(128 N.E.)

driving a well about 200 feet deep and also Tex. Civ. App. 463, 33 S. W. 145; Littrell v. upon the commonly accepted belief that Wilcox, 11 Mont. 77, 27 Pac. 394; Miller v. water obtained from a stratum of gravel will Layne & Bowler Co. (Tex. Civ. App.) 151 S. be potable. In drilling a well for a special W. 341. purpose, particularly when it is contemplated that it must be continued far below the surface of the ground, there is a material element of chance and uncertainty whether the result will be satisfactory for the purposely affect the risk on the part of the well digdesigned.

A contract to dig a well furnishes great opportunities for dispute between the parties. A guaranty of the kind and quality of the water to be obtained would so material

ger that it would necessarily materially inA person who contracts with another to crease the price to be charged per foot for do work is entitled to the prescribed com- digging the well. So material and important pensation therefor. If the compensation is a consideration should not have been left to wholly dependent upon the accomplishment inference. It is not fairly inferred from the of a particular result, the person for whom contract before us. The defendant apparentthe work is done should express such unusually relied upon the probability that water provision in terms so clear as not to be mis- found in a strata of gravel would be so understood.

cleansed and purified as to be potable. If [3] The contract in this case is simple in the defendant had not been satisfied with its terms and provides for drilling a well of the offer as it was written, she would have a specified diameter at a fixed price per foot included in her acceptance thereof a further and for furnishing all material and equip-condition that the water to be furnished from ment therefor and for continuing the same, the well must be fresh water. That the conuntil the pipe "has reached water-bearing gravel." The proposed contract or offer was accepted on behalf of the defendant, upon condition that the work be prosecuted without delay. Which of the parties assumed the risk of obtaining in such stratum of gravel the kind and quality of water desired by the defendant?

The word "well" implies water so that a contract to dig a well commonly places upon the well digger the duty of furnishing water; but, if water is found in substantial amount and no specification is contained in the contract as to the quantity, the landowner must pay the contract price whether the quantity is satisfactory or not. Omaha Consolidated Vinegar Co. v. Burns, 49 Neb. 229, 68 N. W. 492.

In Electric Lighting Co. v. Elder Brothers, 115 Ala. 138, 21 South. 983, where a contract for boring an artesian well was made which provided its dimensions and capacity and further provided that "the water flowing from said well is to be deep strata water, and no strainer will be placed to obtain a flow from intermediate or intervening strata, as water flowing from that source is likely to be of such quality as is not adapted to the use" for which the well is bored, it was held that the party for whom the well is bored as sumes the risk that the deep strata water will be of a suitable quality for his purpose. In American Well Works v. Rivers (C. C.) 36 Fed. 880, it was held that a written contract by which plaintiff agrees to sink an artesian well for defendant supplying a given quantity of water does not require that the water should be potable and fit for washing and for making steam, though plaintiff knew the defendant was a hotel keeper and desired water of that character for hotel purposes. See, also, Farnum on Waters & Water Rights, vol. 2, pp. 2748, 2749; Blum v. Brown, 11 123 N.E.-48

tract was considered with reference to protecting the defendant's rights is shown in the fact that it contained a proviso in regard to the same being performed without delay. The record includes a correspondence between the parties which commenced when it was found that water-bearing gravel was not reached at about 200 feet depth, and continued until after plaintiff's assignor claimed that he had reached water-bearing gravel, put in the screen, and asserted that he had completed his contract. Each of the parties claims that the correspondence is material to sustain his contention, but it is not of sufficient importance to justify including a statement thereof herein.

We think that the contractor was compelled to drill a well until the pipe reached waterbearing gravel, but that he did not warrant that the water to be obtained from the gravel when reached would be fresh, potable, and fit for domestic purposes.

We agree with the Appellate Division that the judgment of the Trial Term should be reversed, not, however, for the reason stated by it, but because the question as to whether the plaintiff reached water-bearing gravel is one of fact that could not be decided by the court except on motion of the defendant as well as of the plaintiff. A new trial of the action should be granted.

The judgment should be modified by striking from the judgment the provision dismissing the complaint, and inserting in lieu thereof a provision granting a new trial, and as thus modified affirmed, with costs to abide the event.

COLLIN, CUDDEBACK, HOGAN, McLAUGHLIN, CRANE, and ANDREWS, JJ., concur.

Judgment accordingly.

(226 N. Y. 335)

BROADWAY REALTY CO. v. LAWYERS'
TITLE INS. & TRUST CO. et al.

(Court of Appeals of New York. May 20, 1919.)

1. INSURANCE 146(3) — CONSTRUCTION OF CONTRACT-BURDEN OF PROOF.

Where a title insurance contract is drawn up by the insurer, in construing its terms, if any are doubtful or uncertain, the insurer must bear the burden.

2. INSURANCE 4261⁄2-TITLE INSURANCE DESCRIPTION OF PROPERTY INSURED.

A contract insuring the marketability of title, drawn by the insurer, describing the property by metes and bounds, "and also the building now being erected," the lands to be insured being that on which "such building now stands, as shown by the survey of F.," held to cover an encroachment of the building on a public street, notwithstanding the survey showed the building to be entirely within the lot lines. Collin, Cuddeback, and Andrews, JJ., dissenting.

building now stands as shown by the survey of Francis W. Ford, dated February 27, 1897, a duplicate of which survey is hereto annexed."

The survey shows Bowling Green Building as entirely within the lot lines, and shows no part of the premises as encroaching upon Broadway. Exceptions are sometimes explicitly made in such policies of any state of facts which an accurate survey would show, and of objection to title of such part of premises as lies within the limits of Broadway; but it seems somewhat significant that such objections are not excepted from the title insured in the policy under consideration.

When the policy was issued, the building therein described encroached beyond the line of the land described by metes and bounds into Broadway. was required to remove the encroachment at Subsequently the plaintiff

a cost of about $16,000. For this sum action the trial court. The Appellate Division held was brought and judgment was directed by that the policy covered only so much of the

Appeal from Supreme Court, Appellate building as stood upon the land specifically Division, First Department.

described, that the survey was a part of the contract, and that the policy covered only the

hypothetical building shown on the survey, and not the land on which the actual building stood, and dismissed the complaint. This disposition of the case we think was more favorable to defendant than the ordinary and proper rules for the construction of contracts permit.

Action by Broadway Realty Company against the Lawyers' Title Insurance & Trust Company and others. From a judgment of the Appellate Division (171 App. Div. 792, 157 N. Y. Supp. 1088), reversing a judgment of the Trial Term (91 Misc. Rep. 137, 154 N. Y. Supp. 1024), entered on a verdict directed by the court in favor of plaintiff, and dis[1, 2] The contract was drawn by defendmissing complaint, plaintiff appeals. Reversant. ed, and judgment of Trial Term affirmed.doubtful or uncertain, defendant must bear In construing its terms, if any are Arthur H. Masten, of New York City, for the burden. Moran v. Standard Oil Co., 211 appellant. N. Y. 187, 196, 105 N. E. 217. Is its meaning P. S. Dean, of New York City, for respond- so doubtful that plaintiff has the advantage of ents.

POUND, J. This appeal presents the question of the construction of a policy of insurance of the marketability of title of certain premises issued to the appellant by the respondent, which is dated December 16, 1896, but which seems to have been delivered at a later date, as it refers to a survey of February 27, 1897, a duplicate of which is annexed to the policy. The question is whether the premises, the title of which is insured, are the lands described in the policy by metes and bounds only, or, in addition, all the lands on which a building then being erected, known as "Bowling Green Offices," actually stood.

Under the heading "The Description of the Property, the Title to Which is Insured," comes a description of the property by metes and bounds. Then follows these words:

"And also the building now being erected on said premises known as the 'Bowling Green Offices'; the lands the title to which is hereby intended to be insured, being that on which said

a reasonably beneficial interpretation of its
language? Ought defendant in reason to
have understood that plaintiff would give the
policy the meaning which it now seeks to sus-
tain? It does not appear from what source
the survey came, and we must not assume
that plaintiff should not believe that it was
accurate, not only as to the lands, but as
to the location of the building.
It covers
the land upon which a known and designat-
ed building stands, and it places such build-
ing wholly inside the street line. The policy
says, even though in somewhat equivocal lan-
guage, that an accurate survey of the plain-
tiff's building is attached to and made part
of the policy, and shows no part of the build-
ing in the street. We cannot say that plain-
tiff did not and might not so read it. If
it may thus be read, it must thus be read.
It is no preposterous supposition that plain-
tiff's primary desire was to protect itself
by insurance against such encroachments,
and that the company made or adopted the
survey to that end. We cannot take notice
that he who runs could read the line of

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(123 N.E.)

Broadway on the ground, and that a survey-|` Action by the Haas Tobacco Company or could make no mistake about it. Nor can against the American Fidelity Company. we assume that the words "said building" From Judgment of the Appellate Division should be read as if the parties intended (178 App. Div. 267, 165 N. Y. Supp. 230), rethem to mean "part of said building." versing judgment of the Trial Term entered upon the verdict of a jury, and dismissing the complaint, plaintiff appeals. Judgment of the Appellate Division affirmed.

2. INSURANCE 535-INDEMNITY INSURANCE Complaint dismissed. -NOTICE TO INSURER.

Tobacco company insured against accidents caused by its automobiles, the policy containing the usual clause for immediate notice of any accident to the insurer, held not absolved from making report on an occasion when its automobile knocked down a boy who ran out from the curb and struck the machine; the company's manager having learned of the accident through the newspaper, and driver, but having made no investigation.

Singularly enough, there is no direct evidence as to what actually occurred on January 20th. We do know that injuries were received, serious enough to justify a large re covery in damages; but as to the actual event both sides seemed content to rest upon the subsequent account of the driver of the truck. Having seen in a newspaper a statement that a Haas automobile had hit a boy, the manager of the plaintiff, on the morning of the

Cuddeback, Cardozo, and Pound, JJ., dissent-21st, asked the driver with regard to it. He

replied that "It didn't amount to anything." He was driving into a garage, and the boy Appeal from Supreme Court, Appellate Di- ran out from the curb and struck the machine vision, Fourth Department. and he was knocked down. The manager

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

asked if the boy was hurt. The driver replied:

"Only slightly, for I brushed off his clothes and he went away. There was a policeman right there. It wasn't necessary to report any accident. I don't think it amounts to much."

Under these circumstances, the insured was not absolved from making the report required by its policy.

(226 N. Y. 427)

LORD ELECTRIC CO. v. BARBER AS-
PHALT PAVING CO.

(Court of Appeals of New York. May 27, 1919.)

1. INDEMNITY 9(1)-CONTRACTS-LIABILITY OF SUBCONTRACTOR TO PRINCIPAL-DAMAGES BY FIRE.

tract made the contractor responsible for all
parts damaged during erection, and provided
that ample precaution be taken against injury
by fire, the subcontractor was liable for injuries
from a fire negligently caused by it, to the con-
tractor, who had been compelled to pay for such
damages, not only to the property covered by
his contract, but also to other property.
2. ACTION
TORT.

27(1)—BREACH OF CONTRACT OB

Where a municipal bridge contractor agreed In the Melcher Case, the plaintiff heard with a subcontractor that, with respect to all that an outside workman employed in repair- the work to be done and materials to be furnished, the subcontractor accepted the conditions ing his building had been struck by an ele- and obligations of the general contract with refvator. He immediately investigated the mat-erence to the same work and such general conter. He saw the workman in question and was told by him while he was at work in the shaft the car had struck him and raised him about a foot. He said that he was not at all hurt, and as a matter of fact he continued at work for the rest of the day, leaving in the evening when the work was completed. The insured never heared anything more of the occurrence and had no reason to suppose that there would be any serious results until some 10 weeks later, when the information reached him that the workman's spine had been seriously injured. He thereupon immediately notified the insurance company. We held that a recovery was permissible. The circumstances in the present case require a different result. A boy struck the machine and was knocked down. True, the driver, who represented the plaintiff, believed he was only slightly hurt, for he walked away, and in his opinion the accident didn't amount to much. But no investigation was made. There was no assurance by the person struck that he was uninjured. There was no opportunity by later observations of determining that he was not in fact injured. The plaintiff relied wholly upon the driver's opinion, an opinion which as subsequent events showed was a mistaken

one.

The ruling in the Melcher Case is not to be extended. Under the peculiar circumstances

there disclosed, and in view of the full investigation made, it might fairly be said that a reasonable man was justified in believing the

occurrence so trivial that no report was required. But where, as here, a boy is knocked down in the street, and at least slightly injured, the insured may not, without any investigation whatever, rely solely upon his own opinion or upon the opinion of his driver that because he went away the injury was too trivial to require attention.

The judgment of the Appellate Division should be affirmed, with costs.

While negligence, considered merely as a tort, is a wrong independent of contract, it may also be a breach of contract, if the contract itself calls for care.

3. INDEMNITY 14-JUDGMENT AGAINST INDEMNITEE-RES JUDICATA-AMOUNT OF DAM

AGES.

A judgment holding a municipal bridge conclusive as to the amount of the verdict in an tractor liable for damages by fire was not conaction against his subcontractor to recover for the latter's negligence in causing the fire; the question of damages not having been tried on the merits in the first suit.

Appeal from Supreme Court, Appellate Division, First Department.

Action by the Lord Electric Company against the Barber Asphalt Paving Company. From, a judgment of the Appellate Division (179 App. Div. 926, 166 N. Y. Supp. 1102), af

firming a judgment of the Trial Term, setting aside the verdict in favor of plaintiff and dismissing the complaint, plaintiff appeals by permission. Reversed, and new trial granted. Frederick Hulse, of New York City, for appellant.

Abram J. Rose, of New York City, for respondent.

POUND, J. The city of New York constructed the Manhattan Bridge over the East River. After the structural construction work of masonry and steel had progressed sufficiently, it entered into a contract with plain

HISCOCK, C. J., and COLLIN and CRANE, tiff for surface construction work, including JJ., concur. CUDDEBACK, CARDOZO, and POUND, electrical equipment. The contract price was

JJ., dissent.

Judgment affirmed.

railings, stairways, pavements, track, and

about $400,000. Plaintiff in turn entered into an agreement with defendant to furnish al labor and materials for asphalting called for

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(123 N.E.)

by its contract. The price was about $11,000. In and by the latter agreement it was "expressly understood and agreed that with respect to all the work to be done and materials to be furnished hereunder [defendant] shall accept all the conditions and perform all the obligations imposed by said general contract upon the [plaintiff] with reference to the same work." Plainly, then, defendant undertook the work subject to all the conditions and obligations which would have been imposed upon plaintiff with reference there to had it done the work itself. So far as the responsibility for doing this particular work was concerned, it took plaintiff's place and stood in plaintiff's shoes.

The specifications, which were a part of the principal contract, provided that "all parts damaged during erection, as well as at any other time prior to the final acceptance of the work, shall be made good to the satisfaction of the engineer and at the cost of the contractor." They also provided that "during the entire erection of the work ample precaution shall be taken to protect it against injury by fire."

On March 25, 1910, during the progress of the work and before final acceptance, it is alleged that defendant caused a fire which damaged the bridge structure. Plaintiff was held liable under its contract to make the city good for damages to the construction work as a whole (Lord Electric Co. v. City of New York, 160 App. Div. 344, 145 N. Y. Supp. 205, affirmed 217 N. Y. 634, 112 N. E. 1063), and the cost of making good the parts damaged was de ducted from the amount due it, over its contention that it was bound only to replace the work which it had agreed to perform, to the extent that it was damaged.

This action is a sequel of the first action and is brought to recover on the subcontract from defendant the amount that plaintiff was thus compelled to pay. The complaint alleges the violation of the contract by the negligence of the defendant in taking precautions against fire. The question is solely as to the contract obligations of defendant to plaintiff, The trial court, having reserved decision of defendant's motion to dismiss the complaint, after verdict for plaintiff, held that plaintiff could not recover on its contract because that contract would be searched in vain for any agreement on the part of the defendant to protect the property of the city of New York and to restore and make good any and all property damaged by its act during the progress of its work. The verdict was set aside on the ground that it was contrary to law and the complaint dismissed, with costs. The trial justice said that the situation of the plaintiff was hard, and made one impatient with the processes of law, but he found no escape. The Appellate Division unanimously affirmed the judgment below, and the appeal is here by permission of this court. We think that the action can be maintained.

[1, 2] It may well be that the contract ob ligation to make good all parts of the bridge damaged during erection was binding upon the principal contractor only, but the plaintiff also agreed with the city to take ample precaution to protect the entire structure against injury by fire, and it follows as a corollary that the defendant, while doing its work, was bound by contract to take ample precautions to protect the entire structure against injury by fire caused by it. Such is the fair and reasonable construction of the contract, and the construction dictated by consistency and a due regard for the rights of litigants in order to give effect to the design of the parties and to comprehend the dangers which they undertook to guard against. Defendant brought its large iron kettles to heat tar and asphalt upon the structure. If the kettles were overheated or improperly covered when fires were started under them on windy days, the safety of the entire bridge structure was threatened. The liability of the plaintiff should not be extended to cover the entire work and the liability of the defendant limited to its own work, when defendant, as to the doing of such work, accepted all the conditions of the principal contract. Although the acts complained of were negligent, the action is on the contract, for the contract imposes upon the defendant while doing its work, the duty of taking ample precaution, as against the dangers it creates, to protect the bridge against injury by fire, and thus imposes the duty of making plaintiff good for any loss resulting from its breach. Negligence, considered merely as a tort, is a wrong independent of contract, but negligence may also be a breach of contract, if the contract itself calls for care.

On the trial the court ruled that the question of negligence was not in the case to be litigated, and it was not litigated. Plaintiff's counsel accepted the suggestion of the court that, because the action was on contract, it was necessary to prove only the cause of the fire. That was the only question submitted to the jury, but the question of ample precaution against fire was also in the case, and might have been submitted on the evidence, which tended to show the manner in which the fire occurred, that defendant's fire boxes were not properly protected, and that sparks which escaped therefrom caused the fire. No proper exception by the plaintiff raises the point that the failure to take reasonable precautions against fire was litigable. Counsel and court adopted as the law of the case the rule of the Appellate Division laid down on appeal from an interlocutory judgment on a demurrer. 165 App. Div. 399, 401, 150 N. Y. Supp. 1000, 1003. That court said:

"The judgment in that action (Lord Electric Co. v. City of New York, supra) is conclusive on defendant with respect to the amount the city was entitled to deduct and with respect to its right to make the deduction from the con