Maryland Cas. Co. v. Independent Metal Products Co., 14528.

• Decision Date: 21 April 1953
• Docket Number: No. 14528.,14528.
• Citation: 203 F.2d 838
• Parties: MARYLAND CAS. CO. v. INDEPENDENT METAL PRODUCTS CO.
• Court: U.S. Court of Appeals — Eighth Circuit

203 F.2d 838 (1953)

MARYLAND CAS. CO. v. INDEPENDENT METAL PRODUCTS CO.

No. 14528.

United States Court of Appeals Eighth Circuit.

April 21, 1953.

COPYRIGHT MATERIAL OMITTED

Edson Smith, Omaha, Neb. (Herbert E. Story, Omaha, Neb., on the brief), for appellant.

Louis E. Lipp, Omaha, Neb. (White, Lipp & Simon, Omaha, Neb., on the brief), for appellee.

Before GARDNER, Chief Judge, and THOMAS and COLLET, Circuit Judges.

GARDNER, Chief Judge.

This was an action brought by the Maryland Casualty Company to recover $7,048.81 which it had expended in defense of an action brought against the Fruehauf Trailer Company and in satisfaction of a certain judgment rendered against that company in an action brought against the Fruehauf Trailer Company on account of an alleged breach of warranty of fitness of a gasoline trailer tank which had been purchased from the Fruehauf Trailer Company by the Gilmore, Gardner & Kirk Oil Company. The basis for the liability of the Maryland Casualty Company was that it had issued a liability insurance policy agreeing to indemnify and hold harmless the said Fruehauf Trailer Company against suit and liability and was obligated to defend against such a suit as the one above mentioned and to pay any judgment obtained against the Fruehauf Trailer Company in such action. The policy also contained provision that in the event of any payment under the policy the Casualty Company should become subrogated to all the insured's rights of recovery therefor.

It was alleged that the Fruehauf Trailer Company had purchased from the defendant Independent Metal Products Company, or its predecessor in interest, a 4000 gallon metal tank manufactured by it for use in the transportation of gasoline and installed said tank upon a trailer chassis; that thereafter the Fruehauf Trailer Company sold and delivered the tank to the Gilmore, Gardner & Kirk Oil Company; that when the tank was delivered to the Fruehauf Trailer Company there remained a small piece of welding rod approximately 2 inches in length by 1/8 of an inch in diameter, in the front compartment of the tank, which had lodged in the valve through which the front compartment discharged and prevented the complete closing of the valve, and on December 10, 1942, this resulted in an excessive delivery of gasoline by the Oil Company to a tank beneath the floor of a garage of the Oklahoma Transportation Company in Oklahoma City, Oklahoma, and an overflow of gasoline which caught fire, resulting in substantial damages; that in an action for damages resulting from the said fire a judgment was rendered against the Fruehauf Trailer Company which, together with the expense of litigation, was ultimately paid by the Maryland Casualty Company. It is alleged that the Fruehauf Trailer Company notified the Independent Metal Products Company of the filing of said action and tendered to it the defense and demanded that it hold it harmless from any loss arising out of said action; that the Independent Metal Products Company failed and refused to defend the action. It is then alleged that the Independent Metal Products Company is liable to plaintiff for the amount expended by it for the reasons: (1) that the loss and damage was the proximate result of the negligence of defendant Independent Metal Products Company in causing and permitting a piece of welding rod to be and remain in the front compartment of said tank and in failing properly to inspect said tank; (2) that Fruehauf Trailer Company, prior to the delivery of the tank to it, made known that the tank was to be used for the purpose of transporting and delivering gasoline and Fruehauf Trailer Company relied on the skill and judgment of the Independent Metal Products Company to so inspect and remove any foreign matter from said tank so that said tank would be reasonably fit for use in transporting and delivering gasoline.

Appellee answered, denying negligence and denying that there was an implied warranty of fitness; pleaded an express warranty which would not make it liable for the defect in the metal tank, alleged that the tank was constructed under the directions, plans and specifications of the Fruehauf Trailer Company, and denied that that company had relied upon the skill of the Metal Products Company or on its inspection, and alleged that the Fruehauf Trailer Company itself inspected the tank before accepting delivery thereof. The answer made specific denial of all allegations seeking to charge it with liability.

We shall now refer to the parties as they were designated in the trial court and refer to the Fruehauf Trailer Company as Fruehauf.

The action was tried to the court without a jury and resulted in findings in favor of the defendant on all the issues. D.C., 99 F.Supp. 862. Based on these findings the court entered judgment of dismissal on the merits and the Maryland Casualty Company prosecutes this appeal on substantially the following grounds: (1) the court erred in finding that the evidence was not sufficient to prove that the piece of welding rod was left in the tank by the defendant or was in the tank at the time it was delivered to Fruehauf; (2) the court erred in holding that although the presence of the welding rod could have been discovered by a more detailed inspection, defendant was not negligent in failing to make such inspection and that it was not negligent in failing to remove the piece of welding rod from the tank if in fact it was in the tank at or prior to the time of the delivery to Fruehauf; (3) the court erred in failing to find that Fruehauf justifiably relied upon defendant's care in cleaning and inspecting the tank; (4) the court erred in concluding that the express warranty given by defendant negatived an implied warranty of fitness for use.

Plaintiff, by the payment of the judgment against Fruehauf, confessedly became subrogated to such rights as that company had against defendant. The basis for the charge of liability is the fact that there was found in this tank a short piece of welding rod which prevented a valve from properly closing, thus permitting the escape of gasoline. The burden of proof was, of course, upon plaintiff and the court found as a fact that it had not sustained the burden of proving that the piece of welding rod was in the tank at and prior to the time of its delivery to Fruehauf. It is pointed out that for a considerable period of time after its delivery and acceptance by Fruehauf it was out of the possession of defendant and that the finding of the piece of welding rod in the tank at a later date gave rise to no presumption that it had been there at a prior time. This finding of the court is presumptively correct and will not be disturbed unless clearly erroneous and it is not the function of this court to retry and redetermine the facts involved. Pendergrass v. New York Life Ins. Co., 8 Cir., 181 F.2d 136; Graver Tank & Mfg. Co. v. Linde Air Products Co., 336 U.S. 271, 69 S.Ct. 535, 93 L.Ed. 672.

In considering the sufficiency of the evidence to sustain the court's findings we must view the evidence in a light most favorable to defendant. So considered, we think the court was warranted in finding from the evidence that plaintiff failed to prove that the interior of this tank had not been thoroughly cleaned before it was accepted by Fruehauf. The nature of the cleanup of the tank interior involved sweeping, vacuuming and cleaning out thoroughly and painting the interior seams. There was direct testimony that the tank was free of foreign matter when accepted by Fruehauf but plaintiff relies upon circumstantial evidence to overcome this direct proof. Thus it is argued that this piece of rod was in the tank when the accident in Oklahoma happened. This was some thirty-six days after it was cleaned by defendant and inspected and accepted by Fruehauf and in the absence of any explanation with reference to what may have been done to the tank in this interim there did not arise a presumption that the obstruction was in the tank at a prior date. Liverpool & London & Globe Ins. Co. v. Nebraska Storage Warehouses, 8 Cir., 96 F.2d 30; W. F. Corbin & Co. v. U. S., 6 Cir., 181 F. 296; 20 Am.Jur. p. 209.

There was also the circumstance that the defendant in fact used the type of welding rod found in the tank. As to this it appears that it was a standard type of rod that is universally used in all shops and factories carrying on welding activities and was identically the same type and size as Fruehauf used in its factory which adjoined defendant's plant, as well as in its sales and service branches in Omaha and elsewhere. In this connection it should be observed that Fruehauf was a manufacturer of similar tanks on a very large scale. The further circumstance is urged that in spite of the most careful cleaning, occasionally a piece of rod may lodge in the interior braces of the tank. The trial court might, we think, reasonably have believed that the circumstance that a bit of welding debris may occasionally escape the task of cleaning does not establish that the bit of rod which caused the fire was the very remnant that may have escaped defendant's cleaning effort more than a month earlier. We can not say that this challenged finding of the court is clearly erroneous.

Appellant challenges the finding of the court that plaintiff had failed to prove the defendant guilty of negligence or that plaintiff was not entitled to restitution. Ordinarily the question of negligence is one of fact to be determined by a jury where the case is tried to a jury, or by the court where the case is tried to the court without a jury. The burden of proof on this issue was on appellant and the finding of the court should not be set aside unless clearly erroneous. Rule 52(a), Federal Rules of Civil Procedure, 28 U.S.C.A. The trial court in considering this charge of negligence among other things said,

"It may be stated as a general rule that a manufacturer is required to exercise...