Thos. G. Hardie & Co. v. Western Union Telegraph Co.

• Decision Date: 24 June 1925
• Docket Number: 457.
• Parties: THOS. G. HARDIE & CO. v. WESTERN UNION TELEGRAPH CO.
• Court: North Carolina Supreme Court

128 S.E. 500

190 N.C. 45

THOS. G. HARDIE & CO. v. WESTERN UNION TELEGRAPH CO.

No. 457.

Supreme Court of North Carolina

June 24, 1925

Appeal from Superior Court, Mecklenburg County; Stack, Judge.

Action by Thos. G. Hardie & Co. against the Western Union Telegraph Company. Judgment for plaintiff, and defendant appeals. Reversed.

United States Supreme Court is final authority to interpret and declare law on subject of interstate commerce by telegraph.

Civil action to recover damages for an alleged negligent error in the transmission of the following telegram:

"Terrell Texas 1-18-23.

Thos G. Hardie & Co., Charlotte, N. C.

Rivulet offer blurting concern inch group B bluffness on March.

Ludlam McGinty & Company."

Translated, this message means:

"Your telegram received. Offer 500 middling inch group B 125 on March."

The word "bluffness," meaning 125, was changed in transmission to "bluffing," which has a code meaning of 100. Upon the strength of this telegram, plaintiff sold to the Monarch Mills of Union, S. C., 500 bales middling inch cotton at 100 on March, and alleges that it sustained a loss of $663 by reason of the error aforesaid.

This message was written on one of the defendant's regular forms, and contained, inter alia, the following stipulations:

"(1) 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 unrepeated-message rate is charged in addition."

"(2) The company shall not be liable for mistakes or delays in the transmission or delivery, or for nondelivery, of any message received for transmission at the unrepeated message rate beyond the sum of $500; * * * nor in any case for delays arising from unavoidable interruption in the working of its lines; nor for errors in cipher or obscure messages."

"(3) No employee of the company is authorized to vary the foregoing."

These stipulations were on file with, and approved by, the Interstate Commerce Commission, prior to and at the time of sending the above message.

Upon denial of liability and issues joined, the jury returned a verdict in favor of plaintiff for $500; it being admitted that the message in question was an unrepeated message. The court ruled that the first part of stipulation No. 2 above was valid, and the second clause, in regard to cipher or obscure messages, void.

From the judgment rendered thereon, defendant appeals, assigning errors.

Tillett & Guthrie, of Charlotte, for appellant.

T. L. Kirkpatrick and H. L. Taylor, both of Charlotte, for appellee.

STACY C.J.

The telegram in question was sent from Terrell, Tex., to the plaintiff at Charlotte, N.C. It is therefore a transaction in interstate commerce, and the case is to be decided under Act Cong. June 18, 1910, 36 Stat. at L. 539, the pertinent provisions of which are as follows:

"All charges made for any service rendered or to be rendered in the transportation of passengers or property and for the transmission of messages by telegraph, telephone, or cable, as aforesaid, or in connection therewith, shall be just and reasonable; and every unjust and unreasonable charge for such service or any part thereof is prohibited and declared to be unlawful: Provided, that messages by telegraph, telephone, or cable, subject to the provisions of this act, may be classified into day, night, repeated, unrepeated, letter, commercial, press, government, and such other classes as are just and reasonable, and different rates may be charged for the different classes of messages," etc. U.S. Comp. St. § 8563.

The case is governed by the federal law. Postal Tel.-Cable Co. v. Warren-Godwin Co., 251 U.S. 27, 40 S.Ct. 69, 64 L.Ed.

118; Johnson v. Tel. Co., 175 N.C. 588, 96 S.E. 36; Bateman v. Tel. Co., 174 N.C. 97, 93 S.E. 467, L. R. A. 1918A, 803; Norris v. Tel. Co., 174 N.C. 92, 93 S.E. 465; Meadows v. Tel. Co., 173 N.C. 240, 91 S.E. 1009. As said in Gardner v. W. U. Tel. Co., 231 F. 405, 145 C. C. A. 399:

"Congress has taken possession of the field of interstate commerce by telegraph and it results that the power of the states to legislate with reference thereto has been suspended."

Prior to the passage of this act by Congress, many states, including North Carolina, had held that the stipulation limiting the defendants' liability to the cost of the telegram, in case of unrepeated messages, was one restricting its liability for negligence, and therefore void as against public policy. Young v. Tel. Co., 168 N.C. 36, 84 S.E. 45; Rhyne v. Tel. Co., 164 N.C. 394, 80 S.E. 152; Williamson v. Postal Tel. Cable Co., 151 N.C. 223, 65 S.E. 974; Hendricks v. Tel. Co., 126 N.C. 304, 35 S.E. 543, 78 Am. St. Rep. 658; Sherrill v. Tel. Co., 116 N.C. 655, 21 S.E. 429; Brown v. Tel. Co., 111 N.C. 187, 16 S.E. 179, 17 L. R. A. 648, 32 Am. St. Rep. 793, overruling Lassiter v. Tel. Co., 89 N.C. 334; 37 Cyc. 1684.

But, since Congress has taken possession of the entire field of commerce, with respect to telegraphs, telephones, and cables of an interstate character, and of messages transmitted from one state to another through the medium of the electric telegraph, we have abandoned our own decisions and followed those of the Supreme Court of the United States, having, as it does, the final authority to interpret and declare the law on the subject. Meadows v. Postal Tel. Co., 173 N.C. 240, 91 S.E. 1009; Boone v. Tel. Co., 175 N.C. 718, 95 S.E. 187; Askew v. Tel. Co., 174 N.C. 261, 93 S.E. 773; Bateman v. Tel. Co., supra; Norris v. Tel. Co., supra; Byers v. Express Co., 240 U.S. 612, 36 S.Ct. 410, 60 L.Ed. 825, L. R. A. 1917A, 197, reversing Id., 165 N.C. 542, 81 S.E. 741.

In Primrose v. W. U. Tel. Co., 154 U.S. 1, 14 S.Ct. 1098, 38 L.Ed. 883, the federal Supreme Court passed upon the validity of a contract made by a telegraph company with the sender of an interstate message by which, in case the message were missent, the liability of the company was limited to a refunding of the price paid for sending it, unless, as a means of guarding against mistake, the repeating of the message for comparison from the office to which it was directed to the office of origin was secured by the payment of an additional sum. It was held that such a contract was not one exempting the company from liability for its negligence, but a reasonable condition appropriately adjusting the charge for the service rendered to the duty and responsibility exacted for its performance. Such a stipulation was therefore held to be valid, and the right to recover for error in transmitting a message, sent subject to it, was accordingly limited to the price paid for sending the telegram. Postal Tel.-Cable Co. v. Warren-Godwin Co., 251 U.S. 27, 40 S.Ct. 69, 64 L.Ed. 118. Arguendo, the court said:

"By the regulation now in question, the telegraph company has not undertaken to wholly exempt itself from liability for negligence; but only to require the sender of the message to have it repeated, and to pay half as much again as the usual price, in order to hold the company liable for mistakes or delays in transmitting or delivering, or for not delivering a message, whether happening by negligence of its servants, or otherwise."

Likewise, the validity of stipulations, limiting liability in case of loss of goods resulting from the default of an interstate carrier, has been sustained in a number of decisions. Adams Exp. Co. v. Croninger, 226 U.S. 491, 33 S.Ct. 148, 57 L.Ed. 314, 44 L. R. A. (N. S.) 257; Chicago, B. & Q. R. Co. v. Miller, 226 U.S. 517, 33 S.Ct. 155, 57 L.Ed. 323; Chicago, St. P., M. & O. R. Co. v. Latta, 226 U.S. 519, 33 S.Ct. 155, 57 L.Ed. 328; Mo., K. & T. R. Co. v. Harriman, 227 U.S. 657, 33 S.Ct. 397, 57 L.Ed. 690; S. A. L. R. Co. v. Pace Mule Co., 234 U.S. 751, 34 S.Ct. 775, 58 L.Ed. 1571, reversing Id., 160 N.C. 215, 76 S.E. 513; W. U. Tel. Co. v. Dant, 42 App. D. C. 398, L. R. A. 1915B, 685, Ann. Cas. 1916A, 1132, and note.

It has been held with us that the sendee or receiver of a telegraphic message as well as the sender, is bound by the valid stipulations of the contract, such as the one prescribing the time for bringing suit for damages, and other similar provisions, whether the action is brought in contract or in tort. Lytle v. Tel. Co., 165 N.C. 504, 81 S.E. 759; Penn v. Tel. Co., 159 N.C. 306, 75 S.E. 16, 41 L. R. A. (N. S.) 223; Barnes v. Postal Tel.-Cable Co., 156 N.C. 150, 72 S.E. 78; Forney v. Postal Tel.-Cable Co., 152 N.C. 494, 67 S.E. 1011; Sykes v. Tel. Co., 150 N.C. 431, 64 S.E. 177; Lewis v. Tel. Co., 117 N.C. 436, 23 S.E. 319; Sherrill v. Tel. Co., 109 N.C. 527, 14 S.E. 94; Meadows v. Tel. Co., supra; Norris v. Tel. Co., supra. Speaking to the question in Penn v. Tel. Co., 159 N.C. 314, 75 S.E. 16, 20 (41 L. R. A. [ N. S.] 223), Hoke, J., said:

"These regulations, to the extent that they are reasonable, and not in excuse for negligence, have been upheld with us by express decision, and we see no reason why they should not be allowed to prevail, whether the action is in contract or tort. [ Citing authorities.] We are aware that there are decisions to the contrary in other jurisdictions, more especially in respect to the addressee of the message, but they are not in accord with the principles established here."

See, also, 26 R. C. L. 583.

Thus, in conformity with our own decisions and many others, until the Supreme Court of the United States shall decide otherwise, we are constrained to hold that the valid stipulations, relating to interstate messages, and which enter into and form a part of the contract, are binding on both the sender and the sendee.

This then brings us to the crucial question as to whether the stipulation exempting the defendant from liability ...