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decided: March 31, 1975.


Appeal from order of Court of Common Pleas of Chester County, Oct. T., 1972, No. 89, in case of Geraldine B. Phillippe and Earett G. Phillippe, her husband, v. Jerome H. Rhoads, Inc.


Kenneth R. Werner, with him Fred T. Cadmus, III, and Cadmus and Patten, for appellants.

Robert C. Steiger, with him Harper, George, Buchanan & Driver, for appellee.

Watkins, P. J., Jacobs, Hoffman, Cercone, Price, Van der Voort, and Spaeth, JJ. Opinion by Van der Voort, J. Dissenting Opinion by Hoffman, J. Cercone and Spaeth, JJ., join in this dissenting opinion.

Author: Van Der Voort

[ 233 Pa. Super. Page 505]

This is an appeal from an Order granting defendant's motion for judgment on the pleadings,*fn1 entered on January 23, 1974, by Trial Judge John M. Wajert. Appellants' cause of action was grounded in trespass and alleged that appellee's negligent installation and maintenance of underground fuel storage tanks, gasoline pumps, and plumbing fixtures associated therewith caused three separate gasoline explosions. Appellee answered and raised by new matter the indemnity provision*fn2 of the contract, viz., an "Equipment Loan Agreement", by which appellants contracted with appellee for installation of certain equipment necessary to the selling of gasoline. Appellee then filed an amendment to his new matter, adding only a "Dealer Contract", which contained a similar indemnity clause, thus placing upon the record both documents relative to the parties' contractual obligations. Appellee moved for judgment on the pleadings

[ 233 Pa. Super. Page 506]

    pursuant to Pennsylvania Rule of Civil Procedure 1034, which was granted.

Appellants urge us to declare the indemnity clause invalid. We must begin with the "rule that a covenant against liability for acts of engligence is valid and enforceable when entered into by private individuals in furtherance of their personal affairs." Galligan v. Arovitch, 421 Pa. 301, 304, 219 A.2d 463, 465 (1966). Our Supreme Court recognizes a caveat to this rule by the holding in Dilks v. Flohr Chevrolet, 411 Pa. 425, 192 A.2d 682 (1963) that such contractual provisions must not contravene public policy. Thus, a contract between individuals cannot void a interest which the Legislature has deemed worthy of regulation for the public health and safety. See Boyd v. Smith, 372 Pa. 306, 94 A.2d 44 (1953). We do not find nor have appellants pointed us to legislative pronouncements on the subject of the instant installation and maintenance. In their brief appellants argue that they were foreclosed from amending so as to add statutes and regulations regarding storage and use of inflammables, and thus to show public policy. This the court in its discretion refused. See Pennsylvania Rule of Civil Procedure 1033 and Pugh v. Bankers Mutual Insurance Co., 206 Pa. Superior Ct. 136, 211 A.2d 135 (1965). We believe that the hearing judge did not abuse his discretion in this refusal, as the issues might more properly have been raised in answer to appellee's motion or at argument.*fn3 Having found no statute or regulation, we do not accept appellants' argument that the instant indemnity clause contravenes public policy.

The further caveat is placed upon the general rule as expressed in Galligan, supra, to the effect that an exculpatary

[ 233 Pa. Super. Page 507]

    clause, to be enforceable, must be part of a contract between parties who are free bargaining agents or mutual beneficiaries of the bargain in their individual capacities. Warren City Lines, Inc. v. United Refining Co., 220 Pa. Superior Ct. 308, 287 A.2d 149 (1971). While appellants aver that they were in an inferior bargaining position with this appellee, they do not allege that they could not deal with another in the business of installing and maintaining the instant fixtures. Further, appellants fail to aver that either they or appellee had not benefitted from the contract relations which had existed one with the other.

Galligan, supra, further stands for the proposition that "an agreement or instrument which reduces legal rights which would otherwise exist is strictly construed against the party asserting it and must spell out with the utmost particularity the intention of the parties." (at p. 303) Reading the present indemnity clause (see footnote 2, above) in a light most favorable to appellants we find it in no way ambiguous or unclear. Its language manifests a clear intention to release only appellee from any negligence of which it might be a part ...

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