Cahill Bros., Inc. v. Clementina Co.

• Decision Date: 11 October 1962
• Citation: 208 Cal.App.2d 367,25 Cal.Rptr. 301
• Court: California Court of Appeals Court of Appeals
• Parties: CAHILL BROTHERS, INC., Plaintiff and Respondent, v. CLEMENTINA COMPANY, a corporation, Defendant and Appellant. Civ. 19850.

Page 301

25 Cal.Rptr. 301

208 Cal.App.2d 367

CAHILL BROTHERS, INC., Plaintiff and Respondent, v. CLEMENTINA COMPANY, a corporation, Defendant and Appellant.

Civ. 19850.

District Court of Appeal, First District, Division 1, California.

Oct. 11, 1962.

Rehearing Denied Nov. 2, 1962.

Hearing Denied Dec. 5, 1962.

Carroll, Davis, Burdick & McDonough, San Francisco, for appellant.

Daniel J. O'Brien, Jr., Daniel J. O'Brien, III, Edward Molkenbuhr, Jr., San Francisco, for respondent.

MOLINARI, Justice.

This is an appeal from a judgment for $17,609.73, plus interest and costs, on a jury verdict for plaintiff and respondent, Cahill Brothers, Inc., a corporation, hereinafter referred to as Cahill, against defendant and appellant, Clementina Company, a corporation, hereinafter referred to as Clementina.

The Facts

J. Peter Cahill, hereinafter referred to as Peter, owned certain buildings at Kearny and Sacramento Streets in San Francisco, California, which he desired to have demolished so that he could construct a new building on the site. He entered into a contract with Cahill, which was headed by his father, John R. Cahill, hereinafter referred to as John, for such demolition and construction work upon a cost plus three per cent fee basis.

Cahill had in its employ for over 40 years one Edwin A. Larkin, hereinafter referred to as Larkin. For many years prior to the accident which is the subject of this action, Larkin had acted as general superintendent for Cahill with whom he enjoyed a position of trust and confidence. Because of this relationship Cahill had from time to time permitted Larkin to engage in other business activities continuing all the while his said employment with Cahill. Among these was the formation in 1941, with two other pesons, of a partnership known as Clementina Company for the purpose of renting construction equipment. In 1946 Clementina was incorporated; and at the time of the accident in October 1956 which brought about this litigation, there were 19 stockholders besides Larkin, who was then the owner of 46 per cent of its stock. Neither Cahill, nor any of its employees, other than Larkin, owned any interest or stock in Clementina.

In 1950 Clementina commenced doing demolition work for other contractors including Cahill. Its contracts with Cahill were always oral, on an informal basis and without the submission of bids. Clementina had only two permanent employees: Larkin, who was its managing officer, and an office girl. It was Clementina's practice to hire such employees as it needed for a particular demolition job, and on numerous occasions it would 'borrow' employees from Cahill. At first, whenever employees of Cahill were 'borrowed' they were paid directly by Clementina, but in later years they were paid by Cahill under its payroll, because Cahill's employees enjoyed a union contract with Cahill which contained welfare provisions, while Clementina had no such union contract. In these instances it was the practice of Cahill to charge such wages back to Clementina "in the final adjustment" for the particular demolition job done for Cahill. The evidence discloses that in demolition jobs done for Cahill, Clementina did so usually on a cost plus 10 per cent basis, subject to final adjustment, with offsets to the credit of Cahill for wages to employees under the aforesaid arrangement and for the sums realized from salvaged materials. Clementina owned certain land on which it maintained its office and area for its materials and equipment. A portion of this area was rented to Cahill for a small separate office building.

On or about September 15, 1956, Cahill orally contracted with Clementina to do the demolition work on Peter's property. Under this contract Clementina was to completely wreck the existing buildings, sell the salvage, and render an accounting as to the amount recovered for salvage. Cahill, on the other hand, was to pay the demolition cost 'plus a fee to be determined.' The required demolition permits were taken out by Cahill in its name. The first work done on the job was by Cahill's men and consisted of the removal of furniture and plumbing from the buildings about to be demolished. Thereafter the demolition work commenced. From the inception of the job for Peter at said site, Larkin was acting as general superintendent for Cahill on a salary basis. He was acting, as testified by him, 'in a dual capacity'--as general superintendent for Cahill and as 'the responsible and managing officer of Clementina.' Larkin testified further: that Clementina was doing the demolition work 'as a subcontractor'; that '[e]verything in connection with the job was within my control, and I am Clementina Company and also Cahill Brothers'; that it 'is up to my judgment as to what work I would put on the Cahill work and what part I would do on my own'; and that he was looking out for Cahill Brothers' interests in doing the demolition job and was attempting to 'hold the cost down' as well as he could.

In the course of the subject demolition job and in his capacity as such superintendent for Cahill, Larkin ordered several of Cahill's employees to engage in the demolition work which work was a 'part of his job.' Among these employees were two carpenters, Robert J. Dobson and Kenneth Wellman. While performing demolition work each was acting in the capacity of a foreman. Both testified that in the demolition work they took orders from Larkin and that during such work they considered themselves employees of Clementina, although their payroll checks on this job were issued by Cahill. Each testified that they had worked under such an arrangement previously, shifting from Cahill's employment to that of Clementina, during the demolition work, upon the completion of which they went back to Cahill's employ. They also testified that prior to the establishment of the aforesaid union welfare plan their checks were issued by Clementina, Wellman testifying that this was the first demolition job in which he received his payroll check from Cahill.

Larkin testified that Dobson and Wellman were ordered on this demolition job by him in his capacity as their superior at Cahill; that Wellman was directed by him 'to keep the job well barricated'; that barricades were erected by Dobson and Wellman, the lumber for the same being furnished by Cahill pursuant to his order as superintendent for Cahill; that the barricades were put up for purposes of protecting the public from falling into any openings or getting into any of the stores which were still occupied by some of the tenants in the buildings about to be demolished; that he instructed Wellman and Dobson 'to keep the place protected,' and that in doing so they were protecting 'Cahill's interests': and that the barricading was done for and on behalf of Cahill, although in another instance he stated that barricading was the type of work he 'was supposed to do; * * *.' There was a conflict as to whether there were both Cahill and Clementina signs affixed to the barricades. Larkin testified further that one of the reasons Clementina was engaged to do the demolition work instead of an outside demolition firm was the presence of tenants who were still in occupancy on the sidewalk level of the building; that '[a]n outside man wouldn't try to protect tenants'; and that the barricade was constructed in the manner in which it was (without a canopy) so as not to block the doorways of the tenants.

Despite such barricade, on Sunday, October 7, 1956, while demolition work was in progress, one William Hull, a pedestrian, was injured when he fell into an excavation on said job site. Hull brought suit against both Cahill and Clementina alleging that his injuries were due to their negligence in failing to provide adequate safeguards for pedestrians. After a trial Hull was awarded a judgment for $30,000, plus costs against both Cahill and Clementina. Said judgment was satisfied by the payment of the sum of $15,576.66 by Cahill and a like sum by Clementina, said sum representing one-half of the judgment, costs and accrued interest. Cahill thereupon filed this present action against Clementina for indemnification, seeking recovery of said sum of $15,576.66, plus the sum of $2,033.07 expenses incurred in defending the Hull action, or a total of $17,609.73. The latter sum was awarded to Cahill by a jury in the instant action.

Before proceeding to the questions and contentions presented on this appeal, it should be noted that the evidence further disclosed that the total cost of the said demolition work amounted to $25,276.38, and that the labor charge for the carpenters 'borrowed' by Clementina from Cahill amounted to $2,838.92. The aggregate of these sums, i. e., $28,115.30, less a credit of $558.07 for lumber salvage, or a net of $27,557.23, was billed to Peter by Cahill. Peter was also charged with the sum of $2,723.62 as Clementina's fee. This sum of $2,723.62 represented the amount accounted to Cahill by Clementina as the amount received by the latter for salvage, and because the said sum approximated the 10 per cent fee which it was agreed Clementina should receive, the respective credits were allowed by agreement between Cahill and Clementina to offset each other without the necessity of exchanging payments.

As established by the pre-trial conference order, Cahill contends that Clementina was its subcontractor, and as such solely responsible for the demolition work, while Clementina, on the other hand, asserts that the two corporations were joint venturers in such work. The essence of Cahill's cause of action, as advanced in the court below, was that Clementina, as such a subcontractor, was solely at fault with respect to Hull's injuries and therefore was obligated to indemnity Cahill for the latter's portion of the satisfied judgment and its expenses incurred in defending the Hull action. Clementina's defense, in substance, was there predicated upon its claim that...