141 F. 522 | 8th Cir. | 1905
The plaintiffs constituted a copartnership under the. title of the “Bank of Havelock," and they sued the
“Dated Denison, Iowa, Feb. 28, 1902.
“To tbe Bank of Havelock: We will pay Barnes’ draft for thirty-five hundred. Bank of Denison.
At the time this telegram was received the plaintiffs had a chattel mortgage on some cattle of the value of $3,500, which Barnes had bought, and they were induced by the telegram to lose their lien upon and to surrender the cattle to him. On March 25, 1902, Barnes made a draft on the bank of Denison in favor of the plaintiffs for $3,500, but the drawee refused to pay it. The Bank of Denison was a copartnership, composed of Leslie M. Shaw and Carl M. Kuehnle. These partners, Charles E. Voss, the cashier, and A. B. Lorenson, were the only persons who had authority to send such a telegram, or to act for the bank in any way. E. G. Lyman was the operator of the defendant at Denison, who received the telegram over the telephone and sent it to the plaintiffs. He had been in his position from February 5, 1902. He did not know the voice of the person who gave him the telegram, but took it for granted that it was the voice of some one who had the right to send it. He knew Voss, the cashier, and did not think that the voice was his. He subsequently became acquainted with Barnes, but could not say that he recognized the voice as that of Barnes. He did not know who gave him the message, because he did not recognize the voice which communicated it to him. The foregoing facts were proved at the trial, and there was no evidence tending to prove any other facts which were material to the decision of the case before us.
At the close of the evidence counsel for the defendant made a motion, which the court granted, for an instruction to the jury to return a verdict for their client upon the specific grounds that plaintiffs had never taken or expended anything for any draft in reliance upon the telegram, that the telegram was so indefinite that they had no right to rely upon it, and that the plaintiffs had no right to recover for the surrender of the cattle, or for the loss of their lien upon them, because the telegram contained no agreement to indemnify them against any such loss, nor was the release of such security within the contemplation of the parties. This ruling is assigned as error. It is true that the plaintiffs never paid out or lost anything by taking or relying upon any draft of Barnes, and that they were not entitled to recover at the trial upon that ground. But the Bank of Denison refused to pay the draft of Barnes on March 25, 1902, and it would not have paid it at any time after the telegram was delivered, if it had been presented. The telegram was not so indefinite or uncertain that reliance and action might not have been lawfully founded upon it, It contained a direct promise to pay Barnes’ draft for $3,500, and if it had been authorized by the Bank of Denison, and the plaintiffs had procured and paid value for a draft of Barnes for that amount, within a reasonable time after they received the telegram, they would have had a perfect cause of
While the plaintiffs parted with no property in reliance upon the ■draft, they were induced by the telegram to surrender the cattle and to lose their lien by mortgage upon them, and they thereby lost $3,500 of their security for their claim against their debtor. Why were they not entitled to recover back this amount? Counsel for the telegraph •company answer (1) because the plaintiffs surrendered the security of the cattle in reliance upon the promise of Barnes to make his draft on the Bank of Denison, and not in reliance upon the telegram; (2) because the failure of Barnes to make his draft was, and the telegram was not, the proximate cause of the loss; and (3) because the plaintiffs had ample security for their debt after the loss of their lien upon the cattle bought by Barnes, so that they never sustained any damage. The evidence, however, does not sustain these positions. It is that the plaintiffs refused to surrender the cattle or their lien upon them for the promise of Barnes to make his draft, or for the draft itself, and that they were induced to lose their lien by the telegram in evidence only. The failure of Barnes to make his draft was not the proximate or other ■cause of the loss of the plaintiffs, because the proof is that they would not have surrendered the cattle or their lien upon them upon the faith of it, and that the Bank of Denison would not have paid it in any event, so that its execution and presentation would have been nothing but one of those idle ceremonies which the law never requires. The proof is clear and convincing that the telegram was the proximate cause of the loss. Without it the plaintiffs would never have lost their lien upon the cattle without payment of their purchase price, and would never have suffered the damages they claim.
It is conceded that, if the telegram had been genuine, the plaintiffs could not have recovered of the Bank of Denison, unless they had purchased or discounted a draft of Barnes upon that bank for value. This, however, is because their cause of action against that bank would have arisen upon contract, if at all, and that contract would not have been made until the plaintiffs had accepted the offer tendered by the telegram, according to its terms. The action in hand, however, against the telegraph company, is not an action upon a contract, but is an action for a tort. The gravamen of this suit is false representation and resulting damage, and the acceptance of the apparent offer which the Bank of Denison never made neither conditioned nor limited it. The facts that the telegraph company, in violation of its duty of reasonable care, falsely represented to the plaintiffs that the Bank of Denison had promised to pay the draft of Barnes for $3,500, and that the plaintiffs, in reliance upon the truth of that representation, surrendered its lien upon cattle of the value of $3,500, constituted a perfect cause of action, and entitled the plaintiffs to a judgment. One who wrongfully deceives or misleads another, to whom he owes the duty of truthful statement, to his damage, is liable for the natural and probable •consequences of his act. The natural and probable effect of the false telegram was the expenditure or the loss by the addressee of $3,500
Nor can the defendant escape judgment for the loss inflicted because the plaintiffs have other security sufficient to satisfy their claim against the mortgagor. They had the right, as against the telegraph company, to all the security which they had obtained, and the depreciation or abstraction of any part of it by the latter was wrongful. It does not lie in the mouth of the telegraph company, after it has depreciated the security of the plaintiffs’ $3,500, to say that it is not liable to make compensation for the loss because the plaintiffs have the power to inflict it upon the mortgagor. It is no answer to a suit by a mortgagee against a stranger for the removal of timber or houses or other valuable property from mortgaged lands, or for the conversion oi mortgaged chattels, that the claim of the mortgagee is amply secured without the timber or houses taken or the chattels converted. And it is no defense to an action by a mortgagee for the loss of security caused by false representations that the plaintiff’s claim is amply secured, notwithstanding the loss. A mortgagee is entitled to recover of a wrongdoer the value of the mortgaged property he has taken from the lien of the mortgage, although that lien still holds sufficient to secure the debt, and he is not required to inflict the loss upon the mortgagor. Shapard v. Hynes, 45 C. C. A. 271, 104 Fed. 449, 52 L. R. A. 675; Allen v. Butman, 138 Mass. 586, 587; Stevenson v. Ford (Colo. Sup.) 25 Pac. 313. The result is that the motion for a directed verdict should not have been granted for any of the reasons stated therein.
But counsel for the defendant insist that there was not sufficient evidence of the negligence of the defendant in the receipt of the telegram to sustain a verdict against it, and that the ruling of the court, if erroneous, was error without prejudice, and therefore no ground for reversal. The first paragraph of the argument of counsel for the plaintiffs is devoted to a discussion of the law and a citation of the authorities upon this question, but in their reply brief they insist that the sufficiency of the evidence of negligence is not open for consideration at this time (1) because that question was not presented by the motion or considered by the trial court, and (2) because after the defendant had answered the original petition, and had denied its material averments, the plaintiffs amended it by modifications of, and additions to, some of its allegations, and by adding to it a second count, wherein they set forth the same cause of action pleaded in the original petition in different and somewhat broader terms, and no answer to this amended petition was ever made. The presumption is that error produces prejudice, and it is only when it is clear beyond doubt that none resulted, or could have resulted, from an erroneous ruling that the judgment may be lawfully affirmed. Deery v. Cray, 5 Wall. 795, 807, 808, 18 L. Ed. 653; U. S. v. Gentry, 55 C. C. A. 658, 663, 119 Fed. 70, 75. Hence when a verdict is directed on limited, but untenable grounds, it may not stand on other grounds, unless it is clear beyond
Nor does the absence of an answer to the amended petition relieve . us from this duty. The material averments of the original petition were denied in due time by a proper answer. The amended petition pleaded the same cause of action. The failure- to answer it entitled the plaintiffs to judgment by default. They never applied for such a judgment. They never suggested the absence of an answer, or the admission of the averments of the amended petition by the defendant, until their counsel filed their reply brief in this court. They appeared in the court below, introduced evidence and tried this action as though the averments of the amended petition had been denied by a formal
The question is essentially one of law. The action is for damages caused by the false representation of the defendant, contained in the telegram, that the Bank of Denison sent it. There was no actual intent by the defendant to deceive the plaintiffs and the sole basis of the action is that the deceit and damage were caused by the breach of the duty of the defendant and of its operator, Lyman, to exercise reasonable care to ascertain whether or not the person who spoke the telegram to the operator over the telephone was authorized by the Bank of Denison to do so. The facts are undisputed. There were three persons, Kuehnle, Voss, and Lorenson, who had lawful authority to telephone the message to the operator in the name of the bank, or to empower others to do so. Lyman subsequently became acquainted with Barnes, and could not say that the dispatch was communicated by his voice. He knew Voss, and thought that the message was not spoken by his voice. It might have been lawfully communicated by the voice of Kuehnle or of Lorenson, or of some other person whom one of them or the cashier directed to do so. Lyman did not recognize the voice of the person who sent it, and did not know whose it was. But he took it for granted that it was the voice of some one who had the right to communicate it and to direct its transmission. This is all the testimony upon this subject, and it discloses nothing in the situation or transaction to warn the operator, or to arouse his suspicion, that the telegram was not spoken to him by one who had the legal authority to send it on behalf of’ the bank. It presents this question: Does the discharge of the duty which a telegraph company owes to the addressee of a message to exercise reasonable care to receive and transmit it correctly and speedily, so that it will represent the truth, require its operators to investigate and ascertain the identity or authority of those from whom they receive messages by telephone or otherwise ?
“Is liable for all mistakes in transmitting or receiving messages made by any person in bis employment or for any unreasonable delay in tbeir transmission or delivery and for all damages resulting from failure to perform.the foregoing or any other duty required by law.”
Section 2164 declares that in any action against any telegraph company for damages caused by erroneous transmission of a message, or by unreasonable delay in delivery of a message, negligence on the part of the telegraph company shall be presumed upon proof of erroneous transmission or delivery. These provisions of the statutes are significant, both in what they contain and what they omit, and they indicate the true boundaries of the duties of telegraph companies. They prescribe their duty to exercise reasonable care to receive, transmit, and deliver messages speedily and without mistakes, and they impose penalties for failures to do so. But they do not charge upon such companies the duty to ascertain the identity or authority of those who tender messages to send them, nor do they impose any liability or penalty for a failure to do so. They recognize the fact that the business, and hence the duty, of telegraph companies, is to speedily and correctly transmit the messages presented to them, not to investigate, ascertain, or guaranty their truth, or the identity or the authority of those who send them. The act or the alleged neglect of which the plaintiffs complain in this case is not one of those denounced in these statutes, and they have no farther relevancy in this action. The defendant’s alleged neglect is not a failure to transmit speedily or correctly, or to receive without mistake, the message tendered to the operator at Denison. The testimony is clear and undisputed that he received and transmitted without mistake the message which was spoken to him over the telephone. Did he fail to discharge his duty because he did not ascertain the authority of the person who spoke it to send it in the name of the bank?
The great purpose of telegraphy is the quick transmission of messages from senders to addressees. In the conduct of this business all other considerations are subordinate. The telephone furnishes the most speedy and convenient means of communicating these messages from the senders to the offices of the telegraph companies, and from these offices to 'the addressees of the messages. For this reason its use for this purpose has become general throughout the land. The persons who operate the telephones are not generally the business men or officers of corporations in whom the authority to send the telegrams is vested in the first instance, but young men and women to
Moreover, the imposition of such a duty by the decision, which counsel for the plaintiffs seek, that the exercise of reasonable care in the receipt of messages by telephone requires inquiry and determination of the identity and authority of those who communicate them, would be violative of the basic principle of business and judicial action. Such a rule must be founded upon the erroneous presumption that men are generally deceitful and dishonest, and it would be destructive of itself. If the telegraph operator must presume that one, with whose voice he is not familiar, who speaks a message to him over the telephone or é otherwise, is deceitfully impersonating another, or is without authority to send it, then by the same mark he must presume that the statements of those who identify the sender, or vouch for his authority, are also false and fraudulent, and his investigation would be both tedious and futile. The truth is that the great majority of private citizens and public officials alike are honest and truthful, and that the entire civic fabric rests upon the fundamental presumption that they are so. Business cannot be transacted, contracts cannot be made and enforced, the rights of citizens cannot be measured and protected by the courts upon any other presumption than that men and women are honest, truthful, and innocent of wrong until the contrary appears. The telegraph company and its employés may, like all others, safely rely upon this presumption, in receiving messages either in writing or by parol. In the absence of notice of facts or circumstances which wmuld suggest or arouse suspicion in the mind of a person of ordinary caution of false impersonation, or of want of authority, the exercise of reasonable care by a telegraph operator to receive messages from those only who have authority to send them does not require him to investigate the identity or authority of those who present them, whether the messages are in writing, or are spoken directly or over the telephone by unfamiliar voices. He may take it for granted that those who present them have the right to send them. Western Union Tel. Co. v. Meyer, 61 Ala. 158, 32 Am. Rep. 1. A care which would delay messages presented to the operator by a person, or by a voice unknown to him, until he could inquire and ascertain the identity and authority of the persons who present them, would not be ordinary, but extraordinary, care, for it would be a care
But notice of facts and circumstances which would put a person of ordinary caution upon inquiry is notice of all the facts to which a reasonably diligent inquiry would lead. And, whenever facts or circumstances come to the notice of a telegraph company, or of its operators, which would arouse the suspicion of a person of ordinary prudence and intelligence in a like situation, and would suggest to his mind that the party who presents the message is not authorized to send it, the exercise of reasonable care requires them either to investigate and ascertain his authority before transmitting it, or to communicate the facts and circumstances and the suspicion to the addressee at or before the delivery of the message. Elwood v. Western Union Tel. Co., 45 N. Y. 549, 6 Am. Rep. 140; McCord v. Western Union Tel. Co., 39 Minn. 181, 39 N. W. 315, 1 L. R. A. 143, 12 Am. St. Rep. 636; Pacific Postal, etc., Co. v. Bank of Palo Alto, 109 Fed. 369, 48 C. C. A. 413, 54 L. R. A. 711; May v. Western Union Tel. Co., 112 Mass. 90; Bank of California v. Western Union Tel. Co., 52 Cal. 280.
Many authorities have been cited and considered in reaching these conclusions. Cases which involve mistakes in the transmission of messages, like Strause v. Western Union Tel. Co., 8 Biss. 104, Fed. Cas. No. 13,531, and Fererro v. Tel. Co., 9 App. D. C. 455, have little relevancy to the question here in hand, because the law is well settled that it is the duty of a telegraph company to exercise reasonable care to correctly communicate the messages it receives to those to whom they are addressed. Nor is the case of Western Union Tel. Co. v. Uvalde National Bank (Tex. Civ. App.) 72 S. W. 232, Id. 77 S. W. 603, 606, 65 E. R. A. 805, either material or persuasive. In that case a telegraph operator gave the call for a certain town to a member of his union, who tapped one of the company’s wires and sent such forged messages to a bank that it cashed a worthless draft. The courts of Texas held that the company was negligent, either because the operator gave out the call or because the company had not used some unknown means that they did not specify to prevent scoundrels from tapping its wires. If no such means were shown by the record or were known to, or suggested by, the court, and there was no evidence that telegraph companies had ever used such means, how could it be a lack of ordinary care to fail to do so? The cases that are pertinent to the question before us have been cited above under the rules which they respectively illustrate. In Elwood v. Western Union Tel. Co., 45 N. Y. 549, 556, 6 Am. Rep. 140, the operator received and transmitted to a bank a message dated at another station, which held out the person who tendered the message as worthy of credit, and bore the forged signature of the cashier of another bank, who, the operator knew, was not the person who presented the message for transmission. In McCord v. Western Union Tel. Co., 39 Minn. 181, 39 N. W. 315, 1 L. R. A. 143, 12 Am. St. Rep. 636, and Pacific Postal,
On the other hand, in Western Union Tel. Co. v. Meyer, 61 Ala. 158, 32 Am. Rep. 1, one Max Reis was the nephew of the plaintiff, Meyer, who resided in Selma, Ala. A person unknown to the telegraph operator at Cincinnati, and who was not Max Reis, presented to him for transmission a message to Meyer, signed “Max Reis,” wherein Meyer was requested to send him money by telegraph immediately. Meyer complied with the request, and the telegraph company paid the money to the person who presented the message. Meyer brought an action against the company for the money he had lost, and the Supreme Court of Alabama denied a recovery upon the ground that the defendant had been guilty of no breach of duty. No decision of any court has been cited or discovered which is inconsistent with the rule that in the absence of notice of facts or circumstances which would awaken inquiry and arouse suspicion in the mind of a person of ordinary prudence and intelligence in a like situation, regarding the authority of the party who presents a message for transmission to send it, the exercise by a telegraph company and its operators of reasonable care to receive and transmit genuine and authorized messages only does not require them to investigate or ascertain the identity or authority to send it of the person who tenders a message for transmission, whether it is in writing or is spoken directly to the operator, or is communicated to him by telephone; and the conclusion is that this is the law which ought to govern, and which does govern, this subject.
Tried by this rule there is no evidence in this case of any negligence of the defendant or of its operator, Lyman. There were three persons who had original authority to send the message, and they had power to direct others to do so. It came to the operator in a voice which he did not recognize, and that he thought wras not the voice of the cashier, and that he could not say was the voice of Barnes. There is no evidence that he could have recognized the voices of Kuehnle or Lorenson or of others to whom they might have delegated the power to send the message, and the natural and legal
The result is that it is clear beyond doubt that no verdict or judgment in favor of the plaintiffs could have been sustained in this case, and as the erroneous ruling of the court below did not prejudice, and could not have prejudiced, the plaintiff's, the judgment must be affirmed. It is so ordered.