Komatz Const. Inc. v. W. U. Tel. Co.

• Decision Date: 16 April 1971
• Docket Number: No. 42433,42433
• Citation: 290 Minn. 129,186 N.W.2d 691
• Parties: KOMATZ CONSTRUCTION INC., Appellant, v. WESTERN UNION TELEGRAPH COMPANY, Respondent.
• Court: Minnesota Supreme Court

Page 691

186 N.W.2d 691

290 Minn. 129

KOMATZ CONSTRUCTION INC., Appellant, v. WESTERN UNION TELEGRAPH COMPANY, Respondent.

No. 42433.

Supreme Court of Minnesota.

April 16, 1971.

Rehearing Denied May 6, 1971.

Syllabus by the Court

1. A telegraphic message transmitted from one point to another, both located in this state, but routed through another state and Canada, is interstate commerce and is governed by Federal statutes and Federal common law to the exclusion of conflicting state law.

2. The limitation of liability for mistakes, delays in transmission, or for nondelivery of an unrepeated interstate message, contained in telegraph company's tariff filed with the Federal Communications Commission, in binding on the sender of such a message even though (a) the limitations are not expressed on the blank or form used by the sender, who used his own letterhead; (b) the sender had no knowledge of the existence of such limitations; (c) the sender suffered substantial damage because of a delay in transmission which may or may not have been avoided by a repeated message; (d) the routing of the message is assumed to have been unreasonable and to have contributed to the delay.

3. The doctrine of estoppel may not be availed of to avoid the limitation of liability contained in a telegraph company's tariff in a cause of action for damages resulting from delay in transmission of an unrepeated message for the reasons that its application would result in (a) the claimant receiving a preference or advantage contrary to § 202(a) of the Communications Act of 1934, 48 Stat. 1070, 47 U.S.C.A., § 202(a), and (b) a violation of the requirement of uniformity and equality of rates in § 203(c) of the act, 48 Stat. 1071, 47 U.S.C.A. § 203(c).

4. The provision in § 206 of the Communications Act of 1934, 48 Stat. 1072, 47 U.S.C.A., § 206, that a common carrier shall be liable for the full amount of damages sustained as a consequence of any violation of the act does not apply to a cause of action based on a delay in the transmission of an interstate message as such a delay does not constitute a violation of the act.

Gault, Mackenzie, Gustafson & Litynski, St. Peter, for appellant.

Blethen, Ogle, Gage & Krause, Mankato, for respondent.

Heard before KNUTSON, C.J., and ROGOSHESKE, KELLY, FRANK T. GALLAGHER and ROSENGREN, JJ.

Reconsidered and decided on the record by the court en banc.

OPINION

KELLY, Justice.

This is an appeal from summary judgment limiting to $500 the amount of damages sustained by plaintiff as a result of defendant's delay in transmitting a message.

At 9:14 a.m., plaintiff's employee sent a telegram from St. Peter, Minnesota, to Baudette, Minnesota, using defendant's facilities. The message was not written on a Western Union blank but was typed on a letterhead of plaintiff. Plaintiff's employee informed defendant's agent that the message must be in Baudette by 2 p.m. of that same day.

The telegram was transmitted from St. Peter to the following cities: Mankato; Minneapolis; Detroit, Michigan; Toronto, Ontario; Winnipeg, Manitoba; Fort Francis, Ontario; and finally to Baudette. Defendant maintained no telegraph circuits from a Minnesota point to Baudette and sent such telegrams through Canada. Thus, the customary route was used for the message involved here. The telegram was picked up at 4 p.m. on that same day. Due to the delay, plaintiff admittedly suffered more than $500 in damages.

The defendant had filed its tariff with the Federal Communications Commission in accordance with the laws of the United States and the rules and regulations of the commission. The tariff includes limitations of liability as set forth on the back of defendant's standard message form, the relevant portion of which

provides: '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 unrepeated message rate is charged in addition. Unless otherwise indicated on its face, this is an un-repeated message and paid for as such, in consideration whereof it is agreed between the sender of the message and the Telegraph Company as follows:

'1. The Telegraph Company shall not be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received for transmission at the un-repeated message rate beyond the sum of five hundred dollars; nor for mistakes or delays in the transmission or delivery, or for non-delivery, of any message received for transmission at the repeated-message rate beyond the sum of five thousand dollars, unless specially valued; nor in any case for delays arising from unavoidable interruption in the working of its lines.

'2. In any event the Telegraph Company shall not be liable for damages for mistakes or delays in the transmission or delivery, or for the non-delivery, of any message, whether caused by the negligence of its servants or otherwise, beyond the actual loss, not exceeding in any event the sum of five thousand dollars, at which amount the sender of each message represents that the message is valued, unless a greater value is stated in writing by the sender thereof at the time the message is tendered for transmission, and unless the repeated-message rate is paid or agreed to be paid and an additional charge equal to one-tenth of one per cent of the amount by which such valuation shall exceed five thousand dollars.'

Neither plaintiff nor its employee was aware of any limitations of liability. No request was made for a valued message or repeated message and as a result the telegram was transmitted at the unrepeated message rate.

Plaintiff instituted this action against defendant for damages incurred because the telegram was delayed. Defendant made a motion for summary judgment to limit plaintiff, as a matter of law, to a maximum recovery of $500. The trial court granted the motion and judgment was entered limiting the liability of defendant to a maximum of $500.

The issue on appeal is whether the limitation of liability for mistakes or delay in the transmission of an unrepeated interstate message in the tariff filed by defendant applies to plaintiff's cause of action and limits the recovery to $500.

The message in this case was sent from one point to another, both locations in Minnesota. However, it was routed through another state and a foreign country and is therefore interstate commerce under the holding of Western Union Telegraph Co. v. Speight, 254 U.S. 17, 41 S.Ct. 11, 65 L.Ed. 104 (1920).

Plaintiff contends that the law of Minnesota, not Federal law, governs in the instant case and cites Minn.St. 237.44 ¹ and Dettis v. Western Union Telegraph Co., 141 Minn. 361, 170 N.W. 334 (1919). At the time Dettis was decided, there were no United States Supreme Court decisions clearly indicating that the Federal government had preempted the field of law governing the liability of telegraph companies for delays, errors, omissions and nondelivery of interstate messages. This court understandably applied state law, citing an Interstate Commerce Commission ruling that telegraph companies were not required to file tariffs for interstate messages and concluding that, inasmuch as such filings were voluntary, no notice of limitations of liability contained in the tariffs was to be imputed to the sender of an interstate message. ² However, in Siats v. Western Union Telegraph Co., 251 Minn. 412, 88 N.W.2d 199 (1958), this court acknowledged that the Federal government had indeed preempted this field of law in these words:

'* * * (I)t should be observed that on June 18, 1910, Congress amended the Interstate Commerce Act, 36 Stat. 539, 545, so as to place interstate telegraphic communication under the jurisdiction of the Interstate Commerce Commission. Such jurisdiction was transferred to the Federal Communications Commission with the enactment of the Communications Act of 1934, 47 U.S.C.A. § 151 et seq. Ever since Federal control was thus established, telegraph companies, as to interstate transactions, have been subject to a national and uniform rule of law. Notwithstanding Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, interstate message transactions are still governed by Federal law to the exclusion of conflicting state law; and this means that they are governed not merely by the provisions of Federal statutes but by 'Federal common law' as well.' 251 Minn. 414, 88 N.W.2d 202.

The following provisions of the Communications Act of 1934 are the foundation for the proposition that the limitations of liability contained in a telegraph company's tariff for interstate messages on file with the Federal Communications Commission are controlling as a matter of law with respect to the amount plaintiff may recover, the theory being that if damages were to be paid in excess thereof that the claimant would be given a 'preference or advantage,' and the company would be receiving 'less or different compensation for such communication * * * than the charges specified in the schedule then in effect.'

Section 202, 48 Stat. 1070, as amended by 74 Stat. 888, 47 U.S.C.A., § 202, provides in part:

'(a) It shall be unlawful for any common carrier to make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services for or in connection with like communication service, directly or indirectly, by any means or device, Or to make or give any undue or unreasonable preference or advantage to any particular person, class of persons, or locality, or to subject any particular person, class of persons, or locality to any undue or unreasonable prejudice or disadvantage.

'(b) Charges or services, whenever referred to in this chapter include charges for, or services in connection with, the use of common carrier lines of communication, whether...