Postal Telegraphcable Company v. Warrengodwin Lumber Company/Opinion of the Court

In Primrose v. Western Union Telegraph Company, 154 U.S. 1, 14 Sup. Ct. 1098, 38 L. Ed. 883, the court passed upon the validity of a contract made by a telegraph company with the sender of a message by which, in case the message was missent, the liability of the company was limited to a refunding of the price paid for sending it, unless, as a means of guarding against mistake, the repeating of the message from the office to which it was directed to the office of origin was secured by the payment of an additional sum. It was held that such a contract was not one exempting the company from liability for its negligence, but was merely a reasonable condition appropriately adjusting the charge for the service rendered to the duty and responsibility exacted for its performance. Such a contract was therefore decided to be valid and the right to recover for error in transmitting a message which was sent subject to it was accordingly limited.

In Western Union Telegraph Company v. Showers, 112 Miss. 411, 73 South. 276, the Supreme Court of that state was called upon to consider the validity of a contract by a telegraph company limiting its responsibility for missending an unrepeated message essentially like the contract which was considered and upheld in the Primrose Case. The court decided that as the Act of Congress of June 18, 1910, c. 309, 36 Stat. 539, 545, had operated to exert the power of Congress over telegraph companies as to their interstate business and contracts, Congress had taken possession of the field and thus excluded state legislation and hence such a contract was valid and enforcible in accordance with the rule laid down in the Primrose Case. In holding this, however, the court pointed out that but for the act of Congress a different rule would apply, as under the state law such a contract was invalid because it was a stipulation by a carrier limiting its liability for its negligence.

In Dickerson v. Western Union Telegraph Company, 114 Miss. 115, 74 South. 779, the validity of a like contract by a telegraph company for the sending of an unrepeated message once again arose for consideration. In passing upon it the court declared that the ruling previously made in the Showers Case, as to the operation of the act of Congress of 1910, was erroneous. Coming therefore anew to reconsider that subject, it was held that the act of Congress of 1910 had not extended the power of Congress over the rates of telegraph companies for interstate business and the contracts made by them as to such subject, and hence the Showers Case, in so far as it held to the contrary, was overruled. Thus removing the contract from the operation of the national law and bringing it under the state law, the court held that the contract was void and not susceptible of being enforced because it was a mere contract exempting the telegraph company from the consequences of its negligence.

The case before us involving the extent of the liability of the Telegraph Company for an unrepeated interstate message governed by a contract like those considered in the previous cases, was decided by a state circuit court after the decision in the Showers Case and before the overruling of that case by the Dickerson Case. Presumably therefore the court, because of the Showers decision upheld the validity of the contract and accordingly limited the recovery. The appeal which took the case to the court below, however, was there heard after the decision in the Dickerson Case. In view of that situation the court below in disposing of the case expressly declared that the only issue which was open was the correctness of the ruling in the Dickerson Case, limiting the operation and effect of the act of Congress of June 18, 1910. Disposing of that issue, the ruling in the Dickerson Case was reiterated and the contract, although it concerned the transmission of an interstate message, was declared not affected by the act of Congress and to be solely controlled by the state law and to be therefore void. That subject, presents then, the only federal question, and indeed the only question in the case.

For the sake of brevity, we do not stop to review the cases which perturbed the mind of the court below in the Dickerson Case as to the correctness of its ruling in the Showers Case (Pennsylvania R. R. Co. v. Hughes, 191 U.S. 477, 24 Sup. Ct. 132, 48 L. Ed. 268; Western Union Telegraph Company v. Crovo, 220 U.S. 346, 31 Sup. Ct. 399, 55 L. Ed. 498; Adams Express Company v. Croninger, 226 U.S. 491, 33 Sup. Ct. 148, 57 L. Ed. 314, 44 L. R. A. (N. S.) 257; Western Union Telegraph Company v. Brown, 234 U.S. 542, 34 Sup. Ct. 955, 58 L. Ed. 1457), but content ourselves with saying that we are of opinion that the effect which was given to them was a mistaken one. We come at once therefore to state briefly the reasons why we conclude that the court below mistakenly limited the act of Congress of 1910 and why therefore its judgment was erroneous.

In the first place, as it is apparent on the face of the act of 1910 that it was intended to control telegraph companies by the act to regulate commerce, we think it clear that the act of 1910 was designed to and did subject such companies as to their interstate business to the rule of equality and uniformity of rates which it was manifestly the dominant purpose of the act to regulate commerce to establish, a purpose which would be wholly destroyed if, as held by the court below, the validity of contracts made by telegraph companies as to their interstate commerce business continued to be subjected to the control of divergent and it may be conflicting local

In the second place, as in terms the act empowered telegraph companies to establish reasonable rates, subject to the control which the act to regulate commerce exerted, it follows that the power thus given, limited of course by such control, carried with it the primary authority to provide a rate for unrepeated telegrams and the right to fix a reasonable limitation of responsibility where such rate was charged, since as pointed out in the Primrose Case the right to contract on such subject was embraced within the grant of the primary rate-making power.

In the third place, as the act expressly provided that the telegraph, telephone or cable messages to which it related may be 'classified into day, night, repeated, unrepeated, letter, commercial, press, government and such other classes as are just and reasonable and different rates may be charged for the different classes of messages,' it would seem unmistakably to draw under the federal control the very power which the construction given below to the act necessarily excluded from such control. Indeed, the conclusive force of this view is made additionally cogent when it is considered that as pointed out by the Interstate Commerce Commission (Clay County Produce Company v. Western Union Telegraph Company, 44 Interest. Com. R. 670), from the very inception of the telegraph business, or at least for a period of 40 years before 1910, the unrepeated message was one sent under a limited rate and subject to a limited responsibility of the character of the one here in contest.

But we need pursue the subject no further, since, if not technically authoritatively controlled, it is in reason persuasively settled by the decision of the Interstate Commerce Commission in dealing in the case above cited with the very question here under consideration as the result of the power conferred by the act of Congress of 1910; by the careful opinion of the Circuit Court of Appeals of the Eighth Circuit dealing with the same subject (Gardiner v. Western Union Telegraph Company, 231 Fed. 405, 145 C. C. A. 399); and by the numerous and conclusive opinions of state courts of last resort which in considering the act of 1910 from various points of view reached the conclusion that that act was an exertion by Congress of its authority to bring under federal control the interstate business of telegraph companies and therefor was an occupation of the field by Congress whcih excluded state action (Western Union Tel. Co. v. Bank of Spencer, 53 Okl. 398, 156 Pac. 1175; Haskell Implement Co. v. Postal Tel.-Cable Co., 114 Me. 277, 96 Atl. 219; Western Union Tel. Co. v. Bilisoly, 116 Va. 562, 82 S. E. 91; Bailey v. Western Union Tel. Co., 97 Kan. 619, 156 Pac. 716; Durre v. Western Tel. Co., 165 Wis. 190, 161 N. W. 755; Western Union Tel. Co. v. Schade, 137 Tenn. 214, 192 S. W. 924; Meadows v. Postal Tel.-Cable Co., 173 N. C. 240, 91 S. E. 1009; Norris v. Western Union Tel. Co., 174 N. C. 92, 93 S. E. 465; Bateman v. Western Union Tel. Co., 174 N. C. 97, 93 S. E. 467, L. R. A. 1918A, 803; Western Union Tel. Co. v. Lee, 174 Ky. 210, 192 S. W. 70, Ann. Cas. 1918C, 1026; Western Union Tel. Co. v. Foster, 224 Mass. 365, 113 N. E. 192; Western Union Tel. Co. v. Hawkins, 14 Ala. App. 295, 70 South. 12).

It is indeed true that several state courts of last resort have expressed conclusions concerning the act of Congress applied by the court below in this case. But we do not stop to review or refer to them as we are of opinion that the error in the reasoning upon which they proceed is pointed out by what we have said and by the authorities to which we have just referred.

It follows that the judgment below was erroneous, and it must be reversed, and the cause remanded for further proceedings, not inconsistent with this opinion.

And it is so ordered.

Mr. Justice PITNEY dissents.