Source: http://masscases.com/cases/sjc/260/260mass242.html
Timestamp: 2019-04-22 10:24:05+00:00

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NEW YORK CENTRAL AND HUDSON RIVER RAILROAD COMPANY vs. THE T. STUART AND SON COMPANY.
(9) The agreement of indemnity, even when read with the quoted portions of the specifications, did not make the contractor responsible for the acts of negligence of the railroad corporation or its agents.
CONTRACT OR TORT with a declaration in two counts, the first count being upon the agreement of indemnity described in the opinion. Writ dated October 28, 1914.
stated in the opinion. The jury found for the plaintiff in the sum of $7,097.28. The defendant alleged exceptions.
L. A. Mayberry, for the plaintiff.
damages, received or sustained by any party or parties, by reason of any act of the said Contractor, or of any Subcontractor hereunder, or of any agent or servant of either said Contractor or said Sub-contractor, in the construction of said work, or by or in consequence of any negligence or carelessness in guarding the same; . . . Neither the completion and acceptance of the work, nor the final payment, operate to discharge the Contractor from his (or its) responsibility for any claims for any personal or property damages which may have arisen during the work under the contract, whether such claims are then known or may become known in the future." By paragraph two of the specifications, It no information upon any such matters derived from maps, profiles or specifications, or from the Engineer or his Assistants, shall in any way relieve the Contractor from all risks incident to the work." The seventh paragraph of the specifications states, that "The Contractor will properly and sufficiently sheet and brace the excavation along the property line of the Company, which is also the backline of the retaining wall, that the adjacent land of abutting owners shall not cave in or be in any way disturbed. The Contractor will not trespass or encroach on the land of abutting owners, except as he himself obtains permission so to do"; and in paragraph fifteen "The Contractor agrees that this being a wall on the property line of the Railroad Company, he will protect, brace, and not trespass upon, the land of abutting owners, and will protect the Railroad Company from all suits, claims or damages arising from the prosecution of the work, and will himself assume all responsibility for damages to the property of abutting owners."
and evidence in support of this contention was introduced at the trial. On November 8, 1909, after the completion of the wall, Szathmary brought a bill in equity against the Boston and Albany Railroad Company and the defendant for damages and for an injunction, at the trial of which as shown by a transcript of the proceedings admitted in evidence - the defendant was found to have trespassed; but damages only were awarded. On the plaintiff's appeal, the decree was reversed by this court, Szathmary v. Boston & Albany Railroad, 214 Mass. 42, and the trial court, after rescript, entered an interlocutory decree directing the removal of so much of the wall as constituted an encroachment on the plaintiff's land; but, the parties having agreed upon a settlement, the railroad company paid to Szathmary $3,585, and thereupon a final decree was entered, the material part of which is as follows: ". . . it appearing that a settlement of the matters in dispute therein has been made by grant of a certain easement in the land of the plaintiff . . . by deed . . . now therefore, upon consideration thereof, and by agreement of all parties hereto, it is ordered, adjudged and decreed that the plaintiff's bill be and the same is hereby dismissed without costs to either party." It was agreed by the parties that the defendant was seasonably notified of the pendency of the bill and given opportunity to defend the suit, but did not enter an appearance. It also was agreed that if Mr. George L. Mayberry, of counsel for the defence, were in court he would testify that "from the time the rescript in the case of Szathmary against the Boston and Albany Railroad, February twenty-sixth, nineteen thirteen, was handed down by the Supreme Judicial Court, to the date of the final settlement to Szathmary, July seventh, he was in constant touch with Mr. Jesse C. Ivy," counsel for the contractor.
mined in an equity suit in Suffolk, where the findings of fact show that there was an encroachment, and said findings were binding upon the parties to that suit, to their privies, and that the defendant company was bound by such finding of fact on the matter of encroachment or trespass; that therefore the court rules that the evidence offered is not admissible in this suit.
"If the plaintiff in good faith made the settlement on the basis that there was an encroachment there and made what he deemed in good faith was the best settlement that could be made under the circumstances, that although in reaching that settlement he got a deed for an easement in the Szathmary land, that that came in within the terms of the contract of indemnity, whereby the plaintiff [sic] was obliged to pay the plaintiff, what it paid out to get rid of the encroachment. if the taking of the deed was merely a form or means of reaching a settlement in good faith, that it would not deprive the plaintiff of a right of action against the defendant for an amount paid in good faith, if the real basis of the getting of the deed and the paying of it was to make a final settlement.
"I think it appears if the plaintiff acted as a reasonably prudent man would act under similar circumstances, acting in good faith, then that it may recover the amount it paid, although it turns out and the jury find that the work would have been done for less, if before the settlement the plaintiff notified the defendant that it was considering seriously the question of settlement, and gave some idea as to the approximate amount or Some amount that was being spoken of.
"It is open to the defendant in this suit to show that the work of removing the encroachment upon Szathmary land could be done for much less money than the plaintiff paid in settlement of the trespass, and that it is also open to the defendant to show that the money wasn't paid in good faith, that it was paid after the defendant notified the plaintiff through its counsel that it was ready to do the work of removing the encroachment, if there was an encroachment, for $200, provided it had the right to go on the property of Szathmary so to do."
the plaintiff contend,that the defendant, through its counsel, had consented to the settlement.
The plaintiff, accordingly, must show that the settlement was fair and reasonable in view of the circumstances under the indemnity clause. It was conceded that the plaintiff acted in good faith and the auditor found that the amount paid in settlement was fair and reasonable, and that it was not in excess of what it would have cost to comply with the conditions required by the interlocutory decree of January 10, 1914.
The judge rightly refused to rule that the final decree dismissing the bill was an adjudication that there was no encroachment upon the Szathmary land. But the ruling that the proceedings conclusively established the encroachment was erroneous. The opinion of this court in Szathmary v. Boston & Albany Railroad, supra, however, is not a part of the record in that case, Snell v. Dwight, supra, and the interlocutory decree therein was vacated by the final decree dismissing the bill. But the portion of the opinion quoted by the trial judge and the interlocutory decree were admissible in this suit for their bearing upon the reasonableness of the settlement. See Hawks v. Truesdell, 99 Mass. 557, 559; Attorney General v. Armstrong, 231 Mass. 196, 202; Carere v. F. W. Woolworth Co. 259 Mass. 238. The instruction given, to which the defendant excepted, that "it was the duty of the defendant to defend the suit and to take the place of the railroad company," was error. It was optional with the defendant whether it would appear and defend.
recover in this action"; and "If the plaintiff, or its engineers, inspectors, or agents furnished contracts, plans, lines, stakes or directions to the defendant for the construction of the retaining wall and the trespass or encroachment on the Szathmary land was caused by the defendant's following the contracts, plans, lines, stakes or directions furnished by the plaintiff, the defendant is not liable in this action to the plaintiff," should have been given. Boston & Maine Railroad v. T. Stuart & Son Co. 236 Mass. 98, 103. The case of New York Central Railroad v. William Culkeen & Sons Co., supra, cited by the plaintiff, is distinguishable. The covenant of indemnity in that case included damage as a result of acts of the indemnitee, and, if certain words of the covenant were to be given any effect, they had to be construed as not excluding negligent acts of the indemnitee. The indemnity clause in the case at bar, even if read with the second and fifteenth clauses of the specifications, does not contain language which supports a construction making the contractor responsible for the acts of negligence of the railroad or its agents.

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