Derby v. Public Service Co. of N.H.

• Decision Date: 31 December 1955
• Citation: 100 N.H. 53,119 A.2d 335
• Parties: Norman J. DERBY et al. v. The PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE. Norman J. DERBY et al. v. BOWMAN FLYING SERVICE, Inc. Norman J. DERBY et al. v. TOWN OF SWANZEY.
• Court: New Hampshire Supreme Court

Page 335

119 A.2d 335

100 N.H. 53

Norman J. DERBY et al. v. The PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE.

Norman J. DERBY et al. v. BOWMAN FLYING SERVICE, Inc.

Norman J. DERBY et al. v. TOWN OF SWANZEY.

Supreme Court of New Hampshire.

Argued Nov. 1, 1955.

Decided Dec. 31, 1955.

McLane, Carleton, Graf, Greene & Brown, Manchester, and Howard B. Lane, Keene, for plaintiffs.

Sulloway, Jones, Hollis & Godfrey and Joseph S. Ransmeier and Irving H. Soden, Concord, and Faulkner, Plaut & Hanna, Keene, for defendant, the Public Service Co. of New Hampshire.

Wyman, Starr, Booth, Wadleigh & Langdell, Manchester, and Homer S. Bradley, Keene, for defendant, Town of Swanzey.

Sheehan, Phinney & Bass, Manchester, and Harry C. Lichman, Keene, for defendant, Bowman Flying Service, Inc.

BLANDIN, Justice.

The main issue is whether the Public Service Company of New Hampshire, a vendor of land, after transfer of title and possession may be liable for injuries sustained by third parties resulting from what could be found to be a dangerous condition of the land existing at the time of transfer. It is undisputed that a grantor who fails to disclose to a vendee a condition involving unreasonable risk to persons upon the land is liable for harm caused thereby to them after transfer of possession to the grantee, if the latter is unaware of the condition or the risk involved, and the vendor knows of the condition and the risk and has reason to believe that the vendee will not discover them. Restatement, Torts, § 353; annotation 8 A.L.R.2d 218, 227. The test, therefore, to determine whether the issue of the defendant Public Service Company's negligence was properly submitted to the jury is to inquire whether, on the facts here, reasonable men could find that the company knew of the danger and had reason to believe the vendees would not discover it.

Assuming the facts most favorable to the plaintiff, Narramore v. Putnam, 99 N.H. 175, 176, 106 A.2d 568, it appears the jury were warranted in finding the following. The defendant Public Service Company, hereinafter referred to as the company, was a public utility long engaged in the construction, operation and maintenance of dams and power stations. In 1926 it purchased the property in question consisting of a dam, reservoir, gates, and other appurtenances, including a penstock, eight feet in diameter, which connected the reservoir and the power station by passing under a public highway known as the Richmond Road running along the top of the dam. The company knew that the penstock had been installed around 1895 and it was not disputed that before the accident, which happened on June 26, 1952, it was never replaced or repaired and that it had not been used since 1942.

In August, 1929, an examination by Noyes, a company engineer who reported to the defendant employer in the regular course of business, disclosed that the penstock had flattened on top so that instead of being eight feet high, it was only seven and was approximately nine feet wide. It had also 'buckled,' opening a seam about sixteen inches long; it was then in 'poor condition' and 'too far gone for patching.' Normally repairs would have been made but the record discloses none. In the opinion of this engineer, the buckling caused a washout in the road at this point in the spring of 1929.

About thirteen years later, on June 18, 1942, Williams, the company's chief engineer who had charge of 'examining and reporting on conditions of penstocks,' made an examination and reported in the regular course of business to the president of the company in a letter, the material portions of which are as follows: 'The penstock under the highway outside the station is also in poor condition and should be renewed. An airport site is being considered near by the structure and if this is built the penstock might be condemned as it is now unsafe for heavy traffic * * * I recommend that the station be abandoned. (Signed) W. H. Williams.' Acting on this recommendation, the company ceased to operate and use the generating plant and penstock in the same year.

On December 30, 1944, the utility conveyed the lot upon which the power house stood to the defendant, Bowman Flying Service, Inc., hereinafter referred to as Bowman. Although this deed, taken in connection with a later conveyance to the defendant Town of Swanzey of the reservoir and some adjacent lands on March 29, 1948, is not entirely clear, it is findable that the portion of the penstock under the road was not conveyed to Bowman, although he was given the right to fill it in, and he in turn released the defendant company from 'all claims or damages resulting from the existence of said penstock across Richmond Road.' The defendant conveyed to the town in 1948 all the original tract except that part previously conveyed to Bowman.

In its deed to Bowman, the company reserved the right to all salvageable machinery and equipment in the power house, and orally undertook as a part of the arrangement to 'see to it' that the machinery and equipment was removed. During the years 1945 to 1947, and before the sale to the town, the reserved materials were removed by junk dealers to whom the company sold them. In the course of this removal, there was 'an awful lot of ripping and tearing.' The waterwheel was cut away from the penstock so that when the former was taken out there was a space of some two or three inches 'at the bottom' between the penstock and the masonry wall of the penstock. Before this operation there had been no appreciable seepage of water from the pond into the Bowman basement. However, after the removal the seal which prevented seepage from the pond into the basement was apparently broken, and much water carrying dirt and silt from under the road ran along the outside of the penstock and into the basement where the waterwheel had been. As much of this came from outside the penstock as from inside it. Proper engineering practice required that after the removal of the wheel and other machinery, the wall be sealed off to prevent water seeping through the dam and washing away the earth supporting the penstock and the foundations of the road. Seepage is characteristic of all earthen dams and when it occurs, the water tends to follow a smooth surface such as a penstock. When it acquires sufficient velocity to become dangerous the condition is called 'piping' and it will wash away the support of the penstock, thereby increasing the likelihood of its collapse. This hazard can be avoided by a masonry wall which prevents the water coming through. Nothing of this sort was ever done nor is there any evidence that the defendant company inspected the work of the dealers to ascertain if any danger of piping existed, although it still had an interest in the penstock.

Although Bowman was aware that dirt and gravel were washing into his basement and the town knew there had been 'holes' in the road on occasions before the accident, the testimony on the part of both these defendants was that each thought the other owned the penstock and the land under the highway, and they were never informed by the Public Service Company of any danger of its collapsing, nor is there evidence that they realized any danger existed. As a result, neither took preventive action.

On June 26, 1952, in the early evening as the plaintiffs were riding in an automobile along the Richmond Road, the highway suddenly gave way over the penstock and the car plunged into a deep hole, causing the injuries complained of. The plaintiffs were admittedly not guilty of contributory negligence. Their expert testified that the 'cave in' of the road and the consequent accident was caused by the collapse of the penstock as a result of piping which washed away the lateral support so that the penstock ruptured.

In this situation it clearly appears that reasonable persons could find the defendant company was aware at the time of the conveyances to Bowman in 1944 and the town in 1948 that there was danger of the penstock's collapsing. Not only did it have special knowledge of the perils inherent in an earthen dam with a penstock running through it under a public highway to a waterwheel, but it had been specifically warned of the danger of the collapse of the penstock on two occasions by its own engineers, whose duty it was to inspect and report on just such matters. On the other hand, there is no evidence that either Bowman or the town possessed any special knowledge of the maintenance of dams, penstocks, the dangers of piping or other matters bearing upon the forces which caused this accident. The liability of the company hinges in large part upon the fact that its knowledge was superior to that of the other defendants. Derosier v. New England Tel. & Tel. Co., 81 N.H. 451, 468, 130 A. 145. In the circumstances we do not believe that all reasonable men must agree that either of the defendants, Bowman or the town, knew or should have known of the danger here, or that the company had any reason to believe that they would discover it.

The defendant's assertion that before liability can be established it must be shown that these plaintiffs came within the orbit of risk of the danger created does not require estended consideration. The persons above all others who might expectably be injured by a cave in of a public way are travelers lawfully upon it. As such, these plaintiffs who came squarely within the orbit of the risk created by the company's negligence were owed a duty by it. Palsgraf v. Long Island Railroad Co., 248 N.Y. 339, 162 N.E. 99, 59 A.L.R. 1253; Dillon v. Twin State Gas & Electric Co., 85 N.H. 449, 453, 163 A. 111; Restatement, Torts, § 281, comment c; 52 Harv.L.Rev. 372, 382.

Owing this duty to these plaintiffs, it could not escape it by the simple expedient of transferring the property to third parties who were unaware of the danger. The question here is upon whom should the burden fall of seeing to it that the penstock...