Southern Pacific Co. v. Fellows

YORK, J. The facts upon which appellant railroad company bases its claim to recover upon an indemnity agreement, and a surety bond executed pursuant thereto by respondent Fellows, as principal, and respondent corporation, as surety, are contained in a stipulation of facts set out in the bill of exceptions herein. It is there shown, among other things, that on December 6, 1923, appellant railroad company and respondent Fellows, as contractor, entered into a contract by which the latter undertook the construction of a locomotive erecting shop for the railroad company. In addition to a provision requiring respondent contractor to furnish a surety bond insuring the faithful performance of [88]his contract, the said contract contained an indemnity clause to the following effect:

"Sec. 21. Contractor expressly agrees to indemnify and save Railroad harmless from and against any and all claims, loss, damage, injury and liability howsoever same may be caused, resulting directly or indirectly from work covered by this agreement. ’1

During the course of construction of said building, one L. T. McCready, an employee of respondent contractor, was injured, and in an action which he thereafter brought against the railroad company in the United States District Court for the Southern District of California (McCready v. Southern Pac. Co., 47 Fed. (2d) 673), he recovered judgment, in full satisfaction of which the appellant railroad company paid to him on November 2, 1931, the sum of $33,543.25. By the instant action appellant seeks to recover upon the surety bond, above-mentioned, the amount of the judgment which it paid to McCready together with $2,303.21 expended by it in connection with the defense of the McCready action, a total of $35,848.46, with interest thereon from November 2, 1931, and costs of suit herein.

From a judgment in favor of defendants, railroad company takes this appeal and thereby presents to this court for decision the following question: "Does the indemnity agreement in question (to-wit, section 21 of the Construction Contract) indemnify the Southern Pacific Company against the consequences of its own negligence ? ’ ’ In other words, this court is called upon to construe the provisions of said section 21 and to decide whether or not it is comprehensive enough to indemnify railroad company for an injury caused by its own negligence.

It appears from the stipulation of facts hereinbefore referred to that the said injury occurred in the manner following, to wit: The building under construction was approximately 400 feet long, 75 feet wide and with side walls 25 feet high. On August 18, 1924, the date upon which the injury was sustained, one-half of the building was completed and in use by railroad company, and respondent contractor was engaged in completing the remainder thereof. In the completed portion, railroad company had installed and was operating two electric cranes suspended from an I-beam 15 or 16 inches wide, on the top of which was set a rail on which ran the wheels of the crane. At the side of the I-beam