Summary of H. R. Moch Co. v. Rensselaer Water Co.
Ct of App. N. Y. 1928
Relevant Facts: Df a waterworks company made a contract with the city of Rensselaer to supply water throughout the utility system, especially fire hydrants. The cost for each hydrant was $42.50 per year. A building caught fire, and df, being notified, failed to provide, supply or furnish sufficient water to suppress the fire. Df was equipped to provide the water sufficient to prevent the destruction of the building and the spread of the fire.
Legal Issue(s): Whether the df is liable to the pl under a contract with another party not at issue?
Court’s Holding: No
Procedure: DF Motion to dismiss(failure to state a claim) was denied at Special Term, App. Div. reversed and granted. Ct of App. Affirmed.
Law or Rule(s): A member of the public may not maintain a 3rd party action against one contracting with the city UNLESS an intention appears that the promisor is to be answerable to the individual members of the public as well as the city for any loss.
Court Rationale: There is no intention of the party where a 3rd party can maintain an action against the Df. The contract is divided into two parts: One, a promise to the city for the benefit of the city; and the other a promise to the city for the benefit of private takers. In a broad sense every city contract is for the benefit of the public. More than this must be shown to give a right of action to a member of the public not formally a party to the contract. The benefit must be one that is not merely incidental or secondary. It must be primary and immediate in such a sense and to such a degree as to bespeak the assumption of a duty to make reparation directly to the individual members of the public if the benefit is lost.
The law does not spread its protection so far. [Robins Dry Dock]
Plaintiff’s Argument: Df after entering into a contract with the city, breach that contract. Pl was a beneficiary of the terms of the contract as a member of the public.
Defendant’s Argument: Df had not entered into an agreement with the pl, and therefor had no legal duty to uphold.