This is an appeal by complainant from a declaratory decree.
The appellant is the liability insurer of a contractor, Daniel Construction Company, Inc., which will be herein sometimes referred to as Daniel, or as the contractor or indemnitee. Appellant, by subrogation, stands in the shoes of Daniel, and appellant has all the rights Daniel had, but no more, so far as this case is concerned.
Daniel, the contractor, was building a plant for American Brake Shoe Company, the owner. Daniel made a subcontract whereby appellee undertook to do a part of the work. Appellee will sometimes be referred to as subcontractor or indemnitor.
The agreement between contractor and subcontractor contains the following provision:
It is alleged in the bill and admitted in the answer that Dallas J. Faulkner was
The record is bare of further facts to show the circumstances of the injury. The parties appear to concede, however, that Faulkner's injury did arise out of the work and was the result of the negligence of the contractor, and that the subcontractor was not negligent. We will so consider the case.
The decree appealed from declared that appellant is subrogated to the rights of Daniel, but that the subcontractor did not agree to indemnify Daniel for loss occasioned by Daniel's negligence, and that appellant is not entitled to recover from appellee the amount paid to Faulkner.
Appellant says that the contractor is entitled to indemnity because the contract provides for indemnity, although the liability of contractor resulted from the negligence of the contractor, the indemnitee.
Appellee says the contractor is not entitled to indemnity for two reasons. First, appellee says the Indemnity Agreement does not contain language sufficient to entitle indemnitee to indemnity for a loss occasioned by its own negligence. Second, appellee says that the contract has other provisions besides the Indemnity Agreement quoted above and that when the entire contract is considered, the contractor is not entitled to be indemnified for a loss which resulted from contractor's own negligence.
Appellant contends that Eureka Coal Co. v. Louisville & N. R. Co., 219 Ala. 286, 122 So. 169, holds that the Indemnity Agreement in the instant case entitles the contractor to indemnity for its own negligence. We do not think that Eureka is decisive of the instant case. There the indemnitor was guilty of primary negligence causing the injury. Here the only causative negligence appears to be that of the indemnitee. We are of opinion that Eureka does not require us to hold that Daniel is entitled to be indemnified for its own negligence.
Appellant insists further, however, that the plain language of the agreement entitles the contractor to indemnity, and cites many cases from other states in support of the contractor's right to indemnity. Among them are: Payne v. National Transit Co., 3 Cir., 300 F. 411; National Transit Co. v. Davis, 3 Cir., 6 F.2d 729; Buckeye Cotton Oil Co. v. Louisville & N. R. Co., 6 Cir., 24 F.2d 347; Baltimore & O. R. Co. v. Youngstown Boiler & Tank Co., 6 Cir., 64 F.2d 638; Cavanaugh v. C. P. Boland Co., 149 Misc. 576, 268 N.Y.S. 390; Southern Pac. Co. v. Fellows, 22 Cal.App.2d 87, 71 P.2d 75; Kokusai Kisen Kabushiki Kaisha v. Columbia Stevedoring Co., D.C., 23 F.Supp. 403; Northern Pac. Ry. Co. v. Thornton Bros. Co., 206 Minn. 193, 288 N.W. 226; Smoke v. Turner Const. Co., D.C., 54 F.Supp. 369; Griffiths v. Henry Broderick, Inc., 27 Wn.2d 901, 182 P.2d 18; Buffa v. General Motors Corp., D.C., 131 F.Supp. 478; James Stewart & Co. v. Mobley, Tex. Civ.App., 282 S.W.2d 290; Turner Const. Co. v. Belmont Iron Works, D.C., 158 F.Supp. 309. Appellee, on the other hand, relies heavily on Batson-Cook Company v. Industrial Steel Erectors, 5 Cir., 257 F.2d 410, where the court held that the indemnity agreement did not require indemnitor to indemnify the indemnitee for a loss occasioned by indemnitee's negligence. Batson-Cook probably represents
The so-called majority rule of strict construction appears to be that the parties are presumed to intend that the indemnitee shall not be indemnified for a loss caused by his own negligence unless the language of the contract affirmatively expresses an intent to indemnify for such loss. See Batson-Cook Company v. Industrial Steel Erectors, supra; and Mostyn v. Delaware, L. & W. R. Co., 2 Cir., 160 F.2d 15. Reference to 175 A.L.R. 8, 143 A.L.R. 312, and related annotations will disclose cases in point. One annotator has said:
This court has said:
We do not decide that the contractor is not entitled to recover for that the contract fails to contain
We do decide that the contract is ambiguous and must be construed against the contractor who wrote it. So construed, the contract does not disclose a right in the contractor to recover for a loss occasioned by contractor's negligence.
The contract contains provisions other than and in addition to the Indemnity Agreement quoted above. This court has said:
Appellant relies on the rule that an indemnity contract when ambiguous is to be resolved in favor of the party intended to be indemnified, and in support of the rule cites Eureka Coal Co. v. Louisville & N. R. Co., 219 Ala. 286, 122 So. 169, and Louisville & N. R. Co. v. Cullman Warehouse, 226 Ala. 493, 147 So. 421. The cited cases do state the rule as contended for by appellant. Both cases cite as authority Alabama Fidelity & Casualty Co. v. Alabama Penny Sav. Bank, 200 Ala. 337, 76 So. 103, where this court said:
In Bank v. Fidelity Co., supra, the court quoted from American Surety Co. v. Pauly, supra, as follows:
Thus it appears that one sound reason for the rule contended for by appellant is the general rule that an ambiguous contract is to be construed against the party whose language is construed. If the reason for the rule, that ambiguities in contracts of indemnity are construed against the indemnitor, does not exist in the case at bar, then the rule resting on that reason does not apply.
The instant contract is primarily one for accomplishing the work undertaken by the subcontractor. The contract is not one whose principal objective is indemnity. The indemnity provision is incidental to the principal objective. We are of opinion that the instant contract, if ambiguous, must be construed against the party whose language the contract is.
The record leads us to conclude that the contract, or subcontract, entered into by contractor and subcontractor was prepared by the contractor, the indemnitee, in whose shoes the appellant now stands. Respondent's Exhibit "A" purports to set out the "Uniform Subcontract," which contains the "Indemnity Agreement" copied hereinabove and on which appellant bases its claim for indemnity. Exhibit "A" commences with Purchase Order No. M 2315 which appears to have been issued by and on behalf of Daniel, the contractor. The Purchase Order recites in pertinent part as follows:
We conclude that the language of the instant contract is the language of the contractor, and, if ambiguous, is to be construed against the contractor.
The "Uniform Subcontract" executed by contractor and subcontractor recites in pertinent part as follows:
Respondent's Exhibit "B" purports to be:
"`THE STANDARD FORM OF SUBCONTRACT
The record indicates that, because the Fifth Edition was not available, the parties stipulated that the Sixth Edition would be used in lieu of the Fifth Edition, subject to correction of any discrepancies that might appear. The record does not indicate that any discrepancies were found and we take it that the Exhibits, which are the Sixth Edition, are to be regarded as correctly setting out the contents of the Fifth Edition.
Section 5 of the Standard Form of Subcontract recites in pertinent part as follows:
Respondent's Exhibit "C" purports to be:
Appellant insists that Exhibit "C" was not properly in evidence and is not to be considered. We do not agree. Appellant admits that the parties executed Exhibit "A," the Uniform Subcontract. Section 4 of Exhibit "A" states that the conditions apply to this agreement as are set forth in Section 5 of the Standard Form of Subcontract, which is Exhibit "B," except that where
Here appears ambiguity. Article 31 of the General Conditions, Exhibit "C," recites in pertinent part:
If the Indemnity Agreement is to be given the meaning which appellant says it must have, and the entire contract is to have that effect, then the subcontractor must reimburse the contractor for a loss caused by the negligence of the contractor.
On the other hand, if Article 31 of the General Conditions governs the entire contract, the contractor must indemnify the subcontractor for damage suffered "in any manner because of any wrongful act or neglect of the" contractor.
Under one provision, the contractor would be indemnified by the subcontractor for loss occasioned by the contractor's negligence. Under the other provision, the subcontractor would be indemnified by the contractor for loss occasioned by the contractor's negligence. It is difficult to see how both provisions can stand. One of them must fall, and that one is the one favorable to the contractor who prepared the agreement.
Appellant argues further that:
We do not agree with appellant's conclusion as to the purpose of the Indemnity Agreement. The effect of Section 5 of the Standard Form of Subcontract, Exhibit "B," quoted above, is to place the subcontractor in the same relation to the contractor, which the contractor occupied in relation to the owner. Admittedly the relation of contractor to owner required the contractor to reimburse the owner for loss occasioned by the contractor's negligence, but did not require the contractor to reimburse the owner for loss occasioned by the owner's negligence. So, the subcontractor is required to reimburse the contractor for loss occasioned by the subcontractor's negligence, but the subcontractor is not required to reimburse the contractor for loss occasioned by the contractor's negligence.
Considered in its entirety, the contract between contractor and subcontractor, as to the point here in question, is not specific or precise. It does not clearly indicate to us just what the parties did intend with respect to indemnity for a loss caused by the contractor's negligence. We are of opinion that the contract can be fairly and reasonably construed to support the contentions of appellee equally as well as it can be construed to support the contentions of appellant. The contract is one which illustrates the soundness of the rule which requires an ambiguous contract to be construed against the party who prepared it. The party preparing the contract had opportunity to choose appropriate language to protect his interest and we must presume that he did so to the fullest extent he deemed necessary. The instant contract was prepared by the contractor and, as to the ambiguity now at hand, is to be construed against the contractor.
The decree appealed from is in accord with this result and is due to be and is affirmed.
LIVINGSTON, C. J., and LAWSON and GOODWYN, JJ., concur.