Albina Engine and Machine Works, Inc. v. Abel

• Decision Date: 05 July 1962
• Docket Number: 6762.,No. 6761,6761
• Citation: 305 F.2d 77
• Parties: ALBINA ENGINE AND MACHINE WORKS, INC., Appellant, v. R. A. ABEL and Safway Rental and Sales Company, Appellees. SAFWAY RENTAL AND SALES COMPANY, Cross-Appellant, v. R. A. ABEL and Albina Engine and Machine Works, Inc., Cross-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

305 F.2d 77 (1962)

ALBINA ENGINE AND MACHINE WORKS, INC., Appellant, v. R. A. ABEL and Safway Rental and Sales Company, Appellees.

SAFWAY RENTAL AND SALES COMPANY, Cross-Appellant, v. R. A. ABEL and Albina Engine and Machine Works, Inc., Cross-Appellees.

Nos. 6761, 6762.

United States Court of Appeals Tenth Circuit.

May 31, 1962.

Rehearing Denied July 5, 1962.

John A. Johnson and Robert E. Shelton, Oklahoma City, Okl. (W. B. Shively, Portland, Or., with them on the brief), for appellant and cross-appellee, Albina Engine & Machine Works, Inc.

L. D. Hoyt, Oklahoma City, Okl. (A. K. Little, Oklahoma City, Okl., with him on the brief), for appellee R. A. Abel.

Gordon F. Rainey, Oklahoma City, Okl., for appellee and cross-appellant, Safway Rental & Sales Co..

Before PICKETT and HILL, Circuit Judges, and CHRISTENSEN, District Judge.

CHRISTENSEN, District Judge.

R. A. Abel brought this action against Albina Engine and Machine Works, Inc., and Safway Rental and Sales Company¹ to recover damages for injuries sustained by him on May 7, 1958, when one of the steel cables suspending scaffolding on which he was standing while working as a painter on the side of a building in Oklahoma City broke, causing him to fall to the pavement below.

Albina was the owner of the equipment which had been rented to Abel's employer by Safway. It was not claimed that Albina's officers or employees directly were negligent, but the trial court held as a matter of law that any negligence of theirs would be imputed to both defendants as joint adventurers in the rental of the equipment.

During the early stages of the trial, the court struck Albina's cross claim against Safway for indemnity, refusing to give further consideration to the matter.

The jury returned a verdict for substantial damages against both defendants.

Albina has appealed in No. 6761 asserting that the trial court committed prejudicial error by determining that it was a joint adventurer and by other rulings, instructions, and comments to the jury which it is charged renders the verdict vulnerable; and Albina further claims that, in any event, the court erred in failing to award it judgment over on the cross claim for indemnity against Safway and in striking the cross claim. Number 6762 is Safway's cross appeal by which it contends that it is not liable to Abel because its employee who was responsible for the accident was acting, in relation to the transaction, as "agent" or "sub-agent" of Albina. Involving the same record below, the appeals are consolidated for disposition here.

The scaffold with its cables, known as an "Albina Mechanical Stirrup" was owned by Albina, an Oregon corporation, and had been rented to Abel's employer (Manhattan Construction Company) by Safway. It had been shipped by Albina from Portland, Oregon, to Safway at Oklahoma City almost two years earlier, pursuant to arrangements between Albina and Safway which will be referred to in more detail later.

During 1958, in the course of a previous rental of the same equipment to another, one of the cables had come in contact with an electric highline and had been burned. The cable was pulled past the damaged area and tied off so that the undamaged section still could be used. One Edwin B. Hayes, Sales Manager of Safway, and in charge of its Oklahoma place of business, inspected the damaged cable the next day. About three weeks later the scaffold and cable were returned to the Safway warehouse. When the equipment was rented to Abel's employer there had been no repair or replacement and no notice to Abel or his employer of the damage. Hayes, at the trial, indicated that he had forgotten about it. There was abundant evidence tending to establish that he was negligent.

In 1955, prior to any use of Albina equipment in Oklahoma City, Albina and Safway had executed a written contract reciting that Safway was employed as "agent and representative" of Albina for the sale, rental and servicing of Albina scaffolds and other designated equipment in Oklahoma, Kansas and the western half of Missouri under terms, conditions and prices to be prescribed by Albina. Title to consigned resale or rental equipment was to remain in Albina until sales were made. It was provided that for rental of Albina equipment to third parties Safway would have a commission of forty percent of the amount to be charged to customers in Albina's rental schedule. Albina agreed to furnish on consignment two mechanical stirrups with baskets and accessories and additional units thereafter sufficient to supply adequately the normal rental demands. The contract as originally written also required Safway to forward to Albina each month copies of all sale, rental and collection records, to accept payment for Albina of all amounts due it, and to make remittance each month after first deducting Safway's commissions and authorized expenses. Safway was obliged to provide dry storage for rental equipment. It was further stated in the original contract that rental forms provided by Albina were to be used, that all contracts of sale, notes and mortgages were to be in the name of and payable to Albina and that any extension of credit would require Albina's approval. Safway further undertook the obligation of acting as "agent" of Albina in "servicing" Albina's scaffolds and equipment.

This written contract, after execution by Albina, was signed on behalf of Safway and forwarded to Albina with a letter dated June 17, 1955, which requested that Safway be permitted to use its own rental forms and that it be permitted to assume all credit risks and carry all paper. Albina agreed to these requests in a letter dated June 21, 1955. In 1957 it was agreed that Albina would be entitled to fifty percent of its "suggested" rental schedule during the time Safway was renting Albina's equipment to others, notwithstanding the amount of rental Safway itself actually received. Except as these changes and subsequent practice with reference to them may have modified the original written agreement, the latter agreement continued in effect.

The trial court concluded, and subsequently instructed the jury to the effect, that upon the undisputed evidence Safway and Albina were joint adventurers in the rental of the equipment. The appellant Albina challenges this ruling, contending that the evidence established that Safway was no more than an independent contractor with reference to the rental of the equipment and that in any case the joint venture issue should have been submitted to the jury as a question of fact. It is Abel's position that the uncontroverted record established the joint venture; that if for any reason the joint venture did not sufficiently appear, a relationship of principal and agent or master and servant with the same effect upon both appellants did appear; and that the decision of this court upon an earlier appeal fixed the law of the case that Albina was "much more than an independent contractor." Abel v. Albina Engine & Machine Works, 284 F.2d 510 (10 Cir. 1960).

With reference to the latter contention, we cannot agree that in the earlier appeal Albina's status was fixed finally with reference to the question of liability. The prior appeal was taken by Abel from an order of the trial court sustaining Albina's motion to dismiss the complaint on the ground that valid service of summons had not been obtained. The only question decided and thus foreclosed was the validity of service of process upon Albina. While in resolving that question we indicated that Safway was more than an independent contractor on the record then before us, we refrained in form and substance from anticipating a ruling on the issue of liability.² Merely by raising, asserting or contesting such a question in the early stages of a legal proceeding a party does not forfeit trial upon the merits, even though the substance of some of the affidavits filed in support or denial of personal jurisdiction might be advanced on the issue of liability.

We thus come to a discussion of the relationship of the defendants as disclosed by the evidence at the trial and the question whether the factual basis of that relationship so uncontrovertably appeared as to permit its determination by the trial court as a matter of law.

The substantive law of the State of Oklahoma applies, the jurisdiction of the federal district court being founded upon diversity of citizenship. In that state an independent contractor is one who, exercising an independent employment, contracts to do work according to his own methods and without being subject to the control of his employer except as to the result of the work. Traders and General Insurance Co. v. Edwards, 216 F.2d 441, (10 Cir. 1954) cert. den. 348 U.S. 953, 75 S.Ct. 441, 99 L.Ed. 744; Long v. Valley Steel Products Co., 207 F.2d 505 (10 Cir. 1953); Cities Service Oil Co. v. Kindt, 200 Okl. 64, 190 P.2d 1007 (1948). A joint venture is a special combination of two or more persons where, in some specific venture, a profit is jointly sought without any actual partnership or corporate designation. Eagle-Picher Co. v. Mid-Continent Lead & Zinc Co., 209 F.2d 917 (10 Cir. 1954); Taylor v. Brindley, 164 F.2d 235 (10 Cir. 1947); United States Fidelity & Guar. Co. v. Dawson Produce Co., 200 Okl. 540, 197 P.2d 978 (1948).

None of the parties claims that there is any Oklahoma case which, on closely parallel facts, identifies the relationship of the defendants, although all assert that the principles of various adjudications positively indicate a result favorable to themselves. The peculiar circumstances here involved render especially appropriate the truism that each of such problems must be decided upon its own circumstances, with little help to be anticipated from a detailed consideration of other cases. Traders and General Insurance Co. v. Edwards, 216 F.2d 441 (10 Cir. 1954), cert. den. 348 U.S. 953, 75 S.Ct. 441, 99 L.Ed. 744, supra; United States v. Wholesale Oil...