Court Opinion

ID: 9771505
Source: CourtListenerOpinion
Date Created: 2023-08-29 16:45:37.922001+00
Date Added: 2024-06-11T07:31:32.138470
License: Public Domain

*730ROBINSON, Justice
(concurring).
I agree that neither the Booker Hospital District and the subclass of its resident taxpayers nor the residents of the Booker Hospital District are third party beneficiaries of the written scholarship agreement executed in June, 1966, between the Bulah Peery Memorial Scholarship Fund, Inc. and Neal K. Suthers, and that the portion of the trial court judgment which awarded the plaintiff hospital district and its resident taxpayers the sum of $110,000 for loss of market value of its clinic and awarded the plaintiff residents of the hospital district the sum of $1,000 for loss of the value of Dr. Suthers’ medical services should be reversed and judgment here rendered denying recovery to those plaintiffs.
The only parties to the contract in question were the Bulah Peery Memorial Scholarship Fund, Inc. and Neal K. Suthers. This written contract provided that the scholarship fund would furnish Suthers with a monthly scholarship of $200 per month while he was in medical school for a period not to exceed four years. Suthers’ obligations in return were spelled out in plain and unambiguous language.
In the event reasonably adequate medical and clinical facilities including equipment, but not necessarily to include a hospital, were not furnished in Booker, Suthers’ obligation was expressly limited to repayment of the funds advanced. However, if the facilities were constructed, Suthers undertook the following express obligations under three different groups of contingencies:
(1) If Suthers failed to complete medical school or failed to get a license to practice medicine or failed to move to Booker and practice medicine for as long as five years, Suthers was to repay the scholarship fund the sums advanced with 7% interest plus 50% of the funds advanced as penalty.
(2) If Suthers practiced medicine in Booker for more than five years, but less than ten years, he was to repay the sums advanced with 7% interest but without penalty.
(3)If Suthers practiced medicine in Booker for ten years, he was not obligated to repay the sums advanced.
There is no language in the contract to indicate that Suthers undertook any obligation other than to the plaintiff Scholarship Fund. The language limiting Suthers’ liability in the event a hospital district should not be created and medical facilities should not be constructed cannot reasonably be construed to extend his liability to a guarantee of the markét value of whatever facility (perhaps to include a hospital) a hospital district, if formed, might decide to construct. There is nothing in the record to show either that Suthers would have signed a contract so obligating him to the plaintiff Hospital District or that such an obligation was contemplated by any of the parties to the contract at the time the contract was executed.
Moreover, even if the hospital district itself were a party to the contract, the residents of the district would not be third party beneficiaries of the contract. Nothing in the contract suggests a duty on the part of Suthers to make reparation to individual residents of the Booker Hospital District for damages incurred by the loss of his medical services should he fail to practice there. The situation presented is analogous to that in House v. Houston Water Works Co., 88 Tex. 233, 31 S.W. 179 (1895), wherein the Supreme Court held that the citizens of the community could not recover for loss of property caused by the defendant company’s failure to satisfy its contract to maintain water pressure at fire hydrants.
See also Moch Co. v. Rensselaer Water Co., 247 N.Y. 160, 159 N.E. 896 (1928), holding that a property owner cannot hold one who has contracted to supply a municipality with water for fire protection liable for destruction of his property by fire because of breach of such agreement unless the intention that the contractor be liable to the individual members of the public appears in the contract. The opinion by Justice Cardozo contains the following language:
“. . . The field of obligation would be expanded beyond reasonable limits if *731less than this were to be demanded as a condition of liability. A promisor 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 & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290.”
The opinion also states:
“. . .A promisor will not be deemed to have had in mind the assumption of a risk so overwhelming for any trivial reward.”
Prom a reading of the record of the testimony in the trial court, it appears that the problem before us developed not out of Suthers’ contract with the Scholarship Fund in June of 1966, but out of happenings six years later in 1972 and 1973. At that time one election to create a hospital district in Booker had already failed. The record shows that, after assurance by Suth-ers that he did intend to come to Booker to practice medicine, a second election was held creating the Booker Hospital District and was followed by an election approving a bond issue. It also shows that the clinic in question was constructed to meet Suth-ers’ insistence on a “first class facility.” No written contract for use of the facility was ever executed between the Booker Hospital District and Suthers and there was no agreement to execute one. The rent to be paid by Suthers for use of the facility was never agreed upon and, so far as the record shows, was not discussed, although the representatives of the hospital district, but apparently not Suthers, contemplated a rental charge after an undetermined period.
Suthers did in fact move to Booker, buy a home there, and practice medicine in Booker for a period of five weeks after the clinic was completed in March, 1974. There is ample evidence that Suthers’ representation that he was going to return to Booker and his insistence on a first class medical facility were made in good faith and the jury refused to find to the contrary. Whatever moral obligation Dr. Suthers may have incurred to the people of Booker as a result of negotiations .in 1972 and 1973, plaintiffs have not shown that such obligation or his statements then created a right of recovery enforceable by the courts of this State.
Recovery under the terms of the contract of 1966 upon Suthers’ failure to practice medicine in Booker for at least five years is limited to the funds advanced plus 7% interest plus 50% penalty. Plaintiff Scholarship Fund does not seek to recover the penalty of 50% of the funds advanced. Therefore, the validity of the penalty provision is not before us.
We do not reach appellant’s points of error challenging the propriety of the measure of damages which formed the basis of the recovery in the trial court by the Hospital District and the residents of Booker.
I concur in the opinion that the judgment of the trial court insofar as it awards the Bulah Peery Memorial Scholarship Fund, Inc. a recovery of the amounts advanced plus 7% interest should be affirmed and that the judgment for Booker Hospital District and the subclass of resident taxpayers and for the residents of the Booker Hospital District should be reversed and judgment here rendered that those plaintiffs take nothing.