Thomas v. Skelly Oil Co.

• Decision Date: 05 December 1960
• Docket Number: No. 23221,23221
• Citation: 344 S.W.2d 320
• Parties: J. L. THOMAS, Plaintiff-Respondent, v. SKELLY OIL COMPANY, a Corporation, Defendant-Appellant.
• Court: Missouri Court of Appeals

Page 320

344 S.W.2d 320

J. L. THOMAS, Plaintiff-Respondent, v. SKELLY OIL COMPANY, a Corporation, Defendant-Appellant.

No. 23221.

Kansas City Court of Appeals, Missouri.

Dec. 5, 1960.

Sam C. Oliver, Tulsa, Okl., Sam D. Parker, Kansas City, Lathrop, Roghter, Gorden & Parker, Kansas City, of counsel, for appellant.

David R. Hardy and David H. Clark, Kansas City, Frank J. Quigley, Tipton, for respondent.

SPERRY, Commissioner.

Plaintiff, owner of a building which was being used as a gasoline service station, sued defendant for damages to the property caused by exploding gasoline and fire. The cause was tried to the Court on an agreed statement of facts and judgment was for plaintiff for $12,500. Defendant appeals.

It was stipulated that plaintiff, referred to as 'Dealer', entered into a 'Loaned Equipment Agreement' with defendant, referred to therein as Company, which was in effect at the time the loss occurred. That instrument contained the following pertinent provision:

'The Dealer will indemnify and save the Company harmless from and against all liability for loss, damage, injury, or other casualty to persons or property caused or resulting from any leakage, fire or explosion of gasoline stored in or handled through said equipment, or otherwise, or caused or resulting from the installation or maintenance of such equipment and appliances, or caused or resulting from the misdelivery, mingling, or other improper handling of products sold and dispensed through said equipment, or from said premises, whether such loss, or injury be to the Dealer, his employees, or any other person or to the property of the Dealer, or of any other person or corporation.'

It was also stipulated that, prior to July 26, 1955 (when the loss occurred), water was discovered in one of the underground gasoline storage tanks, this tank being a part of the 'Loaned Equipment' referred to in the agreement; that defendant undertook to, and did, install two new underground storage tanks, removed the pump connections from the old tanks, filled them with water and left them in place; that, before filling the tanks with water, defendant's agent failed to cap or plug the fuel pipes leading from them and, as a result, gasoline from the tanks was forced out by the water, passed out through the pipes and eventually found its way to the basement of the building where it was ignited, thereby causing plaintiff's damage. It was further stipulated that the damage was caused by the negligence of defendant's agent, and that it is in the amount of $12,500.

Defendant says that it is not liable in this case because of the indemnity provisions of the 'Loaned Equipment Agreement.' Plaintiff contends that that contract does not render defendant immune to liability for damages due to its own negligence. Our decision turns on that question.

In 27 Am.Juris. 460, Par. 9, it is said:

'The authorities are conflicting as to the validity of an agreement to indemnify against the negligence of the indemnitee, the majority holding such a contract to be void. This, however, is not always the case, * * *;'

and, at Page 464, Par. 15, the following appears 'It is well settled that a contract of indemnity will not be construed to indemnify the indemnitee against losses resulting to him through his own negligent acts, where such intention is not expressed in unequivocal terms. Public policy has been said to require such contracts to be restricted rather than extended, and the liability of the indemnitor is regarded as so hazardous, and the character of the indemnity so unusual, that there can be no presumption that the indemnitor intended to assume it in the absence of express stipulation, * * *.' ...