Dresser Industries, Inc. v. Foss Launch & Tug Co. , 1977 Alas. LEXIS 466 ( 1977 )


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  • ERWIN, Justice,

    dissenting.

    I would affirm the decision of the trial court. In my opinion paragraph 5 of the storage agreement, which required Magco-bar to provide its own insurance, represents an agreement modifying the general rule of bailee liability. That modification should act to prevent appellant from recovering in the present action.

    Such an agreement is clearly for the benefit of both parties, for each party has an insurable interest in the property. The mutual benefit of the agreement to the parties was reflected in the rental amount set. Magcobar was to pay appellees only $250.00 monthly rent. If appellees had obtained all-risk insurance, their premium would have been $471.33 per month. It seems reasonable to me to conclude that the rent was set so low because the appellant, rather than the appellees, was responsible for obtaining insurance.

    The effect of the agreement was to cover all losses, even those which resulted from the negligence of appellees. I find the rationale of the majority to be unpersuasive. If two parties to a contract each have an insurable interest and one of them contracts to provide insurance, the likely intent of the parties is that the insurance provided will cover all forms of loss. Prudent business judgment mitigates against a conclusion that both parties should pay premiums to insure the same property. The majority opinion simply says that the parties to a contract should spell out in detail the former result if that is their intent. It appears to me that they did, particularly when the storage agreement is viewed in the light most favorable to appellees, as it must be because it was drafted by Magcobar.

    The reasoning in Monsanto Chemical Co. v. American Bitumuls Co., 249 S.W.2d 428 (Mo.1952), is persuasive on this issue. I find it to be more in line with the reasoning adopted by this court in the analogous situation of indemnity clauses. In Manson-Osberg Co. v. State of Alaska, 552 P.2d 654, 659 (Alaska 1976), we stated that

    [t]he better rule in modern cases .is that the unambiguous language of an indemnity clause as “reasonably construed” should be given effect, even if it does not contain words specifying indemnity for the indemnitee’s own negligence. In modern commerce, indemnity clauses are no longer so unusual as to require such specific mention of the indemnitee’s conduct as being within the scope of the indemnifying obligation. (Citations omitted)

    I find the unambiguous language of paragraph 5 of the storage agreement, as “reasonably construed,” to include losses due to appellee’s negligence within the scope of appellant’s obligation to obtain insurance. Therefore, I would affirm the decision of the trial court.

Document Info

Docket Number: 2396

Citation Numbers: 560 P.2d 393, 83 A.L.R. 3d 512, 1977 Alas. LEXIS 466

Judges: Boochever, Rabin-Owitz, Connor, Erwin, Burke

Filed Date: 2/25/1977

Precedential Status: Precedential

Modified Date: 10/19/2024