South Carolina Elec. & Gas Co. v. Utilities Const. Co.

• Decision Date: 26 March 1964
• Docket Number: No. 18188,18188
• Citation: 135 S.E.2d 613,244 S.C. 79
• Court: South Carolina Supreme Court
• Parties: SOUTH CAROLINA ELECTRIC & GAS COMPANY, Respondent, v. UTILITIES CONSTRUCTION COMPANY, Appellant.

Page 613

135 S.E.2d 613

244 S.C. 79

SOUTH CAROLINA ELECTRIC & GAS COMPANY, Respondent, v. UTILITIES CONSTRUCTION COMPANY, Appellant.

No. 18188.

Supreme Court of South Carolina.

March 26, 1964.

Nelson, Mullins, Grier & Scarborough, Columbia, for appellant.

Arthur M. Williams, Jr., Cooper, Gary, Nexsen & Pruet, Frank B. Gary, Harold W. Jacobs, Columbia, for respondent.

BUSSEY, Justice.

In this action the plaintiff-respondent seeks to recover by way of indemnity, the sum of $39,000, interest and costs from the defendant-appellant. The controversy arose out of the following facts.

The Town of Holly Hill passed an ordinance which granted the plaintiff the electric franchise for that community. The portions of this ordinance pertinent to this controversy read as follows:

'Section 3. The poles, towers, conduits, cables, conductors, transforming stations, fittings, appliances and appurtenances shall be so constructed as not to unreasonably interfere with the proper use of the streets, avenues, alleys, ways, bridges and public places in said Town of Holly Hill and shall be maintained in a reasonably good condition and repair.

'Section 4. Whenever the Grantee shall cause any opening or alteration to be made in any of the streets, avenues, alleys, ways, bridges or public places of said Town of Holly Hill for the purpose of installing, maintaining, operating or repairing any poles, towers, conduits, cables and other appliances, the work shall be completed within a reasonable time and the Grantee shall upon completion of such work restore such portion of the streets, avenues, alleys, ways, bridges or other public places to as good condition as it was before the opening or alterations so made.

'Section 5. The Grantee shall hold said Town of Holly Hill harmless from any and all liability or damages resulting from the negligence of the Grantee in the construction, maintenance or operation of said poles, towers, conduits, wires, cables and other appliances.'

Subsequently, on November 9, 1953, the plaintiff and the defendant entered into a written contract under which the defendant agreed to perform certain work assigned to it by the plaintiff, consisting of the construction and maintenance of transmission and distribution lines. This contract was prepared by plaintiff, or its counsel, and provided, inter alia, that the defendant would work as an independent contractor and not as an agent or employee of the plaintiff; that all work performed by the defendant would be done in a good, proper and workmanlike manner; and contained the following indemnity clause:

'(e) The Contractor hereby agrees to indemnify and to hold the Company harmless from any and all claims for damages to persons and/or property arising out of or in any way connected with the performance of any work covered by this contract.'

In February 1955, while the aforesaid contract was in force between the parties, and pursuant thereto, plaintiff gave the defendant a work order which required defendant to remove an old pole and install a new fifty foot pole, and put two cross arms on it and a gang switch--install light fixtures and some wire attachments--and patch the sidewalk. The pole in question was located near the curb on Main Street in the Town of Holly Hill. The work was completed and accepted by the plaintiff in February 1955. The defendant, unknown to the plaintiff, improperly performed the work of repairing the sidewalk, in a manner which will be later herein more fully described. As a consequence thereof, a depression gradually developed in the patched area of the sidewalk as a result of the defective workmanship and, on June 20, 1959, a Mrs. Brant, a resident of Holly Hill, stepped into the depression, fell and was severely injured. The depression had existed for some time prior to the date of Mrs. Brant's injury.

Thereafter, Mrs. Brant brought suit against the plaintiff and the defendant for the damages caused by the injuries sustained. The plaintiff then made demand upon the defendant to take over the defense of the case on the ground that it was entitled to be indemnified by the defendant, both by reason of the express indemnity provision of the contract and a contract of indemnity implied by law. The defendant denied that it was liable either to the plaintiff or Mrs. Brant and consequently refused to do so. The parties, however, did enter into a stipulation under which, without prejudice to either, the plaintiff could settle Mrs. Brant's case for $36,000, and institute such action under its indemnity agreement, or otherwise, as it might be advised to recover from the defendant. The plaintiff then settled with Mrs. Brant for the sum of $36,000 and in this action seeks to recover that amount plus interest and the sum of $3,000 in attorneys fees. No issue as to the reasonableness of either the settlement figure or the amount of attorneys fees is here involved, nor is it contended that said amounts would not bear interest if the defendant be liable at all.

The plaintiff sought to recover under both the express indemnity agreement and on the theory of an indemnity agreement implied by law. The defendant by answer denied that it was liable under either theory.

The case was referred by consent to the Honorable Harry M. Lightsey, Master in Equity for Richland County, who, after taking testimony, filed his report therein and recommended that plaintiff have judgment under both theories against the defendant in the full amount demanded. The circuit judge, upon hearing exceptions of the defendant to the master's report, confirmed and adopted the factual findings of the master and held that the plaintiff was entitled to indemnification by the defendant by reason of the express contract of indemnity and ordered judgment for the full amount prayed for. The circuit judge did not pass on exceptions to the master's report with respect to the finding that the defendant was also liable to the plaintiff under a contract of indemnity implied by law. On appeal, defendant contends that the circuit judge erred in holding plaintiff entitled to recover under the express contract of indemnity, but raises no question as to the amount of the recovery, if plaintiff be entitled to recover. The plaintiff urges as an additional sustaining ground that it is also entitled to recover by reason of a contract of indemnity implied by law.

The facts and circumstances surrounding the repair of the sidewalk by the defendant, as found by the master, confirmed by the circuit judge, and not excepted to, were as follows:

The defendant had to make an opening in the concrete sidewalk, which was four to five inches thick, immediately adjacent to the old pole; dig a hole and insert a new pole. It then had to remove the old pole, fill in the hole from which it was taken and repair the sidewalk. The defendant filled the area of the sidewalk necessary to be repaired with soil to within one and a quarter to one and three-quarters inches of the sidewalk surface. It then filled in the remaining void with a mortar patch which consisted of one part cement and seven parts topsoil taken from an adjacent alley.

The workmanship was inferior and the topsoil taken from the alley unsuitable as a mixing agent, producing a mortar of a very low adhesive quality, entirely unsuited for sidewalk purposes. Such, however, could not have been determined from a visual inspection by other than a concrete expert at the time of inspection and acceptance by the plaintiff. (It is not contended here that plaintiff did not make a proper and adequate inspection.) A normal sidewalk mixture consists of one part cement, two parts builders sand, and four parts gravel, which after being soaked for twenty-four to forty- eight hours should withstand fifty tons of pressure. To quote in part from the master's report:

'The low percentage of cement, the organic material in the topsoil mixed with it, and the excessive water necessary to obtain the proper consistency as used by the Defendant, on the other hand, created a mortar which, even when dry, easily crumbled under thumb pressure. As a result, normal foot traffic, over the years, gradually eroded the patched surface. In addition, there was apparently some settling of the soil underneath the patch by reason of improper tamping, which, coupled with the reduced strength of the patched area because of its thinness, further aggravated the defect.'

Upon completion of the work, from all visual appearances, the same appeared to have been done in a proper and workmanlike manner, and so appeared to the plaintiff's employee who inspected and accepted the same. The evidence before the master from several witnesses reflected that the depression in the sidewalk was noticeable or observable for quite some time, as much as a year, before Mrs. Brant's injury. These witnesses, for one reason or another, were unusually familiar with the immediate area of the depression. Two of them were ladies who had sprained their ankles by stepping in the depression, one such occurrence being about three weeks prior to the injury of Mrs. Brant, and the other being about a year prior thereto. It does not appear that either of these ladies notified either the Town of Holly Hill or the parties hereto of their respective experiences with the depression until after Mrs. Brant was seriously injured.

The location of the depression was diagonally across the street from the office of the plaintiff in the Town of Holly Hill, and not very far distant therefrom with the result that various employees of the plaintiff, including repairmen, had the same opportunity to observe the depression in the sidewalk which gradually occurred over a period of time, as did members of the public generally. On the other hand, it was found as a fact and not excepted to that the plaintiff had no actual knowledge of either the depression, or the faulty workmanship which caused it, prior to receiving a report of the injury to...