Majority — Brewer J.
Syllabus
CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE FOURTH CIRCUIT.after making the foregoing statement, delivered the opinion of the court.
It is contended that neither the plaintiff in the pending suit nor the bondholders whom it represents were parties or privies to the actions in the state court; that therefore the judgments of the latter court were not conclusive in the foreclosure proceeding as to the nature of the causes of action; that whether they were for torts or breaches of contract is for the determination of the Federal court, and further, that when the property passed from, the old to the new water company it passed subject to the fifty-thousand dollar mortgage, and that under this statute, if applicable at all, only the interest in the property acquired by the second water company was responsible for the damages caused by its negligence. On the other hand, it is contended that the statute deals with judgments — not claims for damages caused by negligence; that the decision of the state court as to the nature of the cause of action is as much a part of the judgment as the determination of the amount to be recovered; that a judgment which in terms is for damages caused by negligence, if entered by a court having’jurisdiction, is made by the statute superior to any mortgage; that by the mortgage the mortgagee and the bondholders it represents agree to accept such judgment'as conclusive and to'subordinate their mortgage to its hen; that to hold that the transfer of property incumbered by a mortgage from one company to another puts that mortgage outside the statute ’practically destroys its beneficial intent; that such .has been the holding of the Supreme Court, of the State, and is a holding which the Federal courts will follow.
“The plaintiff alleges that the defendant company was culpably negligent and willfully careless of its duty and obligations, both to the city of Greensboro and its inhabitants,under the said contract, and by virtue also of the duties, obligations and responsibilities which it assumed when it undertook to supply water to the city' of Greensboro and its inhabitants for a stipulated price, which was paid to it by .the said city.” '
It then set. forth as matters of negligence on tlie part of the water company the “ carelessly, willfully and negligently failing to keep a sufficient quantity of water in its storage water tank in the said city of Greensboro, necessary.for the purpose, of extinguishing fire, together with the other uses to which it was applied;” also á.failure “to keep its pumping engine
The answer consisted mainly of denials in separate paragraphs of the averments in corresponding paragraphs of the complaint, specifically denying the validity of the contracts between the city and the original water company. Questions were submitted to the jury and answers returned, establishing the making of the contracts, the attempt on the part of the company to perform its stipulations, its failure to do so successfully, and also that the plaintiff was injured by the negligence of the defendant.
Upon this record the Supreme Court of North Carolina ruled that the action was one in tort, saying:
“We think the plaintiff was entitled to judgment as prayed for. There was an express and legal obligation upon the part of the defendant to provide and furnish ample protection against fires, and a breach of that obligation aiid a consequential damage to the plaintiff. Although action may have been maintained upon a promise implied by law, yet an action founded in tort was the more proper form of action, and the plaintiff so declared. He stated the facts out of which the legal obligation arose, fully, and also the obligation itself, and the breach of it and the damage resulting from that breach. Chitty on Pleading, vol. 1, page 155; Thompson on Corpora
tions, vol. 5, sec. 6340.” Fisher v. Greensboro Water Supply Company, 128 N. Car. 375, 379.
From the conclusion thus reached we are not inclined to dissent and for these reasons. One may acquire by contract an opportumty for acts and conduct in which parties other than those with whom he contracts are interested and for negligence in which he is liable in damages to such other parties. A company is chartered to construct and operate a railroad. Proceeding thereunder it constructs and operates its road. Nothing may be said in the charter in reference to the manner in which the road shall.be operated or the particular acts which it must do. Yet without any such specification it is under an implied obligation to exercise reasonable care in both construction and operation. If from undue speed, failure to give proper warnings, or other like acts or omissions, individuals are injured, they may recover for such injuries, and their actions to recover sound in tort. Doubtless in the same transaction there may be negligence and breach of contract. If a railroad company contracts to carry a passenger there is an implied obligation that he will be carried with reasonable care for his safety. A failure to exercise such care, resulting in injury to the passenger, givés rise to an action ex contracty, for breach of the contract, or as well to an action for the damages on account of the negligence — an action sounding in tort. But where there is no contract, and the injuries result from a failure of the corporation to exercise reasonable cáre in the discharge of the duties of its public calling, actions to recover therefor are strictly and solely ^actions ex delicto. Pollock, in his treatise, groups torts into three classes, in the last of which he spécifies “breach of absolute duties specially attached to the occupation of fixed property, to -the ownership and custody of dangerous things, and to the exercise of certain public callings.” Webb’s Pollock on Torts, 7. This, it is said, implies the existence of some absolute duty not arising from personal contract with the other party to the, action.
■ With reference to the contention that only the interest in the property acquired by the second water company was' responsible for the damages caused by its negligence — a- contention which, if sustained, would result in giving priority to the fifty-thousand dollar mortgage — the argument is that by the statute “inortgages of incorporate companies . . . shall not have power to exempt the property or earnings of such incorporations ... for torts committed by such incorporation;” that the torts were committed by the second water company; that its purchase was of the property of the first company, subject to the fifty-thousand dollar mortgage, and therefore over that property thus encumbered, and that only, were the judgments given priority. There is, doubtless, force, in this contention. But this is not a penal statute, to be construed strictly, but remedial in its nature, and to be ' construed liberally, to carry into effect the intention of the legislature and provide the adequate remedy which it in
It is. more reasonable to hold that the statute 'imposes upon the investment made by a corporate company in its plant a responsibility for torts committed by it or any subsequent corporate owner,- and that that responsibility cannot be avoided by any mortgage or other incumbrance voluntarily placed' upon the property; Security to the individual citizen is to go hand in hand with the franchise and privilege granted ■ by the State. We see no other question requiring notice, and the decree of the Circuit Court is
Affirmed.
Mr. Justice White, Mr. Justice Peckham and Mr. Justice- McKenna dissented.
Cases cited
- Brooks v. Railway Co. 101 U. S. 443 p. 60
- 127 U. S. 292 127 U. S. 292 p. 60
- 107 U. S. 33 107 U. S. 33 p. 60
- 16 Pet. 18 16 Pet. 18 p. 60
- Rowan v. Runnels 5 How. 134 p. 60
- Liverpool & Great Western Steam Co. v. Phenix Insurance 129 U. S. 397 p. 60
- Baltimore & Ohio Railroad v. Baugh 149 U. S. 368 p. 60
- Town of Venice v. Murdock 92 U. S. 494 p. 60
- Railroad Co. v. Lockwood 17 Wall. 357 p. 60
- Railroad Co. v. National Bank 102 U. S. 14 p. 60
- 8 How. 600 8 How. 600 p. 60
- 159 U. S. 626 159 U. S. 626 p. 60
- Lake Shore & Michigan Southern Railway Co. v. Prentice 147 U. S. 101 p. 61
- 147 U. S. 92 147 U. S. 92 p. 61
- 15 U. S. 651 15 U. S. 651 p. 61
- 164 U. S. 399 164 U. S. 399 p. 62, p. 63
- 110 U. S. 346 110 U. S. 346 p. 62
- 184 U. S. 362 184 U. S. 362 p. 62
- Hampton v. M'Connel 3 Wheat. 234 p. 62
- Crapo v. Kelly 16 Wall. 610 p. 62
- 5 Wall. 302 5 Wall. 302 p. 62
- Hanley v. Donoghue 116 U. S. 1 p. 62
- M'Elmoyle ex rel. Bailey v. Cohen 13 Pet. 312 p. 62
- Thompson v. Whitman 18 Wall. 457 p. 62, p. 66
- Hilton v. Guyot 159 U. S. 113 at 44 p. 62, p. 63
- 177 U. S. 648 177 U. S. 648 p. 62
- Harris v. Balk 198 U. S. 215 p. 62
- Mayhew v. Thatcher 6 Wheat. 129 p. 62
- 9 How. 528 9 How. 528 p. 62
- Board of Public Works v. Columbia College 17 Wall. 521 p. 62
- Chicago & Alton Railroad v. Wiggins Ferry Co. 108 U. S. 18 p. 62
- 146 U. S. 685 146 U. S. 685 p. 62
- 102 U. S. 266 102 U. S. 266 p. 62
- 96 U. S. 564 96 U. S. 564 p. 63
- Connecticut Mutual Life Insurance v. Cushman 108 U. S. 51 p. 63
- Provident Institution for Savings v. Mayor of Jersey City 113 U. S. 506 p. 63
- 134 U. S. 30 134 U. S. 30 p. 63
- East Tennessee, Virginia & Georgia Railway Co. v. Frazier 139 U. S. 288 p. 63
- Walla Walla City v. Walla Walla Water Co. 172 U. S. 1 p. 63
- 100 U. S. 702 100 U. S. 702 p. 64
- 180 U. S. 595 180 U. S. 595 p. 64
- Burgess v. Seligman 107 U. S. 20 p. 64