Southern Pac. Co. v. Morrison-Knudsen Co., MORRISON-KNUDSEN
| Decision Date | 22 April 1959 |
| Docket Number | MORRISON-KNUDSEN |
| Citation | 216 Or. 398,338 P.2d 665 |
| Parties | SOUTHERN PACIFIC COMPANY, a corporation, Respondent, v.COMPANY, Inc., a corporation, Peter Kiewit Sons' Company, a corporation, and Macco Corporation, a corporation, doing business as Morrison-Kiewit- Macco, joint venture, Appellants. |
| Court | Oregon Supreme Court |
Arno H. Denecke, Portland, argued the cause for appellants. On the briefs were Mautz, Souther, Spaulding, Denecke & Kinsey, Portland.
Oglesby H. Young, Portland, argued the cause for respondent. On the brief were Koerner, Young, McColloch & Dezendorf and James C. Ingwersen, Portland.
Before PERRY *, C. J., and WARNER, SLOAN and O'CONNELL, JJ.
This is an action to recover judgment under a contract for indemnity wherein the plaintiff, Southern Pacific Company, is the indemnitee, and the defendants, Morrison-Knudsen Company, Inc., Peter Kiewit Sons' Company and Macco Corporation, joint venturers, together were doing business as Morrison-Kiewit-Macco, are the indemnitors.
We will hereinafter refer to plaintiff as the Railroad and to defendants as the Industry. In so doing we adopt the terms by which they are respectively described in the agreement under review. From a judgment in favor of the Railroad after trial by the court without a jury, the Industry appeals.
The defendant joint venturers are corporations engaged in the construction of what is known as the Lookout Point Reservoir Project near the Railroad's Carter Station, in Lane County, Oregon.
As an incident to the construction project, the Industry and the Railroad entered into what is commonly called an 'Industrial Spur Track Agreement.'
Section 12 of the agreement provides:
Pursuant to the contract, the Industry installed a bunker which was partly over and partly under a spur of the Railroad specially constructed near the point of the Industry's operations to facilitate the unloading of gondola cars carrying cement for the Industry's use.
To insure better weather protection for the unloading operations, the Industry constructed a wooden overhead housing at the end of the spur directly over the unloading bunker. Over the forward end of this structure through which the cement laden cars were backed, the Industry hung a canvas curtain which could be raised or lowered as necessary so as not to interfere with the ingress of loaded cars and egress of empty ones. The agreement provided the maintenance of certain clearances as established by the Public Utilities Commissioner of Oregon. The one of concern here was for a minimum overhead clearance of 22 feet to conform to such overhead clearance requirements. Unfortunately, neither the wooden housing nor the curtain were of a sufficient height above the spur track.
Recourse to the indemnity provision arises from the fact that on November 12, 1952, one James A. White, an employee of the Industry's subcontractor, sustained personal injuries while employed in the bunker.
With respect to White's misfortune, the trial court found that both litigants 'were equally guilty of active, concurrent negligence proximately causing the injuries of James A. White.' After unhitching a gondola car loaded with cement, it appeared to White that the brake wheel of the next car would snag the curtain upon egress. White mounted this car, placed his left arm around the brake wheel, and prepared to lift the curtain. The train proceeded forward slowly. Although testimony is conflicting as to whether his fall was caused by contact with the curtain or was induced by a jerking movement of the train, the record is crystal clear that the accident and the Railroad's consequent liability resulted 'directly from the use of said bunker.'
The controlling issue presented is whether under the indemnity clause the Railroad is entitled to indemnity for damages for injuries sustained by White resulting from the Railroad's negligence.
White thereafter sued the Railroad in the United States District Court for Oregon, where he recovered a judgment in the amount of $5,000. That judgment has been satisfied. In this action, the plaintiff Railroad seeks to recover from the Industry the amount of that judgment, plus costs and attorneys' fees.
The defense of White's action against the plaintiff Railroad was tendered by the Railroad and refused by the Industry.
After the trial of this matter before the late Judge Mundorff, he filed an opinion holding that White's injuries were the proximate result of the concurrent negligence of the Industry and the Railroad. He died before his formal findings could be entered. The case was thereafter tried before Judge Sulmonetti on the same record who adopted Judge Mundorff's opinion and entered findings of fact and conclusions of law in harmony with it. These were followed by the judgment from whence the Industry appeals.
The appellants challenge three of the trial court's Findings of Fact and six of its Conclusions of Law.
It is sufficient for the moment to observe that, generally speaking, the Industry's grounds for appeal are interlaced with references to principles of common-law tort doctrines of negligence in their relation to the right of contribution between parties having some degree of responsibility for a given accident, involving concepts of what may constitute passive or active negligence as between them.
Despite the Railroad's presentment of a claim for contractual indemnification, the Industry points to cases purporting to stand for familiar ex delicto formulas as foreclosing recovery under the instant facts. City of Astoria v. Astoria & Columbia River R. Co., 1913, 67 Or. 538, 136 P. 645, 49 L.R.A.,N.S., 404 is an example of such reliance.
On the other hand, the consistent thread of the Railroad's argument rests upon and represents that if indemnity is forthcoming, it must necessarily flow as a result of the contractual privity between the parties. Indemnity is not supportable, nor is it claimed by the Railroad, to lie within the ambit of ex delicto postulates. The Railroad insists that tort principles concerning the nature and the degree of conduct are not apposite. It contends for the exclusive application of ex contractu doctrines. The Railroad's position, as will later become evident, is supported by the overwhelming authority from other jurisdictions. For the reasons which follow, we embrace this theory.
Since this case is one of relative novelty in this court, and confusion is introduced by an attempt to commingle tort and contract doctrines, we will first proceed with a discussion of those assignments having relevance to the nature and type of action involved. Secondly, we will give attention to the question of whether the contract was intended to cover the type of loss upon which recovery is sought, and, lastly, we will consider the public policy aspects of the indemnity provisions of the agreement.
City of Astoria v. Astoria & Columbia River R. Co., supra, is the leading case in this state expressing, in the absence of statute or agreement, the common-law rules as to the rights to contribution and indemnity. It resulted from the failure of the defendant railroad company there to lay its tracks level with the grade of an elevated street in the city of Astoria and to keep the street crossing in good condition and repair. A pedestrian was injured because of the railroad's fault in this respect. She sued the city and recovered judgment for her injuries. The city thereafter brought suit against the railroad company, claiming a right of indemnity. The city recovered on the ground that the railroad was actively negligent, whereas the city was only passively negligent.
In the Astoria case there was no agreement of indemnity subsisting between the city and the railroad. The city's claim rested solely upon its commen-law remedy.
In the opinion in Astoria, we observe a clear and succinct statement of the rules which would determine the instant Railroad's right to recovery, if a tort theory were pleaded and employed herein instead of a theory resting upon a contractual obligation of indemnity. These rules are embodied in the following statement:
* * *' (67 Or. at page 546, 136 P. at page 648)
Judge Pope in Booth-Kelly Lbr. Co. v. Southern Pac. Co., 9 Cir., 1950, 183 F.2d 902, 910, 20 A.L.R.2d 695 in his analysis of the Astoria case, points out that the common-law rule there referred to as governing joint wrongdoers standing in pari delicto has been restated in Restatement, Restitution § 102, as follows:
'Where two persons acting independently or jointly, have negligently injured a third person or his property for which injury both became liable in tort to the third person, one of them who has made expenditures in the discharge of their liability is not entitled to contribution from the other.'
He also noted that the rule enforced in the Astoria case; that is,...
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