Story Case

Henry Story bought a horse from the Sioux City Horse fair, a corporation. The agent of the corporation misrepresented the intrinsic worth of the animal so that Story lost $100 in the transaction. For this loss he brought an action for breach of contract against the company. The horse fair put in defense that it was not liable for the misrepresentation of agents because it had expressly guarded itself against this by provisions in the contract. It was shown in evidence that the company had this sign posted in the auction room "Agents Representations N. P. C." and that the same words and letters were also in the bill of sale. It was explained that this meant: "Agents Representations Are No Part of the Contract."Story maintained that these abbreviations had no meaning to him and, therefore, were not a part of the contract. For whom should judgment be given?

Ruling Court Ca8e. Bosenfeld Vs. Peoria, Decatur, & Evansville Railway Company, Volume 103 Indiana Reports, Page 121; Volume 53 American Reports, Page 500

Rosenfeld delivered to the railway company a bar-rell of whiskey to be shipped to James O'Brien, who lived at Litchfield, Illinois. The bill of lading issued therefor, contained a statement of the name and residence of the person to whom it was shipped, and a description of the article, as "1 barrel of whiskey of 400 pounds weight." Following these statements there was a blank; this blank was followed by certain printed stipulations, one of which read: "In the event of loss or damage under the provisions of this agreement, the value or cost at the point of shipment shall govern the settlement of the loss".

The whiskey was lost in transit, and this action was brought to recover damages therefor. The defendant company set up the following defense: In the blank above referred to, an agent of the company had inserted the following: "L & O ex $20 R. R. Valuation." This notation meant that the company did not intend to be liable for leaks and outs, and that $20 was the maximum amount of loss which they would indemnify. This abbreviated notation was illegible and not easily discernible to the ordinary person reading it.

Decision

This memorandum, as inserted by the agent of the company, does not constitute a part of the contract between the company and Rosenfeld. Although it was contained in the body of their agreement, it conveyed no meaning to Rosenfeld; and he could not have assented to it. Therefore, he is not bound by the statement in the notation.

Judgment was given for Rosenfeld for the full loss.

Ruling Law. Story Case Answer

One party to a contract cannot take advantage of the other by inserting, in the contract, terms which are not readily discernable. The statements in a writing must be understood by both parties, or must be sufficiently clear to be intelligible to all parties, if an effort is made to understand them. The answer of the Sioux City Horse Fair Company, in the Story Case, is not a good defense, because the terms by which it intended to protect itself were not known to Story and the abbreviations in the contract were not intelligible without explanation.