Chicago, RI & PR Co. v. Chicago & NW Ry. Co.

• Decision Date: 10 August 1960
• Docket Number: No. 16424,16425.,16424
• Citation: 280 F.2d 110
• Parties: CHICAGO, ROCK ISLAND & PACIFIC RAILROAD COMPANY, Appellant, v. CHICAGO AND NORTH WESTERN RAILWAY COMPANY, Appellee. CHICAGO AND NORTH WESTERN RAILWAY COMPANY, Appellant, v. CHICAGO, ROCK ISLAND & PACIFIC RAILROAD COMPANY, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

280 F.2d 110 (1960)

CHICAGO, ROCK ISLAND & PACIFIC RAILROAD COMPANY, Appellant, v. CHICAGO AND NORTH WESTERN RAILWAY COMPANY, Appellee.

CHICAGO AND NORTH WESTERN RAILWAY COMPANY, Appellant, v. CHICAGO, ROCK ISLAND & PACIFIC RAILROAD COMPANY, Appellee.

Nos. 16424, 16425.

United States Court of Appeals Eighth Circuit.

August 10, 1960.

COPYRIGHT MATERIAL OMITTED

A. B. Howland, Des Moines, Iowa, for Chicago, R. I. & P. R. Co.

Ray H. Johnson, Jr., Des Moines, Iowa, for Chicago & N. W. R. Co.

Before SANBORN, MATTHES and BLACKMUN, Circuit Judges.

MATTHES, Circuit Judge.

Appeals in this diversity action grow out of an accident which occurred on February 5, 1955, when B. L. Kleppe, an employee of Chicago & North Western Railway Company, hereinafter called "North Western", was injured while attempting to release a hand brake on a railroad car which was owned by Chicago, Rock Island & Pacific Railroad Company, hereinafter called "Rock Island." North Western was able to settle Kleppe's claim for $70,000, and thereafter it brought the instant action against Rock Island for indemnity or contribution. The action was tried before the court, resulting in a finding denying North Western indemnity but allowing contribution in the amount of $35,000, or one-half of the settlement amount. Judgment was accordingly entered. Both parties have appealed; North Western claims it is entitled to full indemnity of $70,000; Rock Island claims North Western is not entitled to any amount.

Inasmuch as the relevant facts are detailed with precision in the exhaustive opinion of the Honorable Henry Graven, the trial judge, reported in 179 F.Supp. 33, no useful purpose will be served by another full recitation of the facts.

In summary, it may be stated that the railroad tracks of North Western and Rock Island passed through Goldfield, Iowa, intersecting each other at right angles, and a curved transfer or interchange track connected the two lines. At about 9:00 A.M., February 5, 1955, Rock Island placed five of its cars on the interchange track, all destined for points on North Western lines. At 11:45 A.M. on the same day, one of North Western's trains, with instructions to pick up the cars, arrived at Goldfield and waybills were obtained from the Rock Island station. The hand brakes had been set on four of the cars, including the most northerly one, which was designated as "Rock Island 262261," and Kleppe, as North Western's brakeman, ascended to a platform on this car for the purpose of releasing the brake. Being unable to release the brake while the car was standing still, he signalled another employee to move the cars. As the cars were placed in motion, Kleppe continued to pull on the brake handle and after the car had moved 15 to 20 feet, the brake handle and part of the brake housing came loose and Kleppe was thrown to the ground and seriously injured. From the evidence it appears that the brake was defective, in that parts of its mechanism were missing.

When Kleppe made claim against North Western, defense of the claim was tendered to, but refused by, Rock Island, and that company refused to participate in the negotiations or settlement of the claim, which was effected without suit being filed.

We are first confronted with the contention that the Codes of Car Service & Interchange Rules, promulgated by the Association of American Railroads, and to which North Western and Rock Island were parties, operated as a waiver of, or bar to, any claim for indemnity or contribution. Portions of the rules relied upon by North Western are set out verbatim in the opinion of the trial court. 179 F.Supp. at pages 40, 41. In particular, Rock Island relies upon Rule 1(a) which relates to "Care of Foreign Freight Cars" and "Car Service" Rule 7.¹

After giving careful consideration to this defense, it was disallowed, the trial court holding that "the rules relied upon by the defendant do not operate as a waiver of or a bar to any claim for indemnity or contribution that the plaintiff might have against the defendant arising out of the mishap. It is the view of the Court that the most that appears from the evidence is that many railroads heretofore had observed the protocol of not making claims against other railroads of the nature here involved." 179 F.Supp., at pages 41-42. We are in accord with this finding and conclusion.

There can be little dispute with respect to the pertinent legal principle. Generally, parties sui juris may waive a legal right, including the right of indemnity or contribution, provided of course that such an agreement is not contrary to public policy or void because of illegality. See and compare Govero v. Standard Oil Co., 8 Cir., 192 F.2d 962, at pages 964, 965, where Judge Sanborn, in speaking for the Court, stated:

"We know of no public policy which would prevent a landlord and a tenant from agreeing that the tenant should assume, and agree to indemnify the landlord against, the risk of loss, damages and injuries occurring on the premises during the term of the lease, whether due to the negligence of the landlord or not."

See also, Aluminum Co. of America v. Hully, 8 Cir., 200 F.2d 257, 262, and 17 C.J.S. Contracts § 262, p. 645.

The fatal weakness of Rock Island's contention becomes apparent on examination of the Car Service & Interchange Rules upon which it so strenuously relies. We are unable to detect any language therein which, even by inference, could be construed as constituting a waiver of, or bar to, the legal right of one railroad member to seek indemnity or contribution from another member. There is no reference of any kind in the rules to indemnity or contribution. In our view, the rules are solely designed to govern the care and maintenance of cars belonging to one carrier while in possession of another.²

We cannot agree with Rock Island that the language in Rule 1(a) that "(e)ach railroad is responsible for the condition of all cars on its line, and must give to all equal care as to inspection and lubrication," or in Rule 7 that "(u)nless otherwise arranged between the roads concerned the receiving road shall be responsible for the cars * * *," insulates Rock Island from a claim for indemnity or contribution. If the railroad companies which are parties to the Code of Rules desire to waive this legal right effectively, they should have no difficulty in clearly expressing such intent, and until they do, efforts to have such a provision read into the rules by judicial interpretation will, in all likelihood, be unavailing.

We now proceed to consider the merits of North Western's claim to indemnity or contribution. Briefly, Rock Island's position is that it was not liable to Kleppe. North Western contends that Rock Island was primarily liable, or, at the very least, equally liable, for Kleppe's injuries. In view of these diametrically opposed positions, it may be desirable to consider the nature of these remedies of indemnity and contribution. Both actions are premised on a finding that two or more parties have been guilty of actionable wrong thereby bringing injury or damage to some third person. The Supreme Court of Iowa, in Best v. Yerkes, 247 Iowa 800, 77 N.W.2d 23, 26, 27, 28, 60 A.L.R.2d 1354, stated: "The right to indemnity, or contribution, presupposes actionable negligence of both parties, toward a third party." (Emphasis supplied). At common law, when one of the guilty parties was made to bear the entire damage, no relief was afforded him, as against his co-tortfeasors, upon the theory that courts would not adjust rights between wrongdoers. However, Iowa, as other jurisdictions, recognized exceptions to this general rule by way of allowing indemnity, or full recovery of the amount expended, when it could be shown that the one bearing the full loss was not guilty of actual wrong, but was caused to be constructively liable in some respect. Such exceptions were noted in Best v. Yerkes, supra, where the Iowa court stated, 77 N.W.2d at page 27:

"While stating the general rule, this court has recognized and applied many exceptions. Thus, in cases of derivative liability, where a principal or employer has been held negligent only because of some act of his agent or employe, he has been allowed to recover indemnity from the one guilty of the actual negligent act. citing cases. So in workman\'s compensation cases, so-called `safe premises or property\' cases, city street and sidewalk cases, cases involving building contractors and subcontractors, cases in which an employe is directed to do an act not openly and apparently wrong, and cases involving the right to indemnity as between the supplier of a defective product which does harm and the merchant who stocks and sells it without inspection, indemnity has been frequently allowed."

Frequently, the courts, in considering the right to indemnity, speak in terms of "active" vs. "passive" negligence, or "primary" and "secondary" liability. See Best v. Yerkes, supra, and compare Franzen v. Dimock Gould & Co., Iowa, 101 N.W.2d 4, 7, where city recovered indemnity from property owner in a "sidewalk case."

However, where both, or all parties, are equally guilty of an unintentional or inadvertent wrong, i. e., negligence, so that it cannot be said that one is more guilty than the other, indemnity could not be had, for there is no "innocent" party, who although liable, was guilty of no actual wrong. Again, the common law rule in such a situation was that no relief could be afforded to joint wrongdoers. However, in some jurisdictions, by statute or decisional law, contribution is recognized and enforced as an equitable remedy.³

Apparently, prior to 1956, no action for contribution was recognized in Iowa, and the only remedy available to the party upon whom the loss fell was to seek indemnity by proving that his negligence was but passive, or that his liability was secondary as against the active negligence or primary liability of another. In that year, the...