Economy Fire and Cas. Co. v. Goar

Decision Date30 June 1989
Citation551 So.2d 957
CourtAlabama Supreme Court

Steven E. Haddock of Hardwick, Knight & Haddock, Decatur, for appellant.

Byrd R. Latham of Patton, Latham, Legge & Cole, Athens, for appellee.


As subrogee to the rights of its insureds, Loyd and Rosella Pugh, Economy Fire and Casualty Company appeals from a summary judgment in favor of Charles Goar on its third-party complaint against Goar for damages resulting from an accident involving a cattle trailer owned by Goar but loaned to the tort-feasor, Leroy Craft.

On July 9, 1985, Craft borrowed a cattle trailer from Goar in order to transport livestock to auction; the trailer attached to the rear of Craft's truck by a ball hitch and safety chain. Testimony as to whether the hitch was rusted and in poor condition at the time of the accident, and as to whether Goar had knowledge of the hitch's condition, is in conflict: Craft testified that Goar told him after the accident that he knew the hitch was "bad," but Goar denied making the statement to Craft and testified that he had no suspicion that the hitch was weakened or damaged. Mrs. Pugh was struck in her front yard by the trailer, which had broken free from Craft's truck as he drove past the Pugh home.

The Pughs sued Craft, alleging negligence, and sued Economy Fire, alleging bad faith, payment of medical benefits, and payment of uninsured motorist benefits. Economy Fire filed a cross-claim against Craft, and a third-party complaint (based on its right of subrogation through its policy with the Pughs) against Goar, alleging negligence, wantonness, and negligent entrustment of the trailer to Craft. Although jury verdicts were returned for the Pughs against Economy Fire and Craft, the only issue for our review is whether the trial court erred in granting Goar's motion for summary judgment prior to trial as to Economy Fire's third-party complaint.

Economy Fire's third-party complaint was filed July 22, 1987: therefore, pursuant to Code 1975, § 12-21-12, proof by substantial evidence is required in order to submit an issue of fact to the trier of the facts. "Substantial evidence shall mean evidence of such quality and weight that reasonable and fair-minded persons in the exercise of impartial judgment might reach different conclusions as to the existence of the fact sought to be proven. A scintilla of evidence is insufficient to permit submission of an issue of fact to the trier of facts." § 12-21-12(d). Consequently, to establish Goar's liability, Economy Fire must present substantial evidence that Goar owed a duty to Mrs. Pugh; that he breached the duty of care owed to her; that a causal relationship existed between Goar's conduct and Mrs. Pugh's injuries; and that Mrs. Pugh was injured. Failure to present substantial evidence on any one element renders Economy Fire's third-party complaint insufficient to be presented to the jury.

At the outset, we note that a bailment existed between Goar (the bailor) and Craft (the bailee) and that it existed for the sole benefit of Craft. Therefore, Goar's duty of care was limited to warn of those defects in the trailer of which he had actual knowledge and which were not apparent to Craft:

"As a general rule, the only duty which a gratuitous bailor owes is to warn of known defects which render the bailed chattel dangerous for the purpose for which it is ordinarily used. He is under no duty to communicate any warning of matters which are apparent to all concerned or of which he is unaware, to take affirmative measures to see that the chattel is free from danger, or, with respect to a chattel which is not an inherently dangerous instrumentality, to put it in a usable condition. On the other hand, it has been held that even if the bailment is gratuitous, a bailor owes a duty to see that the subject of the bailment is in a reasonably safe condition.

"A lender of a chattel is liable to those whom he should expect to use the chattel, or to be in the vicinity of its probable use, for injuries resulting from use of the chattel, where he knows or should realize that the chattel is likely to be dangerous for such use, and has no reason to believe that such persons will realize its dangerous condition, and fails to exercise reasonable care to inform them thereof.

"However, one making a gratuitous loan is not liable to the borrower on the theory of a breach of an implied warranty of fitness, or, with respect to a chattel which is not an inherently dangerous instrumentality, for failure to communicate information concerning defects in the thing lent, not known to the lender, even if he should have known of them.

"Warnings or instructions are not required if they are not requested and if there is no reason to believe that the persons to whom the thing is furnished does not know how to make proper use of it."

8 C.J.S. Bailments § 44, at 275-76 (1988). See, also, Penton v. Favors, 262 Ala. 262, 267, 78 So.2d 278 (1955):

"It is also insisted that the complaint is defective in not alleging that defendants had knowledge of the defective condition of the car when they let Favors have it to use. This is an essential issue in the case if the bailment is gratuitous. But if it is for hire or based upon other valuable consideration, there is a duty to make reasonable inspection as to its condition. A failure to do so may be negligence without actual knowledge of such defect or of facts sufficient to stimulate investigation." (Emphasis added.)

The only evidence offered by Economy Fire to prove that Goar breached the duty of care owed to Mrs. Pugh in loaning Craft the trailer was Craft's statement in his deposition that, after the accident, "I told Charlie [Goar] about it, and Charlie said he knew the hitch was bad but he...

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