Whitmyer v. New York, 186 N.Y. 25 (1906)

A water company, as a quasi-public corporation, has an implied contractual duty to provide an adequate water supply to its customers, and cannot terminate service for non-payment when the company itself is in breach of that duty by failing to provide sufficient water.

Summary

Whitmyer sued the City of Kingston’s water provider, alleging insufficient water supply and seeking to prevent the company from shutting off his water service due to non-payment. The court found that the company had failed to provide an adequate water supply, breaching its implied contractual duty. The court held that a water company cannot terminate service for non-payment when it is in default of its contractual obligations to provide sufficient water. The court reasoned that allowing the company to do so would be unjust, as it would allow them to be the judge in their own case.

Facts

The plaintiff, Whitmyer, was a resident of Kingston, supplied with water by the defendant water company. The water company was incorporated to supply Kingston and its inhabitants with water. Prior to the lawsuit, the water supply to Whitmyer’s house had decreased in quantity and pressure, failing at times due to an increased number of consumers. This insufficient supply sometimes did not meet the plaintiff’s family’s needs, and the plaintiff had no other water source.

Procedural History

The trial court ruled in favor of the defendant, dismissing the complaint and vacating a preliminary injunction that prevented the water company from shutting off the water supply. The Appellate Division affirmed the trial court’s decision without opinion. Whitmyer appealed to the New York Court of Appeals.

Issue(s)

Whether a water company, failing to furnish a sufficient supply of water, can shut off the water from a customer’s house when the customer refuses to pay the bill.

Holding

No, because a water company, as a quasi-public corporation, has an implied contractual duty to provide an adequate water supply to its customers, and cannot terminate service for non-payment when the company itself is in breach of that duty.

Court’s Reasoning

The Court of Appeals determined that an implied contract existed between Whitmyer and the water company. The court emphasized that the water company was a quasi-public corporation with a duty to supply water to the city and its inhabitants. By connecting Whitmyer’s house to the water mains and providing water for years, the company entered into an implied agreement to provide water if Whitmyer paid the rates. The court stated, “The duties imposed upon a corporation raise an implied promise of performance.” The court distinguished the case from prior cases where companies shut off service due to non-payment, because in those cases, the companies had fully performed their contractual obligations. Here, the company was in default by failing to provide a sufficient water supply. The court reasoned that allowing the company to terminate service while it was in breach of contract would be unjust. “On the other hand, if the company is in default of its contract, express or implied, it would shock the sense of justice if it were to sit as a judge in its own case by cutting off the customer from his contract privileges. In such a situation the rights of the parties must be determined by the courts.” The Court of Appeals reversed the lower courts’ judgments and reinstated the injunction preventing the water company from shutting off the water supply, ordering a new trial.