DocketNumber: Appeal, No. 308
Citation Numbers: 425 Pa. 166, 228 A.2d 656, 1967 Pa. LEXIS 660
Judges: Bell, Brien, Eagen, Jones, Mtrsmanno, Roberts
Filed Date: 4/18/1967
Status: Precedential
Modified Date: 10/19/2024
Opinion by
James Rhodes was an employee of Murphy, Inc., a concern engaged in the painting and glazing business. On December 14, 1962, Rhodes was injured while engaged in work which Murphy had agreed to perform for Westinghouse Electric at the Westinghouse plant in Lester, Pennsylvania. Rhodes sued Westinghouse for the injury and Westinghouse joined Murphy as an additional defendant. The action by Rhodes was settled for $67,500, half of which was paid by Murphy’s insurer and half by Westinghouse’s insurer. At the time of settlement, it was agreed by Westinghouse and Murphy, that the dispute between them as to the liability for Rhodes’ claim should be determined in subsequent litigation between them.
Thereafter, Westinghouse filed an action of assumpsit for $33,750 against Murphy alleging that the terms of the contract between them required Murphy to indemnify Westinghouse for the amount paid by it in settlement of Rhodes’ injury despite the fact that the injury was due to the negligence of Westinghouse. Murphy’s answer denied this contractual obligation and counterclaimed for the $33,750 paid by its insurer in settlement of Rhodes’ claim. A jury trial was waived, no testimony taken and the case submitted to the court below on a stipulation. This is an appeal from the
Stated simply the legal question before us is whether the contract under which Murphy was performing work for Westinghouse included an enforcible term providing that Murphy would indemnify Westinghouse for liability arising out of the job created by Westinghouse’s negligence. In order to answer this question it is necessary to describe in some detail the history of business relations between Murphy and Westinghouse prior to the date of Rhodes’ accident.
Westinghouse is the owner of a large facility located at Lester, Pennsylvania which requires continuing maintenance. On some eighty occasions between November 1956 and November 1962 Westinghouse had contracted with Murphy to perform aspects of this work. In connection with each of these eighty jobs, Westinghouse issued to Murphy a purchase order form. On the face of the purchase order form under the heading “Instruction to Supplier” are seven items each in fine print. Item number seven is as follows: “Terms. Subject to terms and conditions printed on the back, and to specifications, drawings and additional terms and conditions referred to herein and/or attached hereto.” The reverse side of the purchase order is almost completely taken up by fifteen finely printed “terms and conditions”. The fifteenth item is as follows: “When Seller during the performance under this order will send its employes onto Buyer’s premises, the provisions of Appendix D, Westinghouse Form 29181 shall apply, whether or not Appendix D is attached hereto. (Buyer will furnish copies on request.)”
Appendix B in pertinent part provides :
On six occasions—the earliest being November 12, 1956 and the latest being November 4, 1960—a copy of Appendix D was physically attached to the purchase order sent by Westinghouse to Murphy. On the twenty-two occasions between November 4, 1960 and November 7, 1962, on which Westinghouse contracted for Murphy’s painting and glazing services, the Westinghouse purchase order had typed on its face the notation “Appendix D & S Apply You Have Copies.”
On January 3, 1962, Murphy furnished to Westinghouse a certificate of insurance applicable to the calendar year 1962. Murphy claims that this certificate did not insure it for loss occasioned by Westinghouse’s negligence and asserts that the lack of such coverage was evident on the face of the certificate. Murphy further claims that it was never informed by Westinghouse of this deficiency in coverage, but admits in its brief that the deficiency was brought to its attention by another source before the Rhodes’ accident so that by that time its insurance included coverage for loss caused by Westinghouse’s negligence.
It would appear from the record that on most occasions on which Westinghouse and Murphy did business, a purchase order was issued to Murphy and a
The job on which Rhodes was injured was one of those on which work began before the purchase order was issued. Specifically, the sequence of events which led up to that job was as follows: Late in October 1962, Westinghouse orally invited Murphy to bid on a job. Murphy responded with an oral bid which was, in turn, confirmed by a letter by Murphy to Westinghouse dated October 30, 1962. In that letter Murphy stated “we are fully covered with Workmen’s Compensation, Liability and Property Damage Insurance.” Oral acceptance of the terms of this letter was made by Westinghouse on October 31, 1962 and work was begun the same day. On November 7, 1962, Westinghouse prepared and sent to Murphy a purchase order (No. 51-466614) on the form described above.
In its brief, Murphy seeks to avoid liability to Westinghouse on the theory that its contract never included
We do not agree with Murphy. The fact that there is no evidence of record showing explicit reference to Appendix D in the parties’ negotiations up to November 7, 1962 does not preclude us from concluding it to have been included. The existence of a contractual term may be shown by acts of the parties as well as precise words, where to do so would not violate the words used in a contract, see Yezbak v. Croce, 370 Pa. 263, 266, 88 A. 2d 80, 81 (1952); 3 Corbin, Contracts §556 (1960). Especially if evidence of the contract is not an integrated document, and, moreover, one partly or wholly composed of oral communications, the precise content of which is not of record, courts must look to surrounding circumstances and the course of dealings between the parties, Silverstein v. Hornick, 376
Even assuming the reference to Appendix D was incorporated into its contract with Westinghouse, Murphy contends it should not be held liable for an injury caused by the negligence of Westinghouse. In support of this contention, Murphy relies on the rule that contracts will not be construed to indemnify a party for his own negligence, unless the contractual language and surrounding circumstances clearly indicate the intention of the parties so to do. Pittsburgh Steel Co. v. Patterson-Emerson-Comstock, Inc., 404 Pa. 53, 171 A.
In the first place, it should be noted that none of the contractual provisions involved in the Pittsburgh and Perry cases explicitly referred to losses arising from the negligence of the alleged indemnitee, as does the language of Appendix D. Rather the language in those cases merely imposed an obligation to indemnify for “all liability” or “all loss.”
Murphy’s final argument against its liability relies on our decisions in L. B. Foster Co. v. Tri-W Constr. Co., 409 Pa. 318, 186 A. 2d 18 (1962); Frantz Tractor Co. v. Wyoming Valley Nursery, 384 Pa. 213, 120 A. 2d 303 (1956); and Cutler Corp. v. Latshaw, 374 Pa. 1, 97 A. 2d 234 (1953). In those cases we refused to give effect to warrants of attorney to confess judgment which appeared in fine print, on the reverse side of written agreements,
Judgment affirmed.
The language of Appendix D is not finely printed.
Although the face of the purchase order of November 7, 1962 did not contain the typed notation “Appendix D & S Applies You Have Copies” which had appeared on the face of the preceding twenty-two purchase orders, that notation was typed prominently on the sheet of specifications attached to the purchase order and was referred to by a notation typed on the face of the purchase order: “See Attached Sheet ITor All Information.”
Insofar as the common law is concerned, Murphy is, broadly speaking, correct that an agreement modifying a contract requires consideration to be binding. See, e.g., Wilcox v. Regester, 417 Pa. 475, 482, 207 A. 2d 817, 821 (1965). The Uniform Commercial Code §2-209(1), Act of April 6, 1953, P. L. 3, §2-209(1), 12A P.S. §2-209(1) is to the contrary as to contracts controlled thereby. Whether the instant contract for work and materials is within Article 2 of the Code is doubtful. See Epstein v. Giannattasio, 25 Conn. Supp. 109, 197 A. 2d 342 (1963); 1 Uniform Laws Annotated, Sales §1 at 58-59, 63 (1950) and at 37, 41-42 (Supp. 1966); compare 2 Corbin, Contracts §476 (1950). However, it is not necessary to our solution of the problems raised in the instant case to determine whether the instant contract is controlled by Article 2 of the Code.
Compare, as to contracts under the Uniform Commercial Code, Act of April 6, 1953, P. L. 3, §1-205, as amended, Act of October 2, 1959, P. L. 1023, §1, 12A P.S. §1-205 (Supp. 1966).
A contract indemnifying one against his own negligence is not necessarily against public policy, even though the indemnitor is not in the insurance business, Pittsburgh Steel Co. v. Patterson-Emerson-Comstock, Ino., 404 Pa. 53, 57, 171 A. 2d 185, 187 (1961) (dictum). Where clearly intended by the parties, such contracts have been enforced by this Court, Tidewater Field Warehouses, Inc. v. Fred Whitaker Co., 370 Pa. 538, 88 A. 2d 796 (1952). It would appear that such contracts are useful to parties involved in construction and similar activities as a means of allocating the responsibility for obtaining insurance, Spurr v. Acme Steel Co., 238 F. Supp. 606 (N.D. Ill. 1964).
See Darrow v. Keystone Stores, Inc., 365 Pa. 123, 74 A. 2d 176 (1950); Schroeder v. Gulf Refining Co., 300 Pa. 405, 150 Atl. 665 (1930).
In its brief, Murphy appears to rely to a considerable extent on the obscurity of the references to Appendix D finely printed on the form. This consideration is hardly persuasive in light of the additional fact that reference to Appendix D was tyjjed on the form on each of the twenty-two purchase orders immediately preceding the instant contract.
Spurr v. Acme Steel Co., supra note 5, however, indicates that in construction and related fields parties often agree to indemnify another for his own negligence,
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