This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
13Gulla v. Barton, 149 N. Y. S. 952, 164 App. Div. 293. "The union was formed for the benefit and protection of its members, and especially for the purpose of securing to them a reduction in the hours of toil and an increase in wages. The union is based upon the idea that the individual workmen cannot fully protect themselves against their employers, but that by united action they can be better protected in the respects mentioned. It is supported by dues and fees paid by its members, which dues the member pays for the benefit which he expects to realize from the organized action of himself and his coworkers. The agreement referred to was a valid contract, which may be enforced in any proper manner. The renewal of the agreement indicates that it was beneficial to the defendant's firm. The union entered into the contract for the benefit of the plaintiff and the other employees in the defendant's brewery, and for the benefit of all union workmen." Gulla v. Barton, 149 N. Y. 952, 164 App. Div. 293.
If a mortgagor of cattle, with consent of mortgagee, employs a person to take care of such cattle, this does not impose any liability upon mortgagee to pay for such care.15 Employment of an attorney by a woman to draw her will creates no liability from such attorney to her son, though by gross negligence the will is so drawn as to deprive her son of a provision intended for him.16 If A is employed by B to prepare an abstract of title, or to give a certificate of title, it is held by the weight of numerical authority that A is not liable to Cfor negligence in preparing such abstract, even if A knows that B means to use such abstract or certificate to induce C to buy or to make a loan.17 This result is justified on the theory that there is no privity of contract between the abstractor, A, and the prospective purchaser or mortgagee, C.18 At the same time the abstractor or the attorney who is exam-ining the title usually knows that B means to use the abstract or the certificate to induce C to purchase or to lend money upon the security of the realty, and he knows that Cis in fact to rely upon the accuracy of the abstract or of the certificate. For this reason some courts hold that A is liable to Cunder such circumstances;19 and among the jurisdictions which take this view, are some which hold that A, the abstractor, is not liable to C, if it is not shown that C is contemplated as the person who is to rely upon such abstract or certificate. If A is employed by B to deliver the abstract to C, A is held liable to C for defects or omissions in the abstract.20 In some jurisdictions the results of the majority rule have appeared to be so unsatisfactory that the rule has been modified by statute, which provides that one who is to be induced to act in reliance upon such abstract may recover against the abstractor.21
14Gulla v. Barton, 149 N. Y. S. 952, 164 App. Div. 293.
15 Boston, etc., Co. v. Dickson, 11 Okla. 680, 69 Pac. 889.
18 Buckley v. Gray, 110 Cal. 339, 52 Am. St. Rep. 88, 31 L. R. A. 862. 42 Pac. 900.
Arkansas. Tapley v. Wright, 61 Ark. 276, 54 Am. St. Rep. 206, 32 S. W. 1072.
Kansas. Mallory v. Ferguson, 50 Kan. 685, 22 L. R. A. 99, 32, Pac. 410.
Missouri. Zweigardt v. Birdseye. 57 Mo. App. 462.
Nebraska. Thomas v. Carson. 46 Neb. 765, 65 N. W. 899. (No liability seems to exist in favor of C except by the, terms of the statute on this subject.)
Ohio. Thomas v. Guarantee Title & Trust Co., 81 0. S. 432, 26 L. R. A. (N.S.) 1210, 91 N. E. 183.
Tennessee. Equitable Building & Loan Association v. Bank, 118 Tenn. 678, 12 L. R. A. (N.S.) 449, 102 S. W. 901.
Washington. Bremerton Development Co. v. Title Trust Co., 67 Wash. 268, 121 Pac. 69.
18 Savings Bank v. Ward, 100 V. S. 195, 25 L. ed. 621.
19 Western Loan &. Savings Co. v. Silver Bow Abstract Co., 31 Mont. 448, 107 Am. St. Rep. 435. 78 Pac. 774; Economy, etc., Association v. Title Co.,
If a water works company makes a contract with a city to supply a certain amount of water in a given time, to maintain a certain pressure, to keep the water at a certain height in the supply pipe and the like, and by reason of a breach of such covenant loss by fire occurs to the damage of a property owner, the weight of authority holds that he can not maintain an action against the water works company for a breach of such covenant.22 A water company, which is given a license to connect a pipe with. an automatic sprinkling system, under a contract which contains an express provision that the water company is free from all claims of damage by reason of failure to supply water, is not liable for an injury by fire which results from a refusal to turn water into such sprinkling system under the terms of such contract.23 So an insurance company which has been obliged to pay an insurance policy on such building, can not maintain an action therefor against the water works company.24 It is said that no liability can be enforced either on the theory of contract or on the theory of tort.25 This conclusion leads to the further result that no action for such loss can be maintained by anyone, since it is clear that the city as such has not suffered by the loss of the property burned. The unsatisfactory character of this result is conceded by courts which feel that they are committed to the rule.26 While the courts may not be bound to make law to fit hard cases, the fact that the case is hard ought to cause careful consideration and investigation for the purpose of determining the soundness of the principles which lead to such a result. There is, in fact, a vigorous, though limited, dissent from this rule, and it is held in some jurisdictions that the injured property owner may recover from the water works company.27 In some jurisdictions the liability of the water company is explained on the theory that while its duty arises in contract, its failure to perform its duty through its negligence is a tort for which the injured property owner may recover compensation.28 Accordingly, if a judgment has been rendered against a water company for negligence in failing to keep a sufficient quantity of water in its storage tank, by reason of which C's house is destroyed,29 such judgment has priority over a preexisting mortgage, under a statute which gives priority over pre-existing mortgages to judgments in tort.30 In other jurisdictions the right of the property owner to recover from the water company seems to be regarded as a contract right, on the theory that the contract is for his benefit.31 Even in jurisdictions in which it is held that the property owner can not maintain an action against a water company or other public utility for damages growing out of the failure of the public utility to continue the performance of the contract which it has undertaken to perform, an individual property owner or taxpayer may maintain an action to compel the public utility to charge only the rates agreed upon between the public corporation and the public utility.32