Potter v. Carolina Water Company

116 S.E.2d 374 (1960) 253 N.C. 112

James H. POTTER, Jr., James H. Potter, III, and Gilbert M. Potter, t/a and d/b/a Potter's Store, a Partnership; and New Hampshire Insurance Company, a Corporation,
v.
CAROLINA WATER COMPANY, a Corporation.

No. 91.

Supreme Court of North Carolina.

October 12, 1960.

C. R. Wheatly, Jr., and Thomas S. Bennett, Beaufort, for plaintiff appellees.

John G. Dawson, Albert W. Cowper, Kinston, and Luther Hamilton, Morehead City, for defendant appellant.

RODMAN, Justice.

Defendant, by motion to nonsuit and by exception to the charge as a whole, challenges plaintiffs' right to recover notwith-standing the undisputed testimony that there was a total failure to furnish any water to the hydrants during the critical period, and because of such failure plaintiffs' property was destroyed. It bases its denial of liability on two propositions: (1) Breach of a definite and specific contract between a private corporation and a municipality to furnish water for fire purposes creates no right of action in a citizen who suffers damage as a result of such breach; (2) even if such right of action may exist for breach of a contract definite and specific in its terms, the contract on which plaintiffs base their claim is so indefinite and uncertain that plaintiffs' evidence fails to establish a breach.

Counsel for defendant open their argument with the statement: "* * * the question here directly presented is almost a brand new question in this state to the present generation of lawyers." They then concede that the question which they first pose for determination was decided adversely to their contention in Gorrell v. Greensboro Water Supply Co., 124 N.C. 328, 32 S.E. 720, 46 L.R.A. 513, decided at the Spring Term 1899, followed by Fisher v. Greensboro Water Supply Co., 128 N.C. 375, 38 S.E. 912, decided at the Spring Term 1901 (See Guardian Trust & D. Co. v. Fisher, 200 U.S. 57, 26 S. Ct. 186, 50 L.Ed 367); Jones v. Durham Water Co., 135 N.C. 553, 47 S.E. 615, decided at the Spring Term 1904; Id. 138 N.C. 383, 50 S.E. 769; Morton v. Washington Light & Water Co., 168 N.C. 582, 84 S.E. 1019, decided at the Spring Term 1915; and Powell & Powell v. Wake Water Co., 171 N.C. 290, 88 S.E. 426, decided at the Spring Term 1916, all holding that a citizen injured by breach of a contract by a private corporation to supply water to his municipality for fire protection might maintain an action for damages personal to him resulting from a breach of the contract, and he might sue for a breach of the contract or for a negligent failure to comply with the contract.

Counsel for defendant urge us to now overrule those cases and to hold that no such action may be maintained. True, as defendant points out, the Gorrell case was decided by a divided Court, but Gorrell was unanimously accepted as the law of this State in Fisher and Jones.

In 1915 this Court was asked to re-examine the question and to join with the majority of the states in holding that property owners have no right of action because of a breach of such contract. Morton v. Washington Light & Water Co., supra. That the question again propounded was carefully considered is manifest from the several opinions and an inspection of the cases cited in the opinions of Justice Allen, who spoke for the majority, and Justice Walker, who spoke for the minority. An examination of the cases there cited will disclose that North Carolina, Kentucky, and Florida were in accord, and the decisions in other states were to the contrary. Kentucky and Florida continue to adhere to the rule as declared by us in the Gorrell case. See Clay v. Catlettsburg, Kenova & Ceredo Water Co., 301 Ky. 456, 192 S.W.2d 358; Florida Public Utilities v. Wester, 150 Fla. 378, 7 So. 2d 788.

The Morton case was followed a year later by Powell & Powell v. Wake Water Co., supra, where the right to sue was again recognized.

It is manifest from the decision in the Morton case that the doctrine of stare decisis played an important part. Allen, J., said [168 N.C. 582, 84 S.E. 1020]: "Another reason for refusing to sustain the position of the defendant is that it entered into the contract with the city of Washington in 1901, two years after the Gorrell case was decided, and as all laws relating to the subject-matter of a contract enter into and form a part of it as if expressly referred to or incorporated in its terms (citations), it was within the contemplation of the parties at the time the contract was made that the defendant would be liable to the citizen for loss by fire caused by its negligent failure to perform the terms of the contract, as held in the Gorrell case, and to hold otherwise now would relieve the defendant of a responsibility which it knowingly assumed."

Brown, J., concurring in the result, said: "I recognize the fact that the overwhelming weight of authority, including that of the Supreme Court of the United States, is against the decisions of this court in the Gorrell, Fisher, and Jones cases, cited in the opinions in this case. But all three of those cases were decided and the opinions published before the contract in this case was entered into. Those decisions were well known to be the law of North Carolina when the franchise given to the defendant was applied for, and when it was agreed upon and its terms accepted. Whether those cases were correctly decided or not, they were the accepted law of this state at that time, and upon well-established principles entered into and formed a part of the contract under which the defendant operated, unless there is something to be found in the contract excluding such hypothesis."

The conclusion reached in the cases we are now asked to overrule has not been challenged for nearly half a century. To the contrary, the principles enunciated have been repeatedly approved. Illustrative, see Shepard Citations for the cases citing with approval the Gorrell case. See also Pinnix v. Toomey, 242 N.C. 358, 87 S.E.2d 893; Council v. Dickerson's Inc., 233 N.C. 472, 64 S.E.2d 551; Jones v. Otis Elevator Co., 231 N.C. 285, 56 S.E.2d 684.

The reasons why a court should adhere to conclusions deliberately reached in prior cases was well stated by Johnson, J., in Williams v. Randolph Hospital, 237 N.C. 387, 75 S.E.2d 303, 305: "The salutary need for certainty and stability in the law requires, in the interest of sound public policy, that the decisions of a court of last resort affecting vital business interests and social values, deliberately made after ample consideration, should not be disturbed except for most cogent reasons." Ward v. Cruse, 234 N.C. 388, 67 S.E.2d 257; State v. Dixon, 215 N.C. 161, 1 S.E.2d 521; Wilkinson v. Wallace, 192 N.C. 156, 134 S.E. 401; Fowle & Son v. O'Ham, 176 N.C. 12, 96 S.E. 639; Hill v. Atlantic & N. C. R. Co., 143 N.C. 539, 55 S.E. 854, 9 L.R.A., N.S., 606.

The contract here under consideration bears evidence, we think, that Tide Water and Beaufort were advertent to and recognized the rule in the Gorrell and other cases which followed. The contract provides: "The party of the first part shall not be liable for any failure or neglect to supply service to the said hydrants by reason of strike or accident beyond its control." (Emphasis supplied.) Here was apparently a recognition of the water company's right as declared by Brown, J., in Morton v. Washington Light & Water Co., supra. He said: "It could easily have been made to appear from the contract, if such was the agreement of the parties, that the defendant was dealing exclusively with the city, and was accountable only to it." Had it been the intent of the parties to the contract under consideration to deny a right of action to a property owner injured by failure to furnish water for fire protection, more inclusive language would have been chosen.

We are not justified, under the facts here presented, in reversing the rulings made in Gorrell v. Greensboro Water Co., supra; Morton v. Washington Light & Water Co., supra, and Powell & Powell v. Wake Water Co., supra.

Is the contract so indefinite that the intent and agreement of the parties cannot be determined?

Certainly failure to include a date on which the contract would expire cannot relieve defendant of the duty to comply so long as it recognizes the contract as a continuing one. Defendant might have the right to terminate upon reasonable notice, Fulghum v. Town of Selma, 238 N.C. 100, 76 S.E.2d 368, but defendant did not defend on the ground that the contract was not in force at the time of the fire. To the contrary, the evidence tended to establish that the parties thereto recognized the contract as being in effect.

Defendant's contention that the contract does not show an agreement on its part to provide water for fire protection is, we think, without merit. True the contract does not in express language so provide, nor does it prescribe the quantity of water to be furnished or the pressure to be maintained. It does, however, obligate defendant to furnish and maintain "fire hydrants." It obligates Beaufort to use and pay the rental fixed for the hydrants furnished. It exculpates defendant from liability for failure "to supply service to the said hydrants by reason of strike or accident beyond its control." The order of the Utilities Commission, based on the joint application of Beaufort and defendant seeking approval of the sale by Carolina Power & Light and rates to be charged, provided: "Water in excess of present ordinary city's requirements for flushing sewers, streets, and fire protection to be metered and billed." (Emphasis supplied.) It is, we think, apparent that the parties contemplated that defendant would exercise reasonable care to provide such water supply and pressure to the hydrants as might be reasonably necessary to accomplish the purpose for which the contract was made, that is, to furnish fire protection to property in Beaufort.

The agreement to provide and maintain the fire hydrants is analogous to a sale of an article by a manufacturer for a particular purpose, that is, to provide fire protection. Such sale imposes an obligation to provide an article reasonably suitable for the purpose for which it is purchased. Southern Box & Lumber Co. v. Home Chair Co., 250 N.C. 71, 108 S.E.2d 70; Stokes v. Edwards, 230 N.C. 306, 52 S.E.2d 797. The rule finds a parallel in contracts for services. Hazelwood v. Adams, 245 N.C. 398, 95 S.E.2d 917; Hagan v. Jenkins, 234 N.C. 425, 67 S.E.2d 380; Ivey v. Bessemer City Cotton Mills, 143 N.C. 189, 55 S.E. 613; Annotations to Robertson v. Wolfe, 49 A.L.R. 473; 35 Am.Jur. 530.

The Court of Appeals of Kentucky said with respect to a similar situation: "When a public service corporation such as a gas company obtains the privilege of occupying and using the streets for a particular public service that will be beneficial to the people of the city, and there is no express contract between it and the city defining its duties and obligations, the law will raise an implied and enforceable contract to take the place of the omitted express contract, and imposes on the company the obligation to render the service that was reasonably within the contemplation of the parties when the contract was made." Humphreys v. Central Kentucky Natural Gas Co., 190 Ky. 733, 229 S.W. 117, 119, 21 A.L.R. 664.

Plaintiffs have stated a cause of action based on the negligent failure to reasonably comply with its contract. The total failure to furnish water under the existing conditions for a period of time variously estimated at from thirty minutes to one and one-half hours is sufficient to support a finding of negligence. The court placed the burden of establishing negligence on plaintiffs. Defendant took no exception to this portion of the charge. It has neither pleaded nor offered evidence that its failure to perform was due to a strike or accident. To exculpate itself on either of these grounds, it would carry the burden of proof. Fallins v. Durham Life Insurance Co., 247 N.C. 72, 100 S.E.2d 214; Thomas-Yelverton Co. v. State Capital Life Insurance Co., 238 N.C. 278, 77 S.E.2d 692; Wells v. Clayton, 236 N.C. 102, 72 S.E.2d 16; Jones v. Waldroup, 217 N.C. 178, 7 S.E.2d 366; Pasquotank & N. R. Steamboat Co. v. Eastern Carolina Transportation Co., 166 N.C. 582, 82 S.E. 956.

The other assignments of error have been examined. We find nothing to indicate prejudicial error. None is of sufficient importance to require discussion.

No error.