telegram, so that he was compelled to sell the property at a loss. The court in part said: "As the plaintiff was not a privy to the contract between the defendant and the sender of the message, his action was properly in tort. We have held, however, that his action is founded upon and limited by the contract, and his rights thereunder can be no greater than those of the party to the contract. (31 R. I. 174, 76 Atl. 762, 29 L.R.A.(N.S.) 795.) His action is governed by the same rule as to damages as would be that of the sender of the message in an action ex contractu founded upon the same alleged negligent act of the defendant. . If the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendants, and thus known to both parties, the damages resulting from the breach of such contract, which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and communicated. But if, on the other hand, these special circumstances were wholly unknown to the party breaking the contract, he, at 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, from such breach of contract.

The only loss which would naturally flow from the failure to deliver this message would be the loss to the sender of what he paid to the defendant

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