2 Cal.3d 245, 22694, Price v. Shell Oil Co.

Docket Nº22694
Citation2 Cal.3d 245, 85 Cal.Rptr. 178, 466 P.2d 722
Opinion Judge[12] Sullivan
Party NamePrice v. Shell Oil Co.
Attorney[7] O'Connor, Cohn & Lynch, O'Connor, Moran, Cohn & Lynch and Cyril Viadro for Defendant, Cross-complainant and Appellant. [8] Werchick & Werchick, Arne Werchick and Jack H. Werchick for Plaintiff and Respondent. [9] Bledsoe, Smith, Cathcart, Johnson & Rogers and Robert A. Seligson for Cross-defe...
Case DateMarch 25, 1970
CourtSupreme Court of California

Page 245

2 Cal.3d 245

85 Cal.Rptr. 178, 466 P.2d 722

Merton PRICE, Plaintiff and Respondent,

v.

SHELL OIL COMPANY, Defendant, Cross-Complainant and Appellant,

Flying Tiger Line, Inc., Cross-Defendant and Respondent,

Pacific Employers Insurance Company, Intervener and Respondent.

S.F. 22694.

Supreme Court of California

March 25, 1970.

In Bank

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O'Connor, Cohn & Lynch and Cyril Viadro, San Francisco, for defendant, cross-complainant and appellant.

Werchick & Werchick, Arne Werchick and Jack H. Werchick, San Francisco, for plaintiff and respondent.

Bledsoe, Smith, Cathcart, Johnson & Rogers and Robert A. Seligson, San Francisco, for cross-defendant and respondent.

No appearance for intervener and respondent.

SULLIVAN, Justice.

We hold in this case that the doctrine of strict liability in tort which we have heretofore made applicable to sellers of personal property is also applicable to bailors and lessors of such property. As appears Infra, we find substantial evidence in the record that the lessor in the present matter falls within the reach of the doctrine. We therefore affirm the judgment entered on the verdicts in favor of plaintiff Merton Price and plaintiff in intervention Pacific Employers Insurance Company (Pacific) and against defendant Shell Oil Company (Shell). On a secondary issue, presented by Shell's cross-complaint against cross-defendant Flying Tiger Line, Inc. (Flying Tiger) we hold that Shell's aforementioned liability as lessor does not fall within the indemnity provisions of its lease so as to impose on Flying Tiger an obligation to indemnify. We therefore affirm the judgment of nonsuit in favor of Flying Tiger dismissing Shell's cross-complaint for indemnity. In sum, we uphold the judgments of the trial court.

Plaintiff is an aircraft mechanic employed by Flying Tiger. In 1958 Flying Tiger leased from defendant Shell a gasoline tank truck with a movable ladder mounted upon the tank for refueling certain types of aircraft. Under the terms of the lease Flying Tiger was obligated to maintain the equipment in safe operating condition and to make specified repairs not here relevant. All other repairs were to be made by Shell at the request of Flying Tiger.

In 1962 Shell, at Flying Tiger's request, removed the original ladder from the truck. A replacement, built by an undisclosed manufacturer, was furnished and installed under Shell's direction. Both Shell and Flying Tiger participated in the inspection of the new ladder. On March 12, 1964, about two years later, while plaintiff was climbing the ladder onto the wing of an aircraft, both of its legs split into segments. Plaintiff fell against the gasoline

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tank, hanging by his leg which was caught between the rungs of the upper segment of the ladder still attached to the aircraft wing. As a result he sustained serious personal injuries.

Plaintiff brought the instant action for damages against Shell. His complaint was in two counts: the first based on Shell's alleged negligence in manufacturing and maintaining a gasoline tank truck; the second based on an alleged breach of warranties that the tank truck and all its parts were free from defects, of merchantable quality and fit for the purpose for which they were intended to be used.

As we have already indicated, Shell cross-complained against Flying Tiger for indemnity but was nonsuited. On defendant's motion the trial court also nonsuited plaintiff on both of his pleaded causes of action but on its own motion submitted the case to the jury on the theory of strict liability in tort. The jury returned a verdict in favor of plaintiff and against Shell in the sum of $40,000, and in favor of plaintiff in intervention Pacific, the workman's compensation insurance carrier of Flying Tiger, and against Shell for $1,859.24 for medical and indemnity benefits paid by Pacific in connection with Price's injuries. Shell appeals both from the judgment entered on the above verdicts and the judgment of nonsuit dismissing its cross-complaint against Flying Tiger for indemnity. We turn first to defendant's attack on the verdicts.

Application of the Rule of Strict Liability

Shell contends that the trial court erred in submitting the case to the jury on the issue of strict liability. It argues that it is not a manufacturer, distributor or retailer of gasoline trucks. On the contrary, Shell asserts that in the present circumstances it was a bailor or lessor and that its liability as such was governed solely by Civil Code, section 1955 which imposed on Shell no greater duty than that of exercising ordinary care. 1 In support of

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this contention Shell notes that section 408 of the Restatement Second of Torts 2 'continues to hold' Lessors of personal property liable only for negligence although section 402A 3 now imposes strict liability upon sellers of such property. From this premise Shell argues that the Restatement did not intend to apply strict liability to lessors.

The rule is now settled in California that 'A manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being.' (Greenman v. Yuba Power Products, Inc. (1963) 59 Cal.2d 57, 62, 27 Cal.Rptr. 697, 700, 900, 13 A.L.R.3d 1049.) A retail dealer, being an 'integral part of the overall producing and marketing enterprise' (Vandermark v. Ford Motor Co. (1964) 61 Cal.2d 256, 262, 37 Cal.Rptr. 896, 899, 171), is similarly liable. (See also Elmore v. American Motors Corp. (1969) 70 Cal.2d 578, 75 Cal.Rptr. 652; Prosser, Strict Liability to the Consumer in California (1966) 18 Hastings L.J. 9.) We have given this rule of strict liability a broad application. Recently in the Elmore case, Supra, we extended its protection to injured bystanders, a category not covered by the Restatement which limited its application to harm caused 'to the ultimate user or consumer.' 4 (Rest.2d Torts, § 402A;

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see fn. 3, Ante.) We there observed that the doctrine of strict liability may not be limited either 'on a theory of privity of contract' or 'on the theory that no representation of safety is made to the bystander.' (70 Cal.2d at p. 586, 75 Cal.Rptr. at p. 656--657, 451 P.2d at p. 88--89.) Emphasizing that our formulation was not restrictive, we pointed out that 'in both Greenman and Vandermark we did not limit the rules stated to consumers and users but instead used language applicable to human beings generally.' (Id.)

Such a broad philosophy evolves naturally from the purpose of imposing strict liability which 'is to insure that the costs of injuries resulting from defective products are borne by the manufacturers that put such products on the market rather than by the injured persons who are powerless to protect themselves.' (Greenman v. Yuba Power Products, Inc., Supra, 59 Cal.2d 57, 63, 27 Cal.Rptr. 697, 701, 901.) 5 Essentially the paramount policy to be promoted by the rule is the protection of otherwise defenseless victims of manufacturing defects and the spreading throughout society of the cost of compensating them. Thus the court in Kriegler v. Eichler Homes, Inc. (1969) 269 Cal.App.2d 224, 74 Cal.Rptr. 749, while noting that the rule of strict liability had theretofore been applied in California only to manufacturers, retailers and suppliers of personal property, found no difficulty in extending its application to builders engaged in the mass production and sale of homes. 6

Similarly we can perceive no substantial difference between Sellers of personal property and Non-sellers, such as bailors and lessors. In each instance, the seller or non-seller 'places (an article) on the market, knowing that it is to be used without inspection for defects, * * *.' (Greenman, supra, 59 Cal.2d at p. 62, 27 Cal.Rptr. at p. 700, 377 P.2d at p. 900) In the light of the policy to be subserved, it should make no difference that the party distributing the article has retained title to it. Nor can we see how the risk of harm associated with

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166 practice notes
  • 10 Cal.4th 1185, S029736, Peterson v. Superior Court (Banque Paribas)
    • United States
    • California Supreme Court of California
    • August 21, 1995
    ...as a builder who is engaged in the business of constructing (i.e. manufacturing) rental properties. (See Price v. Shell Oil Co. (1970) 2 Cal.3d 245, 251, 85 Cal.Rptr. 178, 466 P.2d 722, citing Kriegler v. Eichler Homes, Inc. (1969) 269 Cal.App.2d 224, 227, 74 Cal.Rptr. 749.) The record befo......
  • 101 Cal.App.3d 268, 57639, Tauber-Arons Auctioneers Co. v. Superior Court
    • United States
    • California California Court of Appeals
    • January 22, 1980
    ...a lessor (McClaflin v. Bayshore Equipment Rental Co., 274 Cal.App.2d 446, 79 Cal.Rptr. 337 (stepladder) and Price v. Shell Oil Co., 2 Cal.3d 245, 85 Cal.Rptr. 178 (gasoline truck)); a developer (Kriegler v. Eichler Homes, Inc., 269 Cal.App.2d 224, 74 Cal.Rptr. 749 (a builder engaged in mass......
  • 133 Cal.App.4th 1528, A105392, McCrary Construction Co. v. Metal Deck Specialists, Inc.
    • United States
    • California California Court of Appeals
    • November 14, 2005
    ...in connection with the equipment or the condition, maintenance, possession, operation or use thereof” ’ (Price v. Shell Oil Co. [(1970)] 2 Cal.3d 245 [85 Cal.Rptr. 178]), or ‘from any and all claims for damages to any person or property by reason of the use of said leased property’ (Morgan ......
  • 144 Cal.App.4th 689, C052420, Nelson v. Superior Court
    • United States
    • California California Court of Appeals
    • November 6, 2006
    .... . .’” (Stein v. Southern Cal. Edison Co. (1992) 7 Cal.App.4th 565, 570-571 [8 Cal.Rptr.2d 907] , quoting Price v. Shell Oil Co. (1970) 2 Cal.3d 245, 250 [85 Cal.Rptr. 178].) This is an important deviation from the Restatement Second of Torts and continues to distinguish California law fro......
  • Request a trial to view additional results
163 cases
  • 10 Cal.4th 1185, S029736, Peterson v. Superior Court (Banque Paribas)
    • United States
    • California Supreme Court of California
    • August 21, 1995
    ...as a builder who is engaged in the business of constructing (i.e. manufacturing) rental properties. (See Price v. Shell Oil Co. (1970) 2 Cal.3d 245, 251, 85 Cal.Rptr. 178, 466 P.2d 722, citing Kriegler v. Eichler Homes, Inc. (1969) 269 Cal.App.2d 224, 227, 74 Cal.Rptr. 749.) The record befo......
  • 101 Cal.App.3d 268, 57639, Tauber-Arons Auctioneers Co. v. Superior Court
    • United States
    • California California Court of Appeals
    • January 22, 1980
    ...a lessor (McClaflin v. Bayshore Equipment Rental Co., 274 Cal.App.2d 446, 79 Cal.Rptr. 337 (stepladder) and Price v. Shell Oil Co., 2 Cal.3d 245, 85 Cal.Rptr. 178 (gasoline truck)); a developer (Kriegler v. Eichler Homes, Inc., 269 Cal.App.2d 224, 74 Cal.Rptr. 749 (a builder engaged in mass......
  • 133 Cal.App.4th 1528, A105392, McCrary Construction Co. v. Metal Deck Specialists, Inc.
    • United States
    • California California Court of Appeals
    • November 14, 2005
    ...in connection with the equipment or the condition, maintenance, possession, operation or use thereof” ’ (Price v. Shell Oil Co. [(1970)] 2 Cal.3d 245 [85 Cal.Rptr. 178]), or ‘from any and all claims for damages to any person or property by reason of the use of said leased property’ (Morgan ......
  • 144 Cal.App.4th 689, C052420, Nelson v. Superior Court
    • United States
    • California California Court of Appeals
    • November 6, 2006
    .... . .’” (Stein v. Southern Cal. Edison Co. (1992) 7 Cal.App.4th 565, 570-571 [8 Cal.Rptr.2d 907] , quoting Price v. Shell Oil Co. (1970) 2 Cal.3d 245, 250 [85 Cal.Rptr. 178].) This is an important deviation from the Restatement Second of Torts and continues to distinguish California law fro......
  • Request a trial to view additional results
2 firm's commentaries
  • Closing The Arguments On Conte
    • United States
    • LexBlog United States
    • January 22, 2009
    ...for injuries caused by allegedly defective products has been justified by reference to this “paramount policy.” Price v. Shell Oil Co., 2 Cal.3d 245, 251 (1970). Specifically as to inadequate warning claims the court in Anderson v. Owens-Corning Fiberglas Corp., 53 Cal.3d 987 (1991), held, ......
  • Amazon Subject to Strict Products Liability in California
    • United States
    • JD Supra United States
    • August 26, 2020
    ...for “market realities” and to cover new transactions in “widespread use . . . in today’s business world.” (Price v. Shell Oil Co. (1970) 2 Cal.3d 245, 252.) To determine whether the doctrine of strict products liability should be applied in a situation that has not been considered by previo......
1 books & journal articles
  • Buyer beware: you may be liable for the defective products of your predecessor.
    • United States
    • Defense Counsel Journal Vol. 75 Nbr. 2, April 2008
    • April 1, 2008
    ...Id. at 429. (16) Id. at 426. (17) Id. at 422-23. (18) Id. at 430. (19) Ray, 560 P.2d at 9. (20) Id. at 31 (citing Price v. Shell Oil Co., 466 P.2d 722 (Cal. 1970)). (21) Turner, 244 N.W.2d at 428. (22) Ray, 560 P.2d at 11. (23) Id. (24) Id. (25) RESTATEMENT (THIRD) OF TORTS [section] 12 cmt......