Court Opinion

ID: 6669504
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:08:27.707416+00
Date Added: 2024-06-11T16:00:27.394015
License: Public Domain

By the Court,
Belknap, J.:
The complaint in this case contains two counts, to each of which the defendant demurred generally. The demurrer was sustained by the district court, and the case comes before us upon an exception to this ruling." In one count it is alleged that the defendant entered into a contract with the town of Carson City, a municipal corporation, on behalf of and for the benefit of its inhabitants, to supply it with water for the extinguishment of fires. That for this purpose fire plugs were established at various places in the town, and, among other places, at a point within a convenient distance of plaintiff’s building. That a fire occurred in premises adjoining plaintiff’s, and by reason of the failure of defendant to keep the pipes connecting with the fire plugs charged with water under sufficient pressure, as" was its duty under the contract, the fire communicated to plaintiff’s building and destroyed it. That in consideration of the contract and of moneys paid thereunder by the town of Carson City to defendant, it became liable *47tinto plaintiff for the damages arising from the neglect above mentioned.
The question presented by this count is whether, upon a breach of contract between the municipality and the water company, the plaintiff, whose property was destroyed through the failure of defendant to perform its obligation, has a right of action for damages.
It will be observed that plaintiff is not a party to the contract. It is a general rule of law that a stranger to a contract can not claim its benefits in an action upon it. An exception to the rule exists in favor of persons for whose benefit a contract has been made, and it is urged in support of the declaration that as this contract was made for the benefit of plaintiff and the other taxpayers and residents of the town, the case falls within the exception.
But a third person, not a party to a contract and for whose benefit it may have been made, does not in all cases. have a right of action upon it. To entitle him thereto, there must be some privity between him and the promisee, and some obligation or duty owing from the latter to him, which would give him a legal or equitable claim to the benefit of the promisee or an equivalent from him personally. “A legal obligation or duty owing from the promisee to him” (the person for whose benefit the contract is made) “will so connect him with the transaction as to be a substitute for any privity with the promisor, or the consideration with the promisee, the obligation of the promisee furnishing an evidence of the interest of the latter to benefit him, and a privity by substitution with the promisor.” (Trooman v. Turner 69 N. Y. 284.)
Other exceptions doubtless exist, but the plaintiff’s case is within none of them.
The board of trustees of the town, in the. exercise of a discretionary power conferred upon them by the legislature, contracted for a supply of water for the extinguishment of fires. The plaintiff, in common with the other residents of the town, enjoyed the advantages of this contract. He had an indirect interest in the performance of the contract by the water company, as had all of the property-holders of *48the town, but such an interest is not sufficient to constitute the privity, either directly or by substitution, which must exist in order to give him a right of action upon the contract. (Davis v. Clinton Water Works, 54 Iowa, 59; Nickerson v. Bridgeport Hydraulic Co., 46 Conn. 24.)
The other count sets forth, in addition to the matter above stated, that prior to the destruction of the plaintiff’s premises he had been accustomed to pay, and but for defendant’s negligence aforesaid would have continued to have paid, a large amount of money annually for taxes to the town of Carson City. That by reason of the failure of defendant to perform its obligation, the town of Carson City was dam-nified in the sum of one thousand dollars by diminution of its taxable property.
An assignment and ownership in plaintiff of the demand and right of action of the town against the defendant is set forth. The question presented by this count is whether the municipality had such an interest in the property destroyed as to give it a right of action against the defendant. We have not been referred to any authority supporting this declaration, and we apprehend none can be found. The cases to which we have been referred in support of the theory that the town had such an interest in the property as would entitle it to recover upon this count are insurance cases, and are inapplicable to the question here presented. There is a wide difference between the interest that will entitle a party to recover in an action for a tort and an insurable interest.
“ An insurable interest,” said the supreme court of Iowa, in Warren v. The Davenport Fire Insurance Co., 31 Iowa, 468, “is sui'generis, and peculiar in its texture and operation. It sometimes exists where there is not any present property, or jus in re, or jus ad rem. Yet such a connection must be established between the subject-matter insured and the party in whose behalf the insurance has been effected as may be sufficient for the purpose of deducing the existence of a loss to him from the occurrence of the injury to it.”
In actions of the character of the present one the interests *49in the property destroyed, in order tó be the basis of an action, should be certain and substantial. The right of taxation vested in the authorities of the city by the legislature did not create an interest, but rather an expectation, which was subject to have been defeated by contingenciesthat may have arisen, and was altogether too remote to be the foundation of a right of action.
The order and judgment of the district court are affirmed.