Firemen's Mut. Ins. Co. v. High Point Sprinkler Co.

146 S.E.2d 53 (1966)

266 N.C. 134

FIREMEN'S MUTUAL INSURANCE COMPANY v. HIGH POINT SPRINKLER COMPANY.

No. 702.

Supreme Court of North Carolina.

January 14, 1966.

*59 Smith, Moore, Smith, Schell & Hunter, by Richmond G. Bernhardt, Jr., Greensboro, for plaintiff appellant.

Jordan, Wright, Henson & Nichols, by G. Marlin Evans, Greensboro, for defendant appellee.

LAKE, Justice.

The policy issued by the plaintiff to the Desk Company was in the standard form prescribed by the statute. G.S. § 58-176. It provided: "Subrogation. This Company may require from the insured an assignment of all right of recovery against any party for loss to the extent that payment therefor is made by this Company." Both by virtue of this provision in the policy and upon equitable principles the plaintiff, having paid the loss to the Desk Company pursuant to the policy, is subrogated to the right of the Desk Company, if any, against the defendant. Dixie Fire & Casualty Co. v. Esso Standard Oil Co., 265 N.C. 121, 143 S.E.2d 279; General Insurance Co. of America v. Faulkner, 259 N.C. 317, 130 S.E.2d 645; Winkler v. Appalachian Amusement Co., 238 N.C. 589, 79 S.E.2d 185; Powell & Powell v. Wake Water Co., 171 N.C. 290, 88 S.E. 426. The plaintiff offered evidence, which is uncontradicted, to the effect that it paid the full amount of the loss to the Desk Company. This evidence being taken as true in passing upon the motion for judgment as of nonsuit, the plaintiff now has the same right against the defendant which the Desk Company had immediately prior to such payment.

One who engages in a business, occupation or profession represents to those who deal with him in that capacity that he possesses the knowledge, skill and ability, with reference to matters relating to such calling, which others engaged therein ordinarily possess. He also represents that he will exercise reasonable care in the use of his skill and in the application of his knowledge and will exercise his best judgment in the performance of work for which his services are engaged, within the limits of such calling. Perfecting Service Co. v. Product Development & Sales Co., 261 N.C. 660, 136 S.E.2d 56 (industrial designer); Hunt v. Bradshaw, 242 N.C. 517, 88 S.E.2d 762 (physician); Jackson v. Central Torpedo Co., 117 Okl. 245, 246 P. 426, 46 A.L.R. 338 (oil well digger); Flint & Walling Mfg. Co. v. Beckett, 167 Ind. 491, 79 N.E. 503 (carpenter). It is alleged in the complaint and admitted in the answer that the defendant, at the time in question, was engaged in the business of installing fire sprinkler systems and held itself out to the public as qualified, competent and experienced in the installation of both wet and dry fire sprinkler systems.

This Court has said on numerous occasions, "The law imposes upon every person who enters upon an active course of conduct the positive duty to exercise *60 ordinary care to protect others from harm, and calls a violation of that duty negligence." Council v. Dickerson's, Inc., 233 N.C. 472, 64 S.E.2d 551. See also: Toone v. Adams, 262 N.C. 403, 137 S.E.2d 132; Williamson v. Clay, 243 N.C. 337, 90 S.E.2d 727.

In 38 Am.Jur., Negligence, § 14, it is said:

"[T]he law imposes upon every person who undertakes the performance of an act which, it is apparent, if not done carefully, will be dangerous to other persons or the property of other persons, the duty to exercise his senses and intelligence to avoid injury, and he may be held accountable at law for an injury to person or to property which is directly attributable to a breach of such duty."

However, an action to recover damages for an injury to person or property may not be sustained on the theory that such injury was caused by the negligence of the defendant unless there existed, at the time and place where the injury occurred, a duty on the part of the defendant to exercise care for the protection of the plaintiff or his property. 38 Am.Jur., Negligence, § 12.

Whether there is a duty owed by one person to another to use care, and, if so, the degree of care required, depends upon the relationship of the parties one to the other. The mere relation of one human being to another imposes some duty upon each. "Every man is in general bound to use care and skill in his conduct wherever the reasonably prudent person in his shoes would recognize unreasonable risk to others from failure to use such care." Harper & James, Torts, § 28.1. Other duties arise by reason of special business or economic relations between the parties. For example, under the common law, an employer owes to his employee affirmative duties of care for his safety which he does not owe to the public generally. The relation of physician and patient imposes upon the physician a duty of care for the protection of the patient from injury which he does not owe to others. A bailee of goods, by virtue of the bailment relation, owes a special duty to the bailor to use care for the safety of the goods. An architect, in the preparation of plans and drawings for the construction of a building, owes to the person employing him a duty, not only to use his own best judgment, but also to exercise the ability, skill and care customarily used by architects upon such projects. 5 Am.Jur. 2d, Architects, § 8; 5 C. J., Architects, § 24; 6 C.J.S. Architects § 19; Anno.: 25 A.L.R.2d 1085. A carpenter who contracts to repair a house is liable in damages if he performs the repair so unskillfully as to damage other portions of the structure. See: Flint Mfg. Co. v. Beckett, supra; Jackson v. Central Torpedo Co., supra; 38 Am.Jur., Negligence, § 20.

The duty to use due care, the breach of which gives rise to a tort action for negligence in favor of one injured thereby in his person or property, may arise out of a contract. A breach of a contract, nothing else appearing, does not give rise to an action in tort. 38 Am.Jur., Negligence, § 20. However, the making of the contract may give rise to a relationship between the parties out of which arises the duty of one party to use due care so as not to injure the person or property of the other. In that event, the failure to use such care resulting in injury to the person or property of the other party gives him a right of action in tort for such negligent injury. Toone v. Adams, supra; Pinnix v. Toomey, 242 N.C. 358, 87 S.E.2d 893; Perfecting Service Co. v. Product Development & Sales Co., supra; Dixie Fire Casualty Co. v. Esso Standard Oil Co., supra; 38 Am.Jur., Negligence, § 14.

However, a complete, binding contract between the parties is not a prerequisite to a duty to use due care in one's actions in connection with an economic relationship. 38 Am.Jur., Negligence, §§ 14, *61 17. Barnhill, C. J., said in Honeycutt v. Bryan, 240 N.C. 238, 81 S.E.2d 653:

"Whenever one person is by circumstances placed in such a position towards another that anyone of ordinary sense who thinks will at once recognize that if he does not use ordinary care and skill in his own conduct with regard to those circumstances, he will cause danger of injury to the person or property of the other, duty arises to use ordinary care and skill to avoid such danger."

The defendant was engaged in the automatic fire sprinkler business. Its regular business included conversion of wet sprinkler systems to dry sprinkler systems. The Desk Company had a wet sprinkler system in its warehouse and informed the defendant of its desire to convert this system to a dry sprinkler system. Taking the plaintiff's evidence to be true and considering it in the light most favorable to the plaintiff, as we are required to do in passing upon the correctness of the judgment of nonsuit, it shows that the Desk Company requested the defendant to examine the system and submit to the Desk Company a proposal of a price for doing the work necessary to convert it to a dry system. The defendant's representative walked through the building, observing the system, unaccompanied by any representative of the Desk Company. One purpose of this inspection was to look for low points. Had he observed one, it would have been his duty to suggest that something be done about it because of the danger that if water was left in such a low point it might freeze and cause the pipe to break. Having completed his inspection, he submitted a proposal to the Desk Company specifying certain things to be done and stating a price for doing them. His proposal was accepted, and the specified things were done. In his inspection he did not find the low point, although it was obvious to an observer who looked at this particular length of pipe. There is nothing to indicate that the Desk Company knew the pipe in question was so connected that it would not drain. Since no other pipe in the system broke, it may reasonably be inferred from the plaintiff's evidence that there were no other low points in the system. The elimination of the hazard caused by this particular low point was a relatively simple, inexpensive matter.

As was said by Moore, J., in Perfecting Service Co. v. Product Development Sales Co., supra:

"When one undertakes a professional assignment, the engagement implies that he possesses the degree of professional learning, skill and ability which others of that profession ordinarily possess, he will exercise reasonable care in the use of his skill and application of his knowledge to the assignment undertaken, and will exercise his best judgment in the performance of the undertaking. * * * He may incur liability in tort by reason of negligent performance."

When one, engaged in the business of installing equipment, such as a sprinkler system, accepts an invitation to inspect an existing installation and submit a proposal for its conversion to one of a different type, which he holds himself out as qualified to do, a relationship arises between him and the owner of the building such as to impose upon him the duty to use, in inspection of the property and the preparation of the specifications for the conversion work, that degree of care which is customarily used upon such assignments by others engaged in such business. In such a situation, knowing that the owner is relying upon him to determine what is necessary to do to the existing system in order to convert it into the system desired, if he, by failure to use due care, omits from his specifications an alteration necessary to avoid danger of damage to the owner's building or other property, he is not absolved from *62 liability for such damage by the fact that the owner accepts his proposal for less than adequate changes in the existing system, the owner being unaware of the condition which makes the proposal inadequate. The duty to use due care to include within the specifications all that is necessary to make the converted system safe continues into and through the performance of the work.

In reviewing the judgment of nonsuit, the plaintiff's evidence must be taken as true and all reasonable inferences favorable to the plaintiff must be drawn therefrom. Coleman v. Colonial Stores, Inc., 259 N.C. 241, 130 S.E.2d 338; Ammons v. Britt, 256 N.C. 248, 123 S.E.2d 579. So considered, the evidence is sufficient to support a finding that the defendant failed to use due care in preparing its specifications of the changes necessary to be made for the conversion of the sprinkler system and that such negligence was the proximate cause of the damage to the property of the Desk Company for which the plaintiff had paid in accordance with its policy. That being true, the motion for judgment of nonsuit should not have been allowed. Upon retrial of the action it will, of course, be for the jury to determine, in the light of all the evidence then introduced, whether the defendant was, in fact, negligent.

The plaintiff's pre-trial motion for an order directing the defendant to permit the plaintiff to inspect its files relating to this matter was addressed to the discretion of the court. G.S. § 8-89. Dunlap v. London Guaranty & Accident Co., 202 N.C. 651, 163 S.E. 750. There is no showing of abuse of this discretion in the denial of the motion.

It is not necessary that we now pass upon the exceptions relating to the admissibility of evidence, since those questions may not recur when the matter is tried again.

Reversed.