
    Continental Asphalt Paving Company, Plaintiff, v. Hudson and Manhattan Railroad Company, Defendant.
    First Department,
    March 10, 1911.
    Trial — motion to dismiss at opening — contract—agreement to save city and property owners harmless from injuries caused by construction of railroad — when promise inures to benefit of contractor working for city.
    Where defendant moves to dismiss upon the complaint and opening of the plaintiff’s counsel it is the same as a demurrer upon the ground that there is a failure to state facts constituting a cause of action, and all the facts alleged by the plaintiff are deemed to have been admitted.
    Where, as a condition for the grant of a franchise for an underground railroad, the railroad company agreed that in constructing its road it would maintain and care for all underground structures at its own expense, maintain all water mains, etc., make good to the city and to abutting owners all damages to property caused by the construction or operation of the road, the promise inures to the benefit of one who installed water mains under contract with the city, and the railroad is liable where the mains were injured by its sub-contractor before they were formally turned over to and accepted by the city.
    Motion by the plaintiff, the Continental Asphalt Paving Company, for a new trial upon a case containing exceptions, ordered to be heard at the Appellate Division in the first instance upon the dismissal of the complaint by direction of the court upon the pleadings on a trial at the New York Trial Term on the 7th day of November, 1910.
    
      William K. Hartpence, for the motion.
    
      J. Arthur Corbin, opposed.
   McLaughlin, J.:

The plaintiff, in pursuance of a contract with the city of New York, furnished and laid a twelve-inch high pressure fire service main in Eighteenth street, between Sixth and Seventh avenues. Before the same had been formally turned over to and accepted by the city it was damaged by a sub-contractor of the defendant, and this action was brought to recover therefor. At the trial before any evidence had been taken, upon the complaint and opening, defendant moved for judgment dismissing the complaint. The motion was granted, and an exception taken, which was ordered to be - heard in the first instance at the Appellate Division. The motion to dismiss was in effect a demurrer to the complaint upon the ground that it did not state facts sufficient to constitute a cause of action, and file ruling, to which an exception was taken, cannot be sustained unless it appears that, admitting all the facts alleged, a cause of action is not set forth: (Abbott v. Easton, 195 N. Y. 372; Doty v. Norton, 133 App. Div. 106.)

The complaint, after setting forth the corporate character of the plaintiff, alleges that the New York and Jersey Eailroad Company, a corporation organized under the laws of the State of New York, on the 7th of March, 1905, obtained from the city of New York a franchise for the construction of an underground railroad under Sixth avenue; that this franchise was thereafter acquired by the defendant in this action, which assumed both by operation of law and by the express provision of articles of consolidation all of the duties and obligations of the Hew York and Jersey Eailroad Company ; that by this franchise the railroad company agreed that in the course of construction of such underground railroad it would maintain the care of all underground structures at its own expense, and would, at all times, by suitable bridging or other supports, maintain in an entirely safe condition all water and gas mains encountered during the progress of the work, and whenever it became necessary to reconstruct any sub-surface structure it would be done by it or at its expense; that it would make good to the city all damages which should be done to its property by the construction or operation of the railroad, and would make good to every owner of property abutting upon the railroad, or which should be injured by the work of construction or operation thereof, all physical damages which should be done to such abutting or injured property through any act or omission of the company, or its successor, or any contractor, sub-contractor or other person in the course of any employment upon the construction or operation of the railroad or any part thereof ; then follow allegations as to the making of the contract between plaintiff and the city; performance of the work under it; the making of a contract between the Hew York and Jersey Eailroad Company and the Degnon Contracting Company for building the underground railroad; that in the course of construction of such road it became necessary to reconstruct a sewer through Eighteenth street; the making of a sub-contract between the Degnon Contracting Company and one Pilkington to reconstruct such sewer; the failure of the sub-contractor to support and maintain in an entirely safe condition the twelve-inch high pressure main laid by the plaintiff in Eighteenth street, and the consequent injury thereto through the negligence of the said contractor and sub-contractor ; the damages sustained by reason thereof, and the demand and refusal of payment for the damages caused thereby.

I am of the opinion that the complaint states a cause of action, and that the motion to dismiss was erroneously granted. One of the provisions in the franchise was that the Hew York and Jersey Eailroad Company would “ make good to the City all damages which shall be done to the property of the City by the construction or operation of the railroad, and shall make good to every owner of property abutting upon the railroad, or which shall be injured by the work of construction, or by operation thereof, all physical damage which shall be done to such abutting or injured property through any act or omission of the tunnel company [Hew York and Jersey Eailroad Company], or successor thereof, or of any contractor, sub-contractor or other person in the course of any employment upon the construction or operation of the railroad or any part thereof.” This provision in the franchise was made for and inured to the benefit of the plaintiff.

A somewhat similar franchise was considered by this court in Haefelin v. McDonald (96 App. Div. 213). That franchise, however, had in it only a covenant to save harmless the city itself, and it was for that reason that the court reached the conclusion it was not the intention of the parties to impose upon the contractor a liability to the owners of abutting property. This, Mr. Justice Ingeaham took occasion to point out, saying: “ There is no indication in any part of the contract that it was the intention of the parties to impose upon the contractor a liability to the owners of the abutting property for negligence of sub-contractors or others over whom he had no control; and if such had been the intention, a clause expressly imposing such a liability would have been inserted.” This franchise, however, has such clause, and it is fairly to be assumed that it was inserted by reason of the decision of the Haefelin case. That case was decided by this court in July, 1904. The franchise under consideration was granted March 7, 1905, and by it the Hew York and Jersey Eailroad Company (whose obligations the defendant assumed) specifically agreed to make good to every owner of property abutting upon the railroad or which should be injured by the work of construction or operation, all damage which should be done to such property through any act or Omission on its part, or its successor, or any contractor or subcontractor. The complaint expressly charges that in the course of construction of the underground railroad it became necessary to change and reconstruct the sewer through Eighteenth street; that this work was done by a sub-contractor who performed it in such a way as to cause plaintiff damage. The facts alleged, it seems to me, meet the objections pointed out in Haefelin v. McDonald (supra) and bring the ease within the rule that where one party makes a promise for a valuable consideration for the benefit of a third person, that third person may maintain an action upon the promise. (Rochester Telephone Co. v. Ross, 195 N. Y. 429; Pond v. New Rochelle Water Co., 183 id. 330; Buchanan v. Tilden, 158 id. 109; Thorp v. Keokuk Coal Co., 48 id. 253.)

In the Thorp, case the court said : “ In such a case it is not needful that there should be any consideration passing from the third person. It is sufficient if the promise be made by the promisor upon a sufficient consideration passing between him and his immediate promisee, and when the third person adopts the act of the promisee in obtaining the promise for his benefit, he is brought into privity with the promisor, and he may enforce the promise, as if it were made directly to Mm.”

In the present ease-the agreement or covenant of the Jersey company to maintain all water pipes encountered during the progress of the work and to make good to every owner of property injured in the construction or operation of the railroad, was made with the city upon a new or present consideration, which was the granting to such company of a franchise. The plaintiff, when it entered into its contract with the city to lay the high pressure main, had a right to rely upon the covenant or agreement of the Jersey company, to the effect that it would maintain and support the plaintiff’s water mains wherever and whenever encountered during the course of construction of the underground railroad or any part thereof, and if it caused damage either in the construction or operation to abutting owners, it would make good the same. The defendant, as it seems to me, is not only liable by express provisions of the franchise which inured to the plaintiff’s benefit, but also under the principle laid down in Little v. Banks (85 N. Y. 258). In that case the defendant, a law book publisher, entered into a contract with the State of New York, by which he was to publish and sell the reports of the New York Court of Appeals. The contract provided that he should at all times keep the volumes published for sale at retail," at a price named, in one or more law book stores in the city of Albany and the city of New York, and it provided that “ should any other law book seller, in either of said cities, apply to purchase any of said volumes, the same shall be supplied to such law boob seller upon application,” and that for a failure on the part of the defendant to keep on sale, furnish and deliver the aforesaid volumes, or any of them, at the price and as hereinbefore provided” the defendant “ shall forfeit and pay * * * the sum of §100, hereby fixed and agreed upon, not as a penalty but as the liquidated damages suffered by the person or persons aggrieved thereby, the same to be sued for and recovered by the person or persons so aggrieved.” It there appeared that a person applied on different occasions for copies of some of the volumes published, which the defendant refused to furnish, and thereupon an action was brought to recover the penalty. Judge Milleb, who delivered the opinion of the court, said: “ The effect of the contract was that in consideration of doing the work the defendant would sell and deliver» the books as provided, to the persons who were entitled thereto, and if he failed to do so, as required, when demanded he would pay to the person injured the damages.” The ground of the liability of the defendant in that case was said to be that “ Contractors with the State, who assume, for a consideration received from the sovereign power, by covenant, express or implied, to do certain things, are liable in case of neglect to perform such covenant to a private action at the suit of the party injured by such neglect, and such contract inures to the benefit of the individual who is interested in its performance.”

The case of Glens falls Gas Light Co. v. Van Vranken (11 App. Div. 420) is very much like the case now under consideration and in principle cannot be distinguished from it. In that case the plaintiff maintained a system of gas pipes to supply gas in the village of Grlená Falls and the village authorities made a written contract with the defendants by which they agreed to construct in the village certain sewers in streets through which the plaintiff’s gas pipes were placed. In the course of construction of these sewers the plaintiff’s gas pipes were broken and injured and thereby plaintiff sustained damage. The contract contained a provision that the contractors were to make all provisions necessary to maintain and protect the gas pipes and to repair all damage done to sub-structures and to be responsible for all damage that might be done to persons or property in the blasting of rock, and if injury were caused the cost of repairs was to be paid by the contractors. It was held that the plaintiff could maintain the action upon the contract under the rule which permitted a person not a party to a contract to sue upon it where the promisee would be under a liability to him were it not performed. (See, also, New York Steam Co. v. Foundation Co., 195 N. Y. 52 ; Cook v. Dean, 11 App. Div. 123 ; affd., 160 N. Y. 660.)

It follows that the exception is sustained and a new trial ordered, with costs to plaintiff to abide event.

Ingraham, P. J., Laughlin, Soott and Miller, JJ., concurred.

Exceptions sustained, new trial ordered, costs to plaintiff to abide event.  