The opinion of the court was delivered by: VAN ARTSDALEN
VAN ARTSDALEN, District Judge.
This indemnity action is submitted for final determination on a stipulation of facts. The legal issue for determination: -- Is a manufacturer liable to indemnify an intermediate seller for the costs of defense, including counsel fees, of a products liability case tried under the "strict liability" doctrine of Section 402(a), Restatement of Torts, 2nd. (as adopted in Pennsylvania in Webb v. Zern, 422 Pa. 424, 220 A. 2d 853), where the jury renders a verdict in favor of defendant?
The stipulated facts are as follows:
1. Merck is a corporation incorporated under the laws of the State of New Jersey with its principal place of business at Rahway, New Jersey.
2. KL&D Company ["KL&D"] is a corporation incorporated under the laws of the Commonwealth of Pennsylvania with its principal place of business in Pennsylvania.
3. Knox Glass, Inc. ["Knox"] is a corporation incorporated under the laws of the State of Delaware with its principal place of business in Pennsylvania.
4. On or about September 30, 1965, Knox acquired the business and assumed the liabilities of KL&D, including any liability assessed in this action.
5. On or about May 12, 1966, one Herbert Schindler instituted an action in the Eastern District of Pennsylvania, Civil Action No. 40291, against Plaintiff herein.
6. The entire record in Civil Action No. 40291 shall be deemed to be a part of the record in this action.
7. In December, 1969, Civil Action No. 40291 was tried before the Honorable Ralph C. Body and a jury and resulted in a verdict for Merck, defendant therein, plaintiff herein.
8. In connection with the trial of the Schindler action [Civil Action No. 40291] Merck, Knox and KL&D determined that their interests were best served by deferring to this action resolution of the issues presented herein, and agreed before Judge Body that Merck's right to present the claims asserted in this action would not be prejudiced by its adherence to that joint decision.
9. The Schindler action was tried upon evidence to which the principles of strict liability as enunciated in Restatement, Torts 2d., § 402 A applied and the Trial Judge ...