decided about the same time as the Smyth Case, the rationale of the Haefelin Case was thus plained: "That franchise

ex

. . had in it only a covenant to save harmless the city itself; and it was for that reason that the court reached the conclusion [that] it was not the intention of the parties to impose on the contractor a liability to the owners of abutting property."

In Newman v. Bradley Contracting Co. (1917; Sup. Ct. App. T.) 100 Misc. 1, 164 N. Y. Supp. 757, it was held that an abutting owner whose building had sustained injury in consequence of the manner in which the work on the New York subway was performed by a contractor could not maintain an action upon the following covenants in his contract: (A) “The contractor will at his own expense make good any damage that shall, in the course of construction, be done to any such foundation, walls, or other parts of adjacent or overhead buildings or structures or surfaces. The liability of the contractor under this covenant is absolute and is not dependent upon any question of negligence on his part, or on the part of his agents, servants, or employees, and the neglect of the engineer to direct the contractor to take any particular precautions, or to refrain from doing any particular thing, shall not excuse the contractor in case of any such damage. (B) The contractor shall be solely responsible for all physical injuries to persons or property occurring on account of and during the performance of the work hereunder, and shall indemnify and save harmless the city from liability upon any and all claims for damages on account of such injuries to persons or property and from all costs and expenses in suits which may be brought against the city for such injuries to person or property; it being distinctly understood, stipulated, and agreed that the contractor shall be solely responsible and liable for, and shall fully protect and indemnify the city against, all claims for damages to persons or property occasioned by or resulting from blasting or other methods or processes in the work of construction, whether such damages be attributable to negligence of the contractor or his employees, or otherwise." The covenants involved in Smyth v. New York and Rigney v. New

York C. & H. R. R. Co. (N. Y.) (see note 3, infra) were declared to be clearly distinguishable from those in the contract under review. The court said: "In the present case the contract made and entered into between the city of New York and its contractors has been modified to avoid the rule of the Smyth Case, and, instead of having independent covenants, the covenants are interdependent; and taking them all in all they amount simply to a covenant to indemnify the city, and upon such a covenant a third party can have no suit." But the position thus taken was disapproved in Schnaier v. Bradley Contracting Co. (1918) 181 App. Div. 538, 169 N. Y. Supp. 88. See note 3, infra.

In Karlson v. Rapid-Transit Subway Constr. Co. (1918; Sup. Ct. App. T.) 170 N. Y. Supp. 949, where the action was brought to recover for injury caused to a pedestrian by an obstruction on a sidewalk, an indemnity agreement, made between the defendant and the city, was held not to be admissible in evidence.

In Kansas City ex rel. Blumb v. O'Connell (1889) 99 Mo. 357, 12 S. W. 791, the bond of a municipal contraetor contained the following stipulations: "It is further distinctly agreed that the said party of the first part [contractor] shall be responsible for all unlawful damages to persons or property, from negligence or carelessness in doing said work, or in not using proper precaution,

and

shall indemnify the city of Kansas against all losses or claims for damages, on account of such neglect or carelessness; and the said party of the first part covenants with said city of Kansas to pay all laborers employed on said work." The court said: "The bond is of a dual character. It is statutory as to the covenant to pay the laborers, and, as to that covenant, the penalty is separately fixed and stated. Aside from the covenant as to laborers, the object and purpose of the bond is to secure a performance of the work according to the terms of the contract, and to protect and save harmless the city from damages occasioned by the negligent acts of the contractor and his servants. In these respects, it is not an agreement with the city for the benefit of third persons, but for the protection and benefit of the city. . . . It does not profess

resulted was of such a nature that the

to create any obligation in favor of third persons save in the single case of laborers."

In Taylor v. Dunn (1891) 80 Tex. 652, 16 S. W. 732, the plaintiff was injured by a train, negligently operated along the streets of Austin, Texas, by one Wilke, a subcontractor under Dunn and other persons employed to erect a state capitol, to whom the municipal authorities had granted by ordinance the privilege of laying a steam railway for the purpose of transporting materials. One of the grounds upon which it was urged that the plaintiff was entitled to recover against the contractors was that the ordinance prohibited a sale or transfer of the privilege. But this contention was rejected, for the reason that the evidence showed that the subcontractor was exercising the privilege with the assent of the grantors. The plaintiff also relied upon a clause in the ordinance providing that the contractors should be liable and responsible to any and all persons for any damage or injury that might result to him or them, or their property, from the construction, use, and maintaining of said railroad. But the court said: "This but asserts a rule of law which all persons might invoke on receiving injury to person or property as well without as with the ordinance; for the injury therein referred to could only be such as might result from some unlawful act by appellant in constructing, using, or maintaining the railway; and it would not be contended that such a municipal ordinance could have the force of the law, and thus give a cause of action when none would exist under it, considered as a contract. That section of the ordinance was evidently inserted for the purpose of avoiding all controversy as to the primary liability of appellant for such injuries as might result from the construction and maintenance of the railway, and not for the purpose of conferring on individuals causes of action against appellant which they would not otherwise have. So limited, it ought to be held that, as between appellant and the city, that section of the ordinance became a contract upon the acceptance of the rights conferred by the ordinance, to which the city might look, and which it might enforce in any case in which it, as well as appellant, might be liable on ac

employer was exempt from liability in

count of his acts or omissions. So far, the city would evidently have power to contract, but it is difficult to find any provision in its charter which would give plausibility to a claim that it had power to make a contract solely for the purpose of conferring on individuals a cause of action they would not otherwise have. It was only empowered to make such contracts as relate to the municipality, and are necessary to enable it to exercise the powers conferred by its charter or some general law." The court then referred to St. Paul Water Co. v. Ware (1873) 16 Wall. (U. S.) 566, 21 L. ed. 485, as being a decision which was "based upon the proposition that the ordinance [in question] inured to the benefit of the injured party, and that on a contract thus created he might maintain an action." This theory was thus criticized: "With the highest respect for the opinions of that court, always distinguished for ability and learning of its judges, it seems to us that the true construction of such a contract made with a municipal corporation would require a holding, as in the cases before cited, that it was a contract for the indemnification of the city, and not intended by the parties to it as a contract for the benefit of individuals, on which a person injured by the negligence of a contractor or his employees might maintain an action. In construing such a contract, the power of a municipality to contract, as well as the subject-matter of the contract, and the purpose intended to be accomplished by it, shall all be looked to; and it ought never to be inferred that a contract made by a municipal corporation was intended to inure to the benefit of an individual further than this may be necessary for the protection of the municipality, unless its charter expressly or by necessary implication confers the power to make contracts to inure to the sole benefit of individuals, and the intent so to do clearly appears in the contract itself. In the case before us, it does not appear that the construction, use, or maintenance of the railway at the place where the injury occurred was necessarily attended with danger to persons passing on the street, nor does it appear that the accident was caused by any defect in the construction of the railway; but it does appear that the injury resulted from the negli

respect of it constitutes an independent reason for holding that the action gence of employees of Wilke in operating the train; and under this state of facts it is clear that appellee could not successfully have maintained an action against the city for the injury. This being true, the right of appellee must be determined by the general principles of law, without reference to the ordinance; and the application of these to the facts requires a reversal of the judgment." The ordinance also provided that the contractors should give bond for the removal of the road at a certain time, as well as all rubbish, etc. But it was held that this contract was to indemnify the city for any expenses it might incur in restoring the streets to their original condition, and did not inure to the benefit of the plaintiff.

In Corrigan Transit Co. v. Chicago Sanitary Dist. (1905) 70 C. C. A. 381, 137 Fed. 851, the remedial rights of the plaintiff in an action brought for damage caused to shipping by reason of the introduction of a current into the Chicago river were thus discussed: "The libel exhibits this theory of recovery: Defendant, though an instrumentality of the state, could not lawfully alter the course of the river without the consent of the Secretary of War. In obtaining that consent defendant made a promise, which inured to the benefit of libellants, that it would pay all damages occasioned by the change. The change created a current which naturally would (and in libellants' case actually did) require more time and more expense in moving barges than formerly. Therefore, defendant must pay. The permit does not contain a promise by defendant to pay damages caused by the change. The third condition, which is relied on, obliges defendant to 'assume all responsibility for damages' by reason of the introduction of a current in the river. This was an indemnifying contract, purely between the parties, and not an undertaking by defendant to pay to outsiders damages for which otherwise they would have no cause of action. Defendant's obligation was to pay or fight all claims for damages on account of the current, and save the Federal government harmless. No elaboration, we believe, can make this conclusion more apparent than does a mere reading of the permit."

In United States use of Carnegie

is not maintainable. But such a consideration would, it is apprehended,

Inst. v. C. A. Riffle Co. (1917) 247 Fed. 374, where the action brought for the use of the owner of a building to recover damages for injuries occasioned to it by the negligence of a contractor in the course of blasting operations on premises on which a Federal building was to be constructed, the contractor's bond provided that he would "be responsible for all damages to person or property which might occur in connection with the prosecution of the contract." Thomson, Dist. J., after referring to certain statutes, continued thus: "I think these propositions may be safely asserted: First. The right to recover in this action stands as if the above-recited acts of Congress had never been passed. Second. The United States is not liable to the institute for the damages occasioned by its contractor in the negligent execution of the work which the latter contracted to perform. Third. For such negligence, resulting in injury, the institute could maintain an action against the contractor. Fourth. The provisions in the contract between the United States and the Riffle Company were intended for the benefit of the United States and no other person. If the action were on the contract, and not on the bond, the institute, not being a party to that contract, would have no standing. Fifth. The action, being brought upon the bond securing the faithful performance of the conditions of the contract, gives the institute no other or higher rights. There is no covenant or promise in that instrument, made by the United States, to pay third parties any damages suffered, if the contractor fails to pay. It follows that, not being a party to the obligation, the institute could maintain no action on the bond in its own name, and making itself use plaintiff does not change its status. Sixth.

The United States, having sustained no damage, could maintain no action in its own name, and this action, being for the benefit of the Carnegie Institute of Technology, on a contract to which the latter was not a party, and in which it has no legal interest, can not be maintained."

2 French v. Vix (1894) 143 N. Y. 90, 60 N. Y. S. R. 469, 37 N. E. 612, affirming (1893) 2 Misc. 312, 30 Abb. N. C. 158, 21 N. Y. Supp. 1016. There a con

not be conclusive as regards cases involving agreements which are deemed

tract made by Vix & Son for the erection of a building on a lot owned by Henry contained the following clause: "The said parties of the second part (Vix) further agreed to become answerable and accountable for any damages that may be done to the property or person of any neighbor or passer-by during the performance of said work." The surface of the lot was covered with rock, and Vix & Son made with their codefendant, Dolan, a subcontract for the excavation of the earth and rock, by which Dolan assumed all responsibility for any loss or damage which might occur to person or property while he or his employees were engaged in the performance of the work, and agreed to save the said Vix & Son harmless from the payment of any such loss. The trial judge was of opinion "that the stipulation in the agreement between Henry and the Vixes made the Vixes liable, upon the ground that they were substantially indemnitors, and that from the principle of avoiding circuity of action a person might act at once against the person ultimately liable." The court of common pleas held that the position thus taken was untenable for reasons thus stated: "If the Vixes were indemnitors, they were only such as to Mr. Henry, the only person with whom they contracted, as it must be assumed, from an inspection of the contract, that he only contracted on his own behalf and for his own security, and to relieve himself from all liability to others by reason of any of the work done upon his premises.

It follows that the plaintiff cannot recover against the Vixes unless she had a right of action against Henry.

But the cases we have before cited from the highest court of this state are abundant authority for holding that, where the accident is caused by blasting, there would be no liability even of a municipality, and, a fortiori, there could be no liability of a person not charged with a special duty, always assuming that the work was done by an independent contractor. It follows that to sustain the rulings of the court below it must be held that the Vixes are liable to the plaintiff in a case where the owner could not be held responsible by her, such liability existing, not by virtue of anything inherent in the nature of the work, but

to inure to the benefit of third persons in the sense explained below.

solely by reason of a stipulation between the owner and the contractor, to which she was not privy and concerning which it does not appear that she had any knowledge before the damage was done. It is self-evident that if the work was such that Henry would not be liable if performed by his contractor, then the same rule would protect the Vixes on their subcontract where a similar provision was inserted in their contract with Dolan, who did the work as an independent subcontractor. Slater v. Mersereau (1876) 64 N. Y. 138." The views thus expressed were approved by the court of appeals, which thus commented upon the stipulation quoted above: "If it be treated as a contract of indemnity it could impose no liability, because, Henry not being liable, there was nothing to call the indemnity into operation. The indemnitors could not be liable unless the party to be indemnified became liable. If it be claimed that this clause in the contract was intended for the benefit of the plaintiff, and that, therefore, she can enforce it, there are two answers to such a claim. It cannot be said that it was inserted for her benefit. The parties did not intend to provide indemnity against damages for which they were in no way liable. The sole purpose of the clause was the indemnity of Henry, and he alone, or someone in his right, could in a proper case enforce it. But even if it could be held that the contract contained in this clause was intended for the plaintiff's benefit, she was not a party to the contract, nor in privity therewith, and as to her it was wholly without consideration. As Henry could not, under any circumstances, become liable for these damages, either on the ground of careless blasting or of inevitable damage, the case of Vrooman v. Turner (1877) 69 N. Y. 280, 25 Am. Rep. 195, is an authority for holding that the plaintiff cannot sue upon and enforce the contract."

In Seattle Lighting Co. v. Hawley (1909) 54 Wash. 137, 103 Pac. 6, where grading contractors who had agreed with the employing city that the work should be performed at their risk, and that they assumed responsibility for all damages to the work or on the line of work from any cause whatever, caused injury to the plaintiff's gas

b. Right of action affirmed. In other cases the remedial rights of third parties have been considered with reference to the recognized qualification of the general rule, viz., that

main by blasting operations, it was conceded that, if the city had been liable for this injury, the contractors might have been sued directly in order to avoid circuity of action. But the liability of the city was denied.

Smyth v. New York (1911) 203 N. Y. 106, 96 N. E. 409. In that case the property of the plaintiff, an abutter, was injured by an explosion of dynamite, owing to the negligence of a subcontractor engaged in the construction of the rapid transit subway in New York. The contract between the principal contractor and the city contained this provision: "The contractor shall be responsible for all damage which may be done to abutting property, or buildings or structures thereon, by the method in which the construction hereunder shall be done, but not including in such damage any damage necessarily arising from proper construction pursuant to this contract, or the reasonable use, occupation, or obstruction of the streets thereby." Held, that the plaintiff was entitled to maintain an action against the principal contractor on his agreement. The court said: "An analysis of this portion of the contract shows that it contained three independent and different covenants or agreements on the part of the contractor. The first is one to safely maintain traffic on the public streets and to take necessary precautions and erect proper guards for the prevention of accidents; the second, to indemnify the city against any or all damages to which it might be put by reason of negligence in the performance of the work; the third, to be responsible for damages to abutting property, buildings, or structures arising from other than the proper construction of the work and the reasonable use and occupation of the streets. As we construe this last clause,-a construction supported by the marginal notes,-it was not an agreement of indemnity to the city, for that was sufficiently covered by the preceding provisions, but an agreement to be responsible to abutting owners for damages arising from improper construction or unreason

"a third party may maintain an action on a contract against the promisor, where the contract is made for his benefit and some obligation or duty to the third party rests on the promisee." 3

able use and occupation of the streets. Therefore, the question before us is further narrowed to that: Can an abutting owner maintain an action under this provision of the contract to which contract he is not a party?" The court then stated the effect of Pond v. New Rochelle Water Co. (1896) 183 N. Y. 330, 1 L.R.A. (N.S.) 958, 76 N. E. 211, 5 Ann. Cas. 504, see § 28, note 2, supra, and continued thus: "In the case before us it was well known and generally appreciated that for at least some very substantial part of the discomfort, damages, and injury occasioned to the abutters by even the most careful and proper prosecution of the work, the abutter could not recover indemnity or compensation. It was also appreciated that in the prosecution of all great works, at times, negligence and fault will occur, and that such fault will often be on the part of irresponsible parties from whom there would be small chance of recovering pecuniary redress. Therefore, though the city might not be liable for injuries occasioned by such negligence, it was entirely proper, if not morally obligatory upon the part of the rapid transit commissioners to secure the abutting owners from loss or damage occasioned by negligence and improper conduct of the work. This could only be accomplished by placing liability for the negligence upon a responsible contractor to whom they might give out the work, for the commissioners could not dictate the subcontractors with whom he might contract. We are of opinion, therefore, that the defendant, McDonald, was, under his contract, liable for the damages sustained by the plaintiffs, and as to him the judgment below should be reversed." The decision in French v. Vix (1894) 143 N. Y. 90, 37 N. E. 612 (see note 2, supra), was distinguished.

The Smyth Case was relied upon in Schnaier v. Bradley Contracting Co. (1918) 181 App. Div. 538, 169 N. Y. Supp. 88, which involved an injury of the same description. One of the clauses of the contract under review was as follows: "The contractor ex