May 26, 1952
TIDEWATER FIELD WAREHOUSES, INC.,
FRED WHITAKER COMPANY, INC., APPELLANT
Appeal, No. 141, Jan. T., 1952, from judgment of Court of Common Pleas No. 6 of Philadelphia County, Dec. T., 1950, No. 4084, in case of Tidewater Field Warehouses, Inc., v. Fred Whitaker Company, Inc. Judgment affirmed.
Walter B. Gibbons, for appellant.
Howard R. Detweiler, with him Frank R. Ambler, for appellee.
Before Drew, C.j., Stearne, Jones, Bell, Chidsey and Musmanno, JJ.
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OPINION BY MR. CHIEF JUSTICE DREW
This action in assumpsit is another phase of the legal proceedings arising out of the death of Hugh E. Donnelly for which his administratrix recovered judgments totaling $42,478.00 against Tidewater Field Warehouses, Inc., plaintiff herein. See Donnelly v. Fred Whitaker Co., 364 Pa. 387, 72 A.2d 61. The sole question here is whether the indemnity clause in a lease between Tidewater and Fred Whitaker Company, Inc., defendant, indemnified Tidewater from losses resulting from its own negligence. The learned court below held that it did and accordingly entered judgment on the pleadings for Tidewater. This appeal followed.
Whitaker is an importer and processer of raw wool. In order to avoid paying import duty immediately on the arrival of the wool, it is stored in a bonded warehouse subject to joint control by the warehouseman and the U.S. customs officials. Pursuant to this practice
[ 370 Pa. Page 540]
Whitaker entered into a lease and warehouse agreement with Tidewater on July 15, 1946. By the terms of those agreements Whitaker leased the warehouse to Tidewater and in return Tidewater agreed to store only Whitaker's wool therein. It was further provided that Whitaker would supply all labor necessary for handling the wool but that the labor would be subject to the exclusive control of Tidewater.
On May 1, 1947, Donnelly, a customs inspector, was killed when a bale of wool was pushed down and fell on him. Suit was brought against Whitaker which brought on the record Tidewater as an additional defendant. The jury returned verdicts against both Whitaker and Tidewater on which judgments were entered. On appeal we reversed as to Whitaker holding that by the terms of the agreement the employe whose negligence caused Donnelly's death was the exclusive agent of Tidewater at the time of the accident and accordingly it alone was liable. We recognized the existence of the indemnity clauses in the agreements but held further that "Tidewater's right to indemnity must be determined in an action on the contract and cannot be adjudicated in this trespass suit." It is to determine the rights growing out of those clauses that Tidewater has brought this action in assumpsit against Whitaker. It is Whitaker's position that the indemnity clauses were designed only to protect Tidewater from claims arising out of its occupancy of the premises but not to include claims arising as a result of acts of negligence on its part. We are of the opinion that the lower court correctly rejected this argument.
The law on this subject is quite clear. In the absence of a clear expression of intent to the contrary a contract of indemnity will not be construed to indemnify against the negligence of the indemnitee: Darrow v. Keystone Stores, Inc., 365 Pa. 123, 74 A.2d 176;
[ 370 Pa. Page 541]
duties of the parties. A reading of it in its context reveals that the only effect it can have is to protect Tidewater against any suit for damages which might arise during the term of the lease. No other interpretation of that clause is possible.
That intent is even more manifest when we consider the factual situation giving rise to this lease. Whitaker owned the wool. It also had possession of the warehouse. Wishing to avoid immediate payment of the duty it leased the warehouse to Tidewater for one dollar and at the same time entered into a warehouse agreement whereby Whitaker supplied all of the labor but such labor was under control of Tidewater while working in the warehouse. Tidewater maintained only one part-time employe on the premises and he was also in the general employ of Whitaker. In other words, both property and the labor were actually Whitaker's and Tidewater was brought in solely for the purpose of meeting the government requirements. Tidewater had no right to select the men to do the work under the agreement. Its only right was to control the men while performing the work. Under such circumstances it is both logical and practical that Tidewater should insist on protection against the negligence of those employes who had been selected for it by Whitaker. It is for that reason that the broad all-inclusive indemnity clause was incorporated into the lease.
When judgment was obtained against Tidewater in the trespass action as a result of the negligence of one of these employes, Tidewater properly demanded indemnification by Whitaker. This Tidewater is entitled to have under the express terms of the agreement.
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