Fulton Ins. Co. v. White Motor Corp.

• Decision Date: 02 February 1972
• Citation: 261 Or. 206,493 P.2d 138
• Parties: The FULTON INSURANCE COMPANY, American Mutual Liability Insurance Company, and Aetna Insurance Company, Respondents, v. WHITE MOTOR CORPORATION, Appellant.
• Court: Oregon Supreme Court

Page 138

493 P.2d 138

261 Or. 206

The FULTON INSURANCE COMPANY, American Mutual Liability

Insurance Company, and Aetna Insurance Company, Respondents, v. WHITE MOTOR CORPORATION, Appellant.

Supreme Court of Oregon.

Argued and Submitted July 9, 1971.

Decided Feb. 2, 1972.

Kenneth D. Renner, Portland, argued the cause for appellant. With him on the briefs were Souther, Spaulding, Kinsey, Williamson & Schwabe, Roland F. Banks, Jr., and Ridgway K. Foley, Jr., Portland.

David N. Hobson, Portland, argued the cause for respondents. On the brief were Phillips, Coughlin, Buell, Stoloff & Black and Donald C. McClain, Portland.

Before O'CONNELL, C.J., and McALLISTER, HOLMAN, HOWELL and FOLEY, JJ.

McALLISTER, Justice.

This is an action for common-law indemnity. Defendant is the manufacturer of a dump truck. Plaintiffs are the insurers of Elmer Griffin and Steven Griffin, the owner and driver of the truck, and of the contractor and subcontractor on a job where the truck as being used. On May 31, 1967, the truck was loaded with rock and was being driven to Lake Oswego from a quarry near Stafford. Plaintiffs' third amended complaint alleges that during the trip 'the suspension system on the left front axle failed causing the load of rocks and gravel being carried to shift to the left and causing the rocks to spill off the truck and fall upon a vehicle * * *.' The falling rocks fatally injured the driver of the other vehicle, damaged the car, and injured three passengers.

As a result of this accident a wrongful death action was brought against plaintiffs' insureds. Plaintiffs settled that case and also the personal injury and property damage claims. Plaintiffs now seek indemnity from defendant, the manufacturer of the truck, charging it with negligent manufacture and with strict liability for sale of the truck in an unreasonably dangerous condition. After trial to a jury, plaintiffs had verdict and judgment in the total amount claimed. On appeal, for the first time, defendant has demurred to the complaint on the ground that it fails to state a cause of action.

In an action for indemnity, the claimant must plead and prove that (1) he has discharged a legal obligation owed to a third party; (2) the defendant was also liable to the third party; and (3) as between the claimant and the defendant, the obligation ought to be discharged by the latter. Restatement, Restitution § 76, 331 (1937); Nelson v. Sponberg, 51 Wash.2d 371, 318 P.2d 951, 954 (1957); Aetna Freight Lines, Inc. v. R. C. Tway Company, 352 S.W.2d 372, 373 (Ky.App.1961). The last requirement means that, although the claimant must have been legally liable to the injured third party, his liability must have been 'secondary' or his fault merely 'passive,' while that of the defendant must have been 'active' or 'primary.' Kennedy v. Colt, 216 Or. 647, 653--654, 339 P.2d 450 (1959); Astoria v. Astoria & Columbia River R. Co., 67 Or. 538, 547--548, 136 P. 645, 49 L.R.A.,N.S., 404 (1913); Jackson v. Associated Dry Goods Corp., 13 N.Y.2d 112, 242 N.Y.S.2d 210, 212, 192 N.E.2d 167, 169 (1963); Bush Term. Bldgs. Co. v. Luckenbach S.S. Co., 9 N.Y.2d 426, 214 N.Y.S2d 428, 430--432, 174 N.E.2d 516, 517--518 (1961). In a recent discussion of indemnity in General Ins. Co. v. P. S. Lord Mechanical Contractors, Or., 482 P.2d 709 (1971) the court observed that the traditional formulations of active and passive negligence, or primary and secondary liability, do not provide precise guidelines for deciding close cases. Nevertheless, the complaint in an indemnity action must include facts which, if proved, would establish each party's liability to the injured third party, and that the plaintiff's liability was not based on conduct which ought to bar his recovery, however that conduct is described.

The complaint in this case adequately alleged that the accident was caused by defendants in furnishing a defective truck. It also adequately alleges that plaintiffs, on behalf of their insureds, paid the damage claims arising out of that accident. It fails, however, to allege facts showing that the owner and operator of the truck ¹ were secondarily liable for those damages--that is, that there was liability under the law, but no conduct which would bar a right of indemnity.

It is alleged that while Steven Griffin was driving the truck, as the agent and employee of Elmer Griffin and the other insureds, the suspension system failed, causing the load to shift and rocks to fall off onto a passing car. The complaint further alleges that the defects in the suspension system existed when the truck left defendant's possession, and that they were not known to the Griffins prior to the accident. The settlement of the damage claims was reasonable and necessary, the complaint alleges, in view of the 'probable liability' of the Griffins and the other insureds.

Probable liability is not enough. If the claimant's actual liability has not been established by a judgment, facts establishing it must be pleaded and proved in the indemnity action. National Surety Co. v. Johnson, 115 Or. 624, 239 P. 538 (1925); Aetna Freight Lines, Inc. v. R. C. Tway Company, supra; Nelson v. Sponberg, supra. Here it is alleged only that the Griffins were unaware of the defect which caused the accident. No facts are alleged showing their liability for failure to discover an unknown defect. For all the complaint shows, the defect may have been undiscoverable by the exercise of the highest degree of care.

Plaintiffs contends that applicable safety laws make Steven Griffin and his employers liable simply because he was driving the truck in a defective condition. They rely on ORS 483.510:

'* * * no vehicles shall be driven or moved on any highway unless it is so constructed or loaded as to prevent its contents from dropping, sifting, leaking or otherwise escaping therefrom.'

They also rely on the following rule promulgated by the Oregon Public Utilities Commissioner:

'(1) All motor vehicles must at all times be kept in a good state of repair.

'(2) If, during any trip, any vehicle or part thereof becomes so defective or inefficient as to endanger passengers, freight, the operator, other users of the highway or property adjacent to the highway, the vehicle must be stopped and the condition remedied before any continued operation is made.' Or.Adm.Rules ch. 860 § 35--020.

The Commissioner's rules cover private as well as common carriers, and have the force of law. ORS 767.445(1), (3).

We have held that violation of a safety equipment statute is negligence per se, unless the violation consists of a defect which could not have been discovered by the exercise of the highest degree of care. Ainsworth v. Deutschman, 251 Or. 596, 599--600, 446 P.2d 187 (1968). ORS 483.510 is a safety equipment law within the rule of Ainsworth and prior cases on negligence per se; as to the Commissioner's rule we express no opinion. However, even if we assume that a violation of either the rule or the statute may be negligence per se, the complaint did not allege such a violation. There are no facts alleged tending to show that the Griffins failed to exercise the highest degree of care in inspecting the truck, or that the defect could have been discovered in any inspection. ²

In assessing the sufficiency of the complaint when first attacked after judgment, we are committed to a liberal construction in favor of the plaintiff, so that the complaint will be upheld if possible. Politte v. Vanderzee, Or., 473 P.2d 1013 (1970). Nevertheless, the total omission of a material and necessary allegation has been held fatal. Johnson v. School Dist. No. 12, 210 Or. 585, 589, 312 P.2d 591 (1957); Duby v. Hicks, 105 Or. 27, 209 P. 156 (1922); Booth v. Moody, 30 Or. 222, 46 P. 884 (1896); Ball v. Doud, 26 Or. 14, 23--24, 37 P. 70 (1894). Failure to allege the Griffins' secondary liability is such a total omission.

We next consider whether this defect, without more, requires a reversal. In the past we have reversed when we found a pleading, challenged for the first time after verdict, to be fatally defective. Sometimes we have given permission to ask leave of the trial court to amend the pleading. See, e.g., Leesi v. Yamhill County, 136 Or. 295, 301, 298 P. 911 (1931). Duby v. Hicks, supra, 105 Or. at 36, 209 P. 156. But see Booth v. Moody, supra, 30 Or. at 226, 46 P. 884. We are of the opinion that reversal in such cases is often wasteful, and may tend to encourage counsel to delay until after the trial, as a matter of tactics, an attack on an arguably defective pleading. We do not think reversal is required in every case.

ORS 16.330 provides:

'If no objection is taken, either by demurrer or answer, the defendant shall be deemed to have waived any objection, save for the objection to the jurisdiction of the court, and the objection that the complaint does not state facts sufficient to constitute a cause of action. * * *'

We have often said, relying on this statute, that the objection that the complaint fails to state a cause of action is never waived. It is true that the mere failure to raise the question by demurrer before answer does not waive it. However, the statute does not direct what shall be done when the question is raised for the first time on appeal.

In Carver v. Jackson, County, 22 Or. 62, 63--64, 29 P. 77, 78 (1892) the court, considering the reasons for noticing basic defects in the complaint even though not properly assigned as error, said:

'* * * The reason of this exception was not stated (in prior cases), but no doubt it is that in a case where the court below was without jurisdiction, or where it acted upon a pleading which was utterly destitute of legal merit,--that is, which entirely failed to state a cause of action or defense,--the court was without power to render a judgment that would be of any validity; and therefore, rather than incumber its records with nullities in the form of void judgments, the court would of its own ...