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Van Ness & Redman, for appellants. E. S. Pillsbury, Alfred Sutro, and Pillsbury, Madison & Sutro, for respondent.

ANGELLOTTI, J. This is an appeal from a judgment given in favor of defendant; a demurrer to plaintiffs' amended complaint having been sustained, and plaintiffs having failed to amend.

The action was brought to recover $124,496.98, damages, resulting from the destruction of certain property, the injury to other property, and a loss of profits from an established business, all occasioned by a fire, which occurred on April 12, 1901, which fire occurred without any fault on the part of plaintiffs. The corporation, IIunt Bros. Company, which will hereafter be called the plaintiff, was the owner of all said property. The numerous other plaintiffs were insurance companies which had, at the time of the fire, policies in force covering, respectively, various portions of said property, insuring plaintiff against loss by fire, and which had paid plaintiff upon said policies, on account of said loss, amounts aggregating $91,221.42, and, having received assignments from plaintiff of its claim against defendant to the extent of the amount so paid by them, are here endeavoring to collect the amount paid by them, from defendant. The plaintiff was engaged in the business of fruit canning, packing, manufacturing cans, storage of fruits, canned goods, etc. The property injured and destroyed consisted of certain buildings used and occupied in the conduct of said business, machinery, and other implements used in such business, and the stock on hand, and 74 cottages occupied by employés of plaintiff. All this property was situated on certain premises occupied by plaintiff in Hayward, Alameda county, Cal. The allegations of the complaint upon which it is sought to hold defendant liable for the amount of this loss are substantially as follows: Defendant was a water company, engaged in the business of supplying water to the inhabitants of Hayward by means of mains laid in the streets of the town, and pipes running therefrom to the premises of its customers. Some time between September, 1900, and March, 1901, plaintiff and defendant entered into an agreement, whereby defendant agreed to lay a sixinch main from one of its mains charged and supplied with water, to a point near one corner of plaintiff's premises, to connect said premises with this new main by a service pipe, and to thereupon supply plaintiff, by means thereof, with 100,000 cubic feet of water annually, at the rate of 25 cents per 100 cubic feet, and as much more as might be required at 20 cents per 100 cubic feet; plaintiff agreeing to consume annually 100,000 cubic feet, and pay for it at the 25-cent rate. Defendant further agreed that it would erect and install a fire hydrant near said premises, to be used by plaintiff in case the premises should take fire, and connect the

same with said main, and supply plaintiff, by means thereof, with water for the purpose of extinguishing any fire which might occur on said premises, in consideration of the payment by plaintiff to defendant of $2.75 a month, which plaintiff agreed to pay. No time was specified for the commencement or completion of this work. Defendant laid the new main to a point near one corner of plaintiff's premises, as agreed, but failed to install the service pipe or the fire hydrant. On March 14, 1901, plaintiff remonstrated with defendant because of its failure to do these things, and defendant, on March 15, 1901, promised in writing that it would "immediately commence the work" of putting in the service pipe to connect the premises with the main, and also that it would "immediately commence the work" of erecting and installing said fire hydrant and connecting the same with the main. It failed to commence to do either of these things prior to the fire. It is alleged that, if defendant had commenced the work of connecting said premises with the main, and the work of erecting, installing, and connecting the fire hydrant, as it had agreed to do, and had prosecuted said work to an end with ordinary diligence, said premises would have been so connected and said fire hydrant installed and connected and ready for use in March, 1901; and that, if said hydrant had been so installed and connected at the time of the fire, said fire could and would have been extinguished, by means of the water which would have thereby become available, before it had damaged the property to the extent of $5,000; and that therefore the additional loss and damage were wholly due to defendant's neglect and failure to comply with the terms of its agreement. We are satisfied that the damages alleged cannot be recovered as a consequence of the breach of contract alleged. In so saying we do not dispute the proposition, made by learned counsel for appellant, to the effect that a failure to furnish water, under a contract requiring one to do so, may, under some circumstances, entitle the other party to the contract to recover, as damages for such breach of contract, the value of such of his property destroyed by fire as would have been saved by the water, had it been furnished in accordance with the contract. We have examined the cases cited from other states by counsel upon this proposition, and find that with practical unanimity they appear to support the conclusion that the circumstances may be such as to make the person who agreed to furnish water for the extinguishment of fires liable for the failure to furnish it as agreed, in the value of such property destroyed by fire as would have been saved by the water, if it had been furnished. New Orleans, etc., Co. v. Meridian Waterworks, 72 Fed. 227, 18 C. C. A. 519; Middlesex Water Co. v. Knappman Whiting Co., 64 N. J. Law, 240, 45 Atl. 692; Paducah Lumber Co. v. Paducah, etc., Co., 89 Ky. 340, 12 S. W. 554,

13 S. W. 249, 7 L. R. A. 77, 25 Am. St. Rep. 536; Gorrell v. Water Supply Co., 124 N. C. 328, 32 S. E. 720, 46 L. R. A. 513, 70 Am. St. Rep. 598; Planters' Oil Mill v. Monroe Water Co. (La.) 27 South. 684; Lenzen v. City of New Braunfels (Tex. Civ. App.) 35 S. W. 341; Atkinson v. Water Co., L. R. G Exch. 404. See, also, Ukiah v. Ukiah, etc., Co., 142 Cal. 173, 179, 75 Pac. 773, 64 L. R. A. 231, 100 Am. St. Rep. 107.

The cases cited are, however, all cases where the contract had been executed to the extent of installing and commencing the contemplated service, and the respective parties to the contract were acting thereunder; the one purporting to supply water for the purpose designated by the contract, viz., the extinguishment of fires, and receiving the agreed consideration therefor, and the other paying for such service, and relying upon the continued observance of the contract by the water company as a protection against such fires as might occur on the premises. As to such a situation it may well be said, as was, in fact, said in some of the cases cited, that, in view of the fact that water may be supplied in such quantity and manner as to usually extinguish a fire before serious damage is done, when promptly and efficiently used, it may reasonably be supposed to have been within the contemplation of the parties that a loss by fire would be the probable result of a failure to comply with the contract at the time the fire occurred. It could only be upon such a theory that one party would pay for the continuance of the service for fire purposes, and the other receive the sums so paid. And it is solely by reason of the fact that, in such cases, damage by fire may reasonably be supposed to have been within the contemplation of the parties as a consequence of a breach of the contract to furnish water, that the liability for such damage may be held to attach, for it certainly cannot be held that any such liability would exist for the breach of a contract to simply furnish water for no particular designated purpose, or for designated purposes not including the extinguishment of fires, even although it might be that, if there had been no breach, the fire would have been extinguished in its incipiency by the water furnished, and such breach therefore would have been indirectly and remotely the cause of the loss. The law of damages does not concern itself with such remote causes. As said in Martin v. Deetz, 102 Cal. 55, 68, 36 Pac. 368, 372, 41 Am. St. Rep. 151: "Remote results, produced by intermediate sequences of causes, are beyond the reach of any just and practicable rule of damages." Field, in his work on Damages (section 10), says: "To trace remote effects of causes would often be a difficult, if not an infinite, task. It would require an infinite mind. Each cause produces results that in turn, alone or by combination with other causes, produces other effects, and so ad infinitum. It is a subject too abstruse and complicated

for the human mind. In the quaint language of Lord Bacon 'It were infinite for the law to consider the cause of causes, and their impulsion one on another.'" No case cited goes to the extent of holding that one may be liable for a breach of contract to furnish water, in the value of property destroyed by a fire, unless the case was such that damage of this kind might reasonably be supposed to have been within the contemplation of the parties to the contract as a consequence of a breach thereof, and, in the case of Beck v. Kittanning Co. (Pa.) 11 Atl. 300, it was expressly declared that, as the plaintiff, who had a contract for water for general use, had no contract with the defendant for a supply of water for the extinguishment of fire, he had no cause of action on his contract for damages resulting from destruction of his property by fire.

It is the well-settled general rule of damages for any breach of contract that the damages that can be recovered for a breach are only such as may reasonably be supposed to have been within the contemplation of the parties at the time of the making of the contract, as the probable result of a breach. Other damages are too remote. In this lies the distinction between damages for breach of contract and damages for tort; the rule as to tort being that the injured person may recover for all detriment proximately caused thereby, "whether it could have been anticipated or not." Section 3333, Civ. Code. Such, as we understand it, is the rule declared by section 3300 of the Civil Code, as that section has always been construed by this court, and it is the rule enunciated in the leading case of Hadley v. Baxendale, 9 Exch. 341, which has been universally accepted and followed. See Mitchell v. Clarke, 71 Cal. 165, 11 Pac. 882, 60 Am. Rep. 529. As has often been suggested by writers upon this subject, the remote effects of slight causes are so beyond all possible conception of the parties to a contract, both in character and extent, that any other rule would practically preclude the making of contracts altogether, for no sane person could be expected to assume such uncertain and limitless liability. This rule does not mean that the parties should actually have contemplated the very consequence that occurred, but simply that the consequence for which compensation is sought must be such as the parties may be reasonably supposed, in the light of all the facts known, or which should have been known to them, to have considered as likely to follow in the ordinary course of things, from a breach, and therefore to have, in effect, stipulated against. The understanding and intention of the parties in this regard must, of course, be ascertained from the language of the contract, in the light of such facts. See Sutherland on Damages, § 45.

Where a contract calls for the continuance of an instituted water service for the purpose of extinguishing fires, loss by fire as the

consequence of a breach may, as already suggested, be reasonably supposed to have been within the contemplation of the parties. This may also be true in the event of such a ⚫ service contracted to be commenced at a certain definite time in the future, especially if the special circumstances are such as to make it essential that the particular protection from fire to be thereby afforded should commence at that time, and those circumstances were made known to the person or company contracting to furnish the service. As to this, however, it is not necessary here to decide. The contract here alleged was, in effect, first, to lay and install certain pipes through which water for general use might be supplied, and to install one fire hydrant, through which water for use in the event of fire might be supplied; and, second, such pipes and fire hydrant having been installed, thereupon to commence supplying water for those purposes, and to continue supplying it at certain prescribed rates. No time whatever was prescribed for the completion of the work essential to the furnishing of such water, or for the commencement of the water service, except that it was to commence upon the installation of the necessary pipes and hydrant. We attach no importance to the subsequent "promise" of March 15, 1901, on the part of defendant, that it would "immediately commence the work" essential to the installing of the service for the various purposes designated. Giving this additional promise full force as a part of the contract between the parties, there was therein no undertaking on the part of defendant that the work so to be commenced would be completed and the water service instituted at any certain definite time. There was no allegation whatever as to any special circumstances known to defendant, or, for that matter, to plaintiff, making it essential to the protection of the property from fire that the contemplated service should be commenced within any particular time. The case presented, then, is one where the parties simply agreed upon the installation and commencement of a water service for various purposes, including one hydrant to be used for the extinguishment of possible fires, upon the installation and commencement of which the plaintiff was to commence paying, at certain prescribed rates, for the water furnished; no definite time for the commencement of such service being fixed, and no special circumstance appearing, by reason of which it might be anticipated that it was essential to the protection of plaintiff's property from fire that the service should be commenced within any particular time, or, as plaintiff claims, within a reasonable time.

Under such circumstances, it appears very clear to us that damage by fire to plaintiff's property cannot reasonably be supposed to have been within the contemplation of the parties, as possible to be caused by a failure on the part of defendant to commence the

water service agreed upon. The plaintiff not having stipulated for the limited protection against fire, to be furnished thereby, to commence at or within any particular time, and, under the terms of the contract, paying for such protection only from the time of the actual commencement thereof, could not, until the actual commencement of the service, be considered as relying on such protection, or on the commencement thereof at any particular time, in the slightest degree, and there was nothing to warrant even a supposition on the part of defendant that plaintiff did so rely. The utmost that can be reasonably contended to have been within the contemplation of the parties in this regard was that, when at some future indefinite time the hydrant had once been installed, and the service actually commenced, water would thenceforth be available, by means of the hydrant, for the extinguishment of possible fires, and that any failure to then have it so available, in the event of a fire, might cause damage to plaintiff's property. This was the full extent of the contract of the parties, and the parties could not be understood as stipulating for such protection prior to the actual commencement of the service. This being so, whatever might be the proper measure of damage for a breach of contract in failing to install the service within a reasonable time, loss of property by fire could not be an element thereof. Until the actual assumption of the duty of such protection, damage by fire could not be held to be within the contemplation of the parties as a possible consequence of a breach, and in no legal sense of the words could such damage be held to have been caused by the breach alleged, although, if it had not been for such breach, water might have been available for the extinguishment of the fire. The case is no different in principle from one where water is furnished by contract for other than fire purposes, and a fire occurs which could have been extinguished by such water if it had been available, but, owing to some failure of the person furnishing the water, no water is available, and the property is destroyed. As already stated, although in such a case the breach is, in one sense of the words, a cause of the loss, there could be no recovery, for the water company has not assumed the duty of protecting the other's property from fire, and loss by fire is not therefore damage possible within the contemplation of the parties to the contract. Here, although water was ultimately to be furnished for fire purposes, the defendant had not, under the terms of its contract, assumed the duty of so protecting plaintiff's property at the time of the fire.

We are of the opinion that the amended complaint did not show any damage for which recovery might be had, and that the demurrer was therefore properly sustained. The judgment is affirmed.

We concur: SHAW, J.; MCFARLAND, J.; HENSHAW, J.; LORIGAN, J.

(150 Cal. 39) PAVKOVICH v. SOUTHERN PAC. RY. CO. et al. (L. A. 1,459.)

(Supreme Court of California. May 24, 1906. On Rehearing Oct. 11, 1906.)

1. DEEDS-RESERVATION-CONSTRUCTION.

A deed granted and conveyed certain land "for the purpose and with the limitation that the rock and material taken therefrom by the grantee, its lessees or assigns, is for railroad purposes, and the grantee is not to carry on the business of furnishing rock for any other purpose, or for such purposes and in such business as the party of the second part may be engaged." Another clause provided that the conveyance was on condition that the grantee, within two years, construct a railroad to certain quarries, otherwise the conveyance should be forfeited. Held, that the subsequent clauses were not in irreconcilable conflict with the premises within the rule that they should be disregarded, but they qualified or limited the estate granted, reserving to the grantor a contingent estate, with the restriction for its benefit as to the taking of rock. 2. SAME.

The limitation as to the removal of rock was for the benefit of the grantor, and therefore, under the express terms of Civ. Code, § 1069, was to be interpreted in his favor, and as so construed the grantee had no right to furnish rock taken from the premises to others. 3. SAME-COVENANTS.

Whether or not the restriction be construed as a covenant running with the land, it was a covenant binding on the assigns of the grantee. 4. CONTRACTS - VALIDITY RESTRAINT OF TRADE.

The deed was not to be construed as giving the grantee right to remove any quantity of rock he desired and then limiting the use he might make of such rock, and was not, therefore, in restraint of trade.

5. WASTE-COMPLAINT SUFFICIENCY.

In an action to enjoin waste and for damages, an allegation that plaintiff was the owner in fee simple of all the lands described, "subject only to the terms and provisions" of a certain deed of a portion of the land, reserving a right to the grantor, sufficiently showed that plaintiff was the heir or assign of the original grantor.

6. SAME INJUNCTION-DAMAGES.

The owner of a contingent estate in premises might enjoin waste in the taking of rock, but, not having a vested interest in the rock removed, could not recover damages therefor. McFarland, J., dissenting.

In Bank. Appeal from Superior Court, San Bernardino County: Frank F. Oster, Judge.

Action by John L. Pavkovich against the Southern Pacific Railway Company and the California Construction Company. From a judgment sustaining demurrers to the complaint, plaintiff appeals. Reversed.

Charles S. Allison, Davis & Rush, and A. W. Hutton, for appellant. Bicknell, Gibson & Trask, for respondents.

SHAW, J. Since the taking of this appeal the plaintiff has died and Spiro B. Radovich, as the executor of his last will, has been substituted as plaintiff in his stead. The appeal is by the plaintiff from a judgment in favor of the defendants, upon the sustaining of a demurrer to the complaint based on the ground that the complaint does not state a cause of action. The action purports to be

for damages caused by the removal of rock from certain land, and to enjoin further waste of the same character. On April 25, 1888, Declez and Beaudry were the owners in fee simple of the land in question, the same being a part of section 35, township 1 south, range 6 west, San Bernardino base and meridian. They also apparently owned the entire section, or a considerable part thereof. On or near to this section were certain stone quarries known as the "Declez Quarries," but whether or not Declez and Beaudry had any interest therein does not appear. On the day mentioned they executed to the Pacific Improvement Company a deed, conveying to said company certain strips of land in said section, to be used as ways for a railroad connecting said quarries with the main line of the Southern Pacific Railroad from Los Angeles to Yuma, and certain spur tracks necessary for the convenient working of the quarry, and also the tract from which the defendants are now taking rock, which tract contains seven acres of land. The conveyance of this seven-acre tract of land was expressly made subject to certain limitations, upon the effect of which the plaintiff's right of action depends. After the execution of this deed the Pacific Improvement Company conveyed all its right, title, and interest thereunder to the defendant, the Southern Pacific Railroad Company, and the plaintiff became, and still is, the owner in fee simple (but subject to the rights of the defendant under the deed of Declez and Beaudry to the Pacific Improvement Company) of all the lands described in said deed, including the seven-acre tract. The California Construction Company is building for the United States the breakwater in the harbor at San Pedro, and for that purpose, by agreement with the Southern Pacific Railroad Company, is quarrying and removing rock from the seven-acre tract, and using the same in the construction of the breakwater. The plaintiff in this action seeks to recover damages for the rock that has been taken from this tract for that purpose, and to enjoin the further taking thereof for such purpose.

The right of the defendants to take this rock, and of the plaintiff to maintain this action, depends on the effect of certain clauses of the deed of Declez and Beaudry to the Pacific Improvement Company. This deed first conveys the strips of land intended for the rights of way. Then follow the paragraphs purporting to convey the sevenacre tract and the qualifying clauses. This part of the deed is as follows: "And the said parties of the first part also grant and convey onto the said party of the second part a tract of land in said section 35, described as follows: [here is described the seven-acre tract in controversy]. The conveyance of the tract of land last-above described to the party of the second part is for the purpose and with the limitation that the rock and material taken therefrom by the party of the

second part or by its lessees or assigns is for railroad purposes, and the party of the second part or its lessees or assigns is not to carry on the business of furnishing rock for any other purpose than that of railroad purposes, or for such purposes and in such business as the party of the second part may be engaged. This conveyance is made to the party of the second part on condition that the said party of the second part shall construct a railroad from the main line hereinbefore described within two years from the date hereof, and shall operate the same; and in the event that said railroad is not constructed within the time above mentioned, or if the said party of the second part shan fail to operate said railroad or abandon the same as a railroad, then and thereupon the estate hereby granted shall be forfeited to the parties of the first part, their heirs or assigns, and this conveyance shall become null and void. This conveyance is made for the purpose and to the end that a railroad shall be constructed and operated over the line aforesaid from the main track of the Southern Pacific Railroad to the quarries herein mentioned, and that the same be completed and operated within two years from this date."

The plaintiff claims that the effect of the qualifying clauses quoted is to limit or qualify the estate which would otherwise pass by the words "grant and convey," so that the estate actually transferred is not a fee simple, but a fee qualified by the limitation that the grantee, or its lessees or assigns, shall have no right to remove from the seven acres any rock, except such as should be found necessary or convenient for the building or maintenance of railroads, or for use in some other business in which the grantee might engage; that the provision for a forfeiture upon the violation of the condition subsequent, in effect, reserved to the grantor a contingent estate in the land granted, which could be, and has been, transferred to the plaintiff, and that the ownership of this estate in the land invests the plaintiff with a right to enjoin the taking of rock therefrom for any other purposes than those specified in the limitation. The defendants contend that the limitation clause does not purport to withhold from the grantee the right to take rock from the land in such quantity as it should choose, even extending to all the rock therein contained, but that it merely limits and restricts the uses to which such rock may be devoted after it is removed; that it is a purely personal covenant, binding only upon the Pacific Improvement Company, and not upon its assigns; that it does not run with the land, and that, in effect, it is a provision that the grantee shall not use rock taken from the land, except for certain purposes, and is a restriction repugnant to the estate conveyed by the granting clause, and therefore void; and hence, that the Southern Pacific Railroad Company cannot be en

joined from the removal of any or all of the rock, and, being a grantee of the Pacific Inprovement Company, it is not liable in damages in an action on the covenant, which binds no one but the original parties.

A reservation or exception in a grant is to be interpreted in favor of the grantor. Civ. Code, § 1069; Code Civ. Proc. § 1864; Martin v. Lloyd, 94 Cal. 203, 29 Pac. 491; Sears v. Ackerman, 138 Cal. 586, 72 Pac. 171. The rules of interpretation in such cases are well stated in Barnett v. Barnett, 104 Cal. 300, 37 Pac. 1050, as follows: "A grant is to be interpreted in the same manner as any other contract (Civ. Code, § 1066), so as to give effect to the intention of the parties, if it can be ascertained (section 1636), and, for the purpose of ascertaining that intention, 'the whole of the contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other' (section 1641). * * * The rule that, if the habendum is repugnant to the premises, it is to be disregarded, is only another form of the rule that, if several parts of a grant are absolutely irreconcilable, the former part prevails' (Civ. Code, 1070). The intention of the parties to the grant is to be gathered from the instrument itself, and determined by a proper construction of the language used therein, but for the purpose of ascertaining this intention the entire instrument the habendum as well as the premises, are to be considered, and, if it appear from such consideration that the grantee intended by the habendum clause to restrict or limit or enlarge the estate named in the granting clause, the habendum clause will prevail over the granting clause. It is in such case to be considered as an addendum or proviso to the conveyancing clause, which, by a well-settled rule of construction, must control must control the conveyancing clause or premises, even to the extent of destroying the effect of the same." In other cases it is said that: "The tendency of modern decisions is to uphold conveyances, and give effect to the intention of the parties, regardless of technical rules of construction." Faivre v. Dailey, 93 Cal. 671, 29 Pac. 258. "It matters little what name we give to the rights reserved to the grantor in a deed. Attempts to create symmetry in the law by classification and designation of classes of different kinds of rights connected with, and springing out of. lands are always hazardous" (Painter v. Pasadena, etc., Co., 91 Cal. 84, 85, 27 Pac. 542); and "to arrive at this intention, the situation of the parties and the subject-matter at the time of contracting should be considered" (Stockton v. Weber, 98 Cal. 439, 33 Pac. 334; Brannan v. Mesick, 10 Cal. 106). The clause immediately following the description of the seven acres, which we designate as the limitation clause, is loosely and awkwardly drawn, and discloses the work of one not skilled in the use of language nor familiar with technical def

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