Graves County Water Co. v. Ligon

— 779 — Opinion op the oouet by JUDGE HOBSON — Affirming. On July 30, 1891, the city of Mayfield made an ordinance providing for a supply of "water and for electric lights for the city, by which it granted to appellant the franchise of supplying the city and its inhabitants with water and electric lights for a period of twenty-five years, appellant to keep a sufficiency of engine and boiler power, so that, if one engine or pump - should get out of fix, there would be others which might be used for pumping water; all mains to be of suitable size, and to furnish an abundant supply of water. A public test of the power and capacity of the waterworks was to be given when completed. At this test they were to throw from separate hydrants in the business part of the city not less than three simultaneous streams, with fifty feet of hose, to the height of eighty feet. The city agreed to rent sixty-four hydrants, and pay therefor $3,840 per annum, and for any additional hydrants $50 each per annum. These hydrants were to be used only for extinguishing fires, and it was stipulated that they should furnish effective streams without the aid of portable engines. Appellant undertook to keep al;l these hydrants supplied with water, and. to maintain them in effective working order, except during the time of repairing- or removing any hydrant which had become ineffective by accident or other cause than willful negligence of appellant. Appellant was also to build a water tower not less than 12% feet in diameter, and not less-than 130 feet in height, which should be for a constant supply of water. Appellant accepted the grant, and built the plant, and put the works in operation. After this, the means theretofore provided by the city and its inhabitants for fire protection were abandoned. On June 26, 1901, a fire began in a house in the city, which spread to and burned appellees’ house from the want of water in the hydrants, — 780 — there not being* sufficient pressure to throw a stream of any size more than from two to five feet. There was. no water in the tower, and the firemen were unable to get water to check the fire. . By reason of this the fire spread to appellees’ property and destroyed it. They then sued the appellant, alleging these facts. It demurred to the petition. Its demurrer was overruled. It then filed an answer, which it subsequently withdrew, and, the case having been submitted to a jury, a verdict was rendered in favor of appellees for $12,000. The court entered judgment on the verdict, and appellant prosecutes this appeal without a bill of exceptions showing the evidence heard in the trial court. It insists that its demurrer to the petition should have been sustained on the ground that,' as there, was no privity of contract between it and the property owners, appellees have no right of action against it on the contract made by it with the city; and that, this contract being evidenced only by the ordinance of the city, and not signed by it, no action can be maintained against it under the statute of frauds. In Paducah Lumber Co. v. Paducah Water Supply Co., 89 Ky., 340, (11 R., 738), (14 R., 141), 12 S. W., 554, 13 S. W., 249, 7 L. R. A., 77, 25 Am. St. Rep., 536, this court, after very mature consideration, held that the property owner might maintain an action against the water company for the destruction of his property by reason of its failure to maintain a water supply pursuant to its contract with the city. This decision is rested by the court on the ground that such a contract is made by the city as the corporate representative of its citizens, and for thejr benefit; and that they may, therefore, maintain an action under the rule allowing one to maintain an action on a contract made with a third person for his benefit. This decision was followed in Duncan v. Water Co., (12 R., 35), 12 S. W., 557), and in Duncan’s — 781 — Ex’rs v. Water Co., (12 R., 824), 15 S. W., 523. The learned counsel for appellant earnestly insists that these cases should be overruled, as contrary to the weight of authority and unsound in principle. We are referred to a large number of cases in other States holding otherwise,- but upon a careful reconsideration of the subject we adhere to the rule heretofore laid down. This rule has since been followed in a well-considered opinion in Gorrell v. Supply Co., 124 N. C., 328 (32 S. E., 720, 46 L. R. A., 513, 70 Am. St. Rep., 598). The court, after referring to the numerical weight of authority against the rule announced by this court, said that authorities are to be weighed, not* counted, and that line should be adopted which is most consonant with justice and the reason of the thing. It then added: “Did the people of Greensboro have just cause to believe that by virtue of that contract they, as well as the corporation, were guaranteed a sufficient quantity of water to pro- ' tect their property from fire, and did the water company understand it was agreeing for' the valuable considerations named to furnish a sufficient quantity of water to protect private as well as public property from fire? The intent is to be drawn from the instrument itself, and on its face there can be no doubt it was contracted that the water supply should be sufficient to protect private as well as public property. If so, it follows that when, by a breach of that contract, private property is destroyed, the owner thereof, one of the beneficiaries contemplated by the contract, is the party in interest, and he and he alone can maintain an action for his loss.” It is universally held that the city is not liable to the property owner for the loss of his property. It is equally clear that the city can not ¡sue the water company and recover damages for the loss of private property. Tbe result is that, if the owner can not himself sue for the — 782 — loss of his property, he is without redress although his property has been destroyed by the breach of a contract made for his benefit by the city. We are not prepared to so hold. The cases above referred to were decided by this court in the year 1889, or two years before the contract now before us was made. The rule thus three times announced by this court was recognized as the law of the State at the time the contract before us was made, and we must presume that the parties to the contract contracted with reference to the law as it had then been declared by this court. To give a different effect now to the words which they, used from that which they at the time understood was the legal 'operation of the contract, would be to make for them a contract different from that which they themselves made; for when they used words which, under the law as it had then been declared, created a certain obligation, it must be presumed that they intended to create this obligation. The other objection to the petition may be more briefly disposed of. The franchise was granted to appellant by ordinance, and it signed no memorial of the contract. Since the contract was to run for twenty-five years, it is insisted that, as the contract was not to be performed in one year, it is within the statute of frauds, and appellant is not liable in this action. Appellant was granted a valuable franchise by the city. The grant was regularly made. The franchise was accepted by appellant, and has been enjoyed by it over ten years. During this time it has received from the city annually the prescribed compensation for supplying the hydrants with water. After accepting the grant, and while in possession of the franchise and enjoying the compensation attached to it, appellant can not be heard to say that it is not liable in damages for its negligent failure to furnish a supply of water. The city carried out its. part of — 783 — the contract by making the grant. Appellant, after accepting and enjoying the grant, and while in possession and still holding an to it, can not escape the burdens it imposed, at least as to past transactions. Roberts v. Tennell, 3 T. B. Mon., 247; Dant v. Head, 90 Ky., 255 (12 R., 153), (13 S. W., 1073, 29 Am. St. Rep., 369). It constructed its works, laid its mains in the streets, and exercised its powers under the ordinance. Whatever its rights as to the future may be, it holds the franchise, so long as it enjoys it, under the ordinance, and subject to the terms on which it was granted. Judgment affirmed. Whole court sitting.