This appeal from a judgment in the Superior Court, Law Division, Monmouth County, has been certified to us on our own motion.
For affirmance -- Justices Case, Oliphant, Wachenfeld and Burling. For reversal -- Chief Justice Vanderbilt, and Justice Heher. The opinion of the court was delivered by Case, J. Vanderbilt, C.J. (dissenting). Heher, J. (dissenting).
Plaintiff suffered a fire loss said to have been due to lack of water and pressure at fire hydrants served by the defendant water company. He instituted action by a complaint which defendant attacked upon the ground that it did not state a claim upon which relief could be granted. On motion the court rendered judgment for the defendant. This appeal brings up that judgment.
The complaint alleges that plaintiff owned and operated a recreation center in the Township of Ocean, Monmouth County. Near the said premises were two fire hydrants, located respectively at distances of 100 feet and 200 feet. On July 11, 1949, a fire broke out on the premises and the
township volunteer fire department responded with its equipment. The water volume and pressure were insufficient, even with the "boost" from the fire apparatus to combat the fire. As a result the building and contents were completely destroyed. The defendant company was a public utility engaged in the supply and distribution of water. It exercised exclusive control over the fire hydrants and the exclusive function of furnishing water thereat for the inhabitants and property owners of the township and for the fire department, and it had knowledge of the existence of plaintiff's building and of the business conducted there. Such is the substance of the allegations.
The complaint contained three counts, all sounding in tort. The first count charged that the water company, by reason of the matters briefly reviewed above, represented that water would be supplied at the hydrants in reasonable volume and pressure for the extinguishment of fires in business structures such as plaintiff's, and thereby induced reliance thereon by plaintiff and others and also thereby, to defendant's knowledge, induced the township to make no other provision for a supply of water; that defendant thereby assumed and owed to plaintiff a correlative duty of reasonable care to prevent the type of harm suffered by plaintiff; that defendant breached its duty in that prior to and at the time of the fire, and especially after knowing of the outbreak of the fire, defendant failed to supply a sufficient volume of water or pressure at the hydrants for the ordinary purposes of those hydrants, this notwithstanding the company had notice by reason of a fire a few weeks earlier that the volume and pressure of water at hydrants in the vicinity were insufficient and that plaintiff's property loss was a proximate result of the company's negligence. It is not to be understood that the complaint charged the company with making an actual representation in manner above set forth; it merely alleged the pleader's conclusion that the congeries of facts which we have related amounted to a representation. The count was intended to ground in nonfeasance.
The second count was pleaded as a misfeasance. It amplified the charge of negligence by alleging that the company, although it knew of the existence of a volunteer fire department and of the reliance of the department in case of fire upon an adequate supply of water, had, several hours before plaintiff's fire, so controlled the water-supply mechanism that there was not a sufficient volume of water or pressure, and that although informed of the fire at the outbreak permitted two hours to pass before providing proper quantity and pressure, and that in consequence of plaintiff's reliance upon defendant's due performance of its duty and of defendant's disregard thereof the property losses were incurred. At the argument it was conceded that the reduction of quantity and pressure was a regular daily practice following the peak load of the day and had no purposeful connection with the conflagration.
The third count repeated the allegations of the other counts and laid its damage in business losses suffered by reason of the same alleged faults.
Before there can be either nonfeasance or misfeasance there must be a duty. Had there been a contract between the company and the owner whereby the company undertook to furnish water to the owner with a pressure sufficient for fire purposes, followed by a breach, liability would have been according to the terms of the contract. 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). There was no contract, therefore no duty imposed by contract. There is no applicable statute and therefore no statutory duty. Plaintiff argues for a common law duty, but the Court of Errors and Appeals held in Baum v. Somerville Water Company, 84 N.J.L. 611 (1913), upon facts that bear a striking resemblance to the facts of the present case, that the common law does not impose a duty upon a company serving a municipality with water to provide a sufficient supply of water at sufficient pressure at fire hydrants to extinguish a fire which is
destroying an individual's property. Very plainly it holds that in the absence of contract no liability exists. Appellant seeks to assail the force of that decision by arguing that in the instant case distinguishing circumstances were present, as that some hours before the fire the company had reduced quantity and pressure, and that the defendant "interfered" with the volunteer fire department in that it prevented the firemen from rendering their ordinary assistance in putting out the fire. We have stated the reason for lowering water supply and pressure. No wantonness or malicious intent is charged. The act was in usual course. "Interference," if that word is properly descriptive, was, specifically, present in the Baum case. The argument is unconvincing.
Another pertinent decision, tried at the circuit and not brought up, but never questioned, is Atlas Finishing Co. v. Hackensack Water Co., 10 N.J. Misc. 1197 (Sup. Ct. Circ. 1932), which held that while a water company may expressly contract to furnish water to a consumer in sufficient quantity and at sufficient pressure to extinguish fires, nevertheless, such an obligation is not implied from the relationship of water supply company and customer and can exist only where, in addition to the ordinary duty of supplying water for general use, the company by express contract assumes the additional obligation of furnishing it in sufficient quantity to protect specific property from fire; further, that the primary business of a water company is to furnish water as a commodity and not to extinguish fires, and that no common law duty arose even though the company had connected its water system with pipe lines, including fire hydrants, on the private property of the owner who thereafter met with a fire loss because of insufficient supply and low pressure. Even where a water company makes a contract with a municipality to deliver a supply of water to the city for fire hydrants at a specified pressure the company is not liable to an inhabitant of the city on that contract for a loss which he sustains through the company's failure to perform. Hall v. Passaic Water Co., 83 N.J.L. 771 (E. & A. 1912).
The law in this State as heretofore pronounced is entirely clear. Appellant, although arguing to the contrary, apparently anticipates that such may be the holding and thereupon asks that the old law be discarded and a modern principle adopted -- a prayer which could more properly be addressed to the Legislature. The Baum case was decided nearly 40 years ago and has never been attacked or weakened. Water companies sell a commodity and their rates have been established and approved by the Board of Public Utility Commissioners upon that basis, not upon the assumption that, without an undertaking to that end, they are responsible for fire losses. A way of business has grown up on that understanding. There are many companies whose function is to insure against fire, and the property owner may protect himself fully against fire loss by contract with those companies. In the making of such a contract the premium varies with the risk and with the character of the property insured, and the insurer may limit its liability. Water rates are uniform; they do not rise or fall with the inherent danger. If the principle for which appellant contends were the law there would be no predetermined limit of liability. There are large water companies and small water companies; companies with ample supply of water and companies with limited and inadequate supply and perhaps with inability to increase the water resources; companies of such size that a considerable verdict against them for a fire loss would bankrupt them or leave them insufficiently financed to meet the general needs of their communities. Important as is a sufficient flow of water, under adequate pressure, for fire purposes, that is not the only use nor, indeed, the most imperative use, for which a municipality needs water.
If such a broad liability as that sought by the plaintiff were established, the ensuing litigation would doubtless be great. Fire insurance companies, entitled to subrogation to their insureds' claims, could, if they would, sue, whether successfully or not, upon settling a fire loss with their insureds in accordance with their contract liability. No one can foretell
the degree of confusion which would follow so revolutionary a decision; a decision which would work backward as well as forward; it would unsettle the past as well as be effective in the future.
We conclude that if our law is to be overturned, the result should be effected by the Legislature, vested with the law-making power. Statutory changes are accompanied by publicity and an opportunity for all interested persons to be heard; incidents which are quite impossible in a suit between parties.
The majority rule in this country appears to be consistent with our New Jersey holdings. Cf. H.R. Moch Co., Inc., v. Rensselaer Water Co., 247 N.Y. 160, 159 N.E. 896 (Ct. App. 1928); Nickerson v. Bridgeport Hydraulic Co., 46 Conn. 24 (Sup. Ct. Err. 1878); Hone v. Presque Isle Water Co., 104 Me. 217, 71 A. 769 (Sup. Judic. Ct. 1908); Beck v. Kittanning Water Co., 8 Penn. Cas. (Sadler) 237, 11 A. 300 (Sup. Ct. 1887); Blunk v. Dennison Water Supply Co., 73 N.E. 210 (Sup. Ct. Ohio 1905); Trustees, De Pauw Church v. New Albany Waterworks, 140 N.E. 540 (Sup. Ct. Ind. 1923); Eaton v. Fairbury Waterworks Co., 21 L.R.A. 653 (Neb. Sup. Ct. 1893).
The judgment below will be affirmed.
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.
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 ...