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Leonard v. the New York, C., Tel. Co.

Court of Appeals of the State of New York
Mar 24, 1870
41 N.Y. 544 (N.Y. 1870)


Cause submitted in 1868; a re-argument then ordered; Re-argued in 1869, and second re-argument ordered; Argued January 15th, 1870

Decided March 24th, 1870

Grosvenor P. Lowrey, for the appellants.

Charles Andrews, for the respondent.

The appellant seeks a reversal of this judgment, upon two grounds, and, unless we find its position right in reference to one or both of them, it is conceded that the judgment must be affirmed.

1st. It claims, that the plaintiffs' agent, Staats, was guilty of negligence in not stopping and unloading the vessel, after he received plaintiffs' dispatch of the 26th of September, and thus avoiding most of the damage, which plaintiffs sustained. Before this dispatch was received, the loading of the vessel was completed, the bill of lading was signed and delivered to the master, and he had procured his clearance from the port of Oswego. Staats knew these facts, and knew, also, that it was usual for vessels, at that season of the year, to hurry their departure. Relying upon these facts, and supposing the vessel had actually sailed, he made no effort to detain her. From all this, the referee found, that there was no negligence on the part of Staats, and I see no good reason for disturbing his findings. There were sufficient grounds for concluding, in good faith, that the vessel had sailed; the facts indicated that she had sailed, and I do not see how Staats could be charged with the want of ordinary diligence, in relying upon them. The greatest degree of diligence would, doubtless, have required Staats to have made inquiries for the vessel, after he received the dispatch. But, he was only bound to ordinary diligence, and I do not see how we can find the want of such a degree of diligence against the finding of the referee, and in favor of a party, who, upon this question, has the affirmative. ( Hamilton v. McPherson, 28 N.Y., 76; Milton v. The Hudson River Steamboat Co., 37 N.Y., 210; Costigan v. The Mohawk Hudson R.R. Co., 2 Denio, 609; Dorwin v. Potter, 5 Denio, 306; Shearman Redfield on Negligence, § 598.)

But, aside from this, it is by no means certain that Staats could have obtained the salt from the vessel, if he had made the effort. He had made a valid contract to have the salt transported to Chicago, and the other party to the contract had taken possession of the salt, and entered upon the execution of the contract. What right had Staats to take the salt away from him? I know of no process of law, by which he could have done it. And what right did the defendants have to ask Staats to violate his contract with that third party, in order to shield it from the consequences of its own wrong. I am, therefore, clearly of the opinion, that the alleged negligence furnishes no defence to the action.

2d. It is also claimed, that the referee adopted an erroneous rule of damages, and that the plaintiffs should not, in any event, have recovered more than they actually disbursed for freight on the salt to Chicago. The measure of damages to be applied to cases as they arise, has been a fruitful subject of discussion in the courts. The difficulty is not so much in laying down general rules, as in applying them. The cardinal rule undoubtedly is, that the one party shall recover all the damages which has been occasioned by the breach of contract by the other party. But this rule is modified in its application by two others. The damages must flow directly and naturally from the breach of contract, and they must be certain, both in their nature and in respect to the cause from which they proceed. Under this latter rule, speculative, contingent and remote damages, which cannot be directly traced to the breach complained of, are excluded. Under the former rule, such damages are only allowed, as may fairly be supposed, to have entered into the contemplation of the parties when they made the contract, as might naturally be expected to follow its violation. It is not required, that the parties must have contemplated the actual damages, which are to be allowed. But the damages must be such, as the parties may fairly be supposed to have contemplated, when they made the contract. Parties entering into contracts, usually contemplate that they will be performed, and not that they will be violated. They very rarely actually contemplate any damages, which would flow from any breach, and very frequently have not sufficient information to know what such damages would be. As both parties are usually equally bound to know and be informed of the facts pertaining to the execution or breach of a contract, which they have entered into, I think, a more precise statement of this rule is, that a party is liable for all the direct damages, which both parties to the contract would have contemplated as flowing from its breach, if, at the time they entered into it, they had bestowed proper attention upon the subject, and had been fully informed of the facts. In this case, then, in what may properly be called the fiction of law, the defendant must be presumed to have known that this dispatch was an order for salt, as an article of merchandise, and that the plaintiff would fill the order as delivered; and that, if the salt was shipped to Chicago, it would be shipped there as an article of merchandise, to be sold in the open market. And the market price in Chicago being less than the market price in Oswego, that they would lose the cost of transportation, and the difference between the market price at Chicago and the market price at Oswego. I think, therefore, that the rule of damages, adopted by the referee, was sufficiently favorable to the defendant. The damages allowed were certain, and they were the proximate, direct result of the breach.

I do not think, under the facts of this case, that the plaintiffs, when they found the state of the Chicago market, were bound to re-ship this salt to Oswego. For anything that appears in this case, the cost of transportation to Oswego would have been equal to the difference in the market price between the two places. Then there was the risk of the lake transportation at that season of the year, and the uncertainty in the Oswego market, when the salt should again be landed there. If the plaintiff had shipped it, and it had been lost upon the lake the total loss would not have been chargeable to the defendant. By the wrongful act of the defendant, the salt had been placed in Chicago, one of the largest commercial centers in the country, and the plaintiffs had the right to sell it there in good faith, and hold the defendant liable for the loss.

I have, therefore, reached the conclusion, that the judgment must be affirmed; and in reaching this conclusion, I believe I am sustained by principles well settled, and by adjudged cases quite analogous. (Sedgwick on Damages, 37; Hadley v. Baxendale, 9 Excheq., 341; British Columbia c. Co. v. Nettleton, 3 Law Reports, Common Pleas, 399, 408; Wilson v. The Newport Dock Co., 1 Law R., Excheq., 176; Griffin v. Colver, 16 N.Y., 489; Hamilton v. McPherson, 28 N.Y., 72; Kent v. Hudson R.R. Co., 22 Barb., 278; Medbury v. The N.Y. Erie R.R. Co., 26 Barb., 564; Scoville v. Griffith, 2 Kern., 509; Cutting v. Grand Trunk R.R. Co., 13 Allen, 381; Squires v. Western Union Telegraph Co., 98 Mass., 382; Wenger v. United States Telegraph, 55 Penn., 262; N.Y. Washington Tel. Co. v. Dryburgh, 35 Penn., 298; Williams v. Barton, 13 Louisiana R., 494.)

Judgment affirmed with costs.

As the findings of fact by a referee, when not disturbed by the General Term, are conclusive upon this court, we are relieved from any critical examination of the testimony. Some of the important points do, indeed, arise upon undisputed facts, and thus present themselves as questions of law rather than as questions of fact. (Code, § 268; 5 Seld., 463.)

Of this character is the first point presented, to wit, whether Magill Pickering were partners of the plaintiffs or were their agents. The referee, in fact and in law, adjudged them to be agents merely. Magill Co. agreed to receive from the plaintiffs their salt, to sell it in the Chicago market, to render correct accounts of sales, and to remit the proceeds every fifteen days. Their compensation for making the sales was to be one-half of the net profits, after deducting the cost of the salt, freight, insurance, dockage, and interest from the day of shipment to the day of sale. There was no agreement that they should bear any portion of the losses suffered. The hazard of loss rested upon the plaintiffs exclusively. This, in law, created an agency, and not a partnership. ( Salter v. Ham, 31 N.Y.R., 321; Burckle v. Eckhart, 3 Coms., 132, S.C.; 1 Denio, 337.)

The dispatch in question was forwarded by the agents of the plaintiffs in their business, and has been adopted and assumed by them. The plaintiffs are the proper parties to bring this action.

The next and the main question is upon the liability of the defendants under the circumstances stated. The referee finds that, in fact and in law, the company receiving the message at Chicago was the agent of the New York company to receive messages for transmission over its wire. He finds this upon the contract, the substance of which is set forth in the preceding statement. He finds, also, that it had upon it a duty to receive and transmit correctly, and that it is liable upon that ground.

The plain and simple rule upon this branch of the case is furnished by the law upon the subject of common carriers. I do not consider a telegraph company subject to the liability of a common carrier, as I shall hereafter show, but I use the case as an illustration. A merchant in New York ships a bale of goods by the People's Line of steamboats from that city to Chicago. The duty of the people's line is not themselves to carry these goods to Chicago, but simply to carry them to the end of their route, and then deliver them according to instructions, or, if uninstructed, to some responsible line for further transportation. Their duty is then ended, as is their liability. ( Gould v. Chapin, 20 N.Y.R., 259; Ladue v. Griffith, 25 id., 364; McDonald v. W.T. Co., 34 N.Y.R., 497.) The railroad company, or the canal boat proprietor to whom they are delivered, upon their receipt, at ance becomes liable to the shipper, and so remains until he carries the length of his route, and delivers them to some responsible party for further transportation. When this is done his liability ends, and that of the new carrier commences, upon the same terms. Each carrier, by the receipt of the goods, and the consequent promise to forward them, enters into an agreement with the owner at New York, although he does not meet him or correspond with him personally, that he will safely carry and deliver the goods, and is liable to the original owner in New York if he fails in his undertaking. ( Auth. sup). The rule and the reason of it are the same in regard to the transmission of telegraphic messages.

A company of this character exists at Chicago, whose own lines extend only to Detroit or Toledo, and then connect with other lines extending to Buffalo; these, in their turn, with lines extending to New York, and connecting with the last line, and lines also extending northerly to Oswego and southerly to Binghamton. It is not the duty of the company thus situated at Chicago, on receiving a message for New York, nor does it undertake that it will, by itself or by its own lines, transmit the message to its final destination. In analogy to the common carriers' rule, and upon the good sense of the transaction and the general understanding of the community, it undertakes for care and attention in transmitting it over its own lines, and for its prompt delivery to a competent and responsible company for further transmission. When so delivered, its liability terminates, and that of the receiving company begins. On this point I hold the case to have been well decided by the referee, and if a liability existed, the defendant was the party upon whom, by law, it rested.

I have examined all the cases cited in the collection of decided cases, respecting telegraphic liabilities furnished by the appellants' counsel, and find that these views are sustained in principle by many of them, and not in hostility to any of them having authority. Stevens v. Montreal Telegraph Company (16 Upper Canada R., 530.)

The third objection presents the question, whether a telegraph company is liable as a common carrier, or whether their liability arises only in the want of proper care and attention.

I can find no authority, and can discover no principle upon which to charge such a company with the absolute liability of a common carrier. That liability was founded upon the necessities of the case, real or fancied, and has never been applied to any person or to any occupation, except those of carriers of goods and innkeepers. The carrier had the exclusive possession and control of the goods, often in secret, away from the supervision of any other person, with opportunity for embezzlement and collusion with evil minded persons, and without means of discovery by the owner. Especially was this so in the ruder stages of civilization, and before the present modes of communication, rapid and easy, were in existence. It was upon this view, early adopted as a rule of safety to the community, that the carrier should always be prima facie liable, in case of non-delivery of the goods, and that he should not be excused for any causes, except those occurring by the act of God or of the public enemies, and these were to be shown by himself.

Whether his liability is based upon the contract he makes, or upon his public duty, the telegrapher does not come within any of these principles. He has no property intrusted to his care. He has nothing which he can steal, or which can be taken from him. There is no subject of concealment or conspiracy. He has in his possession nothing which in its nature and of itself, is valuable. It is an idea, a thought, a sentiment, impalpable, invisible, not the subject of theft or sale, and as property, quite destitute of value. He cannot, himself, see or hear, or feel the subject of his charge. He submits an idea to a mysterious agency, which carries it to its destination, and delivers it to one there at hand to receive it. He is bound to conduct the business appertaining to this pursuit, with skill, with care and with attention. He holds himself out as possessing the ability to transmit these communications and he undertakes that he can and will transmit and deliver them with the expected dispatch. There may be circumstances in the nature of the instrumentality employed, and the effects to be produced, which, in a particular case, will prevent the proper accomplishment of the undertaking. A thunder storm, which prevents or renders dangerous the operation of electrical currents or machines; a tempest, which prostrates poles and breaks the wires; or unusual pressure of prior business; the sudden sickness of an operator, or many other causes, might prove a sufficient excuse for the want of a prompt delivery of a message. A message is taken to an office in Buffalo to be sent to the city of New York, a distance of about 500 miles, and is accepted. This acceptance implies that the message is to be sent immediately, or certainly within a few hours. The sender can communicate by letter or go in person, within the space of twelve or fourteen hours, and the object of a telegraphic message is to gain the advantage over the time that would thus elapse. This is understood by all parties, and the sender has the right to rely upon it.

In the present case the referee has found actual negligence or want of care in the defendants' agent at Syracuse. The message, as received at Syracuse from the west, contained an order for 5,000 sacks of salt, a sack containing about fourteen pounds of fine salt. As sent by the defendants' agent, it contained an order for the same number of casks of salt — a cask containing 320 pounds of coarse salt. No excuse is given for this error, and no explanation, unless it be only that the characters by which these words are designated, nearly resemble each other. No doubt this would furnish a reason why a person ignorant of telegraphic characters or unskilled in their reading, should misunderstand them. Such are not the persons that the defendants are permitted to employ in this business. Those engaged in it profess to understand the hieroglyphics. They have, themselves, invented or adapted them. They are bound, also, to use the machinery which will in the best and safest manner deliver to them the expected messages. Careless reading or ignorant management of the machinery is no excuse; it is simply an aggravation of the offence. The negligence was quite enough to justify the action.

The rule of damages adopted by the referee was the most favorable to the defendants of any that could have been applied, unless it should have been held that no recovery could be had beyond the price paid for the message. He gave the difference in the value of the salt at Oswego, on the day of its shipment, and its value in Chicago on the same day, together with the expense of transportation. Nothing was allowed for profits that might have been made on the fine salt ordered, or on the salt at Oswego, if it had not been sent, and no question of a falling market is in the case. The value of the salt at Oswego, where it would have remained except for the erroneous message, as compared with its value at Chicago, where the same error caused it to be sent, with the expense of so sending it, was the smallest allowance that could have been made. The case shows that the salt was actually sold in Chicago at a much greater loss, and that the plaintiffs were at an expense of several hundred dollars in storing the salt at Chicago. These items were not allowed. ( Griffin v. Colver 16 N.R.R., 489; Blot v. Boiceau, 3 Coms., 78; Watkinson v. Laughton, 8 Johnson, 213; Amory v. McGregor, 15 Johns. R., 24; Richmond v. Bronson, 5 Denio, 55.)

If this is a question of contract, the point of the plaintiffs' negligence does not properly arise.

The breach of a contract by one party is not justified by the subsequent negligence of the other party. It can only be important on the question of damages. In actions of tort, where the plaintiff claims for the negligence of another, if he himself has been negligent, and thus contributed to his own injury, he can recover no damages; in every aspect of this point, the decision of the referee, implied in his finding, that there was no negligence on the part of the agent at Oswego, is conclusive. It might or it might not have been in his power to stop the sailing of the vessel on the 27th. It might or might not have cost less to stop it than to allow it to go on. We do not understand the rules regulating this subject, or their effect, as well as did the agent at Oswego, or as did the referee. We must rest upon the decision of this latter.

Judgment should be affirmed, with costs.

The counsel for the appellants, in his points, waives all the points raised by the case except the following:

1st. Whether the plaintiffs were negligent and contributed to their own injury.

2d. Assuming that they were not, and that every other point requisite to sustain their cause of action be in their favor, what would be the proper rule and measure of damages in this case?

They will be briefly considered.

1st. Upon the facts found by the referee, the plaintiffs were authorized to ship the salt ordered to be sent by the telegram delivered to them. I see nothing in the case which can properly charge them with improper conduct in proceeding to execute the order. Nor is there, in my opinion, anything to warrant the conclusion that they were chargeable with negligence in not stopping the vessel on board of which the salt had been put, and requiring a return thereof.

The referee has found affirmatively that when the dispatch of September 26, 1856, from the plaintiffs to Staats, their agent, apprising him of the mistake in the order of Magill Pickering, was received, he knew said vessel had finished loading, and supposed she had actually left the Oswego harbor. He also finds, it is true, that it did not appear that he made any effort whatsoever to ascertain or inform himself of the fact as to whether she had actually sailed or was then within the Oswego harbor. The omission of such effort did not constitute negligence. Knowing that the vessel was loaded, and believing that she had left port, and without any fact shown to raise a doubt as to the fact of her having sailed, why should he go on an errand or make an inquiry inconsistent with such belief? I certainly cannot see any rule or principle imposing on him that duty or obligation, and consequently there can be no imputation of negligence for omitting to do an act which he was not bound to perform.

2d. After a careful consideration of the question of damages, I have come to the conclusion that the rule adopted by the referee was correct, or at least as favorable to the defendants as can, upon any principle, be claimed by them. He has not charged them with any damages resulting from the non-fulfillment of the order, as actually given, to "send five thousand SACKS of salt immediately," but he has held them responsible only for the loss that has resulted from the order actually given to the plaintiffs' agent, that direct them "to send five thousand casks" instead of sacks of salt; that induced them to ship the salt which was sent and to incur the expense of the transportation thereof; and when it reached where it was ordered to be sent, it was not worth as much in the market there as its value at the port from which it came. If the order had not been given that expense would not have been incurred, and the loss resulting from such difference would not have been sustained. They are, therefore, the direct and immediate consequence or result of the defendant's act, and with those only, and the interest thereon, have they been charged.

It is insisted, and it may be the fact, that if the salt had been sent back from Chicago to Oswego, the loss to the plaintiff would have been less than the difference in value at those places. I am, however, unable to find any authority in the plaintiffs to return it, much less any duty or obligation to do so. Such return would have been attended with the cost of transportation and the charges incidental thereto, and those would not have been justified by the order; that was fully executed when the salt reached its place of destination in pursuance thereof; and there is no ground for saying that anything done after its full execution was done in compliance with its terms and direction. It necessarily follows that the expense incurred thereby would not have been a direct or necessary result or consequence of the defendant's act.

These views lead us to the conclusion that the referee did not err in his decision on either of the two questions now presented for our review, and that the judgment appealed from should be affirmed, with costs.

All the judges concurring for affirmance, except GROVER, J., who thought the rule of damages erroneous.

Judgment affirmed.

Summaries of

Leonard v. the New York, C., Tel. Co.

Court of Appeals of the State of New York
Mar 24, 1870
41 N.Y. 544 (N.Y. 1870)
Case details for

Leonard v. the New York, C., Tel. Co.

Case Details


Court:Court of Appeals of the State of New York

Date published: Mar 24, 1870


41 N.Y. 544 (N.Y. 1870)

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