Gallagher's Estate v. Battle

Collins, J., delivered the opinion of the Court. This is an appeal from a judgment entered on the verdict of a jury in favor of the plaintiff, appellee, William Battle, for injuries received in an automobile collision. Previous to the date of the injury herein, the Budd Company in Philadelphia ordered steel from the Bethlehem Steel Company in Sparrows Point, Maryland. The Estate of Edward A. Gallagher, Lottie Gallagher, Trustee, Arthur A. Gallagher, Individually and trading as E. A. Gallagher & Sons, hereinafter designated as Gallagher, appellant, was a common carrier of freight by truck authorized to operate under a certificate of public convenience and necessity issued by the Interstate Commerce Commission (I. C. C.) In this capacity it was engaged in hauling steel from Sparrows Point to the Budd Company in Philadelphia.

Because Gallagher did not have sufficient equipment to haul the order, it leased a large tractor trailer unit by what is termed as a “trip lease”. The tractor was owned by David Taylor and the trailer by Harry F. Steger. Neither Taylor nor Steger had a certificate of public convenience and necessity from the I. C. C. For six months prior to the accident in this case, which occurred about 1:30 A. M. on January 22, ⁵⁹⁶ 1953, Steger had been driving the leased tractor trailer unit making many trips in hauling steel for Gallagher from the Bethlehem Steel Company to the Budd Company. On the morning of January 21, 1953, in pursuance of a lease executed on January 20th, Steger proceeded to the Bethlehem Steel Company and obtained a load of steel.

After resting he proceeded toward Philadelphia about 4 P. M. In the trial of the case, when asked whether on other occasions between Sparrows Point and Philadelphia he would telephone Gallagher to find out whether Gallagher wanted him to haul another load, Steger answered “Yes”, and said that, as he had done on other trips for Gallagher from Sparrows Point to Philadelphia, he stopped at a diner near Wilmington, Delaware, and called Gallagher's dispatcher to see whether Gallagher wanted to engage him to haul another load. Steger said that, in reply to his inquiry, Gallagher’s dispatcher “said as soon as I could load at Budd Company I’d come back and pick up another load.” This conversation is denied by Gallagher but for the purposes of this case we must assume that it occurred. Steger then proceeded to Philadelphia and delivered his load of steel to Budd. As soon as he got something to eat he started back toward Baltimore.

On his way back, on January 22, 1953, while cleaning the windshield of the tractor with a newspaper, and while the tractor trailer was in motion under the Pennsylvania Railroad underpass at Naaman’s, Delaware, at about 1:30 A. M., he collided with the automobile driven by the plaintiff, appellee, William Battle. As a result, Battle was injured. In the trial below the appellee recovered a judgment against Taylor, Steger, and Gallagher. From that judgment all of the defendants appealed to this Court.

Prior to the hearing in this Court, Taylor and Steger dismissed their appeal. Therefore, Gallagher is left as the sole appellant here. No issue is here made as to Steger’s negligence in the operation of the tractor trailer. The sole question is Gallagher’s responsibility for Steger’s negligence.

As plaintiff gave no notice to the ⁵⁹⁷ defendants of his intention to rely on Delaware law, the case was decided under the law of Maryland. The Maccabees v. Lipps, 182 Md. 190, 196 , 34 A. 2d 424 ; Wilson v. Dailey, 191 Md. 472, 476 , 62 A. 2d 284 . As on all previous trips when Steger was hauling for Gallagher, on this particular trip a trip lease was entered into on January 20, 1953, between Taylor and Gallagher, wherein Taylor as lessor, by Steger, leased to Gallagher as lessee the tractor and trailer above mentioned. The lease contained a number of provisions, among which were the following. “The term of lease shall be the duration of one single trip from Sparrows Pt., Md. to Phila., Pa.” The equipment should be under the complete control of the lessee for the limited purpose of safety to the public and safe delivery of the shipment.

The lessor agreed to fully maintain the equipment in good condition and to comply with all safety requirements of the I. C. C. The lessee should not be liable for any damage or depreciation to the motor vehicle while in its possession under the lease. The lessor agreed to be fully responsible to the lessee for any and all negligence of himself and the operator of the equipment. The lessor further agreed to supply the services of a competent driver, to pay Social Security and other benefits to all employees handling the equipment, to indemnify and save harmless lessee against any loss or damage resulting from the negligence and incompetence of all employees handling the equipment. Lessor also agreed “to indemnify and save harmless the Lessee against any loss resulting from claims brought against Lessee for any property damage or bodily injury, or both, sustained by anyone while the leased equipment is under any control of the Lessee.” It was agreed that the lease terminated when “(a) a trailer owned by the Lessor is unloaded at the above described destination (b) a trailer not owned by the Lessor is detached at the above described destination.

Lessor certifies that the operator of leased vehicle was examined by a physician on or about................as required by the I. C. C. and agrees to furnish copy of said physician’s examination ⁵⁹⁸ certificate. The Lessee assigns and affixes to said vehicles for the duration of this lease its Interstate Commerce Commission identification placards which must be removed at the aforementioned destination and returned to the Lessee before full payment of the rental sum is made. Lessor shall carry public liability insurance in the minimum amount of $5,000.00 for injury to one person and in the minimum amount of $10,000.00 for injury to more than one person arising out of any one accident and property damage insurance in the minimum amount of $5,000.00 covering injury or damage to the property of other persons. Lessor shall furnish Lessee with certificate of insurance evidencing the existence of such policies.

Any alteration hereof either in the names of parties or the other provisions, shall annul, cancel and invalidate this lease insofar as any further obligations thereunder of E. A. Gallagher & Sons, as Lessee, are concerned.” On each trip to Philadelphia, including that made .on January 21, 1953, there were placed on the tractor doors placards which stated “Operated by E. A. Gallagher & Sons, I. C. C. MC 77569.” The testimony was disputed as to whether these placards were on the tractor at the time of the accident. However, Steger admitted that he was instructed by Gallagher to remove the placards after he delivered the steel to the Budd Company, and the lease so provides. The primary question before us in this case is whether there was legally sufficient evidence to submit to the jury the question of Gallagher’s liability for Steger’s negligence on the return trip from Philadelphia. It is stated in Restatement of the Law of Torts, Negligence, Section 428: “An individual or a corporation carrying on an activity which can be lawfully carried on only under a franchise granted by public authority and which involves an unreasonable risk of harm to others, is subject to liability for bodily harm caused to such others by the negligence of a contractor employed to do work in carrying on the activity.” There is no doubt that, if ⁵⁹⁹ the accident had occurred on the trip from Sparrows Point to Philadelphia, for which trip the tractor trailer was leased and on which the I. C. C. placards were placed by Gallagher, Gallagher would have been liable for Steger’s negligence in spite of the fact that Taylor agreed to save Gallagher harmless against bodily injury to other persons.

H. E. Wolfe Construction Co. v. Fersner, (C. C. A. 4th), 58 F. 2d 27 ; Western Express Co. v. Smeltzer, 88 F. 2d 94 ; Venuto v. Robinson, 118 F. 2d 679 ; War Emergency Co-op. Assn. v. Widenhouse, (C. C. A. 4th), 169 F. 2d 403 ; Kemp v. Creston Transfer Co., 70 F. Supp. 521 ; Gassaway v. Barry, 123 F. Supp. 670 ; Brown v. Bottoms Truck Lines, 227 N. C. 299 , 42 S. E. 2d 71 ; Newsome v. Surratt, 237 N. C. 297 , 74 S. E. 2d 732 ; Brabham v. Southern Asphalt Haulers, Inc., 223 S. C. 421, 76 S. E. 2d 301 ; Eli v. Murphy, 39 Cal. 2d 598 , 248 P. 2d 756 ; Lehman v. Robertson Truck-A-Way, 122 Cal. App. 82 , 264 P. 2d 653 ; Trautman v. Higbie, 10 N. J. 239, 89 A. 2d 649 ; Annotation, 17 A. L. R. 2d 1396; Regal Laundry Co. v. Abell Co., 163 Md. 525 , 163 A. 845 ; Maryland Casualty Co. v. Sause, 190 Md. 135 , 57 A. 2d 801 , and cases there cited; Wood v. H. W. Gossard Co., 204 Md. 177 , 103 A. 2d 130 . In Hodges v. Johnson, 52 F. Supp. 488 , heavily relied on by the appellee, Jocie had a certificate from the I. C. C. permitting him to haul general commodities in interstate commerce.

Johnson, who was engaged in the trucking business, had no such certificate. Jocie entered into a lease agreement whereby Jocie would lease the truck to Johnson who would haul in interstate commerce in the name of Jocie and under Jocie’s certificate and license from the I. C. C. All freight was hauled on standard bills of lading in the name of Jocie who paid certain taxes, insurance premiums, and other expenses. Johnson received eighty percent of the freight charges and Jocie twenty percent. Under this arrangement Johnson’s truck proceeded from Charlotte, North Carolina, to Roanoke, Virginia, delivered the load and was returning empty to Charlotte with a bill of lading made out and signed in the ⁶⁰⁰ name of Jocie by an employee of Johnson when the accident occurred.

Jocie sometimes obtained a return load of freight for Johnson’s truck and such return freight was handled the same way. Johnson never hauled return loads of interstate freight for himself but always for and in the name of Jocie. Jocie was held liable for the accident. Under the more or less partnership arrangement between Johnson and Jocie it is clear in that case that the lease between Jócie and Johnson covered both the trip from Charlotte to Roanoke and return.

Steger, at the time he testified that he called Gallagher’s dispatcher on the way to Philadelphia and was told to return and pick up another load, had been called by plaintiff’s counsel as an adverse witness, subject to cross-examination, under the provisions of Code, 1951, Article 35, Section 8. The appellant objects to the introduction of this testimony and claims that Steger was an adverse party to the plaintiff only in a strictly technical sense, but actually so far as the issue of Steger’s relationship to Gallagher was concerned, the plaintiff and co-defendant, Steger, were on the same side of the case. For the purposes of this opinion, we will assume without deciding, that the trial court was correct in overruling Gallagher’s objection to that part of Steger’s testimony. The appellee contends that there was sufficient evidence for the jury to find that Gallagher was responsible for Steger’s negligence under the doctrine of respondeat superior.

In the case of Henkelmann v. Insurance Co., 180 Md. 591 , 26 A. 2d 418 , Judge Delaplaine discussed this doctrine and what was there said appears pertinent to the question before us here. We quote at length from that opinion. “This doctrine [respondeat superior] was founded on the principle that ‘every man, in the management of his own affairs, whether by himself or by his agents or servants, shall so conduct them as not to injure another; and if he does not, and another thereby sustains damage, he shall answer for it.’ Farwell v. Boston & Worcester R. R. Corp., 4 Metc., Mass., 49, 55, 38 Am. Dec. 339 , 340. The courts, however, have regarded the ⁶⁰¹ doctrine with jealousy and have confined it within limits as narrow as are consistent with the true interests of society.

Wood, Master and Servant, 2d Ed., Sec. 277. In 1840 the courts in England began to relax the doctrine by holding that it does not apply to independent contractors. In 1869 the Court of Appeals of Maryland, in an opinion by Judge Alvey, observed that the doctrine had been modified by the English decisions, and held that it is not applicable where the employee is ‘a contractor, pursuing an independent employment, and, by the terms of the contract, is free to exercise his own judgment and discretion as to the means and assistants that he may think proper to employ about the work, exclusive of the control and direction, in this respect, of the party for whom the work is being done.’ Deford v. State, to use of Keyser, 30 Md. 179, 203 . In 1884 the Court of Appeals said that the theory upon which liability under the doctrine is predicated is that the master is constructively present, so that the negligence of the servant is the negligence of the master.

Adams v. Cost, 62 Md. 264, 267 , 50 Am. Rep. 211 . In 1901 this court stated that an essential element of the relation of master and servant is that the master shall have control of the employment and all of its details. Baltimore Boot & Shoe Mfg.

Co. v. Jamar, 93 Md. 404, 413 , 49 A. 847, 850 , 86 Am. St. Rep. 428 . Finally in 1932 we definitely decided that the test in determining whether a person is a servant or an independent contractor is whether the employer has the right of control over the employee in respect to the work to be performed. State, to use of Boznango v. Blumenthal-Kahn Electric Co., 162 Md. 84, 92 , 159 A. 106 .

Thus, it was held by this court that a salesman who sold goods on commission, operated his own car at his own expense and received no directions as to his work or route, was an independent contractor, so that his employer was not liable for injuries caused by him in the operation of his car. Washington News Co. v. Satti, 169 Md. 489 , 182 A. 286 . In recent years, on account of the extensive use of the motor vehicle with its accompanying dangers, the ⁶⁰² courts have realized that a strict application of the doctrine of respondeat superior in the modern commercial world would result in great injustice. * * * It is now held by the great weight of authority that a master will not be held responsible for negligent operation of a servant’s automobile, even though engaged at the time in furthering the master’s business unless the master expressly or impliedly consents to the use of the automobile, and had the right to control the servant in its operation, or else the use of the automobile was of such vital importance in furthering the master’s business that his control over it might reasonably be inferred. Khoury v. Edison Electric Illuminating Co., 265 Mass. 236 , 164 N. E. 77 , 60 A. L. R. 1159; Aldrich v. Tyler Grocery Co., 206 Ala. 138 , 89 So. 289 , 17 A. L. R. 617; Dohner v. Winfield Wholesale Grocery Co., 116 Kan. 237 , 226 P. 767 ; Gall v. Detroit Journal Co., 191 Mich. 405 , 158 N. W. 36 , 19 A. L. R. 1164; Harrington v. H. D. Lee Mercantile Co., 97 Mont. 40 , 33 P. 2d 553 ; James v. Tobin-Sutton Co., 182 Wis. 36 , 195 N. W. 848 , 29 A. L. R. 457; Kassela v. Hoseth, 217 Wis. 115 , 258 N. W. 340 ; Stockwell v. Morris, 46 Wyo. 1 , 22 P. 189 ; 5 Am.

Jur., Automobiles, Sec. 393; 5 Blashfield, Cyclopedia of Automobile Law and Practice, Sec. 3079. * * * In other words, a principal employing an agent to accomplish a result, but not having the right to control the details of his movements, is not responsible for incidental negligence while such agent is conducting the authorized transaction. 1 Restatement of Agency, Sec. 250. ' “Of course, even an agent may be subject to the control of his principal in respect to some portion of the work to be performed, and under such circumstances the doctrine of respondeat superior can be invoked. But it has been distinctly held that the doctrine applies in such a case only when the relationship of master