Reimann v. Monmouth Consolidated Water Co.

Vanderbilt, C. J.

(dissenting). Under Baum v. Somerville Water Co., 84 N. J. L. 611 (E. & A. 1913), the defendant water company, in the absence of an express contract with a property owner and a breach thereof, has no obligation to furnish water with sufficient pressure and in sufficient, quantity for fire fighting purposes. Because I am of the opinion that the rule in the Baum case is repugnant not- only to fundamental concepts of substantial justice but to modern principles of tort liability, I am constrained to dissent from the opinion of the majority and to state the reasons why I think the rule should be discarded in favor of one in keeping-with the needs of the times.

*141 I.

The defendant water company, although a private corporation, is engaged in a business peculiarly associated with and affecting the public interest. It is organized under and exists by virtue of special statutory provisions, R. S. 48:19-1 et seq. It is, moreover, a public utility subject to the general supervision of and regulation by the Board of Public Utility Commissioners, R. S. 48:2-13. Like all public utilities it enjoys extensive privileges by reason of the franchise granted it by the State. Among them are the general power to take and divert springs and streams, to construct reservoirs, and to lay pipes and conduits at such times and in such places as shall be necessary and proper to enable it to carry out its purposes, R. S. 48:19-13; the right to enter upon any lands within the area of its operations for the purpose of making any necessary examinations, explorations, measurements or levels, R. S. 48:19-14; the right to take by condemnation lands and waters necessary to carry on its business, R. S. 48:19-15, including the right to acquire by condemnation new or additional sources of water supply, R. S. 48:19-20 and R. S. 58:6-1; the right to lay pipes beneath public roads, streets and alleys free from all charge by any person or body politic for the privilege, and also the right to construct and maintain hydrants along such streets and alleys, R. S. 48:19-17.

In return for these peculiar and special privileges conferred by the State and enjoyed by a water company as a public utility, it is only reasonable to conclude that on entering into business it assumes a concomitant duty to the public it serves to furnish water of pure quality in sufficient quantity and at sufficient pressure to meet ordinary domestic, business and municipal requirements, including the furnishing of water for the extinguishment of fires. If this be so, it follows that for a failure to perform that duty with reasonable care it subjects itself to liability to those injured as a result of its failure.

*142 While this duty of care with respect to the furnishing of water in sufficient quantity and at sufficient pressure to fight oidinary fires has not previously been recognized by the courts of this State, the analogous duty to use due care in the furnishing of water free from contamination has been recognized. In the ease of Jones v. Mt. Holly Water Co., 87 N. J. L. 106 (Sup. Ct. 1915), the defendant company was held liable for negligence in supplying water contaminated with paratyphoid germs. Other jurisdictions, though a minority, have recognized the duty and imposed liability for negligence in the supplying of water for the extinguishment of fires, Mugge v. Tampa Water Works Co., 42 So. 81 (Fla. 1906); Fisher v. Greensboro Water Supply Co., 38 S. E. 912 (N. C. 1901); Harlan Water Co. v. Carter, 295 S. W. 426, 428 (Ky. 1927). A similar conclusion was arrived at by the United States Supreme Court in Guardian Trust & D. Co. v. Fisher, 200 U. S. 57, 68 , 50 L. Ed. 367, 374 (1906), wherein it was stated:

“* * * if the company proceeds under its contract, constructs and operates its plant, it enters upon a public calling. It occupies tbe streets of the city, acquires rights and privileges peculiar to itself. It invites the citizens, and if they avail themselves of its conveniences and omit malting other and personal arrangements for a supply of water, then the company owes a duty to them in the discharge of its public calling, and a neglect by it in the discharge of tbe obligations imposed by its charter, or by contract with the city, may be regarded as a breach of absolute duty, and recovery may be had for such neglect. The action * * * is an action for tort. * * * Even if the water company was under no contract obligations to construct waterworks in the city or to supply the citizens with water, yet having undertaken to do so, it comes under an implied obligation to use reasonable care, and if through its negligence injury results to an individual it becomes liable to him for the damages resulting therefrom, and the action to recover is for a tort, and not for breach of contract.”

This view is likewise supported by Corbin, Liability of Water Companies for Losses by Fire, 19 Yale L. J. 425 (1910) and Seavey, Reliance upon Gratuitous Promises or Other Conduct, 64 Harv. L. Rev. 913 , 920 (1951), Principles of Torts, 56 Harv. L. Rev. 72 , 76 (1942), Mr. Justice Cardozo and the *143 Law of Torts, 52 Harv. L. Rev. 372 , 392 (1939). The fact that these cases and authorities do not represent the majority view in this eountry does not mean that their point of view should be ignored, for as stated in Gorrell v. Greensboro Water-Supply Co., 32 S. E. 720, 722 (N. C. 1899) :

“They are to be weighed, not counted. We should adopt that line which is most consonant with justice and the ‘reason of the thing’.”

In determining the rule to be followed in this State it should prove helpful to inquire into the circumstances surrounding the decision in Baum v. Somerville Water Co., supra, on which the majority here rely. It had previously been recognized in Middlesex Water Co. v. Knappmann Whiting Co., 64 N. J. L. 240 (E. & A. 1899); Buchanan & Smock Lumber Co. v. East Jersey Water Co., 71 N. J. L. 350 (Sup. Ct. 1904); and Hall v. Passaic Water Co., 83 N. J. L. 771 (E. & A. 1912), that where there was an express contract between the company and the property owner whereby the company undertook to furnish water for fire fighting purposes, it would be liable for a loss occasioned by a breach thereof, but in the latter two cases it was held that in the absence of any such breach of a contract to which the plaintiff was a party there could be no recovery. This constituted the basis of the decision in Baum v. Somerville Water Co., supra.

The rule in those cases may have had its foundation in reason, for at the time the causes of action there involved arose the applicable statute relating to water companies, now R. S. 48:19 — 18, provided:

“Each company organized under this chapter may sell and dispose of the water issuing from its reservoirs, aqueducts or pipes for such prices, or quarterly or annual rents and such restrictions as they may think proper.”

There was at the time no Board of Public Utility Commissioners and the rates charged and the service rendered by water companies were solely matters of contract between the *144 water company and the property owners in the area it served. They were free to contract without regulation by the State. In those circumstances the property owner could expect to receive by way of water service only that for which he had contracted to pay.

Such is not the situation today. By L. 1910, c. 41, and then by L. 1911, c. 195, both of which were enacted after the cause of action had arisen in each of the four cases previously mentioned, the Legislature created the Board of Public Utility Commissioners and charged it with the general supervision, regulation and control of all public utilities, which term was defined specifically as including water companies. Included within the jurisdiction of the Board of Public Utility Commissioners was the power and the duty to regulate both the rates charged and the service furnished by water companies, R. S. 48:2-21, 23, 25. Water companies and property owners were no longer free to contract as they saw fit. As is the ease with all other public utilities, the public as a matter of practical necessity came to rely not upon private contract but upon the Board of Public Utility Commissioners to insure the receipt of safe and adequate service and to fix fair and reasonable rates for the service rendered. Today a property owner stands in the same relation to a water company as a traveller does to a bus company; he accepts the service that 'is offered and pays the price that is fixed -by the Board of Public Utility Commissioners. Such a situation is inherent in the very nature of a public utility which enjoys a public monopoly and is subject to public regulation.

In these circumstances differing radically from those in which the earlier cases were decided, can it reasonably be said that the- rule of law which was applicable formerly is still binding on us today? Must not consideration be given to the change in the status of water companies under the Public Utility Acts of 1910 and 1911 and the changed relationship between water companies and property owners resulting therefrom ? To fail to do so would not speak well for *145 the nature of the common law which requires that each time a rule of law is applied it be scrutinized carefully to make sure that conditions have not so changed as to make its further application the instrument of injustice. The regulation of public utilities by the State has superseded the “freedom of contract” so-called that was the major premise of the Baum case and the earlier decisions. In the circumstances of the present case I am convinced that since the decision was rendered in Baum v. Somerville Water Co., supra, the statutory law of this State as to water companies has so changed as to make the rule there laid down no longer acceptable.

II.

It is well recognized in the field of torts today.that a duty and a resulting liability for failure to exercise due care in the performance thereof may exist where there is no privity of contract between the parties and where there formerly existed no such duty at common law. The common law is subject to change and has been changing just as has the environment in which it exists. Actionable negligence today is frequently predicated on a duty of care which arises out of an implied representation which induces reliance. Thus in the celebrated opinion of Judge Cardozo in MacPherson v. Buick Motor Co., 111 N. E. 1050 (N. Y. 1916) liability was imposed on a manufacturer in a suit brought by the ultimate purchaser of its product in the absence of any privity of contract. In rejecting its long established rule in favor of the doctrine of the MacPherson case, the highest court in Massachusetts recently stated in Carter v. Yardley & Co., Ltd., 64 N. E. 2d 693, 700 (Mass. 1946) :

“The time has come for us to recognize that -that asserted general rule no longer exists. In principle it was unsound. It tended to produce unjust results. It has been abandoned by the great weight of authority elsewhere. We now abandon it in this Commonwealth.”

The United States Court of Appeals for the Third Circuit in holding a manufacturer of a glass bottle liable to a remote *146 third party with whom it had no direct dealings had this to say in Diesbourg v. Hazel-Atlas Glass Co., 176 F. 2d 410, 411 (1949) :

“Defendant says that it is not liable because there is no privity between it and the plaintiff. It acknowledges the existence of the well known case of MacPherson v. Buick Motor Co. * * * but says that while that decision may be applicable to an automobile wheel, it is not applicable to a glass bottle. The defendant misapprehends what has been going on in tort law since that case was decided.”

In the instant case it is alleged in the complaint that the defendant has held itself out as a supplier 'of water, has maintained mains and fire hydrants and impliedly has represented to the public and its customers, among whom is the plaintiff, that it will maintain water pressure for ordinary activities and emergencies, among them the fighting of fires. The' public and its customers have relied on this holding out and have maintained a fire department whose equipment is designed to utilize water from the defendant’s hydrants. Moreover, because of this reliance on the defendant’s holding out of itself as a supplier of water for fire fighting purposes, they have not attempted to make provisions for other sources of water for such purposes, as they might otherwise have done. The defendant had knowledge of this situation and it must have realized that if it should fail to maintain sufficient water^ pressure at its fire hydrants for ordinary firefighting purposes, the efforts of the fire department to subdue a fire on the premises of the plaintiff or others would be futile and their loss greatly magnified. In these circumstances it is clear that if by its negligence the defendant fails to perform this duty which it has assumed it is liable to those such as the plaintiff whose property has been destroyed by fire, assuming, of course, that it can be shown that adequate water pressure would have averted or minimized the loss.

The situation in the instant case is analogous to that in the MacPherson case; or to that in Erie Railroad v. Stewart, 40 F. 2d 855 (C. C. A. 6 1930), cert. denied, 282 U. S. 843 , *147 75 L. Ed. 748 (1930), where the defendant was held liable because of the temporary absence of a watchman, even though the law did not require a watchman to be present; or to Knight v. Sheffield Corp. (1942), 2 All E. R. 411, where the defendant was held liable for failure to perform the self-imposed duty of lighting an obstruction in the highway when the public had come to rely on such lighting. The duty is imposed not because of statute or contract, but because of a holding out and a reliance thereon. In some respects it is not dissimilar to the duty imposed on a rescuer or volunteer to use due care on his errand of mercy.

It therefore follows that the doctrine of the Baum case should be overruled and that water companies should be subject to the same duty and liability for the breach thereof as others. The negligent failure to maintain adequate pressure at its hydrants for ordinary fire fighting purposes should result in liability if proven to be causally related to the loss.

III.

In the instant case, instead of merely relying on the nonfeasance of the defendant, the plaintiff in his second count has alleged misfeasance or active wrongdoing, in that the defendant knowingly reduced the water pressure at its hydrants to such a point as to make water unavailable for fire fighting purposes. Even a municipality which undertakes to furnish water as a governmental function would be liable for active wrongdoing if it knowingly reduced the pressure so low as to prevent use of water for fire fighting, for it is well established that, while a municipality may be immune from liability for passive negligence or nonfeasance, liability is imposed upon it for misfeasance or active wrongdoing, Allas v. Borough of Rumson, 115 N. J. L. 593 (E. & A. 1935); Newman v. Ocean Township, 127 N. J. L. 287 (E. & A. 1941); Lovett v. Borough of Keyport, 133 N. J. L. 122 (E. & A. 1945); Truhlar v. Borough of East Paterson, 4 N. J. 490 (1950); Milstrey v. Hackensack, 6 N. J. 400 *148 (1951); Kress v. City of Newark, 8 N. J. 562 (1952). Moreover, if a third party negligently interfered with the defendant’s furnishing of water to fight a fire, it would be liable to the owner of the property destroyed for the damage resulting from such negligence, Concordia Fire Ins. Co. v. The Simmons Co., 168 N. W. 199 (Wisc. 1918), in which an adjoining landowner broke the water main leading to a fire hydrant; Metallic Casting Co. v. Fitchburg R. R. Co., 109 Mass. 277 (1872), and Phenix Ins. Co. of Brooklyn v. N. Y. Cent. and H. R. R. Co., 90 N. E. 1164 (N. Y. 1909), in both of which a railroad train ran over hose being used to fight a fire; and Globe Malleable Iron Co. v. N. Y. Cent. and H. R. R. Co., 124 N. E. 109 (N. Y. 1919), and Luedeke v. Chi. and N. W. R. R. Co., 231 N. W. 695 (Neb. 1930), in which the railroads were held liable in tort for obstructing a crossing thereby delaying the arrival of fire engines. There is no sound reason why a water company should be in a preferred position of immunity on the theory that it is merely the supplier of a commodity and therefore not liable in the absence of an express contract for a failure to supply water at a pressure sufficient for ordinary fire extinguishment purposes. If the plaintiff can prove the allegations of his complaint that the defendant knowingly reduced the water pressure to a point where it knew or had reason to know that it would not be sufficient to fight a fire, he should be permitted to recover because of the defendant’s misfeasance or active wrongdoing. It is significant that the question of liability for misfeasance or active wrongdoing was not passed upon in any of the decisions relied upon by the majority.

IY.

Two collateral questions remain. The first is whether a decision in favor 'of the plaintiff would result in the great confusion which the majority apparently fear. I cannot see that it would. The defendant is as capable of insuring itself against liability for its own negligence in the supplying of *149 water as the plaintiff and other property owners are of insuring themselves against loss by fire. Considering property alone, the question is merely on whom shall the burden of loss, or of insurance therefor, fall. Sound principles of justice would indicate that it be on the party at fault. If the rates currently fixed and presently being charged for water service by the defendant or other water companies are not sufficient to cover the cost of meeting or protecting themselves against such contingent liability, then procedures are available for adjusting' the rates to the extent necessary. In determining liability for negligence the courts should not be governed by the adequacy of past or existing rates. But the problem has deeper implications than the mere loss of property and liability therefor. The failure to supply water for fire fighting purposes through the fire hydrants erected for that purpose may result in loss of life as well as of property. It is unthinkable that the defendant water company should be able to shield itself behind an outmoded rule of law at the expense of human life.

The other question is whether, assuming that the rule in Baum v. Somerville Water Co. needs to be changed, the courts should refuse to act and leave it to the Legislature to correct the injustice. In my dissenting opinion in the case of Fox v. Snow, 6 N. J. 12, 21 (1950), I had occasion to discuss this very question at some length and so I shall not here presume to traverse the same ground in detail again. Instead I will limit myself to citing a very recent decision of the ETew York Court of Appeals and a decision of the United States Supreme Court illustrating most clearly the process of the growth of the common law. The courts are under as great an obligation to revise an outmoded rule of the common law as the legislatures are to abolish or modernize an archaic statute. The common law is not merely a conglomeration of rules to be gleaned from decisions of the ancient past; it is a living and growing body of legal principles. It derives its life and growth from judicial decisions which alter an existing rule, or abandon an old rule and *150 substitute in its place a new one in order to meet new conditions. It is because of this gradual but continuous process of change- that the body of our common law today is as different from that of mediaeval England as our physical surroundings are from those of that era. And it is absolutely essential that this be so, for it would be an impossible situation indeed if we attempted to determine 20th Century disputes by means of rules of law applicable to 15th Century facts.

This process was strikingly illustrated in a recent decision of the Court of Appeals of New York with reference to the right of a child to recover in tort for prenatal injuries, Woods v. Lancet, 102 N. E. 2d 691 (N. Y. 1951). In overthrowing the rule laid down some 30 years before in Drobner v. Peters, 133 N. E. 567 (N. Y. 1921), the court stated:

“The precise question for us on this appeal is: shall we follow Drobner v. Peters, or shall we bring the common law of this State, on this question, into accord with justice? I think, as New York State’s court of last resort, we should make the law conform to right.” ( 102 N. E. 2d at page 692 )

“* 4 4 Negligence law is common law, and the common law has been molded and changed and brought up-to-date in many another case. Our court said, long ago, that it had not only the right, but the duty to re-examine a question where justice demands it, * * *

4 4 4 We act in the finest common-law tradition when we adapt and alter decisional law to produce common-sense justice.

The same answer goes to the argument that the change we here propose should come from the Legislature, not the courts. Legislative action there could, of course, be, but we abdicate our own function, in a field, peculiarly nonslatutory, when we refuse to reconsider an old and unsatisfactory court-made rule.” ( 102 N. E. 2d at page 694 )

True it is that when a rule has been established by legislation, however undesirable it may be, it is for the Legislature alone to remedy the situation, see Martin v. Curran, 101 N. E. 2d 683, 686 (N. Y. 1951), decided less than two months prior to Woods v. Lancet, supra. But when the rule is one of common law established by the courts the remedy lies with either the Legislature or the courts, and inaction by one does not preclude action by the other.

*151 Even so conservative a jurist as the late Mr. Justice Sutherland, in the case of Funk v. United States, 290 U. S. 371 , 78 L. Ed. 369 (1933), refused to apply a long established rule rendering a wife incompetent to testify in her husband’s behalf in a criminal proceeding, saying:

“The public policy of one generation may not, under changed conditions, be the public policy of another. * * *

It may be said that the court should continue to enforce the old rule, however contrary to modern experience and thought,, and however opposed, in principle, to the general current of legislation and of judicial opinion, it may have become, leaving to Congress the responsibility of changing it. Of course, Congress has that power; but if Congress fail to act, as it has failed in respect of the matter now under review, and the court be called upon to decide the question, is it not the duty of the court, if it possess the power, to decide it in accordance with present-day standards of wisdom and justice rather than in accordance with some outworn and antiquated rule of the past? * * * That this court and the other federal courts, in this situation and by right of their own powers, may decline to enforce the ancient rule of the common law under conditions as they now exist we thinh is not fairly open to doubt * * *” (290 U. S. at pages 381, 382, 78 L. Ed. at page 375 ).

“To concede this capacity for growth and change in the common law by drawing ‘its inspiration from every fountain of justice,’ and at the same time to say that the courts of this country are forever bound to perpetuate such of its rules as, by every reasonable test, are found to be neither wise nor just, because we have once adopted them as suited to our situation and institutions at a particular time, is to deny to the common law in the place of its adoption a ‘flexibility and capacity for growth and adaptation’ which was ‘the peculiar boast and excellence’ of the system in the place of its origin.

* * * It has been said so often as to have become axiomatic that the common law is not immutable but flexible, and by its own principles adapts itself to varying conditions.” ( 290 U. S. at page 383 , 78 L. Ed. at page 376 )

These principles, it seems to me, compel ns to consider the rule of the Baum ease as no longer adapted to either the legislation governing public utilities or the conditions of the present time. I would overrule it and instead hold that the defendant water company had a duty to furnish water in sufficient quantity and at sufficient pressure to extinguish ordinary fires, that duty arising (1) because of its peculiar *152 position as a public utility engaged in the business of supplying water under regulation by the State, and (2) because of the holding out of itself, by the maintenance of fire hydrants, as a supplier of water for fire fighting purposes and the reliance of the property owners it serves on that holding out. This duty I would consider breached either by nonfeasance, as charged in the plaintiffs first count, or by misfeasance, as charged in the plaintiff’s second count. Accordingly, I would remand the case for trial so that the trier of the facts might determine whether the duty was in fact breached as alleged and whether the breach was a contributing factor to the plaintiff’s loss.