Weld v. Postal Telegraph Cable Co.

• Court: New York Court of Appeals Court of Appeals
• Writing for the Court: WERNER
• Citation: Weld v. Postal Tel. Cable Co., 199 N.Y. 88, 92 N.E. 415 (N.Y. 1910)
• Decision Date: 07 June 1910
• Parties: STEPHEN M. WELD et al., Respondents, v. POSTAL TELEGRAPH-CABLE COMPANY, Appellant.

199 N.Y. 88

92 N.E. 415

WELD et al.

v.POSTAL TELEGRAPH CABLE CO.

Court of Appeals of New York.

June 7, 1910.

Appeal from Supreme Court, Appellate Division, First Department.

Action by Stephen M. Weld and others against the Postal Telegraph Cable Company. From a judgment of the Appellate Division, First Department (132 App. Div. 924,116 N. Y. Supp. 1150), affirming a judgment for plaintiffs, defendant appeals. Reversed, and new trial granted.

The plaintiffs are partners engaged in the business of cotton brokers, having their principal place of business in the city of New York. They are members of the New York Cotton Exchange and also of the New Orleans Cotton Exchange. The defendant is a domestic corporation engaged in the business of transmitting telegraphic messages for hire. It has a special office for this purpose in the building occupied by the Cotton Exchange in New York City and a similar office in the New Orleans Cotton Exchange. These special offices are maintained for the purpose of transmitting the messages of the members of the exchanges in connection with the buying and selling of cotton, and for the distribution of market quotations as a branch of the defendant's own business.

On December 4, 1905, Edward M. Weld, who is one of the Cotton Exchange members of the plaintiffs's firm, gave to one of the defendant's operators in its office in the New York Cotton Exchange the following message for transmission by telegraph to New Orleans: ‘Ellis, N. O. Sell 20 thousand Mch. 12.70. Weld.’ When delivered in New Orleans the message read thus: ‘Sell twenty thousand March 1207. Well.’ The message as delivered to the defendant's operator in New York was intended to instruct the plaintiffs' brokers, Ellis & Co., in New Orleans, to sell 20,000 bales of cotton at 12.70 cents per pound for delivery in March. In the message as delivered the numberals ‘12.70’ were changed to ‘1207.’ As a result of this mistake made by the defendant, the plaintiffs suffered a substantial loss which they seek to recover in this action.

The message which the plaintiff Edward M. Weld gave to the defendant's operator was written on one of the printed blanks furnished by the defendant, which contained the usual stipulations limiting its liability. On its face it contained the statement: ‘Send the following message, without repeating, subject to the terms and conditions printed on the back hereof, which are hereby agreed to.’ Upon the reverse side were printed a number of stipulations among which were the following: ‘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 regular rate is charged in addition. It is agreed between the sender of the message written on the face hereof and the Postal Telegraph Cable Company that said company shall not be liable for mistakes or delays in the transmission or delivery, or for nondelivery, of any unrepeated message, beyond the amount received for sending the same; nor for mistake or delays in the transmission or delivery, or nondelivery of any repeated message beyond fifty times the sum received for sending the same, unless specially insured, nor in any case for delays arising from unavoidable interruption in the working of its lines, or for errors in cipher or obscure messages. * * * Correctness in the transmission of messages to any point on the lines of the company can be insured by contract in writing, stating agreed amount of risk and payment of premium thereon, at the following rates, in addition to the usual charges for repeated messages, viz.: one per cent. for any distance not exceeding 1,000 miles, and two per cent. for any greater distance.’

The complaint sets forth in great detail the circumstances surrounding the sending and receipt of this message, and charges the defendant with gross negligence in its transmission. It is alleged that within a very short time after the receipt of the telegram by the plaintiffs' agent in New Orleans and the execution of the order contained therein to sell 20,000 bales of cotton, the plaintiffs perceived that a mistake had been made. At once they telegraphed a second order directing their agent in New Orleans in minimize the loss by purchasing 20,000 bales of March cotton in the New Orleans market at the best prices obtainable. This was done at prices which resulted in a net loss to the plaintiffs, including broker's commissions, of $27,565.

The defendant denies specifically all the material allegations, except the receipt of the message, and alleges that the message was correctly placed on the wire, but that the mistake occurred during its transmission. It alleges as a separate defense the stipulations contained in the printed blank upon which the message was sent, and that they constituted an agreement which bound the plaintiffs and absolved the defendant from liability, except for the repayment of the 60 cents paid for the message.

Upon the trial it appeared that the defendant maintains special offices in both cotton exchanges in New York and New Orleans, which offices are located in close proximity to the ‘rings' where the buying and selling of cotton is constantly going on during the working hours of the exchanges. These offices are in charge of experienced operators familiar with the special kind of business transacted on the exchanges and with the meaning of the technical terms used in the trade. The message was sent on ‘Bureau day,’ when the government publishes its annual report in regard to the prospective cotton crop. ‘Bureau day’ is usually a very busy one upon the cotton exchanges, as the government report causes marked fluctuations in the market, and consequent excitement and activity in buying and selling. Shortly after this particular report had been made public, the plaintiff Edward M. Weld, representing the plaintiffs' firm, went to one of the defendant's operators in the New York Cotton Exchange and requested him to send the message in question. At first it was given orally. Being an unusually large order, induced by the fact that upon the publication of the government report the price of cotton on the New Orleans Exchange had risen very rapidly, the operator sent word over the wire to the New Orleans operator to prepare for a large order. The written message was then given to the New York operator and he sent it over the wire. The New Orleans operator wired back to ascertain whether ‘twenty thousand’ was correct, and the New York operator responded ‘Yes.’ No other part of the message was confirmed, although the plaintiffs' evidence tended to show that it was the custom to confirm (that is, to repeat) orders thus sent, in order to insure accuracy.

The service between these two exchanges was carried on by means of two direct wires known as ‘A’ and ‘B.’ There were relay stations on these lines to replenish the current, but the sending of a message involved no human intervention between these two terminals. The message in question was sent over wire ‘B.’ This wire ran directly to the main office of the defendant in New Orleans, where it passed through a machine known as a ‘Morsegraph,’ from which it ran to the New Orleans Cotton Exchange. The Morsegraph automatically records on a tape all messages which go over the wire passing through it. The defendant also keeps a book called a ‘log’ of the working of the Morsegraph. These records are kept by the defendant for six months from the day when the messages recorded pass over the wires. Prior to the expiration of the six months from the time when this particular message was sent, the plaintiffs' attorney notified the defendant to preserve the records of this message, as they would be needed at the trial of this action. This the defendant failed to do, and at the trial it was admitted that they had been destroyed. The message as delivered to the plaintiffs' agent in New Orleans discloses a number of alterations besides the changing of the numerals ‘12.70’ to ‘1207.’ The initials ‘N. O.’ after Ellis, indicating New Orleans, were omitted. The two numerals ‘20’ before ‘thousand,’ indicating 20,000 were written out into one word ‘twenty,’ which reduced the length of the message by one word, each numeral being counted as a word in the telegraphic code. The check mark of the number of words had, therefore, to be changed from 9 to 8. The abbreviation ‘Mch.’ was changed to ‘March,’ and the name of ‘Weld’ was changed to ‘Well.’ The initials of the sending operator were omitted, although it is usual to insert them; the message was not dated, and the plaintiffs' evidence tended to show that the time of sending was erroneously stated. There was evidence, introduced by the defendant, tending to show that some of the above mistakes could have been occasioned by unpreventable outside causes incident to the business of transmitting messages over wires, while others were not explained. But, as opposed to any mere theory, it appeared that the message reached the defendant's main office in New Orleans in the form in which it was sent from New York, so that it is evident that the error occurred between the main office in New Orleans and the Cotton Exchange in the same city.

To establish the damages suffered by the plaintiffs they proved the sale of 20,000 bales of cotton by their brokers, Ellis & Co., at prices considerably below 12.70 cents per pound, which was the price fixed by the plaintiffs in the telegram sent by them. Then they proved that, immediately upon the discovery of the mistake, they wired their representative to buy back 20,000 bales. This was done at the best prices obtainable on that day. The course taken by plaintiffs in order to minimize their loss caused by the mistake is shown by the testimony to have been the usual method adopted on the Cotton Exchange to reduce losses in transactions of this character. The difference between the prices...