H. R. Moch Co. v. Rensselaer Water Co. , 247 N.Y. 160 ( 1928 )

The defendant, a water works 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 sufficient to 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 withinLawrence v. Fox (20 N.Y. 268); (2) a cause of action for a common-law tort, within MacPherson v. Buick Motor Company (217 N.Y. 382); 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 Ins. Co. v. Villageof Keeseville, 148 N.Y. 46). 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 promiser 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. Nat. Surety Co.,229 N.Y. 44). 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 promiser 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 RepairCo. v. Flint, 275 U.S. 303).

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. Home Water Supply Co., 226 U.S. 220). Such has been the ruling in this State (Wainwright v. Queens County Water Co., 78 Hun, 146; Smith v. Great South Bay Water Co., 82 App. Div. 427), 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 twenty-six States. Typical examples are Alabama (Ellis v.Birmingham Water Co., 187 Ala. 552); California (Nichaus Bros.Co. v. Contra Costa Water Co., 159 Cal. 305); Georgia (Holloway v. Macon G. W. Co., 132 Ga. 387); Connecticut (Nickerson v. Bridgeport H. Co., 46 Conn. 24); Kansas (Mott v. Cherryvale W. M. Co., 48 Kan. 12); Maine (Hone v.Presque Isle Water Co., 104 Me. 217); New Jersey (Hall v.Passaic Water Co., 83 N.J.L. 771), and Ohio (Blunk v.Dennison Water Co., 71 Ohio St. 250). 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 burden that the obligation would impose (cf. Hone v.Presque Isle Water Co., 104 Me. 217, at 232). 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; Rose v. Penn.R.R. Co., 236 N.Y. 568; Moore v. Van Beuren N.Y. BillPosting Co., 240 N.Y. 673; cf. Bird v. St. Paul F. M. Ins.Co., 224 N.Y. 47). 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) the contract with the city fixed a schedule of rates to be supplied not to public buildings but to private takers at their homes. InMatter of International Railway Co. v. Rann (224 N.Y. 83, 85) the contract was by street railroads to carry passengers for a stated fare. In Smyth v. City of N.Y. (203 N.Y. 106) andRigney v. N.Y.C. H.R.R.R. Co. (217 N.Y. 31) 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). 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; Marks v. Nambil Realty Co., Inc., 245 N.Y. 256,258). The plaintiff would bring its case within the orbit of that principle. The hand once set to a task may not always be withdrawn with impunity though liability would fail if it had never been applied at all. A time-honored formula often phrases the distinction as one between misfeasance and non-feasance. Incomplete the formula is, and so at times misleading. Given a relation involving in its existence a duty of care irrespective of a contract, a tort may result as well from acts of omission as of commission in the fulfillment of the duty thus recognized by law (Pollock, Torts [12th ed.], p. 555; Kelley v. Met. Ry.Co., 1895, 1 Q.B. 944). What we need to know is not so much the conduct to be avoided when the relation and its attendant duty are established as existing. What we need to know is the conduct that engenders the relation. It is here that the formula, however incomplete, has its value and significance. If conduct has gone forward to such a stage that inaction would commonly result, not negatively merely in withholding a benefit, but positively or actively in working an injury, there exists a relation out of which arises a duty to go forward (Bohlen, Studies in the Law of Torts, p. 87). So the surgeon who operates without pay, is liable though his negligence is in the omission to sterilize his instruments (cf. Glanzer v. Shepard, supra); the engineer, though his fault is in the failure to shut off steam (Kelley v.Met. Ry. Co., supra; cf. Pittsfield Cottonwear Mfg. Co. v.Shoe Co., 71 N.H. 522, 529, 533); the maker of automobiles, at the suit of some one other than the buyer, though his negligence is merely in inadequate inspection (MacPherson v. Buick Motor Co., 217 N.Y. 382). The query always is whether the putative wrongdoer has advanced to such a point as to have launched a force or instrument of harm, or has stopped where inaction is at most a refusal to become an instrument for good (cf. Fowler v. Athens Waterworks Co., 83 Ga. 219, 222).

The plaintiff would have us hold that the defendant, when once it entered upon the performance of its contract with the city, was brought into such a relation with every one who might potentially be benefited through the supply of water at the hydrants as to give to negligent performance, without reasonable notice of a refusal to continue, the quality of a tort. There is a suggestion of this thought in Guardian Trust Co. v. Fisher (200 U.S. 57), but the dictum was rejected in a later case decided by the same court (German Alliance Ins. Co. v. HomeWater Supply Co., 226 U.S. 220) when an opportunity was at hand to turn it into law. We are satisfied that liability would be unduly and indeed indefinitely extended by this enlargement of the zone of duty. The dealer in coal who is to supply fuel for a shop must then answer to the customers if fuel is lacking. The manufacturer of goods, who enters upon the performance of his contract, must answer, in that view, not only to the buyer, but to those who to his knowledge are looking to the buyer for their own sources of supply. Every one making a promise having the quality of a contract will be under a duty to the promisee by virtue of the promise, but under another duty, apart from contract, to an indefinite number of potential beneficiaries when performance has begun. The assumption of one relation will mean the involuntary assumption of a series of new relations, inescapably hooked together. Again we may say in the words of the Supreme Court of the United States, "The law does not spread its protection so far" (Robins Dry Dock Repair Co. v. Flint,supra; cf. Byrd v. English, 117 Ga. 191; Dale v. Grant,34 N.J.L. 142; Conn. Ins. Co. v. N.Y. N.H.R.R. Co., 25 Conn. 265; Anthony v.Slaid, 11 Metc. 290). We do not need to determine now what remedy if any, there might be if the defendant had withheld the water or reduced the pressure with a malicious intent to do injury to the plaintiff or another. We put aside also the problem that would arise if there had been reckless and wanton indifference to consequences measured and foreseen. Difficulties would be present even then, but they need not now perplex us. What we are dealing with at this time is a mere negligent omission, unaccompanied by malice or other aggravating elements. The failure in such circumstances to furnish an adequate supply of water is at most the denial of a benefit. It is not the commission of a wrong.

(3) We think the action is not maintainable as one for the breach of a statutory duty.

The defendant, a public service corporation, is subject to the provisions of the Transportation Corporations Act. The duty imposed upon it by that act is in substance to furnish water, upon demand by the inhabitants, at reasonable rates, through suitable connections at office, factory or dwelling, and to furnish water at like rates through hydrants or in public buildings upon demand by the city, all according to its capacity (Transportation Corporations Law [Cons. Laws, ch. 63], § 81;Staten Island Water Supply Co. v. City of N.Y., 144 App. Div. 318; People ex rel. City of N.Y. v. Queens Co. Water Co.,232 N.Y. 277; People ex rel. Arthur v. Huntington Water WorksCo., 208 App. Div. 807, 808). We find nothing in these requirements to enlarge the zone of liability where an inhabitant of the city suffers indirect or incidental damage through deficient pressure at the hydrants. The breach of duty in any case is to the one to whom service is denied at the time and at the place where service to such one is due. The denial, though wrongful, is unavailing without more to give a cause of action to another. We may find a helpful analogy in the law of common carriers. A railroad company is under a duty to supply reasonable facilities for carriage at reasonable rates. It is liable, generally speaking, for breach of a duty imposed by law if it refuses to accept merchandise tendered by a shipper. The fact that its duty is of this character does not make it liable to some one else who may be counting upon the prompt delivery of the merchandise to save him from loss in going forward with his work. If the defendant may not be held for a tort at common law, we find no adequate reason for a holding that it may be held under the statute.

The judgment should be affirmed with costs.

POUND, CRANE, ANDREWS, LEHMAN and KELLOGG, JJ., concur; O'BRIEN, J., not sitting.

Judgment affirmed, etc.