Home/Texas Supreme Court/Spence & Howe Construction Co. v. Gulf Oil Corp.

Spence & Howe Construction Co. v. Gulf Oil Corp.

365 S.W.2d 631
CourtTexas Supreme Court
DecidedMarch 6, 1963
DocketA-9045
StatusPublished
Cited by120 cases

This text of 365 S.W.2d 631 (Spence & Howe Construction Co. v. Gulf Oil Corp.) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Spence & Howe Construction Co. v. Gulf Oil Corp., 365 S.W.2d 631 (Tex. 1963).

Opinion

NORVELL, Justice.

This Court granted writ of error upon petitioner’s point which asserted that:

“The Court of Civil Appeals erred in holding that the written contract sued upon provided indemnity to Respondent for an accident which the jury found upon sufficient evidence was solely caused by Respondent’s own negligence and by equipment furnished by Respondent.”

We are in agreement with the Court of Civil Appeals that liability herein is controlled by a written agreement designated as a “purchase order” which bears date of November 3, 1954. The accident which gave rise to this litigation occurred on October 29, but the written memorandum of agreement — the “purchase order” recites that the work commenced on October 26 and it appears that the form of “purchase order” employed was identical in form with the last previous contract between the parties relating to a similar piece of work. We need not add to the discussion of this matter which is contained in the opinion of the Court of Civil Appeals. See, Gulf Oil Corporation v. Spence & Howe Construction Co., Tex.Civ.App., 356 S.W.2d 382.

A question relating to the construction of an indemnity contract is presented. We are to take the wording of the instrument, consider the same in the light of the surrounding circumstances, and apply the pertinent rules of construction thereto and thus settle the meaning of the contract. The issue is squarely joined in that the respondent asserts that:

“The Court of Civil Appeals properly held that the contract was so worded as to afford Respondent the *633 right to indemnity on the basis of the relevant jury findings and the undisputed evidence.”

The problem is one of contract construction and not public policy, and is so treated by the parties. Only a few jurisdictions, and Texas is not one of them, hold that a contract of indemnity against the results of one’s negligence is contrary to public policy in that such contracts tend to encourage careless conduct. This theory or doctrine is not regarded as being sound and has been described as being somewhat fanciful. From a public policy standpoint, an indemnity agreement against one’s negligence issued by an insurance company would be as objectionable for encouraging carelessness as would an indemnity contract issued by any other form of entity or by a natural person. See, Griffiths v. Broderick, 27 Wash.2d 901, 182 P.2d 18, 175 A.L.R. 1, and annotation following in the American Law Reports. Of course, certain types of indemnity agreements may be contrary to public policy for various other reasons, Restatement of the Law of Contracts, §§ 572, 575, but the contract with which we are concerned cannot be so classified. Ordinarily, however, one does not contract against the results of his own negligence. Such agreements, except for insurance contracts, must be regarded as exceptional rather than usual in the majority of business transactions. Before such indemnity contracts may be enforced it must clearly appear that the contracting parties intended that the indemnitor would be held liable for damages resulting from the negligence of the indemnitee.

Spence & Howe Construction Company is a contracting firm engaged in heavy construction, the building of docks and related work. It had been doing pile driving work for Gulf Oil Corporation for a number of years. As a usual thing, these jobs were done in pursuance of a written order from Gulf to Spence & Howe. These orders were on a purchase order form and the particular one here involved was dated November 3, 1954 and addressed to Spence & Howe. Among other provisions it contained the following clauses:

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Bluebook (online)
365 S.W.2d 631, Counsel Stack Legal Research, https://law.counselstack.com/opinion/spence-howe-construction-co-v-gulf-oil-corp-tex-1963.