Western Union Telegraph Co. v. Czizek

Background

A stockholder in the Idaho National Bank asked a Boise attorney, Jones, to act for him in selling his shares. Jones sent a night telegram on November 30, 1917, to the stockholder in Oakland offering $90 per share from a buyer. The telegraph office clerk accidentally filed the message instead of sending it. The buyer remained willing to buy until December 5, but the stock later became worthless. Lower courts had split, and a large damages award was entered for the stockholder before the case reached this Court.

Reasoning

The Court addressed whether the telegraph company’s printed ticket terms limit recovery when an unrepeated night message is not specially valued. The approved form limited liability for unrepeated messages to $50 unless a higher value was written and extra charge paid. The Court held the contract attached when the company received the message and that a momentary clerk’s inadvertence did not remove the protection of the valuation clause. The plaintiff was bound by the printed terms and did not show gross or willful wrongdoing that would void the limitation. Although the plaintiff notified the company and later made a formal demand, the Court concluded recovery must be limited to the $50 valuation.

Real world impact

People who send telegraphs must state and pay for a higher declared value if they want more compensation for loss. Telegraph companies can rely on their printed terms for unrepeated messages unless a sender properly declares greater value or shows a stronger basis to avoid the limitation. The decision reversed the larger award and limited actual damages to the stated $50.

Dissents or concurrances

Justice McKenna dissented, but the opinion of the Court carried the judgment reversing the larger award.