Gudgel v. Southern Shippers, Inc.

Citation387 F.2d 723
Decision Date26 October 1967
Docket NumberNo. 16013.,16013.
PartiesJohn T. GUDGEL, Plaintiff-Appellant, v. SOUTHERN SHIPPERS, INC., Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)

Mort A. Segall, Champaign, Ill., for appellant.

Charles R. Young, Graham, Meyer, Young, Welsch & Maton, Danville, Ill., for appellee.

Before HASTINGS, Chief Judge, and DUFFY, Senior Circuit Judge, and CUMMINGS, Circuit Judge.

HASTINGS, Chief Judge.

This case arises out of a collision between a car driven by plaintiff-appellant John Gudgel, a citizen of Indiana, and a truck tractor driven by defendant Bud Freischlag, a citizen of Illinios, at an intersection in Danville, Illinois, on June 30, 1963.

Defendants in addition to Freischlag are Southern Shippers, Inc., a Mississippi corporation and common carrier which had leased the tractor for a period of one year on November 8, 1962; Gene Moffett, an Illinois citizen whose name appears as owner-lessor on the lease agreement covering the tractor; Cecil Shockley, an Illinois citizen who had apparently purchased the tractor from Moffett prior to the collision and regularly drove the tractor; and Wally Fondaw, a Mississippi citizen who is president of Southern Shippers.

Appellant's complaint alleges that Freischlag negligently ran a stop light, thereby causing the collision and injuring plaintiff in his person and property. The case was tried to a jury.

At the close of plaintiff's case the trial court granted motions dismissing defendants Moffett and Fondaw from the case and denied defendant Southern Shippers' motion to dismiss. Southern Shippers moved for a directed verdict at the close of defendants' case, and the court denied its motion. The jury returned a general verdict against defendants Freischlag and Southern Shippers.

In answer to special interrogatories, the jury found that Southern Shippers did not own the tractor involved in the collision, that Freischlag was in the employ of Southern Shippers on the date of the collision, and that Freischlag was acting within the scope of his employment as agent of Southern Shippers at the time of the collision.

Southern Shippers moved for judgment notwithstanding the verdict on various grounds, including the absence of evidence to support the finding that Southern Shippers was liable for Freischlag's negligence. The trial court granted the motion.

Plaintiff appeals from the trial court's order granting Southern Shippers' motion for judgment notwithstanding the verdict. The jury's finding that Freischlag was negligent and that his negligence proximately caused injury to plaintiff is therefore not at issue. The sole issue is whether the trial court erred in setting aside the jury's verdict against Southern Shippers.

This being a federal diversity negligence action, it is well settled that state substantive law must be applied. Here, it is the law of Illinois.

It is equally well settled that federal law controls on the procedural question inherent in granting a motion for judgment notwithstanding the verdict. We have consistently followed the rule that such motions should be denied "where the evidence, along with all inferences to be reasonably drawn therefrom, when viewed in the light most favorable to the party opposing such motion, is such that reasonable men in a fair and impartial exercise of their judgment may reach different conclusions." Zink v. Radewald, 7 Cir., 369 F.2d 253, 254 (1966); Valdes v. Karoll's, Inc., 7 Cir., 277 F.2d 637, 638 (1960); Smith v. J. C. Penney Co., 7 Cir., 261 F.2d 218, 219 (1958).

Under Illinois law, Southern Shippers' liability to plaintiff could be established on either of two bases. A master is liable for the torts of his agent committed while acting in the scope of his employment. Darner v. Colby, 375 Ill. 558, 31 N.E.2d 950 (1941); Hulke v. International Mfg. Co., 14 Ill.App.2d 5, 32-33, 142 N.E.2d 717 (1957); Laver v. Kingston, 11 Ill.App.2d 323, 137 N.E.2d 113 (1956). The relationship of master and servant exists if the master has the right to control the servant. Darner v. Colby, supra; Hartley v. Red Ball Transit Co., 344 Ill. 534, 538-539, 176 N.E. 751 (1931); Gundich v. Emerson Comstock Co., 21 Ill.2d 117, 123, 171 N.E.2d 60 (1960). Illinois follows the "loaned servant" doctrine, that one in the general employment of one person becomes the servant of another to whom he is transferred for the performance of a specific task, if control of the employee is wholly transferred to the latter. Yankey v. Oscar Bohlin & Sons, Inc., 37 Ill.App.2d 457, 463, 186 N.E.2d 57 (1962); Gundich v. Emerson Comstock Co., supra.

Even if Freischlag was employed by Shockley, the owner of the tractor, Southern Shippers might be liable. A common carrier operating under an Interstate Commerce Commission certificate is liable for the negligence of an independent contractor operating equipment leased to the carrier, if the contractor is operating by authority of the carrier's I.C.C. certificate and is carrying out the carrier's undertaking. Mellon Nat'l Bank & Trust Co. v. Sophie Lines, Inc., 3 Cir., 289 F.2d 473 (1961); Venuto v. Robinson, 3 Cir., 118 F.2d 679 (1941), cert. den., C. A. Ross Agent, Inc. v. Venuto, 314 U.S. 627, 62 S.Ct. 58, 86 L.Ed. 504 (1941); Beers v. Indianapolis Forwarding Co., 43 Ill.App.2d 303, 193 N.E.2d 473 (1963); Louis v. Youngren, 12 Ill.App.2d 198, 138 N.E.2d 696 (1956). This is based on Restatement of the Law of Torts, § 428:

"An individual or a corporation carrying on an activity which can be lawfully carried on only under a franchise, granted by public authority and which involves an unreasonable risk of harm to others, is subject to liability for bodily harm caused to such others by the negligence of a contractor employed to do work in carrying on the activity."

In the instant case, it is undisputed that Freischlag was paid for his services by Shockley, not by Southern Shippers, and that Southern Shippers and Moffett, then the owner of the tractor, entered into a lease on November 8, 1962, which by its terms was in effect on the date of the collision. The lease is in evidence and provides...

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    ...439 U.S. 1059, 99 S.Ct. 739, 58 L.Ed.2d 716 (1978); Pace v. Southern Express Co., 409 F.2d 331 (C.A. 7, 1969); Gudgel v. Southern Shippers, Inc., 387 F.2d 723 (C.A. 7, 1967).2 See, e.g., Phillips v. J.H. Transport, Inc., 565 So.2d 66, 70-71 (Ala., 1990) (failure to remove placards raises a ......
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    ...Record Distributing Co., 5 Cir., 1967, 374 F.2d 455; Fruit Industries, Inc. v. Petty, 5 Cir., 1959, 268 F.2d 391; Gudgel v. Southern Shippers, Inc., 7 Cir., 1967, 387 F.2d 723; F. W. Woolworth Co. v. Carriker, 8 Cir., 1939, 107 F.2d 689; Safeway Stores v. Fannan, 9 Cir., 1962, 308 F.2d 94; ......
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