New York Cent. R. Co. v. Northern Indiana Public Service Co.

• Decision Date: 28 November 1966
• Docket Number: No. 2,No. 20209,20209,2
• Citation: 221 N.E.2d 442,140 Ind.App. 79
• Parties: NEW YORK CENTRAL RAILROAD COMPANY, Appellant, v. NORTHERN INDIANA PUBLIC SERVICE COMPANY, a Corporation, Appellee
• Court: Indiana Appellate Court

Page 442

221 N.E.2d 442

140 Ind.App. 79

NEW YORK CENTRAL RAILROAD COMPANY, Appellant, v. NORTHERN INDIANA PUBLIC SERVICE COMPANY, a Corporation, Appellee.

No. 20209.

Appellate Court of Indiana, Division No. 2.

Nov. 28, 1966.

Rehearing Denied Dec. 30, 1966.

Richard O. Olson, Chicago, Ill., Bowen, Myers, Northam & Givan, Indianapolis, Owen W. Crumpacker, Harold Abrahamson, of Crumpacker, Burbach & Abrahamson, Hammond, for appellant.

George Douglas, of Douglas, Douglas & Douglas, Valparaiso, Fred F. Eichhorn, Jr., Lawyer, Schroer & Eichhorn, Hammond, for appellee.

HUNTER, Judge.

This is an appeal from the Porter Superior Court where appellant filed suit against appellee for reimbursement pursuant to a contract of indemnity entered into between the parties herein. The trial court entered judgment against plaintiff-appellant and for defendant-appellee.

The occurrences pertinent to this action are as follows: appellant railroad company owns a set of railroad tracks over which appellee electric company desired to extend power lines; in obtaining a right to place the lines over appellant's tracks, the parties herein entered into a written licensing agreement which contained the following provision:

'Sixth: Second Party (Nipsco) shall and will at all times hereafter indemnify and save harmless First Party (NYC) from and against any and all detriment, damages, losses, claims, demands, suits, costs, or expenses which First Party (NYC) may suffer, sustain, or be subject to, directly or indirectly, caused either wholly or in part by reason of the location, construction, maintenance, use or presence of said Work as permitted by this license or resulting from the removal thereof, except such as may be caused by the sole negligence of First Party (NYC), its agents or employees.'

After the power lines had been built over the tracks for some time, appellant undertook to replace the steel rails of the center set of tracks. To effectuate this replacement, appellant moved a gondola car loaded with steel rails to the section of the tracks just below the overhead wires. To unload the rails, appellant rented a twenty-five (25) ton truck crane with a forty (40) foot boom maintained by an operator and an oiler from another corporation engaged in the crane rental business. While the crane operator was unloading sections of track with the help and direction of appellant's employees, the end of the boom struck one of appellee's high tension wires. The current from the wire went down the cable attached to the boom into the gondola car grounding through one of appellant's laborers causing fatal injuries to him.

Eventually a claim instituted by the widow of the laborer against appellant in the U.S. District Court was settled for Thirty Thousand ($30,000) Dollars which sum was paid by appellant. Afterwards, appellant filed suit against appellee in Porter Superior Court to recover the amount of the claim pursuant to the indemnity clause quoted above which resulted in the judgment against appellant. Thr trial judge entered special findings of fact which are in part as pertinent to this opinion, as follows:

After setting out the licensing agreement which contained the indemnity clause, the court found that:

'* * * the plaintiff rented from one Daniel J. Varady a mobile crane together with a crane operator and a driver for an undisclosed purpose on an hourly rental basis, the same to be used by the railroad for its own purposes, commencing on the 2nd day of October, 1957. * * *

* * * Daniel J. Varady had no knowledge of the work that was to be performed by the crane or the crane crew, and that the crane crew had been instructed merely to report to the railroad and that they would be instructed as to what work was to be done, and that they were to work for the railroad. * * *

* * * plaintiff railroad, acting by and through said Wooley, thereupon directed the placement of the mobile crane alongside the gondola car, furnished to the crane operator special tongs and attached them to the pulley on the mobile crane, and undertook the direction and control of the crane and the unloading of the rails. * * *

* * * one Ivory Johnson, a track laborer employed by the plaintiff railroad, was stationed in the gondola car by his foreman; that on the direction of said foreman, Johnson grasped the tongs which were attached to the pulley operating on the boom of the crane in the course of the operation involved in hooking a rail to be lifted by the crane out of the gondola car and placed alongside the adjoining railroad track. That he was then and there electrocuted as the result of the boom of the crane coming in contact with one of the three electric transmission wires of the defendant, as a result of which he died. * * *

* * * the boom of said crane was forty feet long and was mounted on the bed of a truck; that said crane was operated by means of controls located in a cab and could be lowered and raised by the crane operator stationed in the cab; that the height of the sides of the gondola car was sufficient so that the crane operator could not see the rails located in the gondola car, and that he was operating the crane upon the directions of the railroad's employees; that at the time of the accident the crane operator could not see the end of the crane or the power line by reason of the glare from the sun, and was swinging the boom around on orders from plaintiff's foreman, and was relying on said plaintiff's foreman for the movement and position of the crane and its boom. * * * the operator of the crane in the course of his operation thereof was acting as the agent and servant of the plaintiff railroad, and that the electrocution and death of Ivory Johnson was the result of the negligence alone or the sole negligence of the plaintiff, New York Central Railroad, acting by and through its agents and employees.

* * * on May 11, 1963, the center wire of said three wires of the defendant was 29.65 feet above the rails on which the gondola car was located; that there has been no change in said track or in the defendant's wires at said place between the 2nd day of October, 1957, and the present date; that there is no evidence as to which wire of said three wires was struck by the boom of the crane nor as to the height of the wires above the rails at the time the wires were originally constructed or as to whether or not there has been any change in the evaluation of the track from the date the electric lines were constructed down to the 2nd day of October, 1957. * * *

* * * there is no evidence as to the reasonableness or unreasonableness of the settlement effected by the plaintiff railroad with the administratrix of the estate of Ivory Johnson.'

Upon these and other findings of fact, the court stated the following conclusions of law:

'1. The law is with the defendant.

2. That the operator of the crane involved in the accident resulting in the death of Ivory Johnson was at the time and in the course of the operation of said crane the agent and acting under the direction and control of the plaintiff, The New York Central Railroad Company.

3. That Ivory Johnson met his death as the result of the sole negligence of the plaintiff, The New York Central Railroad Company.

4. That the defendant is not obligated under the terms of the agreement sued upon to indemnify the plaintiff for the amount of its liability and payment to the administratrix of the estate of Ivory Johnson.'

Within the findings of the lower court there is no direct finding that the servant was negligent. However, due to the lower court's finding that the servant was the agent or employee of the railroad, it was not necessary to decide if the acts of the servant were negligent. Even if the servant were negligent, the claim would still have arisen from the sole negligence of the appellant and its employees, which rendered the hold harmless clause inoperative. The question is did the lower court err in its finding that the operator was the servant of the appellant.

Both the appellant and the appellee seem to agree that the determining question placed before this court involves the borrowed servant doctrine which states that an employee while generally employed by one party, may be loaned to another in such a manner that the special employer may be responsible for the acts of the employee under the doctrine of respondeat superior. Indiana has recognized this doctrine. Standard Oil Company v. Soderling (1942), 112 Ind.App. 437, 446--448, 42 N.E.2d 373; Sargent Paint Co. v. Petrovitzky (1919), 71 Ind.App. 353, 124 N.E. 881. If the operator were the borrowed servant of the appellant, then under the terms of the contract the 'claim' was 'caused by the sole negligence of' the appellant, 'its agents or employees'. Therefore, it would not be within the indemnification provision. In the converse if the operator remained the servant of the Vic Kirsh Trucking Company or Daniel Varday, Inc., and if the operator were negligent the claim arose not out of the sole negligence of the appellant. Consequently, the indemnification provision would be fulfilled and the indemnitee would be bound by such (assuming the operator to have been negligent).

In their argument and briefs both the appellee and the appellant overlooked that there was a third possibility: to-wit: that the operator could have been the employee of both employers. The Restatement of Agency, Second acknowledges this concept in § 226 where it is stated:

'A person may be the servant of two masters, not joint employers, at one time as to one act, if the service to one does not involve abandonment of the service to the other.'

Centainly there is nothing in the facts at bar that involves an abandonment of the service of either of the possible employers while operating the crane. The operator was furthering the business of both. Consequently, as to the particular act in question the operator might have been the employee of both the appellant a...