Alamo Lumber Company v. Warren Petroleum Corporation

316 F.2d 287, 1963 U.S. App. LEXIS 5528
CourtCourt of Appeals for the Fifth Circuit
DecidedApril 19, 1963
Docket19758_1
StatusPublished
Cited by24 cases

This text of 316 F.2d 287 (Alamo Lumber Company v. Warren Petroleum Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alamo Lumber Company v. Warren Petroleum Corporation, 316 F.2d 287, 1963 U.S. App. LEXIS 5528 (5th Cir. 1963).

Opinion

WISDOM, Circuit Judge.

This is an appeal from a judgment granting indemnity to Warren Petroleum Corporation under a contract between it and Alamo Lumber Company.

On June 1, 1960, Alamo agreed in writing with Warren to build cabinets in a chemical laboratory on Warren’s plant *288 site near Fashing, Texas. The contract contained the following provision:

“D. INDEMNIFICATION AND INSURANCE — Contractor [Alamo] indemnifies and agrees to hold Owner [Warren] harmless from any and all liability, claims, demands or judgments for damages resulting from injuries to or death of persons, including Contractor and Contractor’s employees or any injury to or destruction of the property of others, including the property of Contractor or that of Contractor’s employees, or any damages or losses to the property of Owner while Contractor is performing the work, which arises out of or in connection with the activities of Contractor, Contractor’s servants, agents and employees.”

During the course of Alamo’s construction in the laboratory, it was found necessary to remove a sink, and two of the pipes leading into it, a gas pipe and an intake water pipe, were plugged up. A third pipe, for sewer drainage, was disconnected but was left open. Waste gas from Warren’s natural gasoline plant backed up in the sewer and was discharged through the open pipe into the laboratory while two of Alamo’s employees were working there. Both men were overcome by the poisonous gas and became unconscious before they could get out of the room.

The two men brought suit for damages against Warren for negligence, and each recovered $5,000. Warren, in turn, sought indemnity under its contract with Alamo. The lower court granted judgment over. Macon v. Warren Petroleum Corp., W.D.Tex.1962, 202 F.Supp. 194. Alamo appeals. We affirm.

I.

The question is whether the indemnity agreement protects Warren in view of the fact that the jury verdict necessarily required a finding that Warren’s own negligence caused the accident. Alamo, the indemnitor, argues that since it is not an insurance company or professional surety, the indemnity-provision should be narrowly construed; in the absence of an express stipulation to indemnify Warren for its own negligence, Alamo should not be liable.

Texas law controls, and Texas courts uniformly have rejected such a rule of construction. Thus, the Texas Supreme Court stated in Mitchell’s, Inc. v. Friedman, 1957, 157 Tex. 424, 303 S.W.2d 775 that

“It is not necessary * * * for the parties to say in so many words that they intend to protect the indemnitee against liability for negligence. An obligation to hold harmless from claims, liability or damage resulting from a specified operation or instrumentality will be enforced in accordance with its terms even though the indemnitee may thereby be relieved of the consequences of its own negligence.”

The Texas Supreme Court followed this holding in the very recent case of Ohio Oil Co. v. Smith, (Tex.1963), 365 S.W.2d 621. The Court pointed out that

“The ‘express negligence’ doctrine has, in effect, been rejected in this state not only in instances involving the rental or leasing of property, but also in cases where an owner-contractor relationship exists. [Citation omitted.] * * * In owner-contractor situations judicial construction of indemnity clauses to cover the indemnitee’s negligence notwithstanding absence of an express provision to that effect in the contract has been said to be common.”

This is not a new ruling. One of the earliest cases dealing with this issue, Houston & T. C. R. Co. v. Diamond Press Brick Co., 111 Tex. 18, 222 S.W. 204 (1920), involved a contract provision under which a brick company agreed to save a railroad company “harmless from any and all claims for damages” arising out of the construction, operation and maintenance of a spur track leading to the brick company’s plant. In rejecting *289 the argument that there could be no indemnity against the railroad’s own negligence, the Texas Supreme Court stated:

“[T]his section would be inoperative and rendered meaningless if construed to exclude negligence, as a claim for damages against the railroad company growing out of any of these things could have no standing in a court unless predicated upon the negligence of the railroad company, or its servants. The section must, we think, be construed as contemplating claims for damages founded upon such negligence.”

Texas courts have not deviated from this holding. See, for example, James Stewart & Co. v. Mobley, 1955, Tex.Civ. App., 282 S.W.2d 290; Crews Well Service v . Texas Company, 1962, Tex.Civ.App., 358 S.W.2d 171, writ ref’d n. r. e. 1962, 360 S.W.2d 873; Spence & Howe Construction Co. v. Gulf Oil Corp., (Tex. 1963), 365 S.W.2d 631. The indemnity provision now before us is no more narrowly drawn than the provisions in these cases and, like them, must be construed to afford Warren protection even against its own negligence.

II.

Alamo next suggests that the damage claim here did not “arise out of or in connection with” its contractual obligations. It urges that there must be some causal relation between the work which it was obligated to perform under the contract and the damages for which it is liable to indemnify Warren. Since the asphyxiation of its employees by escaping gas had no necessary connection with the contract for cabinet construction, it is not liable. In support of its contention, Alamo cites Employers Casualty Co. v. Howard P. Foley Co., 5 Cir., 1946, 158 F.2d 363 and Westinghouse Electric Corp. v. Childs-Bellows, 1961, Tex.Civ.App., 352 S.W.2d 806 writ ref’d.

Neither case presents a comparable fact pattern. In Employers Casualty Co. v. Howard P. Foley Co., 5 Cir., 1946, 158 F.2d 363, the damage claims resulted from a gas explosion which injured the subcontractor’s employees while they were changing clothes in a locker room preparatory to going to work. The claims were held not to come within the scope of an indemnity agreement. There, however, the contract “related only to installation of electrical work and none was going on in the dressing room.” This Court specifically stated: “[T]he sub-contractor was in no way or degree performing his contract at that time and place. They were in a room of the Contractor which was under the control of the Contractor, and not of the Subcontractor who had no business there. * * * [The injury] did not occur in the course of performance of his contract by the Sub-contractor. He is not liable as indemnitor.” 158 F.2d at p.

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Bluebook (online)
316 F.2d 287, 1963 U.S. App. LEXIS 5528, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alamo-lumber-company-v-warren-petroleum-corporation-ca5-1963.