Celanese Corp. of America v. John Clark Industries, 14729.

• Citation: 214 F.2d 551
• Decision Date: 30 June 1954
• Docket Number: No. 14729.,14729.
• Parties: CELANESE CORP. OF AMERICA v. JOHN CLARK INDUSTRIES, Inc. et al.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

214 F.2d 551 (1954)

CELANESE CORP. OF AMERICA v. JOHN CLARK INDUSTRIES, Inc. et al.

No. 14729.

United States Court of Appeals, Fifth Circuit.

June 30, 1954.

John W. Stayton, Charles L. Black, Austin, Tex., William H. Keys, Corpus Christi, Tex., for appellant.

Josh H. Groce and John H. Dittmar, San Antonio, for appellees.

Before HUTCHESON, Chief Judge, RIVES, Circuit Judge, and WRIGHT, District Judge.

HUTCHESON, Chief Judge.

The suit was for damages, actual and exemplary, for fire losses in plaintiff's hydraulic die casting plant¹ resulting from the use in it of Lindol HF-X, the hydraulic fluid sold and furnished to plaintiff by defendant for such use.

The claim as set out in detail in the complaint was: that in answer to plaintiff's inquiries as to the possible use in its business of defendant's hydraulic fluid known as Lindol HF,² defendant, giving its specifications and stating that it was "nonflammable" and would "not support combustion", recommended most highly it and a new product HF-M and a still newer one, HF-X;³ that actually plaintiff was the first customer to whom HF-X was sold and shortly thereafter in the plants of two other customers, severe and alarming fires occurred because of its use; that defendant directed the immediate removal from the lines in those plants of HF-M and HF-X; that plaintiff, however, was not advised of such fires or that the fluid had proven dangerous and particularly it was not directed because of its flammableness to remove the fluid from its lines; that instead it was merely advised in a wire that defendant was necessarily withdrawing the HF-X fluid from the market and that plaintiff should please arrange to replace HF-X with HF, which defendant would send it, and ship back the HF-X; that, not having been advised and not knowing that the fluid was a dangerous fire hazard, and being then engaged in getting out a rush order, plaintiff continued to use the fluid for a while after the HF substitute arrived on December 3, and on December 19, a line break occurred in the plant, the fluid sprayed out and flamed up fiercely, causing the damages sued for; that defendant was liable to plaintiff for breach of express and implied warranty, for negligence for failing to make adequate tests before selling the fluid, and for both simple and gross negligence in failing after actual discovery of its dangerous qualities to warn plaintiff thereof.

The defenses were: (1) a general denial; (2) that the product was sold plaintiff under a contract whereby plaintiff expressly assumed the risks incident to the use; (3) that it was of defendant's standard quality and was sold under an agreement which expressly provided that seller makes no warranty of any kind, express or implied, except that the material shall be of seller's standard quality, and that plaintiff, though obligated to test the goods before use and notify defendant if the materials were found unfit, did not do so; (4) that certain named insurance companies with whom plaintiff had executed loan agreements were indispensable parties and should be named as plaintiffs in the suit; (5) that plaintiff was guilty of contributory negligence in not withdrawing the product from use on receipt of HF, the substituted material; and (6) that limitation had barred a large part of the recovery.

The issues thus joined, the cause proceeded to trial to a jury. In its course, a great deal of testimony was offered and, though there were some conflicts, the testimony on the issues of the negligence and gross negligence of defendant preponderated to prove the facts substantially as claimed by plaintiff, and at its conclusion the cause was submitted to the jury on special issues, all of which were found in favor of plaintiff with the exception that in answer to question No. 38, the jury found that plaintiff was negligent in failing to substitute HF for HF-X as requested by defendant. It found, though, in answer to question 39 that this negligence was not a proximate cause of the fire and in answer to other questions that defendant's negligence and gross negligence were.

Upon the issue of exemplary or punitive damages, the parties stipulated that if such damages should be allowed, they would be fixed at $17,500, the amount of plaintiff's attorneys' fees, and the jury allowed and fixed them at that amount.

Appealing from the judgment on the verdict, defendant is here with nine numbered specifications of error presented and argued under six numbered points, insisting that its motion for an instructed verdict should have been granted and the judgment should be here reversed and rendered, or, in the alternative, that the judgment should be reversed and the cause remanded for a new trial.

For the reasons hereafter briefly stated as to each of these grounds, we do not think so. Appellant's main, its most confidently argued point is the one asserting that plaintiffs are bound by the terms and provisions of the "acknowledgment of order", particularly those against warranty, which defendant insists constituted the contract between plaintiff and it.⁴

Appellees, in reply to this contention, citing many cases,⁵ urge upon us: (1) that the contract was made and the obligations of the parties fixed before the acknowledgment of order was delivered to plaintiff; (2) that the provision in it on which defendant relies was not seen by, or called to the attention of plaintiff, and, therefore, was not agreed to by, or binding upon, it; (3) that contracts which it is claimed exempt from negligence are strictly construed and will not exempt therefrom unless the exempting provision claiming it is plain and imperative to that effect, especially is that so when exemption from gross negligence is claimed; and (4) that the provision relied on here does not even purport to exempt from either simple or gross negligence. It especially does not exempt from subsequent negligence after discovered peril.

We are of the clear opinion that appellant's claim of exemption from the consequences of its negligence and gross negligence is without merit under the facts of this case. This is so because: (1) the "acknowledgment" relied on was not contractual, the contract having already been made⁶ before the acknowledgment was sent to plaintiff's office; and (2) if it was a part of the contract and should be given effect as a covenant against warranting, it did not purport to, it did not, contract against its negligence and gross negligence.⁷

Appellant stands no better on its second point that the verdict, finding plaintiff negligent but that this was not the proximate cause of the loss, required: a judgment for defendant on the ground that the negligence of plaintiff was as matter of law the proximate cause of the loss, and the verdict, that it was not, was without support in the evidence; or, in the alternative, the granting of a new trial because the findings were fatally inconsistent and would not support the judgment. This is so because the answers to questions 38 and 39 must be read in the light of the court's definition of "negligence" and "proximate cause".⁸

In the light of those definitions, the findings certainly did not require the entry of judgment for defendant. In their light it is quite plain that the jury meant by the answer to question 38 to say that a prudent person would have substituted HF for HF-X as requested by defendant, but it did not mean to say that he would have done this because he would have foreseen that the natural and probable consequences of its failure to do so would have resulted in the fire and injury in question.

In answering questions 38 and 39 as it did, the jury thus fitted its answers to the questions asked and not to some suppositious content of the word "negligence" which had been otherwise defined in the charge. If the evidence supports the verdict that plaintiff was negligent in the sense of the definition of "negligence" contained in the charge, and we express no opinion on that point, it certainly as clearly supports and fully justifies the finding that such negligence was not the proximate cause of the fire but defendant's negligence was.

While it thus clearly appears that defendant was not entitled to a judgment on the verdict, it appears with equal clarity that there was no fatal inconsistency in the verdict, indeed no inconsistency at all. Under settled law, the submission of the issues of negligence and proximate cause under two separate questions was usual and proper. Besides, no objection was made to the submission of the issues in the form chosen. In the light of the definitions used, the two separate findings were not, they could not be, inconsistent.

Appellant's vigorous argument and its reliance upon Phillips v. Texas & Pacific Ry. Co., Tex.Civ.App., 223 S.W.2d 258, 263, in which the court said:

"Implicit in attributing the quality of negligence to an act or omission is the notice of or a duty to know of its harmful tendency. 38 Am.Jur., p. 667, par. 24; Seale v. Gulf, C. & S. F. Ry. Co., 65 Tex. 274, 57 Am.Rep. 602; City of Dallas v. Maxwell, Tex.Com.App., 248 S.W. 667, 27 A.L.R. 927 * *."

will not, therefore, avail it here, for the definition of "negligence", under which question 38 was submitted, negatived what appellant, on the authority of the cited cases, claims is "implicit" in the quality of negligence.

It may be true that the definition the court gave was not a correct one, but the time to call attention to that was at the submission, and this was not done. The jury was controlled by the definitions given in the charge, and in their light the answers are not at all inconsistent.

What was said by the Supreme Court of Texas in the case of Ford v. Carpenter, 147 Tex. 447, 216 S.W.2d 558, is peculiarly apposite here:

"It is the duty of the trial court to reconcile apparent conflicts in the jury\'s finding if they can be reasonably done in the light of the pleadings and the evidence, the manner in which the

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