R. M. Hays & Bros. v. Western Union Telegraph Co.
| Decision Date | 04 October 1904 |
| Parties | R. M. HAYS & BRO. v. WESTERN UNION TELEGRAPH CO. |
| Court | South Carolina Supreme Court |
Appeal from Common Pleas Circuit Court of Greenwood County; Aldrich Judge.
Action by R. M. Hays & Bro. against the Western Union Telegraph Company. From judgment for plaintiffs, defendant appeals. Affirmed.
Evans & Finley, for appellant. Sheppards & Grier, for respondents.
The plaintiffs, R. M. Hays & Bro., were dealers in horses and mules at Greenwood, S.C. A. C. Hays, the junior partner, was sent to the St. Louis stock market, with the understanding that he should purchase only after he had telegraphed prices and received instructions from his senior, R. M. Hays. On January 1, 1901, A. C. Hays delivered to the defendant, the Western Union Telegraph Company, in St. Louis, for transmission to R. M. Hays at Greenwood, a telegram in these words: "Fourteen half hands, ninety-five; fifteen hands one hundred and five; fifteen half hands, one hundred seventeen fifty; pair for self, sixteen hands, two sixty--all little less quality than before." As delivered to R. M. Hays, the telegram read "one hundred and seven fifty," instead of "one hundred and seventeen fifty," as written; and R. M. Hays was thus led to believe that mules 15 1/2 hands high could be bought for $107.50, instead of $117.50. Acting on this impression, he telegraphed his partner to buy 24 mules of that size. R. M. Hays testified he was induced by the price to purchase mules of 15 1/2 hands, instead of the cheaper mules of 15 hands, and that he could have sold in Greenwood the cheaper mules at about the same price; the market price there for the two classes of mules being about the same. The plaintiffs claimed of the defendant damages of $10 for each of the 24 mules purchased, being the difference between the price stated in the telegram as delivered and the price actually paid. In sending the messages, plaintiffs agreed to the printed contract: "That the company will not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty days after the message is filed with the company for transmission." The claim was not presented in writing until more than 60 days had elapsed.
The defendant moved for a nonsuit: First, because there was no proof of any direct loss to the plaintiffs arising from the mistake of transmitting the telegram, but only of loss of profits; and, second, because plaintiffs did not present claim in writing within 60 days after the filing of the message for transmission, as stipulated in his agreement. The refusal of the motion for a nonsuit is made the first ground of appeal.
In Howard v. Stilwell, etc., Manufacturing Co., 139 U.S. 199, 11 S.Ct. 500, 35 L.Ed. 147, the Supreme Court of the United States, after stating the rule that contingent or remote profits are not recoverable, says: "But it is equally well settled that the profits which would have been realized had the contract been performed, and which have been prevented by its breach, are included in the damages to be recovered in every case where such profits are not open to the objection of uncertainty or of remoteness, or where, from the express or implied terms of the contract itself, or the special circumstances under which it was made, it may be reasonably presumed that they were within the intent and mutual understanding of both parties at the time it was entered into." The general doctrine is well expressed in Griffin v. Colver (N. Y.) 69 Am. Dec. 718: "The broad general rule in such cases is that the party injured is entitled to recover all his damages, including gains prevented as well as losses sustained; and this rule is subject to but two conditions: the damages must be such as may fairly be supposed to have entered into the contemplation of the parties when they made the contract--that is, must be such as might naturally be expected to follow its violation; and they must be certain, both in their nature and in respect to the cause from which they proceed." See, also, Jenkins v. Railway Co., 58 S.C. 373, 36 S.E. 703. The principle thus clearly stated is generally recognized, but there is often great difficulty in its application. In the case now under consideration, the telegram which defendant undertook to transmit indicated on its face the purpose to give information of the price of live stock by size, for the word ""hands," as a term of measurement, is not usually applied otherwise. Such a message also gives notice that it will be used as a basis of business action or nonaction, and that loss or profit is liable to result. Indeed, the sole purpose of such telegrams is obviously to make profit by purchase and sale, and this purpose was within the understanding of the plaintiffs and the telegraph company when it undertook to deliver the message. Accordingly, the rule as to telegraph companies is thus stated in 27 A. & E. Ency. Law, 1069: ""When a message announcing prices, sent in contemplation of a trade, is erroneously transmitted, the party injured through acting upon the erroneous message may recover the amount of his actual loss caused by the decrease in the price he obtained, or, in case he is a purchaser, the increase in price he is obliged to pay in consequence of the error." Western Union Telegraph Co. v. Dubois, 128 Ill. 248, 21 N.E. 4, 15 Am. St. Rep. 109. These views are not inconsistent with Sitton v. MacDonald, 25 S.C. 68, 60 Am. Rep. 484, where the profits claimed were not in the contemplation of the parties; nor with Mood v. Telegraph Co., 40 S.C. 524, 19 S.E. 67, where the special damages were held not sufficiently alleged; nor with cases like Western Union Telegraph Co. v. Hall, 124 U.S. 444, 8 S.Ct. 577, 31 L.Ed. 479, where there was failure to deliver the telegram, and hence no purchase based thereon, leaving it entirely conjectural whether the plaintiff would have purchased if the telegram had been delivered, and would have subsequently sold on the rising market. Here there was evidence of an actual purchase on the faith of the telegram, and an actual loss of a profit which would have been made if the telegram had been correctly transmitted. In Wallingford v. Telegraph Company, 53 S.C. 410, 31 S.E. 275, the facts were entirely different, and that case is applicable only by analogy. There the defendant demurred to a complaint for damages, which alleged sale of a car load of mules would have been directed by one partner in answer to a telegram from another stating offer of purchase, if the telegram had been delivered; whereas, by reason of the failure to deliver the telegram, the firm was forced to hold the mules for some time at considerable expense, and then to sell for less than the price mentioned in the telegram. The mules were at Sheridan, Ind., and the undelivered telegram related to an offer in that market. The court said: It is not necessary that the plaintiff should bring home to the defendant knowledge of the market conditions. In the case now under consideration, the market price of the mules in St. Louis, given in the telegram as delivered, was $10 less for each mule than the actual market price in St. Louis, which plaintiffs had to pay. There was evidence to the effect that plaintiffs would not have bought the mules they did buy if the telegram had been correctly transmitted, but would have bought the smaller mules at a price $10 lower for each, which would have answered the same purpose in the conduct of the plaintiffs' business, as they were worth in the Greenwood market, where they were to be sold, as much as the larger mules. This means that the plaintiffs paid out $240 on the faith of the telegram, and that they derived no substantial profit or advantage from the payment of this sum. Therefore, whether we regard the effect on the plaintiffs as a loss of profit, or the fruitless expenditure of money on the faith of the telegram, the result is the same. The difference in the price paid and the price stated in the telegram as delivered was, under the facts of this case, the true measure of damages.
The nonsuit could not have been granted on the second ground, because the plaintiffs had the right to prove in reply waiver or estoppel as to the stipulation that the claim should be presented in writing within 60 days. Copeland v. Assurance Co., 43 S.C. 26, 20 S.E. 754.
The charge of the circuit judge on the subject of profits was in accordance with the views above expressed in considering the motion for nonsuit, and was therefore not erroneous. The Circuit Judge refused the motion to direct a verdict, made on the ground that it was affirmatively proved that the claim had not been presented in writing within 60 days, and that there was no evidence of waiver. The jury were instructed that the contract requiring the claim to be presented in writing within 60 days was valid, and they were left to decide whether there was sufficient evidence of waiver of the stipulation. The question is, whether there was any evidence of waiver, for if there was no such evidence the jury should have been instructed to find for the defendant. Waiver is a voluntary relinquishment of a known right, and it does not require a new contract upon...
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