Hoskins v. Hotel Randolph Co.

• Decision Date: 16 December 1926
• Docket Number: 36669
• Citation: 211 N.W. 423,203 Iowa 1152
• Parties: LOIS HOSKINS, Appellant, v. HOTEL RANDOLPH COMPANY, Appellant
• Court: Iowa Supreme Court

211 N.W. 423

203 Iowa 1152

LOIS HOSKINS, Appellant, v. HOTEL RANDOLPH COMPANY, Appellant

No. 36669

Supreme Court of Iowa, Des Moines

December 16, 1926

REHEARING DENIED JULY 1, 1927.

Appeal from Polk District Court.--O. S. FRANKLIN, Judge.

Action for damages for personal injuries sustained by plaintiff in a passenger elevator in the hotel of the defendant, Hotel Randolph Company. Defendant vouched in the manufacturer of the elevator, the Otis Elevator Company. This Otis Elevator Company defended in the name of the Hotel Randolph Company. Verdict for plaintiff, and judgment entered against the Hotel Randolph Company. No appeal has been taken from that judgment. After the entry of judgment, defendant moved that it be entered against the Otis Elevator Company, and that the Otis Elevator Company be recited as primarily liable as principal, and the Hotel Randolph Company as surety, under Section 3779, Code of 1897. Plaintiff also moved for judgment against the Otis Elevator Company for the amount of the verdict and costs. These motions were overruled, and plaintiff and defendant separately appeal.

Reversed.

William E. Miller, for appellant Lois Hoskins.

Carr Cox, Evans & Riley, for appellant Hotel Randolph Company.

Sims, Welch, Godman & Stransky, Miller, Kelly, Shuttleworth & McManus, and Parrish, Cohen Guthrie & Watters, for Otis Elevator Company.

MORLING, J. STEVENS, VERMILION, and ALBERT, JJ., concur. DE GRAFF, C. J., and EVANS, J., not participating.

OPINION

MORLING, J.

Plaintiff brought a prior action against the Hotel Randolph Company, Otis Elevator Company, and others, to recover for the injuries here in controversy, alleging them to have resulted from the negligence of the defendants. The Otis Elevator Company removed the cause to the Federal court. That court, on the Otis Elevator Company's motion, held that there was a misjoinder of causes, and gave plaintiff leave to set them forth in separate petitions. The plaintiff then filed in the Federal court her petition against the Otis Elevator Company, alleging that the Otis Elevator Company was negligent in the particulars charged against the Hotel Randolph Company in this action. The action in the Federal court is still pending. Plaintiff dismissed as to the other defendants, and filed in the state court in the present case her petition against the Hotel Randolph Company and its manager, Mong. Mong has been dismissed. This petition alleges negligence in the construction, inspection, maintenance, repair, and operation of the elevator. It makes no specific reference to liability on the part of any manufacturer or dealer. The Hotel Randolph Company answered by general denial, and then served on the Otis Elevator Company notice of the commencement of the action, setting out generally the claim of the petition, and stating:

"You are further notified that the undersigned claim that if they are liable to the plaintiff in this action, it is only because of your negligence, for which they are or may be held responsible to the plaintiff, and that, except for your negligence, the plaintiff would not be entitled to recover of the undersigned, the defendants named in the action. You are, therefore, notified that the undersigned will claim of you indemnity for all sums which they may be compelled to pay to the plaintiff on account of the matters and things alleged in the petition heretofore referred to, including all judgments, costs, attorneys' fees, and all expenses incurred in the defense thereof. You are, therefore, notified to appear and defend said action on behalf of said Hotel Randolph Company and George L. Mong, and hold them harmless from all judgments, attorneys' fees and expenses of defense."

To this notice the Otis Elevator Company replied that, in consequence of it, the Otis Elevator Company, through its attorneys (named), would appear and defend, and "will at this time assume charge of the defense of said suit." This reply stated as the understanding of the Otis Elevator Company that it was not liable to plaintiff, and that it disclaimed any liability to defendants or to plaintiff "which has been, is, may, might, or can be claimed by the said defendant to be based upon any matter connected with or growing out of this suit, and you are advised that it appears and defends * * * in consequence of your notice. * * *" The Otis Elevator Company requested defendant and its attorneys to deliver to the Otis Elevator Company's attorneys everything in any way connected with the suit. The Hotel Randolph Company's attorney handed its papers to the Otis Elevator Company's attorneys. Later, the Hotel Randolph Company notified the Otis Elevator Company that the claim of indemnity and the opportunity to defend were inseparable, and that the defense must be accepted by the Otis Elevator Company, if at all, only on the basis named in the original notice to defend. The Otis Elevator Company responded:

"We are prepared to go ahead and defend this suit for both of said defendants, just as stated in the notice of acceptance, and refuse to agree with you as to what legal rights either this Otis Elevator Company or the defendant Hotel Randolph company and George L. Mong may have; but we are willing to and will abide by the law in regard thereto. If you do not wish us to go ahead with this suit, if you will so advise us, we will withdraw; otherwise we intend to go ahead with the defense."

When the case was called for trial, a colloquy took place between the attorney for the Hotel Randolph Company and the attorney for the Otis Elevator Company, in which the various notices referred to were recited. The attorney for the Hotel Randolph Company stated that he again called the attention of the Otis Elevator Company to the fact that the notice to defend was based on and inseparable from a claim of right to be indemnified, and that the Hotel Randolph Company refused to acquiesce in any conditions in accepting the defense. He said:

"You may defend the suit or not, in accordance with the terms of said notice, and in accord with your own judgment."

The Otis Elevator Company attorneys recited the notices, their conferences, and preparation to defend, and stated:

"We are willing to stand on the record, and assume any liability that the law imposes upon us; but, as the representatives of the Otis Elevator Company, and coming in to defend, we cannot agree to assume any liability which the law does not impose upon the Otis Elevator Company. We ask now of the personal counsel for Mong and Hotel Randolph Company whether they desire us to go ahead and try this case or not."

To this the attorney for the Hotel Randolph Company replied:

"I am not asking you to agree to the assumption of any liability. I am only insisting upon the right of your acceptance or rejection of the defense of this suit on the basis of the terms of the notice * * * The right to be indemnified is claimed, and because of that fact, the opportunity is given you to defend. You may accept it or reject it, as your judgment dictates."

The attorneys for the Otis Company stated:

"We are here to try this lawsuit if you want it tried by us, and if you do not, if you will say so, we will get out. We do not have to assume any liability that the law does not impose * * * we assume all liability that the law imposes, and nothing else. * * * If you want us in here, we will stay. If you don't want us in, we will get out."

"Mr. Evans: 'It is not for us to decide. * * * The question * * * is a question for you, to decide on the terms of notices * * *.'"

The reply of the Otis Elevator Company's attorneys was:

"The record may show that we assume the defense under the law as to any liability that the law imposes, and no more."

Thereupon the case went to trial, and the defense was conducted by the attorneys for the Otis Elevator Company.

The evidence showed that the Otis Elevator Company made the original installation, and formerly had a service contract with the Hotel Randolph Company; that the Otis Elevator Company had furnished and installed repairs and replacements as to some of which negligence was assigned and found, as late as a week before the accident. The Otis Elevator Company called a large number of witnesses, most of them Otis Elevator Company employees, whose testimony was directed largely to the establishment of the claim that the accident was the result of the act of the chief clerk of the hotel in replacing the circuit breaker when the car containing the plaintiff was stalled, thereby closing the circuit, sending the car to the top of the shaft, in collision with the overhead beam, and causing the lift cable to break and the car to fall; and also of the act of the Hotel Randolph Company's engineer in causing the safety-brake cable to become tangled and fouled. The Hotel Randolph Company in open court protested against this line of evidence, as well as against the conduct of the defense in other matters. Counsel stated that the method of defense adopted would be urged as further grounds of estoppel against the Otis Elevator Company from denying its liability to make indemnity. The Otis Elevator Company's attorneys stated that their purpose was not to prejudice the Hotel Randolph Company, but to put the facts in evidence and to show that the clerk was acting outside the scope of his employment and that the engineer acted inadvertently, and therefore the Hotel Randolph Company was not liable. It had been proved and not denied that the chief clerk was next to the manager in command, and in the manager's absence was manager. The Otis Elevator Company attorneys reiterated that that company did not assume any liability except such as was imposed by law, and asserted that the defense was being made in good...