Wells v. Whitaker

• Decision Date: 28 November 1966
• Citation: 207 Va. 616,151 S.E.2d 422
• Court: Virginia Supreme Court
• Parties: Joe C. WELLS v. H. B. WHITAKER et al.

Page 422

151 S.E.2d 422

207 Va. 616

Joe C. WELLS v. H. B. WHITAKER et al.

Supreme Court of Appeals of Virginia.

Nov. 28, 1966.

Carol E. McAfee, Norton, Glen M. Williams, Jonesville (Cline & McAfee, Norton, on brief), for plaintiff in error.

Leslie M. Mullins, Norton, John H. Carroll, Wilmington, Del. (Greear, Bowen, Mullins, Winston, Pippin & Sturgill, Norton, on brief), for defendant in error.

Before EGGLESTON, C.J., and SPRATLEY, BUCHANAN, SNEAD, I'ANSON, CARRICO and GORDON, JJ.

I'ANSON, Justice.

Plaintiff, Joe C. Wells, filed a motion for judgment against the defendants, H. B. Whitaker and H. W. Whitaker, individually and t/a Whitaker-Atlas Supply Company; Atlas Powder Company (now Atlas Chemical Industries, Inc., hereinafter referred to as Atlas); Sol Miller; and Howard Adams, to recover for damages to his home resulting from an explosion occurring on December 27, 1961, at the Whitaker-Atlas plant, where ammonium nitrate was mixed with fuel oil to produce a blasting agent.

There was a jury trial, and at the conclusion of all the evidence the trial court sustained a motion to strike the evidence as to defendant H. B. Whitaker. The order dismissing H. B. Whitaker as a party defendant was entered on September 30, 1963. The court also ruled as a matter of law that neither an agency nor a joint venture relationship existed between Whitaker-Atlas and Atlas with respect to the mixing plant operation. The court further ruled that Whitaker-Atlas was an independent contractor of Atlas under two contracts between them, but that Whitaker-Atlas' status as an independent contractor would not insulate Atlas from vicarious liability for negligence in storing in the Whitaker-Atlas plant an explosive known as 'primacord' due to its hazardous nature.

The jury returned verdicts for defendants Miller and Adams and for the plaintiff against H. W. Whitaker and Atlas in the sum of $5,000.

On April 6, 1965, the trial court set aside the jury verdict against Atlas and entered final judgment for it on the ground that although there was sufficient evidence for a jury to find Atlas negligent in storing primacord at the Whitaker-Atlas plant or permitting it to remain there during welding operations, the evidence was insufficient for the jury to find that the negligence of Atlas was a proximate cause of plaintiff's damages.

We granted plaintiff a writ of error as to defendants Atlas and H. B. Whitaker. H. W. Whitaker, Sol Miller and Howard Adams are not parties to this appeal.

Plaintiff assigns as error the action of the trial court (1) in setting aside the jury verdict against Atlas; (2) in holding that under the two contracts Whitaker-Atlas was an independent contractor of Atlas, and that with respect to the mixing plant operations no agency, joint venture or independent contractor relationship existed between Whitaker-Atlas and Atlas; and (3) in striking his evidence as to defendant H. B. Whitaker and not permitting him to amend his pleadings at the conclusion of all the evidence to allege that H. B. Whitaker was the owner of the land on which the Whitaker-Atlas plant was constructed.

The evidence, stated in the light most favorable to plaintiff, shows that the Whitaker-Atlas Supply Company plant, located in Needmore, near Norton, Virginia, was constructed in early 1959. The company was engaged in the business of mixing ammonium nitrate with fuel oil at the Needmore plant, the end result of which was a blasting agent used extensively in strip mining operations.

H. W. Whitaker owned the building and the equipment therein and leased the land on which the plant was located from his father, H. B. Whitaker. Several months prior to the explosion H. W. Whitaker filed, in the proper clerk's office, a certificate under the assumed name statute (Code § 59--169) setting forth that he was the sole owner and operator of the business trading as Whitaker-Atlas Supply Company.

On December 27, 1961, Sol Miller and Howard Adams were hired by Whitaker-Atlas to perform certain welding operations on the equipment in the plant; and while they were so engaged, sparks from the welding torch fell into the bottom of the bucket elevator, four feet below the floor level, where diesel fuel oil had accumulated, and started a fire. Miller and Adams were unable to put out the fire with the fire extinguishers on hand; and when the town fire fighting equipment arrived, the fire was 'a burning inferno.' After the area was ordered evacuated by the chief of the Norton Fire Department, a violent explosion occurred which destroyed the plant and many buildings nearby and damaged plaintiff's home, located one-half mile from the plant and separated from it by a ridge 200 feet high.

On the day of the explosion 40,000 feet of primacord were stored in boxes on a loft or balcony in the mixing plant, which was approximately 50 by 40 feet in area. About fifty tons of ammonium nitrate were also in the building, some two-fifths of which had been mixed with fuel oil and stored in bags stacked on the wood floor under the loft or balcony.

The Whitaker-Atlas Supply Company was organized by H. W. Whitaker in October, 1958, to sell explosives and other supplies to miners. In the course of his business he entered into two contracts with Atlas Powder Company. Under the first contract (referred to as the magazine contract), dated November 15, 1958, Whitaker-Atlas sold explosives and blasting supplies manufactured by Atlas, including primacord (but not ammonium nitrate), consigned by Atlas to its three magazines on the Guest River, several miles from Norton, Virginia. All sales by Whitaker-Atlas from the magazines were made in its own name, and there were no limitations on its extension of credit to its customers. The contract was terminable at the option of either party on thirty days' notice, and Whitaker-Atlas was not expressly prohibited from dealing in goods of other explosives manufacturers. The second agreement (referred to as the hauling contract), dated July 26, 1959, provided for Whitaker-Atlas to haul for Atlas inbound consigned materials delivered at Norton to the Atlas magazines and outbound materials from the magazines to Atlas customers.

Shortly after Whitaker-Atlas entered into the contract of November 15, 1958, Whitaker learned that mixed ammonium nitrate was less expensive than other explosives he was buying from Atlas under his contract, and he purchased the product from other suppliers. Then in early 1959 he decided to erect his own plant at Needmore to mix ammonium nitrate with fuel oil. Whitaker-Atlas purchased outright from Atlas the ammonium nitrate used at the mixing plant, and the purchases were billed and delivered directly to it.

Later, Whitaker-Atlas encountered financial difficulties, and on November 27, 1961, H. W. Whitaker executed a promissory note payable to Atlas, which was secured by a chattel mortgage and agreement to assign, on notice by Atlas, accounts receivable generated by the sale of Atlas products. After the explosion Atlas demanded payment of the note and assignment of accounts and hired a former employee of Whitaker-Atlas to assist in collecting the accounts.

An Atlas representative regularly made an inventory of the consigned materials at the Atlas magazines and on several occasions checked consigned materials, including primacord, that had been removed to the Whitaker-Atlas plant. The ammonium nitrate at the plant was not included in the inventory. The purpose of the inventory was to adjust the accounts between Atlas and Whitaker-Atlas, with Whitaker-Atlas being charged for items missing from the magazines at the time of the inventory. On the day of the explosion Mr. Carty, sales agent of Atlas, visited the plant for a few minutes and observed the welding operations.

Atlas representatives visited the mixing plant from time to time and made suggestions to the Whitaker-Atlas employees as to how they could more effectively carry on their work and care for the equipment of the plant.

Plaintiff's expert witness, Mr. Neal Hammon, testified that ammonium nitrate, before it is treated with oil, is an ordinary commercial fertilizer. It may be detonated either by heat or shock. Ammonium nitrate with oil is detonated by the same means as ammonium nitrate without oil, but less heat or shock is required when oil is added. The temperature at which fire alone will detonate ammonium nitrate depends on the critical mass, which is the total poundage present in a given area. He was unable to say what amount of ammonium nitrate would constitute a critical mass. In a standard test to determine sensitivity to detonation by shock, a four-pound weight dropped thirty-one inches will detonate ammonium nitrate, and as the temperature is increased a shorter drop is sufficient. Burning ammonium nitrate gives off a gas which can create sufficient pressure on the surface to produce the requisite shock for detonation.

Mr. Hammon said that primacord is an explosive which comes in rope-like form. He testified, 'This isn't a fuse you see in television movies. It isn't something you attach to dynamite and light it. You can't light it. You can take a match and it will not light. It will burn a little or melt. I will put a match to it right now; it won't burn.' He further said that although it is not supposed to explode in fire, he had heard of one case where that had happened; but he was not familiar with the facts and circumstances there. Primacord is more sensitive to shock than is ammonium nitrate, and a four-pound weight dropped eight inches will detonate it.

On direct examination, Mr. Hammon testified that an explosion at the plant of about fifty tons of ammonium nitrate, two-fifths of which was mixed with fuel oil, would have caused the damage to plaintiff's home. On the other hand, he said an explosion of only 40,000 feet of primacord might have caused some damage to plaintiff's home, such as a broken window. If both the ammonium nitrate...