Western Union Telegraph Co. v. Nye & Schneider Co.

Albert, C. This action was brought by Nye & Schneider Company against the Western Union Telegraph Company to recover damages sustained by the former; by reason of the negligent delay of the latter in transmitting a telegram. It sufficiently appears, from the pleadings and the evidence, that the plaintiff, whose home office is at Fremont, had a branch office at Morehead, Iowa, where it was engaged in the grain business. On the 13th day of June, 1901, plaintiff’s agent, in charge of the business at the latter place, had a cash offer of 35 cents a bushel for 5,000 bushels of corn, which the plaintiff had on hand at that point, which was to stand open for acceptance until 7:30 P. M. of that day. The agent communicated the offer to the plaintiff at its home office. On receipt of such communication, the plaintiff, on the same day, delivered a message to the defendant for transmission to the agent of the former at Morehead, Iowa, directing him to accept the offer. Had the defendant used due diligence in the transmission of the message, it would have reached the agent in time to enable him to take advantage of the offer and close the sale before the time for which the offer was to hold good expired. But, by reason of the negligent delay in the transmission, it did not reach him until after 7:30 of that day; in consequence whereof, the plaintiff failed to — 253 — make the sale. Had the offer been accepted within the time fixed, the party making the offer would have paid the price in cash, and the corn would have been delivered to him at Morehead. The mai*ket value of the corn on that day, and for some time thereafter, was 32 cents a bushel. Afterwards, the price advanced, so that between the 21th day of June and the 5th day of November following, rhe plaintiff disposed of the corn, at retail, at a higher price than that specified in the offer hereinbefore mentioned. A trial to the court, without a jury, resulted in a finding for the .plaintiff, the court adopting as the measure of damages, the difference between the price offered for the corn on the 13th day of June, 1901, and its market value at Morehead on that day, and gave judgment accordingly. The defendant brings error. The defendant contends that the measure of damages adopted by the trial court is erroneous as applied to the facts in this case, because the plaintiff, having eventually sold the corn at a higher price than that accepted by the message in question, suffered no loss, and therefore sustained no actual damages by reason of the delay in the delivery of the message. At first sight, this contention appears reasonable, but we do not believe it will bear analysis. The action is one for breach of contract, and the breach relied upon is the failure of the defendant to transmit and deliver the message within what, under all the circumstances, would have been a reasonable time. In such cases, the general rule is that, so far as it can be done by money, the injured party is to be placed, in the same situation in which a performance of the contract would have placed him. But it would be impossible to follow the labyrinth of remote results and consequences of a breach of contract, and determine either the ultimate situation of the party as affected thereby or what such situation would have been had the contract been performed. The laAv therefore takes into account only proximate results, and disregards such as are remote or are the product of intervening or independent causes. Hence the situation of the — 254 — injured party, which forms the basis of the comparison, must be his situation when the breach of contract occurred, and before remote or independent causes had intervened to change it. His situation after that time can never be material as an ultimate fact in the case because, after the intervention of such causes, it can never he known with any reasonable degree of certainty to what extent it is due to causes only remotely connected with the breach of contract or wholly independent of it. In the present case, although it is questioned by the defendant, we think the evidence is ample to sustain a finding that the delivery of the corn, and the payment of the price, would have followed immediately upon the delivery of the message, had it been delivered in due time. Hence, upon the failure to deliver the message, the plaintiff had 5,000 bushels of corn which, instead of being worth $1,750 as it would have been, had the message been duly delivered, was worth only $1,600. In other words, the plaintiff’s situation, upon the defendant’s failure to deliver the message and before any remote or independent causes had intervened to change it, was such that it would have required $150 to make it what it would have been, had the message been delivered. The subsequent rise in the market and sale of the corn on such market are no more proximate results of the breach of contract or the contractual relations of the parties, than a subsequent decline in the market and sale of the corn at a loss would have been. The same principle that would have relieved the defendant from increased liability, had the market declined, excludes it from participation in the profits resulting from its advance. In neither case would it be possible to determine to what extent the result was due to the intervention of remote or independent causes. Besides, as a matter of pure justice between the parties, we are satisfied that the rule adopted by the trial court is right. Had the plaintiff, immediately upon the failure to deliver the message, sold the corn at the then market price, the measure of damages, in the absence of special circum — 255 — stances, would have undoubtedly been the difference between such price and what the plaintiff would have received for it, had the message been delivered in due time. Every hour it held the corn, after its cause of action arose, was at its own risk, because it will not be claimed that the damages recoverable would have been increased by the loss or' destruction of the corn or its decline in price, after that time. Those are risks incident to the business of the merchant, and which he takes into account in estimating his profits and deciding upon a cause of action; Holding the corn for a better market, also involved interest on the capital invested, storage, the negotiations of another sale and other outlays, to say nothing of the foresight and energy necessary to conduct the venture to a successful issue. Is there any good reason Avhy the defendant, Avho risked nothing, invested nothing and did nothing in the venture, should be permitted to share in the profits? We think not. We are aware that a different conclusion Avas reached in Houston, etc., Telegraph Co. v. Davidson, Hardeman & Co., 15 Tex. Civ. App. 334, cited by defendant, but it is not supported by any line of reasoning, nor is it entirely clear that the point was necessarily involved in the case. But however that' may be, it does not commend itself to us as a sound rule of law, and we must therefore decline to folloAv it. The defendant also cites Mickelwait & Young v. Western Union Telegraph Co., 13 Ia. 177. In that case, a buyer delivered a mess:- ?;e to the defendant, a telegraph company, for transmission to the plaintiff, which contained an offer to pay 20% cents a bushel for corn. Through a mistake of the defendant, the message, AArhen delivered to the plaintiff, read 21% cents a bushel. On receipt of the message, the plaintiff went into the market and filled the order, paying 21 cents a bushed for a part of the corn and 20 cents for the remainder. The purchaser refused to pay more than 20% cents a bushel for the corn, and it was delivered to him at that price. In passing on the case, Waterman, J., said: “Plaintiffs claim a loss of profits. If this were a case — 256 — where loss of profits might be considered, still we think they could not recover. The mistake in the message caused them no loss of profits; for, if it had been correctly transmitted, they would have been in the same situation they now are. They obtained from Russell the exact price fixed in his message and as it should have been sent. There is no showing that the work of procuring the corn was worth more than the margin of profit received.” We think that case is clearly distinguishable from the-one at bar, and is not in point. In that case, there was nothing to show that the plaintiff would have been in any better position had the message been correctly transmitted; it does not appear that they paid any more for the corn to fill the order by reason of the mistake, nor that, by reason of the mistake, they did anything they would not have done had it not occurred. Hibbard v. Western Union Telegraph Co., 33 Wis. 558, is another case cited by the defendant. The. reasoning in that case seems to us to tell against the defendant and to support the conclusion heretofore reached by us in the; present case. The same may be said of Western Union Telegraph Co. v. Hall, 124 U. S. 444, and Squire v. Western Union Telegraph Co., 98 Mass. 232. But the defendant further contends that the plaintiff did not learn of the failure of the sale, by reason of the nondelivery of the message, until some three days or more thereafter, and that, under such circumstances, it was necessary for the plaintiff to show the value of the corn at the time it learned that the sale had thus failed. In support of this contention the Texas case above referred to is again cited. We do not deem it necessary, in this case, to determine whether the rule hereinbefore approved would be affected by such circumstances, because, were we to adopt the modification suggested, the result in this case Avould be precisely the same. The plaintiff is a corporation, and acts only through its agents. Its agent at More- • head, through Avhom the negotiations for the proposed sale, were conducted, the moment the message was not delivered — 257 — within the required time, knew that the sale had failed. What he knew, the plaintiff knew. Hence, the failure of the sale and knowledge on the part of the plaintiff that it had failed were contemporaneous, and the market price of the corn when the sale failed and when the plaintiff learned that it had failed would be the same. It is therefore recommended that the judgment of the district court'be affirmed. By the Court: For the reasons stated in the foregoing opinion, the judgment of the district court is Affirmed.