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STEVENS v. BALTIMORE & OHIO R.R. CO.

August 29, 1967

John E. STEVENS, Plaintiff,
v.
The BALTIMORE AND OHIO RAILROAD COMPANY, a Foreign Corporation, Defendant and Third-Party Plaintiff, v. LUCERNE COKE COMPANY, a corporation, Shenango Furnace Company, a corporation, and Shenango, Inc., a corporation, Third-Party Defendants



The opinion of the court was delivered by: GOURLEY

 GOURLEY, Chief Judge.

 This is a civil non-jury proceeding which arises out of an accident in which the plaintiff was injured on defective equipment of the defendant Railroad, which proceeding was settled. The reasonableness thereof is not in dispute.

 The matter before the Court is the claim of the Railroad, as third-party plaintiff, against the third-party defendants, hereinafter referred to as the Company, based on an indemnity agreement in which the parties are in dispute as to its application to the facts which gave rise to the original cause of action.

 The Court has conducted a full and complete hearing, considered the briefs of counsel, and it is concluded that the provisions of the indemnity agreement do have application, and the third-party plaintiff is entitled to recover in the amount of $14,000.00.

 It is not in dispute that the Company requested the Railroad to service an area for the unloading of coal and granted a right of way over the premises of said Company for this purpose. A written indemnity agreement was entered into between the parties which provided, inter alia, as follows:

 
"WHEREAS, Company desires to construct certain unloading facilities on land owned by it at Lucerne, in Centre Township, Indiana County, Pennsylvania, and beneath railroad sidetrack to be loaded on said land and . . .
 
WHEREAS, Company proposes to grant unto Railroad, without costs, an easement over and across the land upon which the above-mentioned sidetrack is to be constructed."

 The agreement further provided:

 
"Company hereby assumes, and releases and agrees to indemnify, protect and save Railroad harmless from and against, (I) * * *, and (II) all loss and damage on account of injury to or death of any person whomsoever (including employees and patrons of the parties hereto and all other persons whomsoever), and (III) all claims and liability for such loss and damage and cost and expenses thereof, caused by or growing out of the operation of this agreement or the presence, construction, maintenance, use, repair, change or relocation and subsequent removal of said facilities, whether caused by the fault, failure or negligence of the Railroad or otherwise."

 The action and course of conduct of the Railroad in providing a car with a defective appliance which brought about the accident and claim for damages, in my judgment, was an act of negligence and fault, or otherwise, in that the Railroad instrumentality was furnished in violation of law. The thesis of the Company is that, although the accident occurred on a sidetrack which was constructed for the operation of the unloading facility, the circumstances under which the accident arose were not contemplated by the agreement in that the accident did not relate to the unloading facilities or was the accident due to any act of negligence on the part of the Company.

 I do not believe that this position is consistent with the terms and provisions of the agreement. In order to give this construction to the indemnity section, that section must be so construed so as to limit it to only liability or claims that grow out of the unloading facility itself.

 It is the law in Pennsylvania that in construing a contract the intention of the parties must be ascertained by the entire instrument, and each and every part of it must be taken into consideration and given effect if reasonably ...


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