Rose v. United States Telegraph Co. — 29 N.Y. Super. Ct. 305

Majority

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Conrad W. Rose, plaintiff and respondent, vs. The United States Telegraph Company, defendants and appellants.

Headnote

A broker, employed by telegram to sell a specified quantity of merchandize, for his principals, deliverable at a future day, who has made contracts in accordance with the telegram received, disclosing his principals, cannot maintain an action against the telegraph company for a mistake or error in transmitting the message, by which a larger quantity of the article is ordered sold than that specified in the message as written. His principals being alone liable upon such contracts, and not he individually, the broker is not the injured party.

(Before Monell, Garvin and Jones, JJ.)

Heard May —1867;

decided January —, 1868.

In August, 1865, Tack, Brothers & Co. residing and doing business in the city of Philadelphia, delivered to the defendants at their office in that city, a telegraphic dispatch, addressed to the plaintiff at the city of New York, directing him to contract- to sell for them, five hundred (500) barrels of-petroleum, at fifty-one and a half cents a gallon, deliverable from September 1, to September 15, sellers’ option, ,and requested an immediate reply. The defendants transmitted the telegram in all respects as it was written, except that as delivered to the plaintiff, it was written ufive thousand barrels,” instead of “ five hundred barrels.” On delivery of the telegram, the defendants demanded of, and the plaintiff paid to the defendants the sum of seventy-five cents therefor. Within an hour of the receipt of the telegram, and in pursuance of it, the plaintiff made contracts with different persons, to sell and deliver to them five thousand barrels of. petroleum, deliverable at the option of the sellers from September 1, to September 15, at fifty-one and a half cents a gallon. Whereupon the plaintiff forthwith sent a telegram to Tack, Brothers & Co. stating that he had made such contracts," and received a reply, that in the dispatch which they had sent, they had directed the sale of five hundred and not five thousand barrels; and they refused to

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furnish or deliver any greater number than five hundred barrels, and also refused to ratify any of the contracts made by the plaintiff in excess of the number mentioned in their dispatch. After the contracts were made, and before the error in the dispatch was discovered, the price of petroleum advanced one and a half cents a gallon, and on the 15th of September, had advanced to fifty-eight and a half cents a gallon. The plaintiff claimed that he was liable upon his several contracts to the parties concerned, and demanded judgment against the defendants for a sum which should cover such liability and also his commissions.

On the trial before Justice Jones and a jury, it was proved that the plaintiff had paid two bills, amounting together to $2700 for the difference as expressed, in “ oil bought of Messrs. Tach, Brothers $ Qo. of Philadelphia, August 26, 1865.”

The defendants moved for a nonsuit, on several grounds. The motion was denied, and they excepted.

Upon the facts as proved, the court instructed the jury to find a verdict for the plaintiff for the difference between the contract and market price of the petroleum, and also for Jhis commissions, the amounts of which were agreed upon. To this instruction the defendants excepted; and appealed from the judgment entered on the verdict.

G. P. Lowrey, for the appellants.

J. E. Parsons, for the respondents.

It does not appear that the contracts made by the plaintiff for the sale of five thousand barrels of petroleum, were put in evidence on the trial. It therefore does not appear in whose name the contracts were made. There is no allegation in the complaint that the plaintiff made the contract in his own name, and if any thing can be inferred from the tenor of the receipts taken on settling the contracts, the sales were made either in the names

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of Tack, Brothers & Co. or their relation as sellers was disclosed to the purchasers.

I am not prepared to say that irrespective of a liability arising purely on contract, a telegraphic company may not be responsible to a third person, for the injurious consequences of an error in transcribing and transmitting a telegraphic message to such third person. If upon the faith of a message thus communicated, the receiver enters into contracts, or makes engagements which result in loss to himself, which loss is wholly occasioned by errors in the message as transcribed and sent, and which errors were negligently made by the. telegraphic company, it would seem that a liability should attach, not on the ground of the violation of a contract, but of the violation of a duty, the faithful discharge of which, the company had undertaken. A mere gratuitous offer to perform a service for another, imposes no legal obligation to perform such service; but if performance is undertaken, and it is done negligently or without due care, so that an injury ensues, an action will lie, by the person injured. (Thorne v. Deas, 4 John. 84 .) Upon principles, therefore, analogous to the case last cited, any person injured by the negligence of a telegraphic company in transmitting a message, although neither a party or privy to any contract with such company, can sustain an action for his damages; for when “ one does a legal act in such a careless and improper manner, that injury to third persons may probably ensue, he is answerable in some form of action, for all the consequences which may directly and naturally result from his conduct.” ( Vandenburgh v. Truax, 4 Denio, 464 .)

It is not claimed in this case, that the plaintiff was either a party to, or that there was any privity of contract between himself and the defendants. Their contract was with Tack, Brothers & Co. and for a breach of such contract they are liable only to the latter; and the right, therefore, to maintain this action by the plaintiff, rests solely upon the principle before stated, of a wrong and an injury; and to bring

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himself within the principle, he has endeavored to show that in legal contemplation, he was the injured party. The case shows, that upon being informed of the contracts to sell five thousand barrels, Tack, Brothers & Co. refused to ratify such contracts, or to furnish or deliver any greater number than five hundred barrels; upon which the plaintiff, assuming his liability to the purchasers of the five thousand barrels, closed the contracts, paying to the purchasers the difference between the market and contract price.

If the plaintiff was correct in such assumpsit of liability, he can doubtless sustain this action.

All the parties to the transaction immediately connected with the error of the telegraph company, held the relation of principals and agents. Tack, Brothers & Co. were the common principals in Philadelphia, who desired to.sell; the defendants were their agents authorized to transmit their instructions to the plaintiff, who, as their broker, was directed to sell, and nothing in any of the subsequent transactions of the parties changed such relation of principals and agents. The plaintiff, therefore, acting as the broker of Tack, Brothers & Co. to negotiate a sale, not having the property in his possession, could not by making sales in his own name, affect their rights as sellers, (Story on Sales, § 85;) for nothing is better settled than that a principal is entitled to the same rights and remedies against the purchaser, whether the contract be in his name or in the name of his broker.; (Story on Sales, §§ 88, 89;) and hence, so far as such rights and remedies go, it is not material whether the sales in this case were made in the plaintiff’s name, or in the names of his principals, as in either case they were the contracts of Tack, Brothers & Co. and not of the plaintiff. Qui faoit per alium faeit per se. For says Parsons, (2 Pars. on Cont. 250,) a “ broker being one to whom goods are not entrusted, and who usually and properly sells in the name of his principal, and who is understood to be only an agent, whether he sells in his own name or not, stands only on the footing of an agent.” It

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does not, however, by any means follow, that an agent who does not disclose his principal, is not liable to the person with whom he contracts. If he conceals his character of agent, he then becomes a principal, and individualy liable upon his contracts, but the party dealing with him may, when he discovers the principal, charge either at his election. (Beebe v. Robert, 12 Wend. 413 .) But I do not propose to pursue this branch of the subject further; for it does not appear that the plaintiff made the contract in his own name, and it does sufficiently, I think, appear that he disclosed his principals, and thereby relieved himself from personal responsibility. It is not then disputed that the plaintiff was the mere agent of Tack, Brothers & Co. and was acting for them and on their behalf. Hor can it be disputed, that having disclosed his principals, they, and not he, were liable, upon any contracts which he made in pursuance and within the scope of his agency.

The principals in Philadelphia, in prosecuting their business, and in communicating with their agent in Hew York, employed the defendants to transmit their message. Upon receipt of the message, the agent, obeying his instructions and disclosing his principals, made contracts for the sale of five thousand. barrels of petroleum. Can it be sucessfully contended that the principals were not liable on such contracts, merely, (and there can be no other reason,) because the defendants, their (quasi at least) agents, had negligently transmitted'their message, and by a mistake directed a sale of a larger quantity than was intended ? I think not. A vendor is bound by all the acts of his broker done within the limits of his authority, (Story on Sales, § 90,) and it can make no difference whether the authority proceeds directly from the principal or indirectly through another agent.

Suppose Tack, Brothers & Co. had directed one of their clerks to communicate to the plaintiff by letter to sell five hundred barrels, and the clerk had negligently written five thousand barrels, and the plaintiff had contracted to sell the

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latter number, would not such be the contract of and binding upon Tack, Brothers & Co.? Clearly it would. Nor is there any difference in the two cases. The authority to the agent coming through the telegraph company, or through the clerk, so far as the protection of the agent is concerned, is the same. Whatever errors or mistakes were committed by the medium employed by the principals to transmit their instructions to their agent, can in no way, it appears to me, affect either the .duty or the right of such agent literally to obey their injunctions, and to throw all responsibility from himself upon them.

Not only were the cqntracts'made by the plaintiff obligatory upon his principals in Philadelphia, to the full extent of five thousand barrels, but in like manner, such principals were liable to the plaintiff for his accustomed commissions and expenses, (including the seventy-five cents for the telegram,) in effecting the sale, and which could have been recovered in an action for such purpose. Any payment, therefore, made by the plaintiff in settlement of the contracts, was voluntary, and was made merely on behalf, and for the benefit of Tack, Brothers & Co. and does not give any right of action whatever to him, against these defendants. His only remedy being, if any, against his principals to recover for money paid.

In Wash, and N. O. Tel. Co. v. Hobson, in the Court of Appeals of Virginia, ( 15 Gratt. 122 ,) an order to buy five hundred bales of cotton was altered to twenty-five hundred, and in an action by the sender of the message, against the company it was held he might recover not only his damages^ but also the commissions due to his factor.

We were referred to one case only in opposition to the views I have here expressed. In that case, (N. Y. and W. Print. Tel. Co. v. Dryburgh, 35 Penn. Rep. 298 ,) the order transmitted was “send me for Wednesday evening, two hand boquets,” which was transmitted two hundred boquets; and it was held that the receiver of the message having commenced filling the order before the mistake was dis

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covered, could maintain an action. Judge Sharswood, in an opinion delivered below, admitted, that if the company were to be regarded as the agents of the sender, it was clear they were not liable to an action by the receiver. But he did not regard them as such agents, for reasons which to my mind are not very satisfactory. Yet Judge Woodward when the case was up on appeal, said,, “that the relation of principal and agent existed between LeRoy, (the sender,) and the company, there can be no doubt; but I do not think it equally clear that that relation was not established between the plaintiff and the company. Telegraph companies are in some sense public institutions, and I am inclined to think the company ought to be regarded as the common agent of the parties at either end of the line.” But the error in transmitting the message was regarded as a misfeasance, and the company held responsible as a wrongdoer. The case is unsupported by authority, and is, it seems to me, opposed by well settled principles applicable to the relations of principal and agent, and I cannot therefore regard it as more than a mere dictum emanating, it is true, from a court entitled to much respect, but not binding upon us here.

The examination I have given this question, has led me to the conclusion, that treating the mistake of the company as a misfeasance, and extending their liability to every person injured by the wrong, which is the extent to which any of the cases go, the plaintiff in this case was not the injured party; that he was not responsible individually upon any of the contracts he made; that Tack, Brothers & Co. were alone liable on such contracts, as also .for the plaintiff’s commissions and expenses; and that the settlement of such contracts by the plaintiff, did not, in contemplation of law, make him the injured party.

I am of opinion the judgment should be reversed, and a new trial granted, with costs to abide the event.

Cases cited

Beebee v. Robert 12 Wend. 413 N.Y. Sup. Ct. p. 309