Opinion
Rehearing Denied Dec. 12, 1966.
For Opinion on Hearing, see 59 Cal.Rptr. 809, 429 P.2d 129. McGregor, Bullen & Erich and George W. Bullen, Sacramento, for cross-defendants and appellants.
Rust & Hoffman, David C. Rust, Sacramento, and Ellis J. Horvitz, Los Angeles, for cross-complainants and appellants.
Lancaster & Yorton and Burt Lancaster, Sacramento, for respondent.
OPINION
STONE, Justice.
For convenience we shall refer to the injured plaintiff, who recovered judgment against both the building owners and the contractors, as "Markley," to the building owners, who cross-complained and recovered judgment for indemnity against the contractors, or "Smith," and to the contractors, who appeal from both judgments, as "Beagle."
Markley, a refrigeration serviceman, was injured while working on the ventilation system of a restaurant occupying part of the Smith warehouse building. He was not hired by Smith, but by the tenant who operated the restaurant. A defective railing along the front of the mezzanine in a part of the building not occupied by the restaurant gave way as Markley leaned over it to get a ladder that was being handed up to him from the ground floor. He fell some 11 or 12 feet to the concrete floor, and sustained severe injuries. It was the last section of the railing along the west side of the mezzanine that gave way at the place where it connected to the south endpost or supporting upright.
About ten months before the accident occurred, Smith assigned and transferred ownership of certain equipment and bins on the mezzanine to Beagle who, in turn agreed to remove the equipment and "all wood platforms and supporting posts and bracing of same which are not structurally part of the building and on which said equipment is installed," and to cause said removal and demolition work to progress in a diligent and workmanlike manner. The work included removal of series of bins, along the west mezzanine, which had been installed several years earlier by a former tenant of Smith's. The bins were notched to fit around the railing, giving it support from the bottom and on both sides. Beagle's men removed the bins and Markley contends that in doing so, Beagle removed the railing and negligently replaced it without adequate bracing.
Markley filed an action against Smith, alleging the owner furnished him an unsafe place to work and that Smith violated certain general industry safety orders. Markley also sued Beagle, alleging that his workmen negligently created the unsafe condition. Smith cross-complained against Beagle, alleging an express contract for indemnity for damages resulting from negligent performance of the contract.
During the course of trial, the court permitted Smith to add a cause of action alleging an implied agreement for indemnity. Whether there was a right of indemnity at all and, if so, whether the right derived from the express terms of the contract or was implied from the contract, were presented to the jury as questions of fact. The jury brought in a verdict against both Smith and Beagle on the complaint, finding, in effect, that Smith furnished Markley a dangerous place in which to work and that Beagle's negligent performance of the contract to remove the bins caused the dangerous condition.
Beagle and Smith appeal from the Markley judgment on the complaint, and Beagle appeals from Smith's judgment for indemnity on the cross-complaint.
Propriety of Arguing Per Diem Damages
Both Beagle and Smith contend the court erred in permitting Markley to argue damages calculated on a per diem basis, an This appeal was brief before Beagle v. Vasold, 65 A.C. 161, 53 Cal.Rptr. 129, 417 P.2d 673, came down. The discussion in that case, of permissible inferences that may be drawn from evidence concerning damages, completely answers any assignments of error on the issue of damages. No benefit could derive from our repeating the substance of the Supreme Court holding in Beagle v. Vasold, supra, so we simply refer to that opinion.
Hearsay Admission of Employee
Beagle next argues that both the Markley and the Smith judgments should be reversed because Smith was permitted to introduce in evidence the taped statement of a former employee of Beagle. Although Smith, not Markley, introduced the statement, Beagle objected to its introduction for any purpose, and as the evidence went to the heart of Markley's case against Beagle, prejudicial error is alleged.
The gist of Hood's statement was that Beagle's workmen took down the railing to remove the bins, and replaced it in what Hood thought was its former condition. The statement was taken by an investigator for Markley after Hood had left Beagle's employment. It was not made as part of the res gestac and it was made after the employment or agency terminated. Numerous authorities hold such a hearsay statement by a former employee is inadmissible as a vicarious admission of his employer. (Herman Waldeck & Co. v. Pacific Coast S.S. Co., 2 Cal.App. 167, 169, 83 P. 158; Miller v. Anson-Smith Constr. Co., 185 Cal.App.2d 161, 166, 8 Cal.Rptr. 131; Taylor v. Bernheim, 38 Cal.App. 404, 409-410, 209 P. 55; West Coast Life Ins. Co. v. Crawford, 58 Cal.App.2d 771, 785, 138 P.2d 384; Code Civ.Proc. § 1870, subd. 5; Witkin, Cal.Evidence (1958) para. 230, subd. 3, p. 260, 1963 Supp. p. 91.)
Smith and Markley both contend the statement was admissible nonetheless, under Code of Civil Procedure section 1851, which provides:
" * * * where the question in dispute between the parties is the obligation or duty of a third person, whatever would be the evidence for or against such person is prima facie evidence between the parties."
The test of admissibility under this section lies in the language, "the question is dispute between the parties is the obligation or duty of a third person." In the indemnity action between Smith and Beagle, no obligation, duty or liability of Hood, the third party, is in issue. Smith's right to recover from Beagle rests upon whether Beagle performed his contract with Smith, a contract to which Hood was not a party and under which he incurred no obligation to Smith. It was error, therefore, to admit the statement in evidence insofar as Smith's action on the cross-complaint is concerned. The error does not justify a reversal of Markley's judgment against Smith, as that judgment is amply supported by Substantial evidence as we shall discuss hereinafter. (See Calif.Const. art. VI, § 4 1/2; Alarid v. Vanier, 50 Cal.2d 617, 625, 327 P.2d 897.)
As to Markley's action against Beagle, the situation differs. It was Hood's duty, quite aside from the contract, to securely replace the railing. Beagle, as Hood's employer, is charged with Hood's violation of his duty to make the railing safe; whether Hood fulfilled this duty is the question in dispute between Markley and Beagle. The railing was not secure or safe when Markley leaned against it, and there is no evidence that anyone meddled with it after Beagle's employees completed the work; thus Hood's statement that he and his fellow employees replaced the railing gives rise to an admission, at least by inference, that he participated in creating the The foregoing analysis of the application of Code of Civil Procedure section 1851 has given us some pause, since that section has been on the books since 1873 but never applied to cases of respondeat superior charging an employer with his employee's negligence or breach of duty. However, in a study of the reenactment of section 1851 in section 1224 of the new Evidence Code, the California Law Revision Commission had this to say in its report and recommendation:
"Although it is difficult to discover a distinguishing principle, for some reason Section 1851 has never been cited nor discussed in any of the cases dealing with the liability of an employer under the doctrine of respondeat superior. It would appear that a respondeat superior case would fall within both the language of Section 1851 and the principle upheld in the Ingram [Ingram v. Bob Jaffe Co., 139 Cal.App.2d 193 (293 P.2d 132) ] and Ellsworth [Ellsworth v. Bradford, 186 Cal. 316 (199 P. 355) ] cases. A review of the cases involving admissions of employees in respondeat superior cases indicates that the first cases arising involved statements by the employee which did not inculpate the employee himself. Obviously these statements would not be admissions of an employee in an action against him and would be inadmissible hearsay. (Note, however, such statements would be admissible against the employer under Rule 63(9) (a).) Later cases, involving admission of the employee's own liability, merely cite the former cases holding that the employee was not authorized to make that type of statement. Thus in Shaver v. United Parcel Service [90 Cal.App. 764 (266 P. 608) ], the driver's statement, 'I could have stopped but I thought the trailer was going to stop,' was admitted only as to the driver and not as to the employing corporation. Yet the liability of the employing corporation was dependent upon the liability of the driver in that situation to the same extent that the liability of the motor vehicle owner was dependent upon the permission of the transferee in the Ingram case. The liability of the employing corporation was dependent upon the driver's liability, too, in the same manner that the liability of the shareholder was dependent upon the corporate liability in the Ellsworth case." (1964 Calif.Law Rev.Comm.Reports & Recommendations and Studies, vol. 5, Appendix pp. 491-496.)
With this report before it, the Legislature not only incorporated in section 1224 of the Evidence Code that part of section 1851 with which we are concerned, but enlarged the scope thereof by adding "liability" to the section 1851 language "obligation or duty of a third person."
We conclude that in Markley's action against Beagle the statement of the employee was admissible under Code of Civil Procedure section 1851.
Sufficiency of the Evidence
Beagle contends there is insufficient evidence to connect any negligence of his employees with the proximate cause of Markley's injuries. There was a conflict in the evidence as to the manner in which the work was done and whether Beagle's men removed the railing temporarily. Whether or not the railing was removed, it is significant that a sideways shift caused it to give way. The jury could well have determined that Beagle's men were negligent in not bracing each side of the railing after removing the bin. Since the jury found against Beagle on these questions of fact and there is evidence which reasonably supports the jury's determination, we find no ground for reversing Markley's judgment against Beagle.
Smith's Appeal from Markley Judgment
Smith argues it was error to instruct the jury that certain general industry "Title 8, Section 3237 of the California Administrative Code in a subchapter, general Industry Safety Orders, provides in part as follows:
" 'Platforms, runways, ramps or other working levels four feet or more above the floor, ground or other working areas, shall be guarded by a railing on all open sides. Standard railings shall be provided where overhead clearance permits.'
"Section 3225, of the same Title, provides in part:
" 'All standard railings and other permissible types, including their connections and anchorage, shall be designed for a live load of 20 pounds per linear foot applied either horizontally or vertically downward at the top rail using approximate working stresses given in the 1946 Edition of the Uniform Building Code. * * * ' "
Even though Markley was not a direct employee of Smith, he was a business invitee. In Porter v. Montgomery Ward & Co., Inc., 48 Cal.2d 846, at page 849, 313 P.2d 854, at page 856, the court discussed the right of a store customer to the benefit of a general safety order, and said:
"An entirely different situation, however, is presented where, as here, a person is a business invitee in a department store and is using a stairway which the store provides for persons in her position as well as for employees. Plaintiff was entitled to the benefits of the safety order under the circumstances, and the court properly received it in evidence and informed the jury that its violation by defendant gave rise to a presumption of negligence which could be rebutted by evidence of justification or excuse."
(See Tesche v. Best Concrete Products, Inc., 160 Cal.App.2d 256, 325 P.2d 150; Longway v. McCall, 181 Cal.App.2d 723, 5 Cal.Rptr. 818; Halliday v. Greene, 244 A.C.A. 539, 53 Cal.Rptr. 267.)
Smith rented a part of the building to a restaurant operator with full knowledge that this kind of tenancy required use of an air conditioning system. Markley was in the building working on the restaurant ventilating equipment when the injury occurred. Thus, he was an invitee of Smith, the owner, under the rationale of Porter and its progeny. We find no error in the safety order instructions.
For an interesting discussion of this subject, see 13 U.S.L.A.Law Review, pp. 120-124.
Quite aside from the safety order, there was substantial evidence to support a jury determination that Smith, knowing the bin had been notched around the railing, made an inadequate inspection of the railing after the supporting bin was removed. Because of this negligence, he furnished the invitee, Markley, with an unsafe place to work. Under the rationale of Florez v. Groom Development Co., 53 Cal.2d 347, 357, 1 Cal.Rptr. 840, 348 P.2d 200, the jury was justified in finding in favor of Markley and against Smith on this issue.
Owner's Right to Indemnity
We turn now to Beagle's appeal from the judgment in favor of Smith on the cross-complaint for indemnity. The contract between Smith and Beagle provided:
"CONTRACTOR SHALL use due diligence to protect the property of the Owner in the performance of the agreed work and will carry adequate public liability insurance and property damage insurance to protect the Owner and will hold Owner harmless and defend Owner in any suit at law for damages which might arise in connection with the agreed work."
Beagle contends the paragraph evidences an intention between the parties for indemnity only during performance of the County of Alameda v. Southern Pac. Co.,
Beagle's argument also paraphrases statements found in cases delineating the requirement of specificity in an express agreement to indemnify an indemnitee against his own active negligence. See Vinnell Co. v. Pacific Elec. Ry. Co., 52 Cal.2d 411, 340 P.2d 604; Harvey Machinery Co. v. Hatzel & Buehler, Inc., 54 Cal.2d 445, 447, 6 Cal.Rptr. 284, 353 P.2d 924; Goldman v. Ecco-Phoenix Elec. Corp., 62 Cal.2d 40, 41 Cal.Rptr. 73, 396 P.2d 377; King v. Timber Structures, Inc. of Calif., 240 A.C.A. 180, 183, 49 Cal.Rptr. 414.)
Here, Smith is not seeking to recover damages caused by his own negligence occurring during the course of the work. If Smith was negligent, it was passive in that there was a failure to properly inspect the premises after Beagle completed the work required by the contract.
Smith's right to indemnity rests on his allegation that Beagle failed to perform the contract "in a diligent and workmanlike manner," an obligation assumed by Beagle not in the indemnity paragraph but in another part of the agreement. However, the term "workmanlike manner" appears to be an obvious referent of the words "agreed work" found in the indemnity clause. Looking at the contract as a whole, the question is whether the injuries of Markley resulted from or were proximately caused by Beagle's failure to perform the "agreed work" in a "workmanlike manner."
Construing the two parts of the contract together accords with the elementary principle embodied in Civil Code section 1641, that
"The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practical, each clause helping to interpret the other."
We agree with Smith that in view of the result reached by the jury it must have interpreted the contract in this way, but even so the court erred in submitting the contract to the jury for interpretation. the authenticity of the contract was unquestioned; no mistake was alleged and no extrinsic evidence was proffered to explain any uncertainty or ambiguity. Thus, interpretation of the contract presented no question of fact and it was the duty of the court to interpret the contract as a matter of law. In O'Connor v. West Sacramento Co., 189 Cal. 7, at page 18, 207 P. 527, 532, the Supreme Court said:
" * * * the construction of a contract is always a matter of law for the court, no matter how ambiguous or uncertain or difficult its terms, * * * the jury can only assist the court by determining disputed questions of fact."
(See Clark v. Lesher, 46 Cal.2d 874, 883, 299 P.2d 865, 65 A.L.R. at p. 648.)
Additionally, the court erred by also submitting to the jury the question whether the right to indemnity was express or implied.
Smith argues that since he was entitled to indemnity under the terms of the contract there was no harm in instructing the jury on the elements of both express and implied indemnity.
The upshot of the cases is that the question a jury must determine in an action by an indemnitee to recover from San Francisco Unified School Dist. v. California Building etc. Co.,
Cahill Bros., Inc. v. Clementina Co.,The law also recognizes the right to implied indemnity grounded in equity, a right not dependent upon a contractual relationship. The elements of these two kinds of implied indemnity are not the same. in a thorough resume of the cases, contractual and noncontractual implied indemnity are aptly distinguished in Cahill Bros., Inc. v. Clementia Co., supra, at pages 375-376, 25 Cal.Rptr. 301. (See also Weyerhaeuser S.S. Co. v. Nacirema Co., 355 U.S. 563, 78 S.Ct. 438, 442, 2 L.Ed.2d 491; Ryan Stevedoring Co. v. Pan-Atlantic Corp., 350 U.S. 124, 133, 76 P.2d 232, 100 L.Ed. 133; San Francisco Unified School Dist. v. Calif. Building etc. Co., supra, 162 Cal.App.2d 434, 447, 328 P.2d 785; King v. Timber Structures Inc. of Calif., supra, 240 A.C.A. 180, 183, 49 Cal.Rptr. 414.)
One distinction is that implied indemnity predicated upon primary and secondary liability is limited to equity and does not determine the right to implied indemnity based upon a contractual relationship.
The trial court erroneously instructed the jury that
"The right of implied indemnity in this instance rests on a difference between the primary and secondary liability of two persons, each of whom is made responsible by law to an injured party * * *."
We have no way of knowing whether the jury predicated its verdict that Smith was entitled to indemnity from Beagle upon the erroneous instruction that included primary and secondary liability among the standards for determining the right to implied indemnity, or upon correct instructions defining the principles of indemnity based on a contractual relationship. In these circumstances, we must follow the rule laid down in Robinson v. Cable, 55 Cal.2d 425, at page 428, 11 Cal.Rptr. 377 at page 378, 359 P.2d 929, at page 930, by the following language:
"Where it seems probable that the jury's verdict may have been based on the erroneous instruction prejudice appears and this court 'should not speculate upon the basis of the verdict.' "
The judgment in favor of Markley and against Smith and Beagle is affirmed. The judgment in favor of Smith and against Beagle is reversed. The order denying motions for new trial is a nonappealable order and the purported appeals therefrom are dismissed; the portion of the order denying judgment notwithstanding the verdict is affirmed. Markley to recover costs on his appeal from the judgment on the complaint; Beagle to recover costs on his appeal from the judgment on the cross-complaint.
CONLEY, P.J., and McMURRAY, J. pro tem., concur.
Assigned by the Chairman of the Judicial Council.