Court Opinion

ID: 9636843
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:45:05.140777+00
Date Added: 2024-06-11T12:16:05.695134
License: Public Domain

SOPER, Circuit Judge
(dissenting).
The Railway Company gave a written license to the Coca Cola Company to construct and maintain a bottling warehouse on a portion of the Railway’s right of way in such a location that the clearance between the wall of the building and a passing freight car was only 18 inches. The parties conferred about the exact location of the building; the shipper stated its requirements and the Railway Company furnished the final blue prints. Both parties realized that real danger lurked in the proximity of the building to the track and consequently the Railway Company granted the license only upon the condition that the shipper would indemnify the Railway Company from the consequences of any property loss 'or personal injury attributable to the location of the building.
Of these facts there can be no doubt, for the parties expressly stated in an agreement prepared by the Railway Company that “inasmuch as the use by the licensee of property of the Railway Company in exercise of privilege herein granted may create risks of fire or other loss, injury or damage which would not accrue except for such use, and the Railway Company would not grant said privilege except upon the condition that it shall be protected against any risk so created, the licensee, in consideration of said privilege * * * covenants hereby to protect and indemnify the Railway Company and save it wholly harmless from the consequences of any property loss or damage, death or personal injury whatever, * * * which may in any manner or to any extent be attributable * * * to the presence of the warehouse of the licensee * * * on property of the Railway Company and whether or not negligence on the part of the Railway Company * * * may have caused or contributed to the loss, injury or damage.”
But we are now asked to believe that the Railway Company, having safeguarded itself by this explicit indemnity agreement, deliberately destroyed its effect by adding an excepting clause which deprived it of the very protection which it had set out to secure. Why the Railway Company should have acted in this extraordinary fashion no one attempts to explain, and such behavior would be so devoid of ordinary business judgment that one is led to reexamine the excepting clause in the hope that a more reasonable interpretation may be found.
It provides that “the licensee shall not be held responsible for any loss of life or personal injury, or damage to cars or property of the Railway Company, accruing from its own negligence, without fault of the licensee”. What did the parties mean by loss occurring from “negligence” of the Railway Company “without fault of the licensee”? Did they have in mind any negligence that might be involved in locating the building too, near to the track? The answer must be no, because in the clause of the agreement immediately preceding the exception, the licensee agreed to safeguard the Railway Company from any loss in any manner attributable to. the presence of the warehouse on the property of the Railway Company “whether or not negligence on the part of the Railway Company, its servants, or employees, may have caused or contributed to the loss, in*309jury or damage”. In this respect this case is stronger for the indemnitee than that before this court in Cacey v. Virginian R. Co., 4 Cir., 85 F.2d 976, because in that case it was not expressly agreed that the Railway Company might recover notwithstanding negligence on its part in creating the situation.
How then shall the two parts of the indemnity agreement, the principal clause and the excepting clause, be interpreted in relation to one another? It is conceded “that we should not give to the excepting clause an interpretation that would nullify the clear intent of the first clause of the paragraph which is to impose liability for loss arising out of the location of the building notwithstanding negligence on the part of the company contributing to the loss”; and it is said that the general provisions of the first clause make the Coca Cola Company liable generally for losses attributable to the maintenance of the warehouse on the right of way, while the excepting clause protects that company from losses sustained through the operation of the railroad when the Coca Cola Company itself has been without fault. To illustrate, negligent operation might involve some disregard by the Railway Company of the safety of its employees or of the employees of the shipper, or some neglect in the use of a car which, by reason of its peculiar structure or appurtenances, could not safely pass through the limited space. If the Railway Company should be negligent in such a fashion without fault of the shipper, the latter would have no liability for an ensuing loss.
This interpretation of the contract is correct; but if it is correctly applied to the facts of the case, the liability of the Coca Cola Company is at once apparent. The injury to the brakeman which formed the basis of the judgment for $8,500 against the Railway Company in the state court was not caused by the negligent operation of the railroad but by the negligent location of the building. This conclusion is not open to dispute, for the only finding of negligence relied on in this case is the specific finding of the jury in the state court that the Railway Company was negligent in permitting the building to be constructed on it's right of way in such close proximity to the track as to render it dangerous and unsafe to employees engaged in operating passing trains.
Why then should the Coca Cola Company be allowed to escape from its promise to save the Railway Company from losses so occasioned? The only answer is an appeal to the phrase “without fault of the licensee” which occurs in the excepting clause; and it is said that since the Coca Cola Company had no control of the operation of the railroad, it had no responsibility for the accident. This answer is obviously insufficient. The absence of fault on the part of the Coca Cola Company affords it an opportunity to escape liability for loss only when the loss is caused by the negligent operation of the railroad which did not occur in this case. When loss occurs through the negligent location of the building, it is of no importance that the Coca Cola Company was “without fault” in respect to the location, for these words are not found in the principal cause and have no relation to the location of the building or to losses occasioned thereby.
However, if the neglect contemplated in the exception relates to the location of the building, the licensee is not released from liability in this case, because it was a party to the transaction and was not without fault in the selection of the site of its warehoitse. One does not excuse himself from negligence by proving that he acted at the behest or in accordance with the instructions of others; and in this instance the very purpose of the indemnity agreement was to safeguard the Railway Company from any loss that might flow from locating the building as shown on the plan. It did not require expert knowledge on the part of the Coca Cola Company to realize that some risk or danger of loss was involved in placing the building very near to the railroad track. Indeed the Coca Cola Company had positive and specific information from the very terms of the indemnity agreement that the location of the building might create a risk of fire or injury to property or person. Indemnity would not have been given if the parties had not realized that at some future time their conduct in locating the building might be adjudged to involve actionable negligence. The licensee, therefore, was a party to the neglect for which the Railway Company has been mulcted in damages and may not claim the benefit of the exception on the ground that it was without fault.
The judgment in favor of the Coca Cola Company should be reversed. There is nothing inherent in an indemnity agreement which requires a departure from the *310usual rules of interpretation. Rather the proper approach is aptly expressed in Re New York, N. H. & H. R. Co., D.C., 46 F.Supp. 214, 232: “A court of equity in its zeal to protect an indemnitor from unreasonable demands will not, I apprehend, in so doing deprive the indemnitee of the substance of the protection for which it has contracted.”