B-20550, MAY 7, 1943, 22 COMP. GEN. 1021

B-20550: May 7, 1943

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TELEGRAMS - LIABILITY FOR GOVERNMENT'S ADDITIONAL EXPENSES ATTRIBUTABLE TO ERRONEOUS TRANSMISSION OF OFFICIAL MESSAGE A TELEGRAPH COMPANY IS LIABLE FOR THE DAMAGES. 1943: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 26. AS FOLLOWS: REFERENCE IS MADE TO CLAIM AGAINST THIS COMPANY IN THE AMOUNT OF $19.48 COVERING THE LOST TIME AND EXPENSES OF MR. WHICH IS A DEMAND FOR PAYMENT OF THE CLAIM IN QUESTION. WITH NOTICE TO THE EFFECT THAT THE GOVERNMENT IS SELF PAYING PART OF THE CLAIM. SINCE THIS MESSAGE WAS A GOVERNMENT MESSAGE. OUR POSITION SO FAR AS GOVERNMENT MESSAGES ARE CONCERNED IS THAT THE TELEGRAPH COMPANY IS NOT A COMMON CARRIER. IT IS OUR CONTENTION THAT THE SCOPE OF THE PENALTY IS LIMITED TO A REFUSAL TO HANDLE GOVERNMENT MESSAGES AS PROVIDED BY THE STATUTES AND THAT DAMAGES FOR MERE ERRORS OR DELAYS IN THE DELIVERY THEREOF CANNOT BE RECOVERED.

B-20550, MAY 7, 1943, 22 COMP. GEN. 1021

TELEGRAMS - LIABILITY FOR GOVERNMENT'S ADDITIONAL EXPENSES ATTRIBUTABLE TO ERRONEOUS TRANSMISSION OF OFFICIAL MESSAGE A TELEGRAPH COMPANY IS LIABLE FOR THE DAMAGES--- LOST TIME AND ADDITIONAL EXPENSES OF A GOVERNMENT EMPLOYEE--- SUSTAINED BY THE GOVERNMENT DUE TO THE ERRONEOUS TRANSMISSION BY THE COMPANY OF AN OFFICIAL MESSAGE ADDRESSED TO THE EMPLOYEE, AND THE CONSEQUENT DELAY IN DELIVERY THEREOF.

ACTING COMPTROLLER GENERAL YATES TO THE WESTERN UNION TELEGRAPH COMPANY, MAY 7, 1943:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 26, 1943, AS FOLLOWS:

REFERENCE IS MADE TO CLAIM AGAINST THIS COMPANY IN THE AMOUNT OF $19.48 COVERING THE LOST TIME AND EXPENSES OF MR. W. F. HARTIGAN, A REPRESENTATIVE OF THE FEDERAL SECURITY AGENCY, FOOD AND DRUG ADMINISTRATION, WITH HEADQUARTERS IN KANSAS CITY, AND ALLEGEDLY DUE TO DELAYED DELIVERY OF A GOVERNMENT DAY LETTER FILED AT NEW ORLEANS, LOUISIANA, ON JULY 15, 1940, ADDRESSED TO W. F. HANN, CARE SKIRVIN HOTEL, OKLAHOMA CITY, OKLAHOMA, AND SIGNED E. C. BOUDREAUX.

OUR NEW ORLEANS OFFICE RECEIVED FROM THE GENERAL ACCOUNTING OFFICE " ADVICE OF PAYMENT OF SETTLEMENT TO ACCOMPANY CHECK" CERTIFICATE NO. 10690449 DATED AUGUST 15, 1942, WHICH IS A DEMAND FOR PAYMENT OF THE CLAIM IN QUESTION, WITH NOTICE TO THE EFFECT THAT THE GOVERNMENT IS SELF PAYING PART OF THE CLAIM, BY APPLYING 70 CENTS OWED TO WESTERN UNION BY THE GOVERNMENT FOR A TELEGRAM OF APRIL 14, 1939, AGAINST THE TOTAL OF $19.48 LEAVING A BALANCE OF $18.78.

SINCE THIS MESSAGE WAS A GOVERNMENT MESSAGE, CHARGED FOR AT THE GOVERNMENT RATE, DAMAGES FOR FAILURE TO TRANSMIT OR DELAY IN THE TRANSMISSION THEREOF CANNOT BE RECOVERED. OUR POSITION SO FAR AS GOVERNMENT MESSAGES ARE CONCERNED IS THAT THE TELEGRAPH COMPANY IS NOT A COMMON CARRIER. THE COMPANY UNDER DATE OF JUNE 8, 1867, FILED WITH THE POSTMASTER GENERAL OF THE UNITED STATES ITS WRITTEN ACCEPTANCE OF THE RESTRICTIONS AND OBLIGATIONS OF THE ACT OF CONGRESS OF JUNE 18, 1866, KNOWN AS THE POST ROADS ACT. SECTION 1079 OF THE UNITED STATES COMPILED STATUTES PROVIDES THAT ANY TELEGRAPH COMPANY HAVING ACCEPTED THE POST ROADS ACT SHALL BE LIABLE TO A PENALTY OF NOT LESS THAN $100.00 AND NOT MORE THAN $1,000.00 TO BE RECOVERED BY AN ACTION IN THE DISTRICT COURT OF THE UNITED STATES FOR ITS REFUSAL OR NEGLECT TO TRANSMIT ANY GOVERNMENTAL MESSAGE. IT IS OUR CONTENTION THAT THE SCOPE OF THE PENALTY IS LIMITED TO A REFUSAL TO HANDLE GOVERNMENT MESSAGES AS PROVIDED BY THE STATUTES AND THAT DAMAGES FOR MERE ERRORS OR DELAYS IN THE DELIVERY THEREOF CANNOT BE RECOVERED. WE CONTEND THAT IN THE TRANSMISSION OF ANY MESSAGE AT THE GOVERNMENTAL RATE WE ARE PERFORMING A GOVERNMENTAL FUNCTION AND ACTING AS THE AGENT OF THE GOVERNMENT IN THE PERFORMANCE OF THAT FUNCTION AND NOT AS A COMMON CARRIER.

IN VIEW OF THE POSITION WE HAVE CONSISTENTLY TAKEN IN MATTERS OF THIS KIND WE CAN ONLY DECLINE PAYMENT OF THIS CLAIM AND WE MUST PROTEST AGAINST THE FAILURE TO PAY FOR SERVICE ADMITTEDLY RENDERED IN THE CASE OF THE MESSAGE OF APRIL 14, 1939 AND WHICH HAS, AS A MATTER OF FACT, BEEN CERTIFIED AS DUE FROM THE GOVERNMENT OF THE UNITED STATES.

THE STATEMENT IN THE FIRST PARAGRAPH OF YOUR LETTER THAT THE GOVERNMENT RATE DAY LETTER FILED AT NEW ORLEANS, LOUISIANA, ON JULY 15, 1940, WAS ADDRESSED TO "W. F. HANN" IS NOT ENTIRELY CORRECT. THE RECORDS OF THIS OFFICE SHOW THAT THE MESSAGE SENT BY THE FOOD AND DRUG ADMINISTRATION, FEDERAL SECURITY AGENCY, WAS ADDRESSED TO " MR. W. F. HARTIGAN," THAT IT WAS DISPATCHED BY YOUR NEW ORLEANS STATION AT 1:22 P.M., AND THAT IT WAS RECEIVED BY YOUR BRANCH STATION AT THE SKIRVIN HOTEL, OKLAHOMA CITY, OKLAHOMA, ADDRESSED TO "W. F. HANN.' SAID MESSAGE SHOWS THE TIME OF TRANSMISSION AS 3:33 P.M. IT WAS NOT DELIVERED TO MR. HARTIGAN UNTIL JULY 16, AT 11:45 A.M., ALTHOUGH HE REGISTERED HIS ROOM NUMBER WITH THE STATION IN THE HOTEL LOBBY AND MADE REPEATED INQUIRIES THEREFOR DURING THE AFTERNOON OF JULY 15. AS A RESULT OF THE FAILURE TO TRANSMIT THE NAME AS GIVEN, AND THE CONSEQUENT DELAY IN DELIVERY, THE UNITED STATES WAS INJURED TO THE EXTENT OF CERTAIN EXPENSES WHICH OTHERWISE WOULD NOT HAVE BEEN INCURRED, IN THE SUM OF $19.48, AS ITEMIZED IN OFFICE LETTER OF SEPTEMBER 30, 1941.

HOWEVER, IT IS NOT UNDERSTOOD FROM YOUR LETTER THAT ANY OF THE FACTS RELATING TO THE TRANSACTION ARE QUESTIONED. ON THE OTHER HAND, IN SEEKING RECONSIDERATION OF THE SETTLEMENT OF THIS OFFICE, DATED AUGUST 15, 1942, BY WHICH A PARTIAL COLLECTION OF THE DAMAGES SUSTAINED WAS ACCOMPLISHED THROUGH APPLICATION OF 70 CENTS OTHERWISE DUE YOU, IT IS CONTENDED THAT THE CAPACITY IN WHICH THE WESTERN UNION TELEGRAPH COMPANY HANDLES GOVERNMENT MESSAGES IS NOT THAT OF A COMMON CARRIER BUT THAT OF AN AGENT OF THE GOVERNMENT PERFORMING A GOVERNMENTAL FUNCTION, AND THAT ITS LIABILITY IS LIMITED TO THE PENALTIES PRESCRIBED FOR VIOLATIONS OF THE PROVISIONS OF THE POST ROADS ACT.

THE CONTENTIONS IN YOUR LETTER UNDER CONSIDERATION REITERATE THE STATEMENTS MADE IN A LETTER, DATED JANUARY 4, 1941, TO THE FOOD AND DRUG ADMINISTRATION, AS FOLLOWS:

PURSUANT TO CONVERSATION WITH MY REPRESENTATIVE YESTERDAY, I AM GLAD TO CONFIRM BY THIS LETTER THE COMPANY'S POSITION RELATIVE TO YOUR CLAIM GROWING OUT OF THE MESSAGE JULY 15, 1940, FILED AT NEW ORLEANS, ADDRESSED TO W. F. HARTIGAN, OKLAHOMA CITY, OKLA.

THE TELEGRAPH COMPANY IS THE AGENT OF THE GOVERNMENT IN THE TRANSMISSION OF TELEGRAPH MESSAGES ON GOVERNMENT BUSINESS AND WAS ENGAGED IN PERFORMING A GOVERNMENT FUNCTION IN TRANSMITTING THE MESSAGE IN THIS CASE AND AS SUCH AGENT IT CANNOT BE HELD LIABLE FOR THE NEGLIGENCE OF ITS EMPLOYEE SO LONG AS IT EXERCISED ORDINARY DILIGENCE IN THE SELECTION OF THE EMPLOYE--- SEE WILLIAMS V. TALLADEGA, 226 U.S. 404; WESTERN UNION V. TEXAS, 105 U.S. 460; GERMAN STATE BANK V. MINN. S.P. AND S.S.M. RY. CO., 113 FED. 414 (AFF-D. IN BANKERS MUTUAL CASUALTY CO., V. MINN. S.P. AND S.S.M. RY. CO., 117 FED. 434); BOSTON INSURANCE CO., V. C.R.I. AND P.R.R. CO., 92 N.W. 88. COURSE THERE IS NO SUGGESTION IN THIS CASE THAT THE TELEGRAPH COMPANY DID NOT USE DILIGENCE IN THE SELECTION OF ITS EMPLOYEES.

FURTHER, ONE OF THE PROVISIONS OF THE POST ROADS ACT ( SECTION 10079, 10 COMPILED STATUTES OF 1916) IMPOSES A PENALTY UPON A TELEGRAPH COMPANY WHICH SHALL REFUSE OR NEGLECT TO TRANSMIT GOVERNMENT MESSAGES; SUCH PENALTY TO BE RECOVERED IN AN ACTION AT LAW IN THE DISTRICT COURTS OF THE UNITED STATES.

THE ACCEPTANCE OF THE POST ROADS ACT FIXED THE RELATIONSHIP BETWEEN THE GOVERNMENT AND THE TELEGRAPH COMPANY, CREATING A CONTRACT. BY REASON OF SUCH CONTRACT THE TELEGRAPH COMPANY IS NOT A COMMON CARRIER WITH RESPECT TO THE TRANSMISSION OF GOVERNMENT MESSAGES AS SUCH. THE ONLY LIABILITY IS THAT FIXED BY THE SPECIAL RELATIONSHIP BETWEEN THE GOVERNMENT AND IT, THAT IS, ONLY TO THE EXTENT OF BEING SUBJECT TO THE PENALTY PROVIDED BY THE POST ROADS ACT. IT IS OUR CONTENTION THAT THIS PENALTY IS EXCLUSIVE AND IS THE GOVERNMENT'S SOLE REMEDY FOR REFUSAL OR NEGLECT TO TRANSMIT GOVERNMENT MESSAGES. UNION PACIFIC V. UNITED STATES, 219 FED. 427.

BY THE POST ROADS ACT, JULY 24, 1866, AS AMENDED, SECTIONS 5263 - 5269, REVISED STATUTES, THE UNITED STATES OFFERED PRIVILEGES OF GREAT VALUE, RELATING TO THE USE OF PUBLIC LANDS FOR THE OPERATION OF TELEGRAPH LINES, TO ANY TELEGRAPH COMPANY WHICH SHOULD ELECT TO ACCEPT THE PROVISIONS OF SAID ACT. IN RETURN IT REQUIRED THAT TELEGRAMS BETWEEN THE SEVERAL DEPARTMENTS OF THE GOVERNMENT AND THEIR OFFICERS AND AGENTS SHOULD HAVE PRIORITY OVER ALL OTHER BUSINESS AND BE SENT AT SUCH RATES AS SHOULD BE FIXED ANNUALLY BY THE POSTMASTER GENERAL. ALSO, PENALTIES OF NOT LESS THAN $100 AND NOT MORE THAN $1,000 WERE PROVIDED FOR IN THE CASE OF ANY TELEGRAPH COMPANY WHICH, AFTER FILING WRITTEN ACCEPTANCE OF THE RESTRICTIONS AND OBLIGATIONS REQUIRED BY THE ACT, SHOULD, THROUGH ITS AGENTS OR EMPLOYEES, REFUSE OR NEGLECT TO TRANSMIT SUCH COMMUNICATIONS IN THE MANNER PRESCRIBED. THESE PROVISIONS OF THE POST ROADS ACT REMAIN SUBSTANTIALLY THE SAME AT THE PRESENT TIME, ALTHOUGH THE RATE MAKING FUNCTION IS NOW VESTED IN THE FEDERAL COMMUNICATIONS COMMISSION PURSUANT TO SECTION 601 (B) OF THE COMMUNICATIONS ACT OF 1934, 48 STAT. 1064, 1102. SEE 47 U.S.C. 1 TO 6, 8, 15, AND 601. OTHER STATUTES BY WHICH CONGRESS HAS DEALT WITH THE FIELD OF COMMUNICATIONS HAVE A BEARING ON QUESTIONS RELATING TO THE DUTIES, PRIVILEGES, AND LIABILITIES OF TELEGRAPH COMPANIES IN THE TRANSMISSION OF INTERSTATE MESSAGES, BUT IT APPEARS UNNECESSARY TO CONSIDER THEM IN DETAIL HERE. SEE TITLE 47, U.S. CODE, GENERALLY.

CAREFUL CONSIDERATION HAS BEEN GIVEN TO THE CASES CITED IN SUPPORT OF THE VIEWS EXPRESSED IN YOUR LETTER OF JANUARY 4, 1941, SUPRA. WHILE THEY ARE AUTHORITY FOR THE CONTENTION THAT A TELEGRAPH COMPANY WHICH HAS ACCEPTED THE PROVISIONS OF THE POST ROADS ACT EXERCISES A GOVERNMENTAL FUNCTION WHILE TRANSMITTING GOVERNMENT TELEGRAMS, SO AS TO MAKE VOID THE IMPOSITION OF CERTAIN LOCAL TAXES ON THAT FUNCTION, AND, ALSO, REASONING FROM THE ANALOGY BETWEEN CARRIERS OF MAIL AND OF INTELLIGENCE FOR THE UNITED STATES, FOR THE CONTENTION THAT THE LIABILITIES OF THE LATTER ARE LIMITED, SUCH CASES DO NOT INVOLVE RIGHTS OR REMEDIES EXISTING BETWEEN THE CARRIERS AND THE UNITED STATES. IN THIS CONNECTION, ATTENTION IS INVITED TO THE CASE OF UNITED FRUIT CO. V. UNITED STATES, 33 F. (2D) 664, WHEREIN THERE WAS INVOLVED AN EMBEZZLEMENT OF MAILS BY AN EMPLOYEE OF A CARRIER TRANSPORTING THE SAME, AND THE COURT STATED, IN PART, THAT:

* * * IN SUPPORT OF THE CONTENTIONS THAT DEFENDANT WAS PERFORMING A PUBLIC FUNCTION AS AN AGENT OF THE POST OFFICE DEPARTMENT IN TRANSPORTING THE MAIL, AND WAS NOT LIABLE FOR THE DISHONESTY OF ITS EMPLOYEES, RELIANCE IS HAD ON THE CASE OF BANKERS' MUTUAL CASUALTY CO. V. MINN., ST. P. AND S.S.M. RY. CO. ( C.C.A.) 117 F. 434, 65 L.R.A. 397. THAT CASE IS EASILY DISTINGUISHABLE. THERE THE SUIT WAS BROUGHT BY AN INDEMNITY COMPANY TO RECOVER THE AMOUNT IT HAD PAID THE SENDER OF LOST MAIL. WHATEVER MAY BE THE RULE WITH REGARD TO A SUIT BROUGHT BY THE SENDER OF MAIL AGAINST THE TRANSPORTATION COMPANY, THE DECISION HAS NO APPLICATION TO A SUIT BROUGHT BY THE UNITED STATES AGAINST ITS AGENT. UNION PACIFIC R. CO. V. U.S. ( C.C.A.) 219 F. 427; U.S. V. ATLANTIC COAST LINE R. CO. ( C.C.A.) 215 F. 56, L.R.A. 1915A, 374 ( ITALICS SUPPLIED.)

ALSO, THE PENALTIES MADE APPLICABLE WHEN A CARRIER REFUSES OR NEGLECTS TO TRANSMIT A GOVERNMENT MESSAGE AS REQUIRED UNDER THE POST ROADS ACT DO NOT COVER INJURIES ARISING OUTSIDE OF THAT ACT. AN ERROR IN TRANSMISSION IS NOT A CONSEQUENCE OF DOING SOMETHING MADE UNLAWFUL BY THE ACT, OR OF OMITTING TO DO SOMETHING REQUIRED BY THE ACT, AND THE ACT'S REMEDIAL PROVISIONS HAVE NO APPLICATION IN SUCH A CASE. SEE STANLEY V. WESTERN UNION TELEGRAPH COMPANY, 23 F.1SUPP. 674, AND CASES CITED THEREIN, CONSTRUING SECTIONS 206 AND 207 OF THE COMMUNICATIONS ACT OF 1934, 47 U.S.C. 206 AND 207.

IN THE UNITED FRUIT COMPANY CASE, SUPRA, THE COURT ALSO HELD AS FOLLOWS:

IN SUPPORT OF THE CONTENTION THAT THE EXCLUSIVE REMEDY OF THE UNITED STATES WAS TO IMPOSE A FINE, DEFENDANT CITES THE CASES OF UNION PACIFIC R. CO. V. U.S. AND U.S. V. ATLANTIC COAST LINE R. CO., SUPRA, AND ALSO U.S. V. UNITED FRUIT CO. ( D.C.) 292 F. 308. IN THE FIRST TWO CASES CITED THERE WERE EXPRESS CONTRACTS FOR THE CARRIAGE OF INLAND MAIL, AND FINES HAD BEEN IMPOSED EXCEEDING THE LOSS TO THE UNITED STATES. IN THE FIRST OF SAID CASES IT WAS HELD THAT THE GOVERNMENT WAS ESTOPPED TO SUE BY THE IMPOSITION OF THE FINE. IN THE SECOND OF SAID CASES IT WAS RECOGNIZED THAT, IN THE ABSENCE OF AN EXPRESS CONTRACT NEGATIVING THE IDEA OF LIABILITY EXTENDING THAT FAR, A SUIT WOULD LIE TO RECOVER THE FULL VALUE OF THE LOST MAIL, BUT IT WAS HELD THAT BY THE PROVISIONS OF THE CONTRACT IN THAT CASE THE REMEDY BY FINE WAS EXCLUSIVE. IN THE LAST-CITED CASE THE DECISION WAS ON DEMURRER TO THE DECLARATION, AND WHILE IT WAS HELD THAT THE REMEDY BY FINE WAS EXCLUSIVE, IT WAS ALSO HELD THAT THE DECLARATION DISCLOSED NO CAUSE OF ACTION FOR FAILURE TO ALLEGE NEGLIGENCE. THAT IS NOT THE CASE HERE.

WE THINK THE JUST CITED CASES ARE EASILY DISTINGUISHABLE FROM THE CASE AT BAR. CONCEDING ARGUENDO THAT THE POSTMASTER GENERAL MAY IMPOSE A FINE FOR THE LOSS OF MAIL CARRIED BY VIRTUE OF AN IMPLIED CONTRACT, WE HAVE NO HESITANCY IN HOLDING THAT THE REMEDY BY FINE IS NOT EXCLUSIVE AND THE UNITED STATES HAS ALSO A RIGHT OF ACTION TO SUE TO RECOVER THE VALUE OF LOST MAIL, AND MAY ELECT WHICH REMEDY TO PURSUE.

THE FACT THAT THE POST ROADS ACT PRESCRIBES A PROCEDURE FOR THE COLLECTION OF PENALTIES FOR REFUSAL OR NEGLECT TO TRANSMIT A GOVERNMENT MESSAGE DOES NOT BAR A CLAIM FOR DAMAGES RESULTING FROM ERROR OR MISTAKE IN A TELEGRAM ACTUALLY TRANSMITTED BY THE COMPANY, NOR DOES IT REQUIRE THE GOVERNMENT TO FOLLOW, IN CASE OF SUCH DAMAGES FROM ERRORS IN TRANSMISSION, THE PROCEDURE OUTLINED THEREIN AS A REMEDY FOR REFUSAL OR NEGLECT TO TRANSMIT.

IT IS WELL ESTABLISHED THAT THE SENDER OF A MESSAGE MAY MAINTAIN AN ACTION AGAINST A TELEGRAPH COMPANY FOR A MISTAKE IN TRANSMITTING THE SAME, AND IT HAS BEEN HELD REPEATEDLY BY THIS OFFICE THAT A TELEGRAPH COMPANY IS LIABLE FOR DAMAGES CAUSED TO THE UNITED STATES BY THE ERRONEOUS TRANSMISSION OF OFFICIAL TELEGRAMS. SEE 1 COMP. GEN. 605; 2 ID. 479. ALSO, SEE THE RECENT DECISION OF THE SUPREME COURT OF THE UNITED STATES, NESTER V. WESTERN UNION TELEGRAPH CO., 309 U.S. 582, HOLDING THAT, ALTHOUGH A TELEGRAPH COMPANY MAY LIMIT ITS LIABILITY UNDER CERTAIN CIRCUMSTANCES WHEN NOT CONTRARY TO THE PURPOSE OF APPLICABLE STATUTES AND PUBLIC POLICY, IT CANNOT RELIEVE ITSELF BY CONTRACT FROM ITS OWN NEGLIGENCE. YOUR CONTENTIONS THUS ARE UNSUPPORTED BY APPLICABLE LEGAL PRECEDENTS AND DO NOT WITHSTAND THE FORCE OF THE ESTABLISHED PRINCIPLES OF LIABILITY AS A RESULT OF WHICH IT HAS BEEN DETERMINED THAT THE WESTERN UNION TELEGRAPH COMPANY IS LIABLE FOR THE DAMAGES CAUSED BY ITS ERRONEOUS TRANSMISSION OF THE MESSAGE HERE INVOLVED. HENCE, THE SETTLEMENT OF AUGUST 15, 1942, MUST BE, AND IS, SUSTAINED. A BALANCE OF $18.78 ($19.48 LESS 70 CENTS) STILL REMAINS DUE THE UNITED STATES IN TH SHOULD BE PROMPTLY REMITTED TO OBVIATE HAVING TO APPLY TO THE INDEBTEDNESS AMOUNTS OTHERWISE FOUND DUE THE COMPANY.