SECTION VII. OF THE MEASURE OF DAMAGES. In some of our States, the owners of stock or shares in telegraph companies are made personally liable for the debts of the company. More frequently they are left to the common law of corporations, which would hold only the company as a corporate body. * * If the telegraph In regard to the measure of damages, the principal question has been, as in so many other cases, that arising from the rule, "causa proxima non remota spectatur." We have repeated occasion to consider this rule, and the adjudication respecting it, in other chapters, (d) and do not know that we need 257 w now add to these general considerations anything belonging especially to telegraphic communication. company is in default, but their default is made mischievous to a party only by the operation of some other intervening cause, then the rule above mentioned would prevent the liability of the company; because their default would be only the remota, the remote or removed cause of the injury, and not the proxima, or nearest cause. 1 So when the question takes the form, How far shall the claim for mischief or damage be pursued, and for what consequences of their default shall the company be liable? The answer is, only for proximate or immediate, and not for distant consequences. And the meaning of this is only for those consequences which follow naturally and directly from the failure of the company to perform their contract duly, and therefore may be supposed to have been in contemplation of the parties when they made their contract. (dd) Our notes will show that this question has arisen in many forms; and they will also show the adjudication upon it. (e) 2 (d) See post, vol. iii. p. 178. (dd) Baldwin v. U. S. Tel. Co. 1 (e) The rule of damages is thus laid down by Earl, C. J., in Leonard v. N. Y., &c. Tel. Co. 41 N. Y. 544: "The measure Lans. 125; 54 Barb. 505; 6 Abb. Pr. N. s. 405. of damages to be applied to cases as they arise has been a fruitful subject of discussion in the courts. The difficulty is not 1 See Barnesville Bank v. Western Union Tel. Co. 30 Ohio St. 555. For negligent errors in transmitting the price at which goods are offered for sale a telegraph company is liable for all damage caused by acting on reliance of the 289 so much in laying down general rules, as in applying them. The cardinal rule undoubtedly is that the one party shall recover all the damages which have been occasioned by the breach of contract by the other party. But this rule is modified in its application by two others. The damages must flow directly and naturally from the breach of contract, and they must be certain both in their nature and in respect to the cause from which they proceed. Under this latter rule, speculative, contingent, and remote damages, which cannot be directly traced to the breach complained of, are excluded. Under the former rule, such damages are only allowed as may fairly be supposed to have entered into the contemplation of the parties, when they made the contract, as might naturally be expected to follow its violation. It is not required that the parties must have contemplated the actual damages which are to be allowed. But the damages must be such as the parties may be fairly supposed to have contemplated when they made the contract. A more precise statement of the rule is, that a party is liable for all the direct damages which both parties would have contemplated as flowing from its breach, if, at the time they entered into it, they had bestowed proper attention upon the subject, and had been fully informed of the facts." In this case, plaintiff's agents at Chicago had telegraphed to his agents at Oswego to forward 5,000 sacks of salt. In the course of transmission the word sacks was changed to casks. It appeared that the latter term in the salt trade referred to packages of coarse salt containing over three hundred pounds, the former to packages of fine salt containing fourteen pounds. Before the mistake was rectified, the requisite quantity of coarse salt was sent; and, there being no demand for it at Chicago, it was sold at a heavy loss. The measure of damages was held to be the difference in the market prices of the salt at Chicago and at Oswego on the day of shipment, together with the charges of transportation. In Squire v. West. Un. Tel. Co. 98 Mass. 232, plaintiffs had accepted by telegraph an offer for the sale of a number of hogs in Buffalo. The dispatch was not promptly delivered, and, in consequence, the hogs were sold to another party. The court say: "The sum which would compensate the plaintiffs for the loss and injury sustained by them would be the difference, if any, in the price which they agreed to pay for the merchandise by the message which the defendants undertook to transmit, if it had been duly and seasonably delivered, in fulfilment of their contract, and the sum which the plaintiffs would have been compelled to pay at the same place in order, by the use of due diligence, to have purchased the like quantity and quality of the same species of merchandise." Where the dispatch directed the immediate attachment of property on a suit in plaintiff's favor, and, by reason of delay in transmission, the opportunity for making the attachment was lost, the company has been held liable to pay the whole sum which would have been secured had the attachment been seasonably made. Parks v. Alta Cal. Tel. Co. 13 Cal. 422; Bryant v. Amer. Tel. Co. 1 Daly, 575. It has been held that, even when the loss is the direct result of the error or delay, the company are not liable, unless either the terms of the message itself show that such a loss would naturally follow a failure to transmit promptly and correctly, or the circumstances of the case were explained to the company. Thus, in Landsberger v. Magnetic Tel. Co. 32 Barb. 530, plaintiffs made a contract with parties in San Francisco to buy for them in New York a quantity of pistols, on which they were price as transmitted. Western Union Tel. Co. v. Du Bois, 128 Ill. 248; Western Union Tel. Co. v. Richman, 8 Atlantic Rep. 171, (Pa.); Pepper v. Western Union Tel. Co. 87 Tenn. 554. See also Turner v. Hawkeye Tel. Co. 41 Ia. 458; Smithson v. United States Tel. Co. 29 Md. 162; Leonard v. New York, &c. Tel. Co. 41 N. Y. 544; Western Union Tel. Co. v. Landis, 12 Atlantic Rep. 467, (Pa.); Western Union Tel. Co. v. Stevenson, 128 Pa. 442. Compare Frazier v. Western Union Tel. Co. 84 Ala. 487. If through the negligence of the telegraph company a sale falls through which would otherwise have taken place, the measure of damages is the difference between the contract price and the market value. Western Union Tel. Co. v. Way, 83 Ala. 542; Alexander v. Western Union Tel. Co. 67 Miss. 386. But see Western Union Tel. Co. v. Hall, 124 U. S. 444; Cothran v. Western Union Tel. Co. 83 Ga. 25. In Tyler v. Western Union Tel. Co. 60 Ill. 421, it was held that where through the negligence of the defendant, a sale of a thousand shares of stock was made on the sender's account instead of one hundred shares, the sender being obliged to purchase nine hundred shares to make the sale good, if in the interval between the sale and the purchase of the extra shares there was an advance, such advance would be the measure of damages. And see Marr v. Western Union Tel. Co. 85 Tenn. 529. to receive a commission, agreeing also to forfeit $500 in case of failure to fulfil their agreement. Plaintiffs transmitted $10 000 to their agents in New York, to enable them to fulfil the contract, sending at the same time the following telegram, "Get $10,000 of the Mail Co." Through the negligence of the company, the dispatch did not arrive in season to fulfil the contract. In an action against the company, it was held that plaintiff could recover neither his expected commissions nor the $500 paid as forfeit, but was limited to the amount paid for the transmission of the message, and interest on the $10,000 during the time it was delayed in the hands of the Mail Co.; the court saying that there was nothing in the dispatch to intimate that any other loss would be suffered by the plaintiff from the delay. Similar views are expressed in Gildersleeve v. U. S. Tel. Co. 29 Md. 232; Stevenson v. Montreal Tel. Co. 16 Up. Can. (Q. B.) 530; Kinghorn v. Montreal Tel. Co. 18 Up. Can. (Q. B.) 60. Western Union Tel. Co. v. Crall, 39 Kan. 580; Smith v. Western Union Tel. Co. 83 Ky. 104; Western Union Tel. Co. v. Graham, Col. 230; Clay v. Western Union Tel. Co., 81 Ga. 285. It was held in Shields v. W. & N. O. Tel. Co. 4 Am. Law J. (N. s.) 311, that, where the message is unintelligible to the operator, its value is inappreciable, and the company has no means of knowing the extent of the responsibility involved in its transmission. The dispatch in this case read, "Oats fifty-six; bran one ten; corn seventythree; hay twenty-five." Plaintiff was allowed to recover only the cost of transmission. Similar decisions are Sanders v. Stuart, 1 C. P. D. 326; Hart v. Western Union Tel. Co. 66 Cal. 579; Mackay v. Western Union Tel. Co. 16 Nev. 222; Cannon v. Western Union Tel. Co. 100 N. C. 300; Western Union Tel. Co. v. Kirkpatrick, 76 Tex. 217. On the other hand, in Rittenhouse v. Indep. Line of Tel. 1 Daly, 474, it was held that, so long as the words were plain, the fact that the meaning was unintelligible to the operator would not discharge the company. So Bowen v. Lake Erie Tel. Co. 1 Am. Law Reg. 685; Daughtery v. American Union Tel. Co. 75 Ala. 168; American Union Tel. Co. v. Daughtery, 89 Ala. 191; Western Union Tel Co. v. Heyer, 22 Fla. 637; Western Union Tel. Co. v. Fatman, 73 Ga. 285; Western Union Tel. Co. v. Reynolds, 77 Va. 173. See also Postal Tel. Cable Co. v. Lathrop, 131 Ill. 575. Where an order is sent by telegraph for the purchase of an article, and by mistake the name of another article is substituted, and the receiver purchases this last-named article, the company are liable for the damage resulting from the failure to purchase the article actually ordered, but not for a loss on the resale of that purchased by mistake, unless they have had fair notice of such sale. Rittenhouse v. Ind. Line of Tel. 1 Daly, 474; 44 N. Y. 263; W. & N. O. Tel. Co. v. Hobson, 15 Gratt. 122. 291 * 257 y *CHAPTER XIII. SECT. I.-Of Patents in General. THE law of Patents is but a little more than two centuries old, in England; and on the continent of Europe it began still later. In this country a statute authorizing and regulating patents was enacted in 1790, and upon this and subsequent amendatory statutes the law of patents rests. In itself it is utterly unknown to the common law; but the rules and principles of the common law, as to contract, construction, evidence, and remedy, are applied to the law of patents. The last statute, which covers the whole ground and replaces the earliest enactments, was approved July 8, 1870. (a) We propose to consider the law of patents only in its relation to the law of contracts. We would say, however, that as to the methods and processes of obtaining patents, any applicant at the patent-office in Washington is furnished not only with a copy of the statute, but with a carefully-prepared pamphlet, in which full directions are given for the transaction of any business with the office. And the experience of the author of this work justifies his saying that any person having or wishing to have dealings with the patent-office, as counsel or otherwise, may be sure of receiving from the officers employed therein all the guidance and assistance compatible with the discharge of their duties. * 257 z SECTION II. OF THE FOUNDATION OF A PATENT-RIGHT. Whatever may have been the theory in former years, it must now be admitted, that a patent-right now rests altogether on the (a) The English legislation upon this subject rests upon a clause in the Statute 21 Jac. 1, c. 3, § 6, commonly called the Statute of Monopolies, exempting from the operation of that act "letters-patent and grants of privilege, for the term of fourteen years or under, of the sole working or making of any manner of New manufactures within this realm, to the true and first inventor and inventors of such manufactures, which others, at the time of making such letters-patent and grants, shall not use, so as also they be not contrary to law, nor mischievous to the state by raising prices of commodities at home, or hurt of trade, or generally inconvenient." statute, and not at all upon any inherent or natural right of an inventor to the exclusive use of his invention. (b) The statute in fact makes, or constitutes, a contract between the inventor and the public, resting on sound and actual considerations on both sides. The public engages to protect him in the exclusive use of his invention for a certain time. This he gains. On the other hand he agrees to put on a record open to the public a description of his invention which shall enable any person of competent skill to make use of it, after his exclusive use is terminated. This the public gains; but their greater gain is in the stimulus to invention given by this protection of the inventor. It is plain, therefore, that the owner of a patent-right should not be treated as a monopolist, as he once was, who ought to be limited and restrained in every way, whenever an ingenious construction of language or rigorous application of a principle, could turn a decision against him. He is a party to a fair and equal contract, and should be dealt with by the law rationally and impartially. And so of late years, he has been. (c) * SECTION III. WHO MAY OBTAIN A PATENT. * 257 aa The statute of 1870 enacts, that "any person who has invented or discovered any new and useful art, machine, manufacture or composition of matter, or any new and useful improvement thereof, not known or used by others in this country, and not patented or described in any printed publication in this or any foreign country, before his invention or discovery thereof, and not in public use or on sale for more than two years prior to his application, unless the same is proved to have been abandoned, " may obtain a patent therefor. The patentee must be the first as well as an original inventor, to be entitled to the protection of the statute. His title rests entirely on the priority of his invenBut he need not have been the first to conceive the tion. (d) (b) Morton v. N. Y. Eye and Ear Infirmary, 2 Fish. 320. (c) Grant v. Raymond, 6 Peters, 241; Ames v. Howard, 1 Sumn 485. The patentee must be the first, as well as the original, inventor, to be entitled to the protection of the statute. His title rests entirely on the priority of his invention. (d) Woodcock v. Parker, 1 Gall. 439; Bedford v. Hunt, 1 Mass. 304; Parker v Stiles, 5 McLean, 61; Allen v. Blunt, 2 Wood. & M. 140. |