Houston & T. C. R. v. Diamond Press Brick Co. , 1916 Tex. App. LEXIS 858 ( 1916 )

It appeared from the pleadings that the recovery sought by appellant was of a sum it had to pay Hamilton because of its negligence resulting in injury to his person. The correctness of the court's ruling therefore may be said to depend upon the answers which should be made to these questions: (1) Did it appear that appellee undertook by the contract declared upon to bind itself to indemnify appellant against liability for personal injury to a third person due to appellant's own negligence? (2) If it did, then did it so bind itself, or was its undertaking ultra vires?

The contract should not be so construed "as to render it oppressive or inequitable as to either party, or so as to place one of the parties at the mercy of the other, unless it is clear that such was their manifest intention at the time the agreement was made." 2 Elliott on Contracts, § 1521. It is plain that, if the contract should be construed as binding appellee to indemnify appellant against the consequence of its own negligence, it would place appellee at the mercy of appellant, and easily could be made to operate oppressively and inequitably against it. Therefore it should not be held to have that effect, unless it is clear from its language that the parties, when they made it, intended it to operate that way. It will be noted that by the terms of the contract the spur track was to be constructed by appellant, but wholly at appellee's expense, and when constructed was to become and be appellant's property and under its "entire control." Appellant was to determine when and how it should be repaired, and have such repairs made as were necessary to keep it in "first-class condition," but at appellee's expense. Appellant was to be released from all liability on account of loss by fire of property belonging to appellee or in its care or control, etc., whether such liability was due to negligence of its agents or employes, "or otherwise." Harsh and inequitable as the terms stated appear to be, it is manifest from the language used that the parties intended so to bind themselves. But that they intended by the seventh paragraph in the instrument to bind appellee to indemnify appellant against the consequences of its negligence resulting from other causes than fire is not at all manifest. On the contrary, the reasonable meaning of that paragraph, construed with the one preceding it, is that appellant was not to be liable for damages caused by fire due to its negligence, and was to be saved harmless from any and all other claims for damages against it not based on its negligence, "growing out of the construction, maintenance, and operation of said spur track." To construe it as meaning that appellee was to indemnify appellant against liability to third persons for personal injuries to them resulting from its negligence in the construction, maintenance, and operation of the track, we think would be unreasonable. "Every presumption," said the court in Mynard v. Syracuse, etc., R. R. Co., 71 N.Y. 180, 27 Am.Rep. 28, "is against an intention to contract for immunity for not exercising ordinary diligence in the transaction of any business, and hence the general rule is that contracts will not be so construed, unless expressed in unequivocal terms." There is no doubt the language of paragraph 7 is broad enough to bind appellee to indemnify appellant against the consequences of its own negligence, but it is not believed it should be construed as manifestly showing the intention of the parties to have been that it should so operate. "When general words," said the court in the case cited, "may operate without including the negligence of the carrier or his servants, it will not be presumed that it was intended to include it." And see Perry v. Payne, 217 Pa. 252, 66 A. 553, 11 L.R.A. (N.S.) 1173, 10 Ann.Cas. 589; Mitchell v. Railway Co., 124 Ky. 146, 74 S.W. 216; Railway Co. v. Cornell, 54 Hun, 292, 7 N.Y.S. 557; 6 Rawle C. L, 727; 5 Elliott on Contracts, § 4007; 22 Cyc. 85. If appellee could bind itself to do so, the words used in paragraph 7 of the contract undoubtedly operated to bind it to indemnify appellant against any liability it might incur in the construction, maintenance, and operation of the spur track not due to its negligence. Such, we think, should be held to have been the intention of the parties. Having reached this conclusion, it is not necessary to determine whether the contract was ultra vires as to appellee or not.

The judgment is affirmed.