Newsome v. Surratt

74 S.E.2d 732 (1953)

237 N.C. 297

NEWSOME v. SURRATT et al.

No. 105.

Supreme Court of North Carolina.

March 4, 1953.

*734 Carr & Gibbons, Wilson, Goodman & Goodman and Peter L. Long, Charlotte, for defendants Transit Co. and Porter, appellants.

Lucas & Rand and Z. Hardy Rose, Wilson, for defendant Motor Lines, appellee.

Gardner, Connor & Lee, Wilson, for plaintiff, appellee.

DENNY, Justice.

The determinative question raised by this appeal is simply this: Did the court below commit error by the entry of a judgment in favor of the Motor Lines over against its co-defendants, the Transit Company and Porter, in the sum of $6,000 and the costs of the action? The answer must be in the negative.

It is a well settled rule of law that there can be no indemnity among mere joint tort-feasors. But this rule does not apply to a party seeking indemnity who did not participate in the negligent act, but is liable only by reason of a duty or liability imposed by law, or where the parties are not in pari delicto as to each other. Gregg v. City of Wilmington, 155 N.C. 18, 70 S.E. 1070; Guthrie v. City of Durham, 168 N.C. 573, 84 S.E. 859; Black Mountain R. Co. v. Ocean Accident & Guarantee Corp., 175 N.C. 566, 96 S.E. 25; North Carolina Electric Power Co. v. French Broad Mfg. Co., 180 N.C. 597, 105 S.E. 394; Bowman v. City of Greensboro, 190 N.C. 611, 130 S.E. 502; Taylor v. J. A. Jones Construction Co., 195 "N.C. 30, 141 S.E. 492; Johnson v. City of Asheville, 196 N.C. 550, 146 S.E. 229; Wright's Clothing Store v. Ellis Stone & Co., 233 N.C. 126, 63 S.E.2d 118; Builders Supply Co. v. McCabe, 366 Pa. 322, 77 A.2d 368, 24 A.L.R.2d 319; Rozmajzl v. Northland Greyhound Lines, 242 Iowa 1135, 1145, 49 N.W.2d 501; Panhandle Gravel Co. v. Wilson, Tex.Civ.App., 248 S.W.2d 779; War Emergency Co-Op. Ass'n v. Widenhouse, 4 Cir., 169 F.2d 403, certiorari denied, 335 U.S. 898, 69 S. Ct. 300, 93 L. Ed. 433.

The appellants take the position that since the lease between the Transit Company, *735 the lessor, and the Motor Lines, the lessee, provides that during the term of the lease the vehicle of the Transit Company "shall be solely and exclusively under the direction and control of the Lessee who shall assume full common carrier responsibility (1) for loss or damage to cargo transported in such motor vehicle and (2) for the operation of such vehicle," that this provision created the relation of master and servant between the Motor Lines and Porter, the driver of the truck. Therefore, they contend that the lessee and not the lessor is liable for the negligent acts of Porter, citing Wood v. Miller, 226 N.C. 567, 39 S.E.2d 608 and Brown v. Bottoms Truck Lines, 227 N.C. 299, 42 S.E.2d 71.

In order to have a clear understanding of the duties and obligations of the respective parties under a lease agreement like the one under consideration, it is necessary to construe the lease in light of certain principles of law which are applicable to this class of contracts.

In the case of Hill v. Carolina Freight Carriers Corp., 235 N.C. 705, 71 S.E.2d 133, 136, Barnhill, J., in speaking for the court with respect to a lease agreement similar in form to that under consideration, said: "Hence, as between the plaintiff and the defendant, purely in respect to their mutual contractual rights and liabilities, one to the other, the owner of the vehicle occupied the position of independent contractor. Hayes v. [Board of Trustees of] Elon College, 224 N.C. 11, 29 S.E.2d 137; Bass v. Fremont Wholesale Corp., 212 N.C. 252, 193 S.E. 1; Hudson v. Gulf Oil Co., 215 N.C. 422, 2 S.E.2d 26; Beach v. McLean, 219 N.C. 521, 14 S.E.2d 515; U[nited] S[tates] v. Mutual Trucking Co., 6 Cir., 141 F.2d 655. On the other hand, the vehicle was to be operated in interstate commerce in furtherance of the business of the lessee as a franchise carrier of freight. It was to be operated under the franchise and license plates of the lessee in fulfillment of its contracts for transportation of freight in interstate commerce. Therefore, the person who actually operated the vehicle (whether the owner or a third party hired by him) was, as between the franchise carrier and the consignor, the consignee, and third parties generally, a servant or employee of the defendant. This is true in fact for he transported cargoes in behalf of the franchise carrier and dealt with the consignors, consignees, and the public generally as agent of the franchise carrier. Furthermore, public policy requires it to be so held."

Likewise, it seems to be unanimously held by the courts that where a public authority grants an individual or corporation the right to engage in certain activities involving danger to the public, which right is denied to the general public, the duty to protect the public while performing such franchise activities is legally nondelegable and the franchise holder is therefore responsible for the conduct of those who are permitted to act under such franchises, even though such persons be independent contractors. Hodges v. Johnson, D.C., 52 F. Supp. 488; Brown v. Bottoms Truck Lines, supra; Joice Motor Lines v. Johnson, 231 N.C. 367, 57 S.E.2d 388; Eckard v. Johnson, 235 N.C. 538, 70 S.E.2d 488; War Emergency Co-Op Ass'n v. Widenhouse, supra; Trautman v. Higbie, 10 N.J. 239, 89 A.2d 649; Zimmerman v. Mathews Trucking Corp., D.C., 105 F. Supp. 57; Venuto v. Robinson, 3 Cir., 118 F.2d 679; Costello v. Smith, 2 Cir., 179 F.2d 715, 16 A.L.R.2d 954; Barry v. Keeler, 322 Mass. 114, 76 N.E.2d 158; Carter v. E. T. & W. N. C. Transp. Co., Tenn.App., 243 S.W.2d 505; Eli v. Murphy, Cal.Sup., 248 P.2d 756; Aetna Casualty & Surety Co. v. Prather, 59 Ga.App. 797, 2 S.E.2d 115.

It is stated in 57 C.J.S., Master and Servant, § 591, page 368, "An individual or a corporation cannot evade liability for negligence by delegating performance of work to an independent contractor where such individual or corporation is carrying on an activity, involving danger to others, under a license or franchise granted by public authority and subject to certain obligations or liabilities imposed by public authority."

We have held that when an interstate franchise carrier executes a lease or contract by which its equipment is augmented and used as one of its fleet of trucks under its franchise and with its license plates attached thereto, the holder of the franchise *736 is responsible for the operation of the truck in so far as third parties are concerned. Brown v. Bottoms Truck Lines, supra; Wood v. Miller, supra; Joice Motor Lines v. Johnson, supra; Eckard v. Johnson, supra. We have likewise held that the franchise carrier in such cases is also liable to the driver of such truck for any injury that may arise out of and in the course of his employment within the purview of our Workmen's Compensation Act, and that the driver of such leased vehicle is not bound by any provision in the lease to the contrary. Brown v. Bottoms Truck Lines, supra; Roth v. McCord & Dellinger, 232 N.C. 678, 62 S.E.2d 64.

The liability thus imposed on interstate franchise carriers is to prevent such carriers from evading their responsibility by the employment of irresponsible persons as independent carriers. Hodges v. Johnson, supra; War Emergency Co-Op. Ass'n v. Widenhouse, supra. However, as pointed out by Parker, J., in the last cited case, the liability of the franchise carrier was secondary, and in the absence of some countervailing equity, the carrier is entitled to recover over against the owner of the leased truck.

In the instant case, the owner's regular driver was in charge of the Transit Company's truck, and in reality of course the only thing that the franchise carrier did was to tell him where to go and what to bring or carry. And the duty imposed by law with respect to third parties in no way interfered with the right of the lessor to agree to indemnify the lessee for any loss it might sustain as a result of the negligence, incompetence or dishonesty of any driver which the lessor might furnish to operate the leased truck. Here it is conceded that the negligence of Porter, the driver furnished by the Transit Company, was the sole proximate cause of the plaintiff's injuries and damage.

The appellants also rely on the case of Hill v. Carolina Freight Carriers Corp., supra, to support the view that a party cannot exculpate himself from liability for his own negligence. In that case, however, the cause of action arose in the State of Georgia and involved an injury to a driver furnished by the lessor to operate the leased truck. Such driver was injured by the negligence of an employee of the lessee. The rights and liabilities of the parties were determinable under the statutory law of the State of Georgia. The case is not in point or controlling on the facts involved in this appeal.

The judgment of the court below is

Affirmed.