General Grain, Inc. v. International Harvester Co.

• Decision Date: 05 January 1968
• Docket Number: No. 20506,No. 2,20506,2
• Citation: 232 N.E.2d 616,142 Ind.App. 12
• Parties: GENERAL GRAIN, INC., an Indiana Corporation, Appellant, v. INTERNATIONAL HARVESTER CO., a New Jersey Corporation, Appellee
• Court: Indiana Appellate Court

Page 616

232 N.E.2d 616

142 Ind.App. 12

GENERAL GRAIN, INC., an Indiana Corporation, Appellant, v. INTERNATIONAL HARVESTER CO., a New Jersey Corporation, Appellee.

No. 20506.

Appellate Court of Indiana, Division No. 2.

Jan. 5, 1968.

Rehearing Denied Feb. 9, 1968.

Fulmer, Burris & Byrum, William K. Byrum, Indianapolis, for appellant.

Ice, Miller, Donadio & Ryan, Alan H. Lobley, Indianapolis, for appellee.

COOK, Presiding Justice.

This is an action brought by appellant, General Grain, Inc., against appellee, International Harvester Co., for damages because of negligence arising out of the storage and servicing of appellant's International Harvester semi-tractor.

The semi-tractor was delivered to appellee's garage in the late afternoon by appellant's regular driver of the truck, Tom Wertsbaugh, who parked it on the driveway in front of appellee's service entrance doors. Wertsbaugh left the ignition keys in the motor vehicle. He then went inside appellee's garage and signed a work order authorizing specified work to be done on the tractor.

The printed form work order furnished by appellee and signed by Wertsbaugh contained the statement that International Harvester was:

'* * * not responsible for loss or damage to the motor vehicle or its contents due to collision not due to (its) negligence; or due to fire, theft or other casualties regardless of whether or not such fire, theft or other casualties is due to (its) negligence; and (International Harvester Company) and (its) agents are hereby released from any and all claims for such loss and damage.' (Matter in parentheses added for clarity.)

Appellee retained the work order and did not furnish a copy to appellant.

The trial court found that neither Wertsbaugh nor his superiors were aware of the exculpatory language, although it had appeared on previous work orders signed on behalf of appellant.

The trial court also found that the appellee knew, or should have known, that the keys were still in the tractor when it closed the garage for the day. The appellee admits that it negligently permitted the tractor, with the keys in it, to stay on its unguarded and unfenced lot adjacent to U.S. Highway 52, a heavily traveled highway extending through Lafayette, Indiana.

When appellee reopened its garage the next morning, its employees discovered the semi-tractor had disappeared during the night. The tractor was never recovered.

The trial court stated the following relevant conclusions of law:

'2. The contract of bailment by which the Plaintiff delivered its tractor to the Defendant provided that the Defendant would not be liable for any loss due to theft while the tractor was in the Defendant's possession regardless of whether or not such theft was caused by the Defendant's negligence.

'3. The loss suffered by the Plaintiff was a loss due to theft while the tractor was in the Defendant's possession pursuant to the aforesaid contract of bailment.

'4. The limitation of liability in the contract of bailment between Plaintiff and Defendant was a valid limitation and was not against the public policy of Indiana.' (Our emphasis.)

The judgment followed the conclusions of law that appellant 'take nothing by its complaint'.

We need consider only appellant's assigned error that the trial court erred in overruling its motion for a new trial, which motion contains the specification, 'the decision of the court is contrary to law'.

Appellant argues that the provision in the work order exempting appellee from liability for negligence resulting in theft of its vehicle is against public policy and is void; and that appellant is not bound by such provision because the material elements necessary to a binding contract are lacking.

Appellee asserts that 'this argument is without merit for it has long been recognized that one may by contract limit his liability even for his own negligence. The only exception to this rule is with regard to utilities, public warehouses, common carriers, and other businesses affected by a public interest and usually regulated by the public.'

We recognize the well established general rule that parties to a contract are free to negotiate and include such terms as they see fit, provided their agreement does not violate statutory inhibitions or does not contravene the public policy. Thus, where the parties have substantially equal bargaining power, one party may contract to exempt the other party from liability for the consequences of the latter's own negligence, as in the case of a negotiated lease of real estate. Loper v. Standard Oil Co., et al. (1965), Ind.App., 211 N.E.2d 797.

Neither the Supreme Court nor this court has examined an exculpatory provision in a bailment relationship involving a motor vehicle since Keenan Hotel Co. v. Funk (1931), 93 Ind.App. 677, ...