H.R. Moch Co. v. Rensselaer Water Co.

• Decision Date: 10 January 1928
• Citation: 159 N.E. 896,247 N.Y. 160
• Parties: H. R. MOCH CO., Inc., v. RENSSELAER WATER CO.
• Court: New York Court of Appeals Court of Appeals

247 N.Y. 160

159 N.E. 896

H. R. MOCH CO., Inc.,

v.RENSSELAER WATER CO.

Court of Appeals of New York.

Jan. 10, 1928.

Action by the H. R. Moch Company, Inc., against the Rensselaer Water Company. From a judgment of the Appellate Division (219 App. Div. 673, 220 N. Y. S. 557), reversing an order of the Special Term, and granting defendant's motion for judgment dismissing the complaint for failure to state facts sufficient to constitute a cause of action, plaintiff appeals.

Affirmed.

See, also, 127 Misc. Rep. 545, 217 N. Y. S. 426.

Appeal from Supreme Court, Appellate Division, Third Department.

Glenn A. Frank, of Albany, for appellant.

Thomas F. McDermott, of Albany, for respondent.

CARDOZO, C. J.

The defendant, a waterworks company under the laws of this state, made a contract with the city of Rensselaer for the supply of water during a term of years. Water was to be furnished to the city for sewer flushing and street sprinkling; for service to schools and public buildings; and for service at fire hydrants, the latter service at the rate of $42.50 a year for each hydrant. Water was to be furnished to private takers within the city at their homes and factories and other industries at reasonable rates, not exceeding a stated schedule. While this contract was in force, a building caught fire. The flames, spreading to the plaintiff's warehouse near by, destroyed it and its contents. The defendant, according to the complaint, was promptly notified of the fire, ‘but omitted and neglected after such notice, to supply or furnish sufficient or adequate quantity of water, with adequate pressure to stay, suppress, or extinguish the fire before it reached the warehouse of the plaintiff, although the pressure and supply which the defendant was equipped to supply and furnish, and had agreed by said contract to supply and furnish, was adequate and sufficientto prevent the spread of the fire to and the destruction of the plaintiff's warehouse and its contents.’ By reason of the failure of the defendant to ‘fulfill the provisions of the contract between it and the city of Rensselaer,’ the plaintiff is said to have suffered damage, for which judgment is demanded. A motion, in the nature of a demurrer, to dismiss the complaint, was denied at Special Term. The Appellate Division reversed by a divided court.

Liability in the plaintiff's argument is placed on one or other of three grounds. The complaint, we are told, is to be viewed as stating: (1) A cause of action for breach of contract within Lawrence v. Fox, 20 N. Y. 268; (2) a cause of action for a common-law tort, within MacPherson v. Buick Motor Co., 217 N. Y. 382, 111 N. E. 1050, L. R. A. 1916F, 696, Ann. Cas. 1916C, 440; or (3) a cause of action for the breach of a statutory duty. These several grounds of liability will be considered in succession.

(1) We think the action is not maintainable as one for breach of contract.

No legal duty rests upon a city to supply its inhabitants with protection against fire. Springfield Fire & Marine Ins. Co. v. Village of Keeseville, 148 N. Y. 46, 42 N. E. 405, 30 L. R. A. 660, 51 Am. St. Rep. 667. That being so, a member of the public may not maintain an action under Lawrence v. Fox against one contracting with the city to furnish water at the hydrants, unless an intention appears that the promisor is to be answerable to individual members of the public as well as to the city for any loss ensuing from the failure to fulfill the promise. No such intention is discernible here. On the contrary, the contract is significantly divided into two branches: One a promise to the city for the benefit of the city in its corporate capacity, in which branch is included the service at the hydrants; and the other a promise to the city for the benefit of private takers, in which branch is included the service at their homes and factories. In a broad sense it is true that every city contract, not improvident or wasteful, is for the benefit of the public. More than this, however, must be shown to give a right of action to a member of the public not formally a party. The benefit, as it is sometimes said, must be one that is not merely incidental and secondary. Cf. Fosmire v. National Surety Co., 229 N. Y. 44, 127 N. E. 472. It must be primary and immediate in such a sense and to such a degree as to bespeak the assumption of a duty to make reparation directly to the individual members of the public if the benefit is lost. The field of obligation would be expanded beyond reasonable limits if less than this were to be demanded as a condition of liability. a promisor undertakes to supply fuel for heating a public building. He is not liable for breach of contract to a visitor who finds the building without fuel, and thus contracts a cold. The list of illustrations can be indefinitely extended. The carrier of the mails under contract with the government is not answerable to the merchant who has lost the benefit of a bargain through negligent delay. The householder is without a remedy against manufacturers of hose and engines, though prompt performance of their contracts would have stayed the ravages of fire. ‘The law does not spread its protection so far.’ Robins Dry Dock & Repair Co. v. Flint, 275 U. S. 303, 48 S. Ct. 134, 72 L. Ed. 290.

So with the case at hand. By the vast preponderance of authority, a contract between a city and a water company to furnish water at the city hydrants has in view a benefit to the public that is incidental rather than immediate, an assumption of duty to the city and not to its inhabitants. Such is the ruling of the Supreme Court of the United States. German Alliance Ins. Co. v. Homewater Supply Co., 226 U. S. 220, 33 S. Ct. 32, 57 L. Ed. 195,42 L. R. A. (N. S.) 1000. Such has been the ruling in this state (Wainwright v. Queens County Water Co., 78 Hun, 146, 28 N. Y. S. 987;Smith v. Great South Bay Water Co., 82 App. Div. 427, 81 N. Y. S. 812), though the question is still open in this court. Such with few exceptions has been the ruling in other jurisdictions. Williston, Contracts, § 373, and cases there cited; Dillon, Municipal Corporations (5th Ed.) § 1340. The diligence of counsel has brought together decisions to that effect from 26 states. Typical examples are Alabama (Ellis v. Birmingham Waterworks Co., 187 Ala. 552, 65 So. 805); California (Niehaus Bros. Co. v. Contra Costa Water Co., 159 Cal. 305, 113 P. 375,36 L. R. A. [N. S.] 1045); Georgia (Holloway v. Macon Gas Light & Water Co., 132 Ga. 387, 64 S. E. 330); Connecticut (Nickerson v. Bridgeport Hydraulic Co., 46 Conn. 24, 33 Am. Rep. 1); Kansas (Mott v. Cherryvale Water & Mfg. Co., 48 Kan. 12, 28 P. 989,15 L. R. A. 375, 30 Am. St. Rep. 267); Maine (Hone v. Presque Isle Water Co., 104 Me. 217, 71 A. 769,21 L. R. A. [N. S.] 1021);New Jersey (Hall v. Passaic Water Co., 83 N. J. Law, 771, 85 A. 349,43 L. R. A. [N. S.] 750); and Ohio (Blunk v. Dennison Water Supply Co., 71 Ohio St. 250, 73 N. E. 210,2 Ann. Cas. 852). Only a few states have held otherwise. Page, Contracts, § 2401. An intention to assume an obligation of indefinite extension to every member of the public is seen to be the more improbable when we recall the crushing burdenthat the obligation would impose. Cf. Hone v. Presque Isle Water Co., 104 Me. 217, at p. 232,71 A. 769,21 L. R. A. (N. S.) 1021. The consequences invited would bear no reasonable proportion to those attached by law to defaults not greatly different. A wrongdoer who by negligence sets fire to a building is liable in damages to the owner where the fire has its origin, but not to other owners who are injured when it spreads. The rule in our state is settled to that effect, whether wisely or unwisely. Hoffman v. King, 160 N. Y. 618, 55 N. E. 401, 46 L. R. A. 672, 73 Am. St. Rep. 715; Rose v. Pennsylvania R. Co., 236 N. Y. 568, 142 N. E. 287;Moore v. Van Beuren & New York Bill Posting Co., 240 N. Y. 673, 148 N. E. 753; Cf. Bird v. St. Paul Fire & Marine Ins. Co., 224 N. Y. 47, 120 N. E. 86,18 L. R. A. 875. If the plaintiff is to prevail, one who negligently omits to supply sufficient pressure to extinguish a fire started by another assumes an obligation to pay the ensuing damage, though the whole city is laid low. A promisor will not be deemed to have had in mind the assumption of a risk so overwhelming for any trivial reward.

The cases that have applied the rule of Lawrence v. Fox to contracts made by a city for the benefit of the public are not at war with this conclusion. Through them all there runs as a unifying principle the presence of an intention to compensate the individual members of the public in the event of a default. For example, in Pond v. New Rochelle Water Co., 183 N. Y. 330, 76 N. E. 211,1 L. R. A. (N. S.) 958,5 Ann. Cas. 504, the contract with the city fixed a schedule of rates to be supplied, not to public buildings, but to private takers at their homes. In Matter of International R. Co. v. Rann, 224 N. Y. 83, 85,120 N. E. 153, the contract was by street railroads to carry passengers for a stated fare. In Smyth v. City of New York, 203 N. Y. 106, 96 N. E. 409, and Rigney v. New York Cent. & H. R. R. Co., 217 N. Y. 31, 111 N. E. 226, covenants were made by contractors upon public works, not merely to indemnify the city, but to assume its liabilities. These and like cases come within the third group stated in the comprehensive opinion in Seaver v. Ransom, 224 N. Y. 233, 238,120 N. E. 639,2 L. R. A. 1187. The municipality was contracting in behalf of its inhabitants by covenants intended to be enforced by any of them severally as occasion should arise.

(2) We think the action is not maintainable as one for a common-law tort.

‘It is ancient learning that one who assumes to act, even though gratuitously, may thereby become subject to the duty of acting carefully, if he acts at all.’ Glanzer v. Shepard, 233 N. Y. 236, 239, 135 N. E. 275, 276 (23 A. L. R. 1425);Marks v. Nambil Realty Co., 245 N. Y. 256, 258, 157...