burned in consequence of the breach of the defendant's contract with the city of Greensboro to supply an adequate quantity of water for fire purposes.

CLARK, J. (After setting out the complaint.) The demurrer, so far as it relates to the merits of the case, is, substantially, that the complaint has stated no cause of action (1) because the plaintiff, though a citizen and taxpayer of Greensboro (as alleged in the complaint), is neither a party nor privy to the contract, the breach of which is the foundation of the action; (2) the failure of the defendant to furnish water was not the proximate cause of the plaintiff's loss.

It is true, the plaintiff is neither a party nor privy to the contract, but it is impossible to read the same without seeing that, in warp and woof, in thread and filling, the object is the comfort, ease, and security from fire of the people, the citizens of Greensboro. This is alleged by the eleventh paragraph of the complaint, and is admitted by the demurrer. The benefit to the nominal contracting party, the city of Greensboro, as a corporation, is small in comparison, and, taken alone, would never have justified the grants, concessions, privileges, benefits, and payments made to the water company. Upon the face of the contract, the principal beneficiaries of the contract in contemplation of both parties thereto were the water company on the one hand and the individual citizens of Greensboro on the other. The citizens were to pay the taxes to fulfill the money consideration named, and furnishing the individual citizens with adequate supply of water, and the protection of their property from fire, was the largest duty assumed by the company.

One not a party or privy to a contract, but who is a beneficiary thereof, is entitled to maintain an action for its breach. This has been sustained by many decisions elsewhere. Tillis v. Harrison, 104 Mo. 270; Lawrence v. Fox, 20 N. Y. 268; Simson v. Brown, 68 N. Y. 355; Vrooman v. Turner, 69 N. Y. 280; Wright v. Terry, 23 Fla. 160; Austin v. Seligman, 18 Fed. 519; Burton v. Larkin, 36 Kan. 246. And even when the beneficiary is only one of a class of persons, if the class is sufficiently designated. Johannes v. Insurance Co., 66 Wis. 50. It was considered, though without decision, by this court, in Haun v. Burrell, 119 N. C. 544, 548; and Sams v. Price, 119 N. C. 572. Especially is this so when the beneficiaries are the citizens of a municipality whose votes author

ized the contract, and whose taxes discharge the financial burdens the contract entails. The officials who execute the contract are technically the agents of the corporation, but the corporation itself is the agent of the people, who are thus effectively the principals in the contract. The acceptance of the contract by the water company carries with it the duty of supplying all persons along its mains. Griffin v. Water Co., 122 N. C. 206; Hangen v. Water Co. (Or.), 28 Pac. 244.

In Paducah Lumber Co. v. Paducah Water Supply Co. (1889), 89 Ky. 340, it is held: "If a water company enter into a contract with a municipal corporation whereby the former agrees, in consideration of the grant of a franchise and a promise to pay certain specified prices for the use of hydrants, to construct waterworks of a specified character, force, and capacity, and to keep a supply of water required for domestic, manufacturing, and fire protection purposes for all the inhabitants and property of the city, a taxpayer of the city may recover of the water company when, through a breach of its contract, he is left without means of extinguishing fire, and his property is, on that account, destroyed;" and it is therein further held: "Where a party undertakes to furnish water in such mode and quantity that it may be used to extinguish fires in the city in which it is to be supplied, damages sustained by the destruction of buildings by the failure to so furnish such water is a natural and proximate consequence of such breach of the undertaking." This opinion is based upon sound reason, and is adopted by us. It is conclusive cf both points raised as to the merits of the controversy by the demurrer. Indeed, it could not be doubted that, if the city buildings were destroyed by fire through failure of the defendant to furnish water for their protection, as provided by the contract, the city could recover. New Orleans & N. E. R. Co. v. Meridian Waterworks Co., 72 Fed. 227. Besides, the complaint, in paragraphs 13 and 14, alleges that the defendant's failure to furnish water as per contract was the direct and sole cause of the loss, and this is admitted by the demurrer.

Thus, the question really narrows down to the question whether the beneficiaries of a contract, who furnish the consideration money of the contract, can maintain an action for damages caused by its breach. The case of Paducah Lumber Co. v. Paducah Water Supply Co. is exactly in point, was reaffirmed on a rehearing, and is followed by Duncan v. Water Co., in the same volume, making three decisions altogether. The decisions, however (twelve in num

ber), in other States where the question has been presented, are the other way. But this is a case of the first impression in this State, and decisions in other States have only persuasive authority. They have only the consideration to which the reasoning therein is entitled. They are to be weighed, not counted. We should adopt that line which is most consonant with justice and the "reason of the thing."

Did the people of Greensboro have just cause to believe that by virtue of that contract they, as well as the corporation, were guaranteed a sufficient quantity of water to protect their property from fire; and did the water company understand it was agreeing, for the valuable considerations named, to furnish a sufficient quantity of water to protect private as well as public property from fire? The intent is to be drawn from the instrument itself, and on its face there can be no doubt it was contracted that the water supply should be sufficient to protect private as well as public property. If so, it follows that when, by breach of that contract, private property is destroyed, the owner thereof, one of the beneficiaries contemplated by the contract, is the party in interest, and he, and he alone, can maintain an action for his loss.

As is said by Judge Freeman, the learned annotator of the American State Reports, in commenting on the fact (Britton v. Waterworks Co. [Wis.], 29 Am. St. Rep., at page 863), that the majority of decisions so far rendered were adverse to the position taken in the Kentucky case above cited, and approved by us: "As none of the courts has fairly faced what seems to be the logical result of these decisions, viz., that the injured person is left without any remedy at all, it must be admitted that the subject is left in an extremely unsatisfactory position. It seems to be universally agreed, and on the soundest reasoning, that the city itself is not liable for failing to protect the property of the taxpayers from fire, unless made liable by express statutory provisions. Wright v. Augusta, 78 Ga. 241. And it seems equally clear that the city would have no right of action in such case in behalf of the taxpayer, for the basis of all the [adverse] decisions is that there is no privity of contract between the taxpayers and the water companies. If the contract is not made for the benefit of the taxpayers in such a sense that they can sue upon it, it can hardly be maintained that the same contract is made for one of those taxpayers in such a sense that the city can recover damages in his name. If, then, neither the taxpayer himself nor the city on

his behalf can sue the company, the conclusion seems to be that the loss by fire in these cases is regarded by the law as damage for which there is no redress." This is a complete reductio ad absurdum, and we prefer not to concur in cases, however numerous, there are probably a dozen scattered through half a dozen States, which led to such conclusion. All these cases (when not based on reference to the others) rest upon the narrow technical basis that a citizen, because not a privy to the contract, cannot sue, whereas authorities are numerous that a beneficiary of a contract, though not a party or privy, may maintain an action for its breach. Am. & Eng. Enc. Law (2d ed.), 105-108. Here the water company contracted with the city to furnish certain quantities of water for the protection of the property of the citizens as well as of the city, and received full consideration, a large part of which comes in the shape of taxation, paid annually by those citizens. On a breach of the contract, whereby the property of a citizen is destroyed, he, as a beneficiary of the contract, is entitled to sue; and under our Code requiring the party in interest to be plaintiff he is the only one who can.

Whether there was a breach of the contract, and whether it was the proximate cause of the loss, regarded as matters of fact, will be determined by the jury, if, when the case goes back, the defendant shall file an answer, as it has a right to do (Code, § 272), raising those issues. But in overruling the demurrer to the complaint there was no error. As was said by the Supreme Court of Kentucky, when affirming, on a petition to rehear, the decision in the Paducah Case, supra: "The water company did not covenant to prevent occurrence of fires, nor that quantity of water agreed to be furnished would be a certain and effectual protection against every fire, and consequently does not in any sense occupy the attitude of an insurer; but it did undertake to perform the plain and simple duty of keeping water up to a designated height in the standpipe, and, if it failed or refused to comply with that undertaking, and such breach was the proximate cause of destruction of the plaintiff's property, which involves issues of fact for determination by a jury, there exists no reason for its escape from answering in damages that would not equally avail in case of any other breach of contract."

FAIRCLOTH, C. J., and FURCHES, J., dissent.

Affirmed.

ENGINEERING CASES: EXCERPTS FROM

DECISIONS.

THIRD PARTIES.

A stipulation in an engineering contract, by which the contractor is to indemnify the owner for damages, does not give to a party injured a cause of action against the contractor. French v. Vix (N. Y. App.), 37 N. E. Rep. 612.

A provision in a contract that a city may retain money until the contractor shall have paid his laborers, does not give the laborers any rights against the city when the contractor has been paid in full. Lawrence v. United States (C. C.), 71 Fed. Rep. 228; Old Dom. Gran. Co. v. District of Columbia, 20 Ct. of Claims, 127. A provision that the owner shall retain a certain percentage of the contract price till the completion of the work is for the benefit of the owner, and affords a ground of personal liability by the owner to subcontractors. Steele v. McBurney (Iowa), 65 N. W. Rep. 332; Weller v. Goble, 66 Iowa 113.

A bond given by contractors to a city, providing that they will pay for all labor and materials furnished, is a promise for the benefit of all persons furnishing labor and materials, and such persons may sue on it. Lyman v. Lincoln (Neb.), 57 N. W. Rep. 531; Kauffman v. Cooper (Neb.), 65 N. W. Rep. 796; St. Louis v. Von Puhl (Mo.), 34 S. W. Rep. 843.

If the bond be to pay for all materials furnished, the contractor is not liable to creditors of subcontractors for materials furnished. Brower v. Thompson Lumber Co. (Oreg.), 43 Pac. Rep. 659.

A subcontractor is not liable to the owner for negligently and unskilfully doing his work so that the owner is injured. The owner should bring suit against the principal contractor. Bissel v. Roden, 34 Mo. 63 (1864).

A subcontractor cannot hold the owner liable on his contract with the principal contractor, nor can the contractor be considered the agent of the owner and thus hold him. Epeneter v. Montgomery Co. (Iowa), 67 N. W. Rep. 93.

A third party told a contractor to go ahead and do the work ordered by the owner and he would pay for it. The owner had introduced the third party to the contractor as his partner. Held: not liable; that the promise to pay was without consideration. Stidham v. Sanford, 36 N. Y. Sup. Ct. 341 (1873).