Maloney Tank Mfg. Co. v. Mid-Continent Petroleum Corp., 331.

• Decision Date: 30 March 1931
• Docket Number: No. 331.,331.
• Parties: MALONEY TANK MFG. CO. v. MID-CONTINENT PETROLEUM CORPORATION et al.
• Court: U.S. Court of Appeals — Tenth Circuit

49 F.2d 146 (1931)

MALONEY TANK MFG. CO. v. MID-CONTINENT PETROLEUM CORPORATION et al.

No. 331.

Circuit Court of Appeals, Tenth Circuit.

March 30, 1931.

William F. Tucker, of Tulsa, Okl. (Hulette F. Aby and William H. Martin, both of Tulsa, Okl., on the brief), for appellant.

Frank E. Lee, of Oklahoma City, Okl. (F. A. Rittenhouse and John F. Webster, both of Oklahoma City, Okl., on the brief), for appellees.

Before COTTERAL, PHILLIPS, and McDERMOTT, Circuit Judges.

McDERMOTT, Circuit Judge.

The Mid-Continent Petroleum Corporation owned a battery of oil tanks located near Seminole, Okl. On February 1, 1927, its vice president directed his subordinates to have these tanks dismantled by the Maloney Tank Manufacturing Company. While they were being dismantled, one of the workmen stopped in his work to light a cigarette, and threw the match on the ground. The ground was oil-soaked, and a fire ensued which destroyed the tanks and the oil therein. The North British & Mercantile Insurance Company paid the petroleum corporation $18,371.38 to apply on the loss. The total loss was alleged to be $20,000. The petroleum corporation and insurance company joined in a suit against the tank company for the damage. The petition alleged an oral agreement with defendant to remove the tanks in question, and that, while defendant was engaged in such work of removal, the tanks were destroyed by a fire caused by the negligence of the defendant, its agents, servants, and employees. The tank company answered denying that it entered into the oral agreement alleged, or that its employees were engaged in removing the tanks when the fire occurred; it also alleged that, if any of its employees did light a cigarette, such act was not within the scope of his employment.

Upon the issues so joined there was a trial and much conflicting evidence. The trial court charged the jury that, before the plaintiffs could recover, the following facts must be established to the satisfaction of the jury: (a) That there was an oral agreement between the petroleum corporation and the tank company as alleged; (b) that the workman who started the fire was a servant of the defendant; (c) that the lighting of the cigarette was a careless act under the circumstances; and (d) that such act was in the scope or line of work for which the servant was employed. There was a verdict for the plaintiffs for $17,185, a motion for a new trial was denied, and defendant appeals.

The principal errors assigned are that there was no evidence from which a jury could find that there was a contract between the parties, or that the workman lighting the match was in the employ of the defendant, and, even if he was, that, as a matter of law, lighting a cigarette, even under the highly dangerous conditions existing here, is beyond the scope of the servant's employment. Since the jury passed upon the disputed facts, our inquiry need not be further pursued than to determine whether there was substantial evidence to support their verdict.

1. The Maloney Tank Manufacturing Company manufactures steel tanks and had at one time maintained an office in Seminole, Okl., with its company name on the windows. The petroleum corporation had done considerable business with it, buying tanks of it and employing it to set, reset, and dismantle tanks. About three months before this fire, a new and small corporation was formed, called "The Maloney Sales Corporation," which was a representative of and distributor for the Maloney Tank Manufacturing Company. After that date, the tank company sold its tanks to the sales corporation, and the sales corporation sold them to the public and did such work as setting and dismantling of tanks. The sales corporation used the former office of the tank company at Seminole, no change being made in the signs on the windows. The tank company sent out all the bills to the public for tanks sold or work done by the sales corporation and collected the money therefor. The tank company followed this practice because the sales corporation was not financially able to take care of the business, and for the protection of the tank company. All invoices sent out were in the name of the tank company, and carried the printed notation "Labor and material furnished by our representative, Maloney Sales Corporation, Tulsa, Oklahoma."

Mr. Moody, the vice president of the petroleum corporation in charge of such work, had never heard of the sales corporation when he directed this work to be done by the tank company with which he had theretofore dealt. The employees who did the work thought they were working for the tank company. The tank company billed the petroleum corporation for the work, and the petroleum corporation paid the tank company for it. A large number of orders from the petroleum corporation for similar work was introduced in evidence, all given about the same time as the one in question; all of the orders run to the "Maloney Tank Company"; in each case the tank company sent invoices for the work in its own name, and accepted and cashed checks drawn to it for such work. There is ample evidence to justify the conclusion that the job in question was handled the same way as all other such work was handled during this period, to wit, a written order to the tank company, an invoice from the tank company, and payment to the tank company. It is true that an ex-employee of the petroleum corporation, testifying for the tank company, said he knew he was transmitting orders for such work to the sales corporation; but, in view of the fact that he was the one who signed the written orders to the tank company, the jury were not required to believe him. It is proven that the sales corporation hired and paid the workmen, and that collections for such work were credited on the tank company's books to the sales corporation. But this evidence is consistent with what the jury found and what we believe the facts were, and that is that the tank company contracted to do this work and received the pay for it, using the sales corporation as an instrumentality of its own selection for the performance of it. We conclude that the record, including the written orders, invoices, and checks, discloses ample and satisfactory evidence that there was a contract, as the jury found.

2. Appellant's brief treats the case as one sounding in tort; it is argued that, whatever the rule may be in actions on the contract, "the actual facts control in tort actions," and that "the rule of ostensible agency does not apply, this being a tort action." The appellant approaches the case by disregarding the fact that the workmen, by whomever employed, were doing work at appellee's request and for it, and treat the whole case as if appellee were a stranger to the transaction, i. e., as if it were the owner of adjacent property to which the fire had spread. We cannot concur in this view. The petition does leave room for doubt as to what wrong was sought to be redressed, but this is a common fault in the loose pleading invited by the Codes. But the doubt disappears if the entire record is considered. The petition does allege a contract, as its first and basic allegation; a considerable part of appellee's evidence in chief was in proof of the contract alleged. If this were a tort action, the appellee need not have assumed the burden of pleading or proving the contract. The trial court charged the jury at length as to the elements of a contract, and charged that appellee must prove such contract before it could recover. We are of the opinion that the action is one to recover for the failure to perform the work of dismantling the tanks in a workmanlike and careful manner. There is, of course, an implied undertaking in all building and construction contracts "to perform his work in a proper and workmanlike manner," and "a builder is responsible to his employer for defective performance." 9 C. J. 749 and 751, and cases cited in notes 85 and 87.

3. Considered as an action on the contract, all difficulties disappear. The appellant undertook to dismantle the tanks with reasonable skill and in a workmanlike manner; it did not do so. So considered, it makes no difference whether the appellant employed the workmen directly, or employed the sales corporation to employ them. The work the appellant contracted to do was not done as agreed. But the result would not be otherwise if the action be considered as sounding in tort. Ordinarily, in tort actions, the doctrine of respondeat superior is applicable only against the actual employer, the person who has actual control over the servant. Standard Oil Co. v. Parkinson (C. C. A. 8) 152 F. 681; Texas Co. v. Brice (C. C. A. 6) 26 F.(2d) 164; Golden v. Southwestern Utilities Corp., 121 Kan. 793, 250 P. 286; Schmitt v. Kier, 111 Okl. 23, 238 P. 410; Riverland Oil Co. v....