Case Name: Norman TOLBERT, Respondent, v. GERBER INDUSTRIES, INC., defendant and third-party plaintiff, Appellant; and VOLDCO, INC., defendant and third-party plaintiff, Respondent, v. SCHULER GRAIN COMPANY, third-party defendant, Respondent
Court: Minnesota Supreme Court
Jurisdiction: Minnesota
Decision Date: 1977-04-22
Citations: 255 N.W.2d 362
Docket Number: No. 45290
Parties: Norman TOLBERT, Respondent, v. GERBER INDUSTRIES, INC., defendant and third-party plaintiff, Appellant, and VOLDCO, INC., defendant and third-party plaintiff, Respondent, v. SCHULER GRAIN COMPANY, third-party defendant, Respondent.
Judges: Heard before OTIS, PETERSON, and SCOTT, JJ.; reheard, considered, and decided by the court en banc.
Reporter: North Western Reporter 2d
Volume: 255
Pages: 362–372

Head Matter:
Norman TOLBERT, Respondent, v. GERBER INDUSTRIES, INC., defendant and third-party plaintiff, Appellant, and VOLDCO, INC., defendant and third-party plaintiff, Respondent, v. SCHULER GRAIN COMPANY, third-party defendant, Respondent.
No. 45290.
Supreme Court of Minnesota.
April 22, 1977.
Field, Arvesen, Donoho, Lundeen & Hoff and Norman D. Arvesen, Fergus Falls, for appellant.
Rufer, Hefte, Pemberton, Schulze & Sor-lie and Richard C. Hefte, Fergus Falls, Jar-dine, Logan & O’Brien, St. Paul, for Tol-bert.
Clemmensen & Robertson, Breckenridge, Bey, Ochs & Klimek, Minneapolis, Dosland, Dosland, Nordhaugen & Mickelberg and J. R. Dosland, Moorhead, for Voldco.
Korbel & Gospodar and Anthony C. Gos-podar, Breckenridge, for Schuler.
Heard before OTIS, PETERSON, and SCOTT, JJ.; reheard, considered, and decided by the court en banc.

Opinion:
OTIS, Justice.
This is an action brought by Norman Tolbert against Gerber Industries, Inc. (Gerber), the manufacturer, and Voldco, Inc. (Voldco), the installer of defective equipment which caused plaintiff's injury. Schuler Grain Company (Schuler), Tolbert's employer, was made a third-party defendant. The jury found that Gerber and Vold-co were negligent and that the negligence of each was a direct cause of Tolbert's injury and awarded Tolbert $60,572. Pursuant to our comparative negligence statute, Minn.St. 604.01, the jury was instructed to attribute a percentage of negligence to each tortfeasor. They attributed 100 percent of the negligence to Gerber and Voldco jointly and did not apportion percentages between them. The trial court, relying upon our recent decisions in Hillman v. Ellingson, 298 Minn. 346, 215 N.W.2d 810 (1974), and Sorenson v. Safety Flate, Inc., 298 Minn. 353, 216 N.W.2d 859 (1974), thereupon awarded Voldco 100-percent indemnity from Gerber. We reverse and remand for further proceedings.
The issue presented is one which prompts us to re-evaluate well-established common-law rules in light of recently adopted principles of comparative negligence. Specifically, the question is whether a negligent installer of defective equipment is entitled to 100-percent indemnity from the negligent manufacturer because the negligence of the former was "passive" or "secondary," or whether the joint tortfeasors should be responsible for the loss in accordance with their respective degrees of culpability.
In 1968, Schuler, a corporation operating a grain-and-seed elevator, contracted with Voldco, a corporation engaged in the construction of grain elevators and the installation of grain-handling equipment, to design and install a trackside loading leg to permit gravity loading of grain hopper cars on a railroad siding immediately adjacent to one of Schuler's plants.
Schuler outlined its requirements, and Voldco determined what equipment was needed, selected a supplier, and obtained and installed the equipment.
Voldco gave Gerber the basic information concerning the type of system required, and Gerber determined what specific components would be needed. Gerber prepared a sketch showing the height of the leg and the length of the transfer spout necessary to reach the open-top hatches of hopper cars. In addition, it determined the angles of an A-valve and a metal elbow. Gerber then shipped all component parts, separately and unassembled, to Voldco and received payment.
The installation consisted of a hollow tube some 30 feet high, mounted vertically alongside the track on which railroad cars would be loaded. Inside the tube, which was supported by bracing to hold it upright, was a power-driven conveyor belt to which cups were attached to raise grain from the bottom of the column to other equipment at the top of the column. Grain was fed to the belt at the bottom of the column from storage bins in the Schuler structure.
.At the top of the column the grain cups emptied into an A-valve which was to carry the grain out toward the hopper car at an angle below the horizontal. The grain then flowed by gravity to an elbow which changed its direction to the descending vertical. Bolted to the lower end of the elbow was a metal turnhead, so-called because, within a circular motion in the center of the upperplate bolted to the elbow, it was designed to turn 360 degrees in rotation. Below the circular turnplate, the turnhead, which consisted of a cast-metal pipe, sent the grain downward at an angle between the horizontal and the vertical into a metal transfer spout approximately 12 feet in length, having articulating segments just below its point of attachment to the transfer spout. Attached to the transfer spout was a metal sleeve which could be extended for another 12 feet, to produce a total spout length from the turnhead of about 24 feet. This sleeve could be retracted by a crank-operated cable and pulley with a ratchet release to permit extension from a retracted position without operation of the crank.
The hopper car was metal, its roof level being some 12 or 15 feet above track level. Down the center of the roof and running lengthwise was a three-segment open channel into which the transfer spout and its extension were to be placed to fill three separate bins, each open segment of the channel serving one bin and having a separate door segment which covered the channel segment when closed. The car was about 40 feet in length and, when spotted for loading, was centered on the loading-leg structure which loaded the grain.
The top segment of the transfer spout was attached to the turnhead by hooking a hole in the spout to a cast-metal lug on the turnhead. The turnplate was designed to be mounted in a level horizontal valve to the base of the elbow above it, and the angles of the A-valve and the elbow had to coincide for a level installation. If the turnplate was not installed in a level position, it permitted the hole in the transfer spout to slip off the lug on the turnhead, allowing the entire transfer spout and sleeve assembly to fall free from its point of suspension 30 feet above ground level.
In preparing its sketch, Gerber, the manufacturer, determined that the proper angle of the A-valve was 35 degrees. By mistake, its shipping department sent a 47-degree angle instead. As a result, the turnplate was tilted 12 degrees below the horizontal at its outer edge toward the hopper car. Voldco, the installer, had not ordered specific component parts but rather had ordered a complete system, leaving to Gerber the decision as to what parts were needed. Voldco has been in the business of installing systems such as this since 1947 or 1948, and had installed "quite a few" of them. It proceeded to install the equipment sent by Gerber without detecting its potentially dangerous propensities.
On January 8,1972, Tolbert was on top of a hopper car extending the transfer spout and its sleeve to the west end of the car centered at the base of the loading leg on an east-west track. In this process, the hole in the head of the transfer spout disengaged from its point of suspension on the lug of the turnhead and fell to the ground, sweeping the plaintiff off the top of the hopper car, causing him severe injuries.
There were no safety devices on the transfer-spout suspension to prevent its falling in the event of disengagement. Gerber had never produced a system with any such safety device, Voldco had never installed one with safety devices, and Schu-ler had never seen such a device or ordered the installation of one. If a safety device were installed, it would have had the unwanted effect of making permanent that which was intended to be portable. The system was designed to move the transfer spout from turnhead to turnhead as differ ent commodities were loaded into railroad cars. Gerber, Yoldco, and Schuler had no knowledge of any occurrences of unintentional disengagements, although similar equipment had been installed in grain elevators throughout the country.
In Hendrickson v. Minnesota Power & Light Co., 258 Minn. 368, 372,104 N.W.2d 843, 848 (1960), we reviewed our decisions concerning indemnity between joint tort-feasors and adopted the following rules:
" A joint tortfeasor may generally recover indemnity only in the following situations:
"(1) Where the one seeking indemnity has only a derivative or vicarious liability for damage caused by the one sought to be charged.
"(2) Where the one seeking indemnity has incurred liability by action at the direction, in the interest of, and in reliance upon the one sought to be charged.
"(3) Where the one seeking indemnity has incurred liability because of a breach of duty owed to him by the one sought to be charged.
"(4) Where the one seeking indemnity has incurred liability merely because of failure, even though negligent, to discover or prevent the misconduct of the one sought to be charged.
"(5) Where there is an express contract between the parties containing an explicit undertaking to reimburse for liability of the character involved." (Italics supplied.)
The instant case falls within Rule 4 of Hendrickson. In situations covered by Rules 1, 2, and 3, the party who seeks indemnity has been held liable even though not personally at fault. In cases under Rule 1, the liability of the party, seeking indemnity is imposed upon him for the conduct of another. Indemnity in such a case is supported by the fundamental principle that one who is guilty of injurious misconduct is himself liable therefor. In cases under Rule 2, indemnity is granted to a party who justifiably relied upon representations made by another and thus is without personal fault, but whose actions are nevertheless tortious. In cases under Rule 3, the party seeking indemnity is again without personal fault, but is exposed to liability because of the failure of another to perform a duty which he was legally or contractually obligated to perform. Rule 5 deals with contractual indemnity and is thus distinguishable from Rules 1, 2, and 3 and from Rule 4.
Cases which fall under Rule 4 are of a very different type from the others. Aside from cases of contractual indemnity, the other rules concern parties seeking indemnity who are without personal fault, but who nevertheless are liable in tort. Rule 4, however, concerns parties who are themselves culpably negligent but who nevertheless seek to avoid responsibility for the injury they have caused. The typical example of this is where the party seeking indemnity has failed to discover or prevent the negligence or misconduct of another when an ordinarily prudent person would have done so. Previously, the rule has been interpreted to apply where the negligence of the party seeking indemnity was merely "passive" or "secondary" as contrasted with the "active" or "primary" negligence of the other tortfeasor.
Our current rule on indemnity in Rule 4 situations presents a trial court with a bewildering array of issues. First, the Court must determine if the negligence of the party was "passive" or "secondary" as opposed to the "active" or "primary" negligence of the other tortfeasor. Next the Court is expected to decide whether the negligence was "concurrent," in which case contribution and not indemnity is awarded. Thill v. Modern Erecting Co., 272 Minn. 217, 136 N.W.2d 677 (1965); White v. Johnson, 272 Minn. 363, 137 N.W.2d 674 (1965). It also must examine "the relative culpability of the conduct of the wrongdoers," but still it must award indemnity on an all-or-nothing basis. Hillman v. Ellingson, 298 Minn. 346, 350, 215 N.W.2d 810, 813 (1974). Finally, it is admonished that such indemnity cannot be determined by "hard-and-fast rules and must turn on the facts of each case." Sorenson v. Safety Flate, Inc., 298 Minn. 353, 361, 216 N.W.2d 859, 864 (1974).
Indemnity provides a just result in cases under Rules 1, 2, and 3. Its application insures that liability for damages is borne by the negligent party. It prevents those only vicariously liable from bearing an unfair burden thrust upon them by others (i. e., tortious acts by servants or employees, people driving cars with the owner's consent, or anyone for whose negligence another is held to be liable under the law). In Rule 4 cases, however, indemnity is a blunt instrument for reallocating responsibility for damages. It shifts the entire loss from one culpable wrongdoer to another.
In the related area of contributory negligence, our legislature has abandoned the all-or-nothing approach of the common law by adopting a comparative negligence statute, Minn.St. 604.01. Tortfeasors must now accept responsibility for damages commensurate with their own relative culpability. Because indemnity in Rule 4 situations is an equitable doctrine, we are at liberty to ameliorate the rigid common-law rules in keeping with legislative philosophy without an express statutory mandate.
By limiting the reallocation of loss between joint tortfeasors to contribution based upon relative fault, the more culpable tortfeasor will continue to bear a greater share of the loss, but at the same time his joint tortfeasor will not continue to escape all liability as in the past. We were invited to adopt such a rule in Bjorklund v. Hantz, 296 Minn. 298, 208 N.W.2d 722 (1973), and now accept it.
The jury found that both Gerber and Voldco were negligent and that the negligence of each was a direct cause of plaintiff's injury. Consequently, as between them, each will bear the cost of compensating plaintiff in proportion to its relative culpability.
The judgment of the district court is affirmed in so far as it awards plaintiff judgment against defendants Gerber and Voldco and dismisses the third-party claims against Schuler. With respect to the award to Voldco of indemnity against Gerber, the judgment is reversed and the matter is remanded for a new trial on the limited issue of apportionment of liability between Gerber and Voldco in accordance with the rule we here adopt.
Reversed and remanded.
. As we use the term "joint tortfeasors" it includes "all cases where there is joint liability for a tort, whether the acts of those jointly liable were concerted, merely concurrent, or even successive in point of time." Leflar, Contribution and Indemnity Between Tortfeasors, 81 U. of Pa.L.Rev. 130, 131 note 9.
. Restatement, Restitution, § 96, refers to a party seeking indemnity who is "without personal fault." See, Keefer v. Al Johnson Construction Co., 292 Minn. 91, 193 N.W.2d 305 (1971); Lunderberg v. Bierman, 241 Minn. 349, 63 Nf.W.2d 355 (1954).
. Leflar, supra, footnote 1, p. 147.
. Restatement, Restitution, § 90. See, also, Restatement, Restitution, § 89, 91, and 92. Lef-lar, supra, footnote 1, p. 150, describes such a party as one who "voluntarily but innocently and in good faith [does] at the direction of another person an act which on its face appears lawful and proper, but which is in fact tortious See, Henderson v. Eckern, 115 Minn. 410, 132 N.W. 715 (1911); Guirney v. St. Paul, Minneapolis & Manitoba Ry. Co., 43 Minn. 496, 46 N.W. 78 (1890).
.Restatement, Restitution, § 98(a) states that such a party must be "without fault." Restatement, Restitution, § 98(b), comment b reveals that that subsection is but a special case of the vicarious liability treated in § 96. See, also, Leflar, supra, footnote 1, p. 158; Minneapolis Mill Co. v. Wheeier, 31 Minn. 121, 16 N.W. 698 (1883).
. See, Restatement, Restitution, § 93, 94, 95; Leflar, supra, footnote 1, p. 154. Hillman v. Ellingson, 298 Minn. 346, 215 N.W.2d 810 (1974); Bjorklund v. Hantz, 296 Minn. 298, 208 N.W.2d 722 (1973); White v. Johnson, 272 Minn. 363, 137 N.W.2d 674 (1965); Fidelity & Cas. Co. v. Northwestern Tel. Exch. Co., 140 Minn. 229, 167 N.W. 800 (1918); City of Wabasha v. Southworth, 54 Minn. 79, 55 N.W. 818 (1893).
. We note that these distinctions may well have occurred from dicta, rather than from the holdings of some of our earlier decisions. For example, Lunderberg v. Bierman, 241 Minn. 349, 63 N.W.2d 355 (1954), was a case wherein the party seeking indemnity was liable only because the negligence of another was imputed to her by law, yet we nevertheless drew the "active/passive" distinction. Likewise, in Keefer v. Al Johnson Construction Co., 292 Minn. 91, 193 N.W.2d 305 (1971), the party seeking indemnity was only vicariously liable, yet we went on further to use the "primary/secondary" distinction.
. Wade, Comments on Maki v. Frelk, 21 Vand. L.Rev. 938, 941.
. Note, 65 Col.L.Rev. 123, 126; Jensvold, A Modern Approach to Loss Allocation Among Tortfeasors in Products Liability Cases, 58 Minn.L.Rev. 723, 737.
. The principles governing indemnity between joint tortfeasors grew out of the doctrines of quasi-contract and unjust enrichment. Restatement, Restitution, Part 1, Introductory Note; Hendrickson v. Minnesota Power & Light Co., 258 Minn. 368, 370, 104 N.W.2d 843, 846 (1960).
. New York and Wisconsin have adopted similar rules. Dole v. Dow Chemical Co., 30 N.Y.2d 143, 331 N.Y.S.2d 382, 282 N.E.2d 288 (1972); Pachowitz v. Milwaukee & Suburban Transport Corp., 56 Wis.2d 383, 202 N.W.2d 268 (1972).
Decisions reaching a contrary conclusion in the following cases are necessarily overruled; Hillman v. Ellingson, 298 Minn. 346, 215 N.W. 2d 810 (1974); Bjorklund v. Hantz, 296 Minn. 298, 208 N.W.2d 722 (1973); White v. Johnson, 272 Minn. 363, 137 N.W.2d 674 (1965); Hendrickson v. Minnesota Power & Light Co., 258 Minn. 368, 104 N.W.2d 843 (1960) (in part); Fidelity & Cas. Co. v. Northwestern Tel. Exch. Co., 140 Minn. 229, 167 N.W. 800 (1918); City of Wabasha v. Southworth, 54 Minn. 79, 55 N.W. 818 (1893).