Trevor & Colgate vs. Wood and others

Trevor & Colgate vs. Wood and others. Where parties have agreed that their communications with each other shall be made by telegraph, this in effect is a warranty by each party that his communications to the other shall be received. A communication by telegraph is only initiated when it is delivered to the telegraphic operator. It is completed when it comes to the possession of the party for whom it is designed. The rule that has been established by the courts, in respect to contracts made by letter sent through the mail, is not applicable to communications by telegraph. Telegraph companies, while conducted by private enterprise, cannot be so clothed with a public official character as to make the receipt of a communication at the office of the company of the same effect, in regard to the acceptance of an offer by a contracting party, as the actual delivery of it would have. The telegraph company is the agent of the employer, while the post office is conducted by public authority and is not the agent of any person. APPEAL from a judgment entered upon the. report of a referee. The action was brought to recover damages for the breach of an agreement alleged to have been made by telegraph. The following facts were found by the referee, viz: The plaintiffs and defendants were respectively partners, and were respectively dealers in specie, exchange and bullion; the plaintiffs doing business in the city of New York, the defendants in the city.of New Orleans. The following correspondence ensued between them, partly by telegraph, partly by mail; the plaintiffs’ telegrams being sent by the “Interior or National Line,’’ the defendants’ telegrams by the “Seaboard Telegraph Line.” On the 30th January, 1860, the plaintiffs telegraphed to the defendants as follows: “To John Wood & Oo.: At what price will you sell one hundred thousand Mexican dollars per next steamer, deliverable here. Trevor & Colgate.” On the 31st of the same month the defendants answered the above by another telegram, as follows : “Trevor & Colgate, New York: Will deliver fifty thousand at seven and one-quarter per Moses Taylor. Answer. John Wood & Co.” The word answer was on the last dispatch as written by the operator at New Orleans, but was not on the copy delivered to the plaintiffs. On the same day the plaintiffs telegraphed to the defendants as follows: “To John Wood & Co.: Your offer fifty thousand Mexicans at seven and one quar-' ter accepted: send more if you can. Trevor & Colgate.” • At the same time the plaintiffs sent by mail to the defendants a letter acknowledging the receipt of defendants’ telegram, and copying the plaintiffs’ telegraphic answer. On the same day the defendants had also sent by mail a letter to the plaintiffs, copying defendants’ telegram of that date, and adding, “if you accept our offer at 7£, we will ship you by same steamer. We wait your answer to our dispatch of to-day.” On 1st February, 1860, (the next day,) the plaintiffs again telegraphed to the defendants as follows: “To John Wood & Co.: Accepted by telegraph yesterday your offer for fifty thousand Mexicans; send as many more same price. Eeply. Trevor & Colgate.” This telegram, as well as that of 31st January, from the plaintiffs, did not reach the defendants until 10 a. m., on 4th February, 1860, in consequence of some derangement in a part of the line used by the plaintiffs above Canton, Mississippi, from noon of 31st January to the morning of February 4, but which was not known to the plaintiffs until 4th February, when the telegraph company reported the line down. On the 3d February, the defendants telegraphed to the plaintiffs as follows: “Mess. Trevor & Colgate, blew York: bio answer to our dispatch 31st; dollars are sold. John Wood & Co." And the same day they wrote by mail in the same terms. The plaintiffs received the last telegram on 3d February, and answered it as follows, by telegram, on the same day: “To John Wood & Co.: Your offer was accepted on receipt and again the next day. The dollars must come, or we will hold you responsible. Eeplv. Trevor & Colgate.” On 4th February, the plaintiffs telegraphed to the defendants as follows: “To John Wood & Co.: Telegraph company reports line down on thirty-first, hence the failure of our two messages. We sold the dollars and must have them by this or the next steamer, or we are liable for damages. Don't fail to send the dollars at any price. Will write to-day. Trevor & Colgate.” On the same day last mentioned, the defendants telegraphed to the plaintiffs as follows: “To Trevor & Colgate: bio dollars to be had. We may ship by steamer twelfth, as you propose, if we have them. John Wood & Co.” On the same day they wrote by mail to the defendants a letter, the contents of which it is not material to state. Other correspondence also followed, which it is not material to state here. The defendants, on their part, insisted that the telegraph company employed by the plaintiffs was the agent of the plaintiffs, and the delay in transmitting the plaintiffs' telegrams was through the fault of such agents, and that the defendants, not receiving an answer to their proposal of 31st January as late as the 3d of February, were justified in selling the dollars. The plaintiffs insisted that as the dollars were to be shipped by the Moses Taylor, which was to sail on the 5th February, the defendants should have waited until then or about that time. The Moses Taylor was, in fact, to sail on the 5th February, and she did sail on that day, at noon, and arrived in New York on the 13th. It is usual not to ship specie until the day before the sailing of the vessel. All the telegrams were punctually transmitted and received on the same day that they were written, except the two above mentioned as failing; all the letters sent by mail were received in due course of mail, which at that time was in seven days. The plaintiffs, by paying an extra price, could have had their telegrams to New Orleans repeated from there, so as to be certain that they had been properly transmitted. This was not done. It is not usual to do it. The market price of Mexican dollars on the 13th February, 1860, was seven and five-eighths above par; thus the loss to the plaintiffs on that account alone was three-eighths of one per cent on $50,000. They had contracted to sell the $50,000 to Berend & Co., who claimed damages, and believed they would have made $750 if the contract had been carried out, but compromised with the plaintiffs and received from them $250. In July or August, 1859, Wood, one of the defendants, was in the city of New York, and called on the plaintiffs, and then an arrangement was made between them that if the defendants had dollars to sell they should telegraph to the plaintiffs, who should answer whether they would take them or not, and that every thing between them should be done through the telegraph. (Some shipments of specie were afterwards made by the defendants to the plaintiffs in pursuance of contracts thus made hy telegraph, before January, 1860.) The two telegraph companies had but one office in the city of New York. The lines of the company employed by the defendants were "in running order during all the period in question. The lines of the company employed by the plaintiffs were down on the 31st January, in the afternoon, and thence until the 4th February. The referee found, also, on the evidence, that it was the duty of the telegraph company employed by the plaintiffs on the 31st January, or promptly thereafter, to have notified the office in New York of the break in the line at Canton, and then for the office in New York to have promptly notified the plaintiffs of the same facts, and that it was negligence in the company to delay giving this notice until the 3d of February. He found, also, as matter of fact, that the damages sustained by the plaintiffs by the omission of the defendants to forward the dollars, was $187.50, with interest from 13th February, 1860. On these facts the referee found, as matters of law, as follows: Assuming that the plaintiffs are not responsible for the negligence of the telegraphic company by which their telegram was forwarded, the contract between the plaintiffs and the defendants was complete on the same day that the plaintiffs’ acceptance of the defendants’ offer began to be transmitted by said telegraph company to the defendants, viz., on the 31st of January, 1860, or as soon thereafter as the telegram could be transmitted by due diligence, which would he on that or the following day, and then the defendants were bound to fulfill the contract, and to pay the plaintiffs their damages for the non-fulfillment of the same, and they were not justified in attempting to withdraw their offer or in selling the dollars when they did. Conforming his decision to the ruling of the court, he also found, as matter of law, that the plaintiffs were not responsible for the negligence of the telegraphic company, and that they were entitled to judgment against the defendants for their damages for said breach of contract, amounting to $219.33, and also to their costs, to be adjusted. And he directed that judgment be entered accordingly. Before the case was submitted the counsel for the defendants requested the. referee to find, as matter of fact, that the failure to transmit the telegram, was owing in part to the omission of the plaintiffs in not ascertaining that the Interior line was down, and then in not sending the telegram by the other line, and also in not having their telegrams repeated. The counsel for the defendants also requested the referee to find, as matter of law: 1st. That by reason of the non-prepayment of the telegrams by the plaintiffs the defendants might have properly refused to receive them, and that no such deposit of the communication here could bind the defendants. 2d. That even if the telegraphic company was not the agent of the plaintiffs, the message did not operate as an acceptance of the offer until actually received by the defendantsj and that the. withdrawal by the defendants was effective. 3d. That there was no contract in writing between the parties, within the statute of frauds. But the referee refused to find except as above stated, George R. Thompson, for the respondents. I. There was a valid contract made between the parties. The offer of Wood & Co. was distinctly to deliver to the plaintiffs, by the steamer Moses Taylor, which was understood to sail, and did sail from Hew Orleans to Hew York on the 5th of February, 1860, certain dollars, at a certain price. This was an offer continuing and- binding upon the defendants up to the time the steamer sailed, unless withdrawn -previous to its acceptance, and'they were bound to hold the dollars at the disposal of the plaintiffs until that time, whether the offer was accepted or not. The proposer may, and has, in this case, determined how long the offer shall continue. “ If the proposer receives the assent to it before retracting his offer, he is bound by it." (1 Parsons on Contracts, 405. Boston and Maine R. R. v. Bartlett, 3 Cush. 224. See cases cited in Notes to 1 Parsons on Contracts, book 2, ch. 2, pp. 404-8.) If it be considered that the defendants were only bound to wait a reasonable time before disposing of the dollars offered, then that reasonable time is, in this case, to be determined by the sailing of the steamer, if she sailed at the time the defendants supposed she was to sail, when they forwarded the offer. If the proposer fixes a time, he expresses his intention, and the other party knows exactly what it is. If no definite time is stated, then the inquiry is as to what time it is natural to suppose the parties contemplated. The intention is to be gathered from the offer itself, and from the attendant circumstances. There can be no doubt from the offer itself, but that the defendant meant to make the offer continuing until the sailing of the steamer. The steamer was to sail in a few days; the defendants knew it; they offered to send the dollars then if desired, and they were bound to wait until that time before they put it out of their power so to do. The offer did not relate to any particular dollars then in their possession. It does not appear whether they had these dollars on hand, or proposed to procure them elsewhere. It would have been no answer to this action that Wood & Oo. expected to be able to procure the dollars, and afterwards found themselves unable to do so. Is it not reasonable to suppose that the plaintiffs thought that they could accept the dollars at any time previous to the sailing of the steamer ? The offer is susceptible of no other construction. Three, or four or five days was not an unreasonable time to wait, in any event. The defendants themselves did not exercise due diligence. The offer was accepted by telegraph the same day it was made, again the next day, and also by letter, properly mailed, the same day. All these different acceptances reached the defendants the day before the sailing of the steamer. II. Either of these acceptances concluded the contract the moment either were put in a proper way of being communicated to the defendants. And the referee under the decision of this court at general term, made no erfor in disregarding the question of negligence. The question is, was there a contract ? The definition of a contract is the agreement or meeting of minds for the consummation of any particular object. It has been decided by the court of last resort in this state, in broad terms, that if a proposer makes his offer by mail, and that offer is accepted, before notice of its withdrawal, by depositing an acceptance in the post office properly addressed to the proposer, at that moment the contract is complete, and it makes no kind of difference whether the proposer ever receives the acceptance, or ever hears of it, or not. (Vassar v. Camp, 1 Kern. 441. Mactier v. Firth, 6 Wend. 103. Adams v. Lindsell, 1 Barn. & Ald. 681.) In the case in Wendell, the court say : “Where the offer is by letter, the usual mode of acceptance is by sending a letter announcing a consent to accept; where it is made by a messenger, a determination to accept, returned through him or sent by another, would seem to be all the law requires. There are other modes equally conclusive upon the parties; keeping silence under certain circumstances is an assent to a proposition ; any thing that shall amount to a manifestation of a formed determination to accept, communicated, or put in a proper way to be communicated, to the party making the offer, would doubtless complete the. contract. The knoivledge of the párty making the offer of the determination of the party receiving it, is no ingredient of an acceptance.” III. If this is law, then we insist there is a contract in this case. The only question is as to whether there is any difference between the telegraph and the mail, or whether the privilege does not equally apply to the telegraph as to the mail. The reason why the contract is considered binding in the case of the mail is, that the minds of the parties having met, the contract is rendered complete at once. The non-liability of the government for the neglect of the officials of the post office is not the reason. Post office officials are liable for neglect, and the difficulty of tracing the neglect to its source, or the lack of responsibility of any post master, is not a reason for the doctrine as established. (Whitfield v. Lord de Spencer, Cowper, 754, 765. Teall v. Felton, 1 Comstock 537.) There is then no real difference between the mail and the telegraph in this respect. And the decisions do not put the case of the mail upon any such ground. The ground is the absolute completion of the contract, not that as you cannot sue the post office, therefore you may sue the party. IV. If the offer was not accepted by telegraph, it was accepted by mail. V. If these views are correct, then certainly the question of the negligence of the telegraph company had nothing whatever to do with the case, and the referee did not err in deciding that the plaintiffs are not responsible for the neglect of the telegraph company. There was no neglect on the part of the plaintiffs ; their failure to repeat their messages is of no consequence. It is not usual to do so, nor was it incumbent upon them. VI. The testimony on the question of negligence was inadmissible for another reason. In order to show it, it was 'necessary that the answer should allege it. It contains nothing of that sort. (McKyring v. Bull, 16 N. Y. Rep. 297.) VII. On the hearing of the former appeal in this case the court decided that the telegraph company was not the agent of the plaintiffs, and that therefore they are not responsible for its negligence. This decision is evidently correct, especially in view of the fact that there was an arrangement between the parties to correspond by telegraph in relation to business, and that this contract was made in pursuance of that arrangement. And the subsequent ruling of the referee granting the judgment appealed from by this appeal was a matter of course. VIII. It is evident that this contract was not void under the statute of frauds. It is proved beyond question that the defendants sent an offer. This they subscribed before they sent it, and do not deny it. It was not necessary to produce the original telegram. The contract was confirmed by a letter which was produced, and which was signed by the defendants. Ira D. Warren, for the appellants. I. The referee erred in finding as a fact, “that it is not usual to have telegrams repeated.” All the evidence upon that subject is the other way. II. The referee erred in finding, as a conclusion of law, that the contract was completed on the same day that the plaintiffs' acceptance of defendants' offer began to be transmitted to the defendants, and that it was not necessary that the defendant should actually receive the message of acceptance to make a binding contract. (1.) The plaintiffs, then, must rely wholly upon the assumption that communications by telegraph, between contracting or negotiating parties, are governed by the rule laid down in the cases of Mactier v. Frith, and Vassar v. Camp, in reference to negotiations by mail. It is submitted that, as the question is new, this court will not establish such a rule in relation to communications by telegraph, unless it be supported by clear analogy or by conclusive reasons founded upon justice and public policy, and that it is supported by neither. (2.) When the rule in reference to mail communication was first established in this state, it required every argument in its favor to support it. And it is submitted that it must soon be modified.here in cases where the parties have also telegraphic facilities, or business men will cease to use the mail for business purposes. (3.) There is no more reason why this rule should be applied to a telegraphic message than to a message sent by a private messenger, or by an express company. In case of mail, the medium of communication is not responsible to, or under the control of either party, and is the agent of neither. In the language of Selden, J. in Vassar v. Camp, “ He (the person depositing in the post office) can do nothing more to insure its safe delivery, and is not responsible for its miscarriage.” The telegraph is controlled and managed by private persons or corporations. Its owners receive compensation, and are liable for errors and failures in the same way as individuals. (4.) In this case there were two distinct lines. The plaintiff had a choice of messengers. There is no such choice in case of mail. (5.) The person depositing a letter in the post office cannot know that it will be received in due course of mail, and he necessarily acts upon the faith that it will. Not so with the telegram. By repeating he can be assured of its delivery, or ascertain its failure. (6.) The referee has found that the damage was occasioned by the negligence of the National Telegraph Company, employed by the plaintiffs. Whether agent of the plaintiffs or riot, it is responsible to them for damages occasioned by its negligence in their employment. (Sedgwick on Damages, 62, 63. Bryant v. American Telegraph Co., Transcript, March 14, 1862. N. Y. &c. Tel. Co. v. Drybury, 35 Penn. R. 298. W. & C. Tel. Co. v. Habron, 15 Gratt. [Va.] R. 122. Parks, &c. v. Alten, &c. Tel. Co. 13 Cal. 422. Camp v. Western Tel. Co., 1 Met. [Ky.] R. 164.) It is not responsible to the defendants, as there was no contract between them. The rule, contended for by the plaintiffs, would charge an innocent party, who has no remedy, with damages to—if you please— an equally innocent party, but who has complete remedy against the one properly chargeable. No legal proposition can be established which ever produces such absurd consequences. The rule is well established that whenever one of two innocent parties must suffer by the act of a third, he who has enabled the third party to do, or occasion the injury, must sustain the loss. (Dows v. Greene, 24 N. Y. Rep. 645.) The ruling of the general term, in reversing the former judgment, may perhaps be reconciled with the- common sense of the case, by leaving the parties to the law governing contracts in ordinary cases, viz., that the acceptance must be communicated within a reasonable time, to the party to be charged, or his authorized agent. Each retaining any remedy they may have against third parties in case of accident or neglect. The rule, in the case of the mail, is founded upon other considerations than the mere fact that the post office department is not held to be be agent of either party; in fact the absence of the relation of principal and agent, between the party depositing the acceptance, and the mail which carries it, seems scarcely to have entered into the reasoning of the cases, and the considerations which controlled the court in adopting that rule do not apply to telegraphic communications as shown above. A party is chargeable with all the information he might have obtained by reasonable diligence. Here he knew, or should have known, that this telegraph was down and that another line was running. Suppose a party knew that, by reason of an insurrection the mails were entirely stopped, would a deposit in the post office of an acceptance bind the other? Clearly not, but were there a telegraph line working, which he might use, the case would be stronger. Then, should the offerer withdraw his offer before the mails" started, would any reason remain for holding a contract completed ? (7.) Suppose the defendants had not received the telegram of acceptance until February 5, and had sold their dollars when the steamer sailed, or had the plaintiffs deposited their telegram when they knew both lines were down, would defendants have been liable? If not, then there is no such rule, and the only question is, whether the defendants waited for a reasonable time. The referee has found that they did. (8.) The plaintiffs might have withdrawn their message of acceptance on the second, before it was actually transmitted, and they would not have been bound by it. Had it beén a letter sent by mail, they could not have done it. If the contract is not binding on one party, it should not be on the other. III. The defendant waited more than a reasonable time. The message contained the word 11 answer” which meant answer at once, and they waited four days for what should have reached them in one day at farthest. (Story on Cont. §§ 380, 384, 388.) The plaintiffs had a right to withdraw their offer, and did so on the 3d February, and before the acceptance reached them. (Payne v. Cave, 3 T. R. 148. 1 Parsons on Cont. 399-408, and cases cited. 3 Cush. 234.) The referee erred in finding that the telegram of February 3 did not amount to a withdrawal. IV. The plaintiffs were guilty of negligence. They knew that by repeating their telegram they could ascertain whether it went through or not, and if not, could send it by the other line; or, if both failed, by knowing it they would avoid entering into engagements resulting in damage. They cannot recover damages of the defendants which their own negligence, in any way, contributed to produce, or where caused by the negligence of the medium of communication they employed to transmit their message. There was no arrangement between the parties to employ this particular company. There were two companies. V. There was a condition attached to the offer. The word “answer,” on defendants’ telegram, was equivalent to saying “ we must receive an answer at once, to make this binding.” The plaintiffs’ theory, and the only one upon which this case can stand, is that the company being the agent of no one, and not responsible for its acts, its acts or omissions do not affect the rights of the parties. The non-reception of this word by the plaintiffs does not alter its effect. The condition was not complied with and no contract was made. VI. The plaintiffs did not prepay the telegraph company’s charge upon their messages of acceptance. The defendants might properly have refused to receive a communication so incumbered, and such a message cannot be considered as delivered, for the purpose of binding a party who could only know its contents by paying a charge which the plaintiffs themselves should have paid. VII. The real responsibility is with the National Telegraph Company, where the referee places it. The fault was theirs, and they are liable in damages to the plaintiffs who employed them. If the plaintiffs should recover of the defendants, the latter would be remediless, as there was no privity of contract between them and that company. VIII. Communications by telegraph are not such memoranda in writing as to take the case out of the statute of frauds. (1.) There is no evidence that the defendants left a copy of the dispatch of 31st January at the office in ¡New Orleans, signed by them, or that such a writing so signed was delivered to the plaintiffs. (2.) If it be answered that the defendants made the telegraph company their agent to sign and deliver such a memorandum in writing, the fact of the agency overturns the only theory upon which the plaintiffs’ case can stand. [MAJORITY — By the Court, Leonard, J.] By the Court, Leonard, J. There was never any agregatio mentium, or meeting of the minds of the parties in respect to the purchase and sale of the dollars in question. The plaintiffs failed to notify the defendants of the acceptance of their offer until after the defendants had countermanded' or recalled it. The plaintiffs must be regarded as having undertaken on their part to bring to the defendants the knowledge of their acceptance or refusal of the offer made. The parties had agreed beforehand that their communications should be made by telegraph. This in effect was a warranty by each party that his communication to the other should be received. It cannot be supposed that the party who was to receive the communication was willing to incur the hazard of a safe delivery of the messages of the other party with whom he was in treaty through the medium of the telegraph. The communication is only initiated when it is delivered to the telegraphic operator. It is completed when it comes to the possession of the party for whom it is designed. We think that the rule that has been established by the courts in respect to contracts made by letters sent through, the mail, is not applicable to communications by telegraph. (Mactier v. Frith, 6 Wend. 103. Vassar v. Camp, 1 Kernan, 441.) [New York General, Term, February 1, 1864. The public post office is governed by no private interests. The officers who direct its operation are regulated by law, and its violation is punished criminally. The operators of the telegraph are appointed or employed by private enterprise, and are responsible to those who employ them for the proper performance of their service. There are also other distinctions. The telegraphic companies have been conducted, so far as has come to my knowledge, with great integrity and fidelity, but an institution of that description cannot, while conducted by private enterprise, be so clothed with a public official character as to make the receipt of a communication at the office of the telegraph company of the same effect, in relation to the acceptance of an offer by a contracting party, as the actual delivery of it would have. The judgment should be reversed, and a new trial had before the same referee. The costs of the appeal to the appellant to abide the event. Leonard, Sutherland and Clerke, Justices.]