Petition for Writ of Certiorari — B & G Electric Co. v. G. E. Bass & Co. (No. 1008)

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LIBRARY FILED

No. TO 0S°UPREME court. ulg. MAY LS 1558

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IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1957

B & G ELECTRIC COMPANY,

Petitioner

v.

G. E. BASS & COMPANY, INC.,

Respondent

Petition for Writ of Certiorari

To the United States Court of Appeals,

Fifth Circuit

ROBERT L. TAYLOR,

208 Adams Avenue,

Memphis, Tennessee,

Attorney for Petitioner.

TAYLOR, COSTEN & TAYLOR,

208 Adams Avenue,

Memphis, Tennessee,

SMITH & HURDLE,

Holly Springs, Mississippi,

Of Counsel.

The Daily News, Memphis, Tenn., 4/21/56—50c.

Page

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Sen Me OI Gs ac scaanebsarenkseusi ca 2

Reasons for granting the writ ..................... 5

pe MER He eg TE EET EE TET eye 6

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RA ere gpa te rE DACA My fas Pont hs. 11

EE a cus Susas co ede eh saewas cueeeeees 16

CS rch Guacnadad es cain ake Bere eee eae ERE 18

Ce ee I a overs eeeaenseeaas 20

Appendix A — Court of Appeals Opinion ........... 21

Appendix B — Court > Appeals Judgment ......... 28

Appendix C — Judgment on Petition to Rehear ..... 29

CASES AND OTHER AUTHORITIES CITED

Cases:

Berg Shipbuilding Co. v. The United States,

3 ee OS CN ee rer ee 13

eee S. Pee: TE. Te Ge ons pore eesccasccvces 18

Burris v. American Chicle Co., 120 F. 2d 218 ........ 8

Cen‘ral States Grain Co. v. Nashville W. & E. Corp.,

ke SS areas et rere eee ere 9, 12

Christianson v. Gaines, 174 F. 2d 534 ..............-. 18

Commercial Cas. Ins, Co. v. Skinner,

ee ee eB eGo hk bbsccewindwerne 10

Dickson v. U. S. F. & G., 150 Miss. 864, 117 So. 245... 9

Durasteel Co. v. Great Lakes Steel Co., 205 F. 2d 438.. 18

CASES AND OTHER AUTHORITIES CITED (Cont )

; Page

Fountain v. Filson, 69 Sup. Ct. 754, 336 U.S. 681 .... 18

Guerrero vy. Amer.-Hawaiian S. S. Co., 222 F. 2d 238.. 18

lioy v. Hansborough, 1 Miss. Chancery Reports 533.. 9

Jones v. Miss. Farms Co., 116 Miss. 295, 76 So. 880 .. 13

Kasper v. Barem, 101 B.S TS occas css ccseccne vis 18

Sterneck v. Equit. Life Ins. Co., 237 F. 2d 626 ....... 18

Trainor Co. v. Aetna Cas. & Surety Co., 62 F. 2d 487.. 10

Travelers Ins. Co. v. Inman, 157 Miss. 810, 126 So. 399 10

United States v. C. A. Riffle Co., 247 F. 374 ......... 12

U.S. F. & G. v. Vermont Marble Co., 16 F. 2d 83 ..... 12

Wicker v. Hoppock, 73 U. 6. 94 0... ccc cccscccccces 10

Text Books:

American Jurisprudence ........6.ccsccccccscess 6, 11

Corpus Juris Secoundum .........cc.ccccacsecses 6, 11

Federal Rules of Civil Procedure:

oe oe a ea ea ea webs Wis eed RAS 17

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1957

B & G ELECTRIC COMPANY,

Petitioner

v.

G. E. BASS & COMPANY, INC.,

Respondent

Petition for Writ of Certiorari

To the U-ited States Court of Appeals,

Fifth Circuit

To THE HonorAaBLE JUSTICES OF THE Supreme Court

OF THE UNITED STATEs:

Petitioner is very much aggrieved by the decision of the

United States Court of Appeals, Fifth Cireuit, in this cause

and prays that a Writ of Certiorari issue to review its

opinion and action in the case of B & G Electric Company

v. G. E. Bass & Company, Inc., No. 16,936 in said Court.

OPINION BELOW

An opinion and judgment were entered by the United

States Court of Appeals, Fifth Cireuit, on Februay 25, 1958,

(not yet published), and on April 1, 1958, it entered an

oruer denying a Petition to Rehear withcut opinion. A

copy of the said opinion is printed in full as Appendix A,

the judgment as Appendix B and the order denying Petition

to Rehear as Appendix C.

2

JURISDICTION

The opinion of the United States Court of Appeals, Fifth

Circuit, was entered on February 25, 1958, and on petition

to rehear an order denying the same was entered on April 1,

1958.

Jurisdiction of this Court is invoked under the provisions

of Chapter 646 of the Act of June 25, 1948; 28 U.S.C.A,,

See. 1254(1). Jurisdiction of the United States Court of

Appeals affirmatively appears upon the record.

QUESTIONS PRESENTED

I

Is an indemnitor liable to indemnitee under a contract

of indemnity egainst loss or damage where the indemnitee

has suffered no loss or damage?

II

Is a party entitled to maintain an action under a contract

of indemnity where he was not a party to the agreement

and where it is not shown that he has some interest in it or

that it was made for his benefit?

Ill

Is a party entitled to a summary judgment for damages

where there is a genuine issue of fact with respect to said

damages?

STATEMENT OF THE CASE

The original suit was a common law action filed by one

James R. Henderson, a citizen and resident of the State of

Tennessee, against G. E. Bass & Company, Inc., a Missis-

sippi Corporation, and McQuay, Inc., a Minnesota Corpora-

tion, in the United States District Court for the Northern

District of Mississippi, seeking damages in excess of

3

$3,000.00 for personal injuries which he alleged resulted

from the negligence of defendants G. E. Bass & Company,

Ine., and MeQuay, Ine. (R. 4, 5).

At the time of his alleged injuries plaintiff was an em-

ployee of petitioner herein. Plaintiff had been employed in

Tennessee and received fuil compensation for his alleged

injuries under the provisions of the Workmen’s Compensa-

tion Act of Tennessee (R. 5).

The original defendant G. EK. Bass & Company, Inc.,

moved the Court to dismiss the complaint of plaintiff sum-

marily or, in the alternative, to be permitted to make and

sue petitioner as a third party defendant, alleging a con-

tract of indemnity between the parties. The District Court

declined to dismiss the suit but permitted G. E. Bass & Com-

any, Inc., to bring petitioner into the controversy as a third

party defendant (R. 5, 6, 7).

On September 24, 1956, petitioner moved the District

Court to be dismissed as third party defendant which motion

was sustained and the cause was dismissed as to petitioner

to the extent of recovery of damages against it resulting

from the negligence of petitioner, its agents, servants or

employees. No recovery could have been had of petitioner

as the result of the negligence of any one else, and,

therefore, the cause was completely and finally dis-

missed against petitioner except that the Court reserved

judgment as to the liability of B & G Electric Company

under the alleged indemnity agreement (R. 27, 28, 29).

Your petitioner denied any negligence on its part and

answered that it had fully complied with the Workmen’s

Compensation Act and alleged that Henderson’s exclusive

remedy was under that act and that he had been fuliy com-

pensated as therein provided. Your petitioner filed a cross

‘action against G. E. Bass & Company, Inc., for twenty-six

4

thousand, one hundred eighty-one dollars and eighty-three

cents ($26,181.83) (R. 7).

G. E. Bass & Company, Inc., answered the cross com-

plaint of B & G Hlectrie Company, your petitioner herein,

by admitting the indebtedness but averred that under its

alleged contract of indemnity with B & G Electric Com-

pany, B & G Electric Company was obligated for the pay-

meni of costs and attorney’s fees (R. 7, 8).

On June 10, 1957, there was a tria! of plaintiff’s personal

injury action against G. KE. Bass & Company, Ine., and

MeQuay, Ine., which was dismissed by the Court and from

which no appeal was prosecuted (. 8, 9).

On June 17, 1957, the Court heard the cross complaint

of B& G Electric Company against G. E. Bass & Company,

Ine., for $26,181.83 and awarded your petitioner a judg-

ment for the full amount sought but also awarded G. E.

Bass & Company, Inc., a judgment for $2,000.00 for re-

spondent’s alleged attorney fees (R. 9).

The claim of petitioner wes admitted as due and owing

and judgment was confessed by respondent. Respondent’s

claim, on the other hand, was very vigorously denied by

petitioner and no affirmative proof was intro.luced relat-

ing thereto. The judgment against petitione in favor of

respondent was predicated solely upon the statement of

respondent’s attorney of his theory of his claim (R. 12).

Petitioner appealed from the judgment awarded against

ic to the United States Court of Appeals, Fifth Cireuit.

Upon brief and argument, the Court afirmed the action of

the Distriet Court on the ground that petitioner was liable

to respondent for attorney's fees under an alleged contract

of indemnity against loss or damage even though respondent

had suffered no such joss or damage (Appendix A, page 5,

par. 3).

5

REASONS WHY THE WRIT SHOULD BE GRANTED

This is not a case where the jurisdiction of this Court is

being invoked on a novel theory of law or upon the con-

struction of constitutional or statutory provisions. It is a

case where the United States Court of Appeals, Fifth Cir-

cuit, has adopted a novel and unusual theory of law in sub-

stitution for the established !aw of Mississippi and all

other jurisdictions, beth state and federal, from which

reported opinions are available.

It held petiticner liable for attorney fees, under a con-

tract of indemnity against loss or damage to one not a

party to the contract, and who had no interest in the con-

tract, when no loss or damage had been suffered, in con-

travention of the established law of this nation.

Through the impact of its opinion, the Court of Appeals

has pressed upon this Court the positive and impelling

necessity and urgency cf review and consideration for

four of the five special and important reasons set out in

Rule 19 of this Court, Section 1(b). These are:

1. The Court of Appeals, Fifth Cirenit, has rendered a

decision in conflict with the decisions of other Courts of

Appeals on the same matter.

2. The Court of Appeals in this cause has decided an

important state question in a way which is in conflict with

applicable state law.

3. The Court of Appeals has decided a federal question

in a way which is in conflict with applicable decisions of

this Court.

4. The Court of Appeals so far sanctioned the acticn

of the District Court where it departed from the accepted

and usual course of judicial proceedings as te call for an

exercise of this Court’s power of supervision.

6

ARGUMENT

I

Is an indemnitor liable to indemnitee under a contract

of indemnity against loss or damage where the indemnitee

has suffered no loss or damage?

The cases cited herein, along with literally hundreds of

others from many jurisdictions, state and federal, several

from the Fifth Cireuit, are the basis of, and in accord with,

the general rule as declared in American Jurisprudence

and corpus Juris Seeundum. We have found no case from

any jurisdiction contrary to or in conflict with the universal

rule of law as follows:

“The rule of the common law is that to authorize a

recovery on a mere bond of indemnity, actual damage

must be shown. This rule is limited to simple con-

tracts of indemnity against damages, and does not

govern in the case of indemnity against mere liability.

Applying the rule, it has been held that a surety can-

not have a right of action on a general promise of in-

demnity until he has been compelled to pay the debt

for which he is bound. And generally, if the indem-

nity is against payment of money, the plaintiff must

prove actual payment, or that which the law considers

equivalent to actual payment, @ mere liability to pay

not being sufficient.’’

27 Am. ur. 470, See. 21

“Where the contract is strictly one of indemnity,

that is, one against loss or damages, the indemniter

cannot recover until he has made payment or other-

wise suffered an actual loss or damage, against which

the ~ovenant runs.”

42 C.J.S. 589, See. 14C. (1)

There was not a line of evidence introduced at the trial

of any loss or damage suffered by either the respondent,

G. E. Bass & Company, Inc., or its companion entity, G. E.

7

Bass & Company, a partnership. The record is devoid of

any such evidence. It is admitted by respondent that it

never suffered any loss or damage. The Court of Appeals

found that ‘‘The agreed statement of the case upon which

this appeal is submitted does not show payment by Bass

of the attorney's fee.”’ (Appendix A, page 5, par. 3, first

sentence)

Following the above quotation, the Court of Appeals

goes on to ask this question:

‘*Is the contract one strictly for indemnity, upon which

judgment can be awarded only after actual payment?’’

After accurately stating the law with reference to con-

tracts of indemnity against loss or damage, in keeping with

the universal rule of law relating to contracts of indemnity

(actually quoting verbatim one of the authorities cited, i. e.,

42 C.J.S. 589, Sec. 14C}, the Court, in its opinion goes on

to hold that respondent is entitled to recover under a con-

tract of indemnity against loss or damage even though it

has suffered no loss or damage. The Court found (Appendix

A, page 6) that respondent had ‘incurred’ the expense

of an attorney’s fee, even though counsel for respondent

admits that it had not. But assuming, for the sake of argu-

ment, that it had incurred this expense, isn't this the same

as saying it had a ‘‘liability’’ for this expense?

Webster’s Dictionary gives the following definition of

‘*ineur’’:

“Become liable to: bring down on oneself. * * *

Incur emphasizes the idea of liability, and commonly

implies voluntary action.”

The contract in question was not a contract of indemnity

cqainst liabiity, but merely one against loss or damage.

The Court of Appeals has departed from the law of Mis-

8

sissippi and the universal rule of law in holding an indem-

nitor liable to an indemnitee for an alleged liability under

a contract of indemnity against loss or damage. The pro-

vision of the contract upon which the judgment was predi-

cated is as follows:

“The Sub-Contractor shal] protect and indemnify

said Contractor against any loss or damage suffered

by any one arising through the negligence of the Sub-

Contractor or those employed by him, or his agents or

servants; he shali bear any expense which the Con-

tractor may have by reason thereof, or on account of

being charged therewith.” (R. 21)

Respondent was not charged with the negligence of peti-

tioner; it was chargea with its own negligence (R. 4, 5

par. 4—R. 8, 9, par.10). It suffered no loss or damage and

consequently did not have and could not have any expense

by reason thereof.

Reasonable minds can’t read into the above quotation

an indemnity against liability. It is an indemnity against

loss or damage, pure aud simple. The Court of Appeals so

found it to be, but awarded a judgment against petitioner

when no loss or damage had been suffered, the contract to

the contrary notwithstanding.

1. The opinion of the Court of Appeals, Fifth Circuit,

in this case is in conflict with the following decisions of

other Courts of Appeals where the same question was

presented ;

_ ‘‘Being only liable, however, as an indemnitor, Ash-

land’s responsibility to Chicle is to compensate it for

the loss sustained. That loss will not be suffered until

Chicle satisfies the plaintiff’s judgment and only then

will indemnity be due.’’

Burris v. American Chicle Co

120 F. 2d 218

9

‘‘A contract to indemnify and hold harmless is not

an original covenant to pay, but is rather an under-

taking to repay or reimburse the indemnitee or make

good to him the actual loss which he may suffer. One

of the characteristic differences between a contract of

indemnity and one to pay legal liabilities is that upon

the former an action cannot be brought and recovery

had until the liability indemnified against is dis-

charged; whereas upon the latter the cause of action is

complete when the liability attaches.’’

Central States Grain Co. vs.

Nashville W. & E. Corp.

48 F. 2d 138

2. It is in conflict with the applicable law of the State

of Mississippi as enunciated in the following cases:

‘‘There is no doubt as to the general proposition

that, in order to recover upon a mere bond of indem-

nity, actual damage must be shown. If the indemnity

be against the payment of money, the plaintiff must,

in general, prove actual payment, or that which the

law considers equivalent to actual payment. A mere

legal liability to pay is not in such case, sufficien:.’’

(Quoting with approval fromthe English case of Chase

v. Hinman, the language being identical to that as de-

clared to be the general rule in 27 Am. Jur. 470,

Sec. 21.)

Hoy v. Hansborough

1 Miss. Chancery Reports 533

‘‘One question is whether the bond sued on indemni-

fied appellee, the indemnitee thereir, against loss alone,

or both liability and loss, as surety on the contractor’s

bond. We think it plain from the language of the bond

that the bond was one indemnifying appellee against

liability as well as loss, and therefore appellee did not

have to wait until loss occurred before it had a right

of action on the bond.”’

Dickson v. U.S.F.&G.

150 Miss. 864-—— 117 So. 245

10

In addition to the above cases quoted, we cite the follow-

ing Mississippi cases which primarily involve the right of

judgment creditors to garnishment against insurance com-

panies, but which distinguish indemnity against liability

from indemnity against actual loss and acknowledge the

general rule to be the applicable law in the state of

Mississippi.

Travelers Ins. Co. v. Inman

157 Miss. 810—126 So. 399

{

Commercial Cas. Ins. Co. v. Skinner

19% Miss. 533—1 So. 2d 225

3. It has decided a federal question in a way in which

is in conflict with the following applicable decisions of this

Court:

‘If the contract in the case before us were one of

indemnity, the argument of counsel for the plaintiff in

error would be conclusive. In that class of cases the

obligee cannot recover until he has been actually dam

nied, and he can recover only to the extent of the in-

jury sustained up to the time of the institution of the

suit.’’

Wicker v. Hoppock

73: UL S. 94

In the case of Trainor Co. v. Aetna Cas. & Surety Co,

62 F. 2d 487, the Court of Appeals reached the same conclu-

sion as quoted from the case of Wicker v. Hoppock, supra,

and this Court granted certiorari in 53 Sup. Ct. 659, 289

U.S. 718. Upon review the decision of the Court of Appeals

(incidentally, the Fifth Circuit) was reversed on other

grounds but this Court tacitly approved the opinion of the

Court of Appeals upon this principle in 54 Sup. Ct. 1,

290 U. S. 47.

The Wicker case and the Trainor case are of particular

significance since they both limit the indemnity to the

11

amount of the actual loss or damage suffered at the time

of the institution of the respective suits. In the case at

bar, there was no claim for damages in the original com-

plaint ef respondent and, as a matter of fact, it emphat-

ically and steadfastly denied any liability to the original

plaintiff on its own behalf and ci behalf of petitioner.

Even in its supplemental pleadings it did not claim any

actual loss or damages but only suggested that it might

have some undetermined liability (R. 8).

II

Is a party entitled to maintain an action under a con-

tract of indemnity where he was not a party to the agree-

ment and where it is not shown that he has some interest

in it or that it was made for his benefit?

The general rule is that such a party cannot maintain an

action for damages under the contract.

‘‘One not a party to a contract of indemnity and for

whose benefit it was not made catinot maintain an ac-

tion thereon against the indemnitor.”’

. 27 Am. Jur. 476, See. 32

‘‘Ordinarily the only party entitled to sue on such a

contract is the indemnitee or some one in his right, such

as assignee, and one not named as indemnitee may not

sue on an indemnifying instrument containing no prom-

ise to him. A third person, although he may have an

interest in the subject matter of the indemnity, and a

right of action against the indemnitee, not being a

party to the indemnity contract, is not entitled to sue

hereon in his own name.”’

42 C.J3.S. 610, Sec. 29

The record shows very clearly that the so-called contract

of indemnity was actually a ‘‘Sub-Contract Agreement”’

entered into between petitioner and G. E. Bass & Com-

pany, & partnership, whereas the respondent and the party

12

in whose favor the judgment for damages was rendered,

is an entirely different entity, G. E. Bass & Company, Inc.,

a corporation (R. 15 through 26).

There is no evidence in the record that the respondent

has any usterest in this agreement and no evidence was tn-

troduced to that effect.

The opinion of the Court of Appeals in this respect is

contrary to the common law of this nation, its own prior

decisions, the decisions of other Courts of Appeals, the

applicable law of the state of Mississippi and the applica-

ble decisions of this Court.

1. Decisions from other Courts pf Appeals:

‘*Without undertaking to lay down a general rule

defining when a stranger to a promise between others

may sue to enforce it, we are prepared to say that,

where there is nothing but the promise, no considera

tion trom such stranger, and no duty or obligation to

him on the part of the promisee, he cannot sue upon it.”

US.F.&G. v. Vermont Marble Co.

16 F. 2d 83

‘This Court in United States Fidelity & Guaranty

Company v. Vermont Marble Co., 16 F. 2d 83, held

that, where one has agreed to indemnify another, a

piaintiff not named as the indemnitee may not maintain

an action on such indemnifving instrument where there

is no promise to such plaintiff in the instrument

sued on.’

Central States Grain Co. v. Nash-

ville W. & E. Corp,

48 F. 2d 138

‘“‘The provisions in the contract between the United

States and the Rifle Company were intended for the

benefit of the United States and no other person. Tf

the action were on the contract, and not on the bend,

the Institute, not being a party to that contract, would

have no standing.’’

United States v. C. A. Riffle Co.

247 F. 374

13

2. The applicable law of the state of Mississippi:

There appear to be no reported cases from the state of

Mississippi with respect to the right of one not a party to

an indemnity contract to sue the indemnitor, but the general

rule is followed that one without benefit or interest in a

contract, and not being a party thereto, cannot maintain a

suit thereon, for want of privity.

‘‘On the proposition of allowance of damage in lieu

of specific performance, we think that the appellees

cannot recover because the Mississippi Farms Com-

pany, not being a party to the contract, cannot recover

from the appellant the damages it may have suffered

in its dealings in this respect.”’

Jones v. Miss. Farms Co.

116 Miss. 295—76 So. 889

3. The applicable decisions of this Court:

By implication, this Court has held that one not @ party

to an indemnity agreement could not sue thereon. It has

heid many times that one not a party to a contract (of va-

rious types) could not sue, privity being lacking.

In the case of Berg Shipbuilding Co. v. The United States,

66 Sup. Ct. 89, 326 U. S. 751, this Court denied certiorari

where the Court of Claims had held that one not a party to

an indemnity agreement could not sue the indemnitor, that

being the major issue presented by the petition for

certiorari.

In its brief filed in the Court below, respondent claimed

that it was surprised to learn of the error in the names of

the parties and averred that this was not raised in the trial

court. Actually, it is not a question of error 'n names at

all. The record shows very clearly that petitioner has

insisted since the beginning that there was no contract

between the parties.

14

‘*There was no contract nor common law obligation

on the part of B & G Electric Company to defend the

suit for G. E. Bass & Company, Inc., nor to pay its

expenses in defending such suit.’’ (R. $—statement

of points relied upon by appellant).

‘‘There was no obligation on the part of B & G Elee-

trie Company by contract or otherwise to reimburse

G. E. Bass & Company, Ine., or its surety for this ex-

pense or to assume its obligation in the premises.’’

(R. 4—statement of points relied upon by appellant).

Respondent will insist here, as it did below, that the

record shows that the so-called contraet of indemnity was

between petitioner, B & G Electric Company, and respond-

ent, G. E. Bass & Company, Inc. The record will not bear

respondent out in this argument for a copy of the contract

will be found appended in the agreed statement of the case

(R. 15 through 26) which, if one’s eves are to be believed,

make it obvious that respondent corporation was not a

party to that contract. Moreover, the Clerk of the Court

of Appeals, in indexing the record, properly described it as

‘Copy of Contract Between G. E. Bass & Co. and B & G

Electric Co.”’

Respondent contends that petitioner is bound by the

next to last sentence on page 5 of the Transcript of the

Reeord and is estopped to deny that respondent was a

party to the contract. However, when one reads the in-

strument attached as Appendix ‘* B*’ (on page 15 of the

Reeord) he will readily find that G. BE. Bass & Company,

Inec., was not a party to that agreement and that it had no

interest in it. It was a contract between respondent’s cor-

panion entity, G. E. Bass & Company, a partnership, and

petitioner. It becomes obvious from a reading of the

whole record that this was just one of many statements

where the lawyers, the District Judge and the respondent

15

itself inadvertently referred to the partnership by the cor-

poration’s name, and the corporation by the partuership’s

name. For example:

R. 4—first sentence of last paragraph:

“The original suit was a common law action for the

recovery of damages for personal injuries brought by

James R. Henderson, as plaintiff, ageinst G. Eb. Bass

d) Company, and MeQuay, Ine., as defendan’:

The original suit was obviously brought against G. E.

Bass & Company, inc., and not the partnership.

R. 5—first paragraph:

“At the time of plaintiff's injury, B & G Electric

Company was a subcontractor under G. EB. Bass &

Company, Ine, ete”

If B & G Eleetrie Company was a subcontractor under

G. E. Bass & Company, Ine., it is not shown in the record

what the terms of the contract were, whether written or

ora.

R. 10—- first paragraph:

“The attorneys presented same to Bass at its office

at Jackson, Mississippi, and G. EF. Bass & Company

issued its check for the said sum.”

Immediately following is a copy of the check issued to

B & G Electrie Company referred to above which shows

that it was not issued by G. E. Bass & Company, but by

G. BE. Bass & Company, Ine.

R. 11 —first paragraph, from cheek voucher:

“In full settlement of judgment rendered in favor

of B & G Electrie Company against G. FE. Bass &

Company on June 17, 1957, ete.”’

16

The judgment referred to shows that it was against G. E.

Bass & Company, Inc., and not the partnership. (Appendix

F to Transcript of the Record, R. 34, 30).

R. 27, 28— order entered in District Court:

In this interlocutory order the Court referred to the de-

fendant as G. E. Bass & Company on three occasions while

in his orders of June 10 (R. 33) and June 17 (R. 34, 35)

the Court referred to it as G. E. Bass & Company, Inc.

The quotation ‘To err is human”’ is attributed to many

authors, including Benjamin Franklin. It is obvious that

the District Court erred in his reference to the parties, and

in finding that respondent was entitled to recover on an

agreement in which it had no interest. It is obvious that

the lawyers have erred in their reference to the respondent

as G. E. Bass & Company, and to G. E. Bass & Company

as G. E. Bass & Company, Inc. It was inadvertent on our

part, and on the part of adversary counsel, we are sure,

Suffice it to say, there was no contract of indemnity entered

into between petitioner and respondent. If respondent wiil

produce such an agreement and file it with this Court, peti-

tioner will withdraw his petition and forget the whole

matter, even though the lower Courts erred in awarding a

judgment when no loss had been sustained by respondent.

IIT

As hereinabove set out, respondent introduced no tes-

timony or evidence of any type in support of its claim,

either as to its payment of the alleged attorney’s fee or

its obligation to pay it. Neither did it prove its reasonable-

ness. The award was made upon the statement of counsel

for respondent that he had prepared a statement for ser-

vices in amount of $2000.00 which he intended to present

to his client (R. 12).

We feel that the action of the District Court in award-

ing a judgment without affirmative proof of any type was

17

such a departure from the accepted and usual course of

judicia) proceedings as required a reversal by the Court

of Appeals; and that the action of the Court of Appeals

in sanctioning such a departure from the accepted and

usual course of judicial proceedings as to call for an exer-

cise of this Court’s power of supervision.

Under Rule 56(¢) a summary judgment may be ren-

dered if the pleadings, depositions, and admissions on file,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving

party is entitled to a judgment as a matter of law.

It cannot be contended that respondent was entitled to

a Judgment as a matter of law. On the basis of the author-

ities hereinabove cited, respondent’s claim should have

been denied as a matter of law. The record affirmatively

shows that respondent did not suffer the loss for whieh

it was awarded judgment and no affirmative claim was

made by the pleading for any specified or definite amount

(R. 8).

The reeord clearly shows that there was a genuine

issne of fact with respect to the alleged attorney's fee and

that no evidence of any form was introduced upon which

this judgment could be predicated. With respect to the

judgment rendered against petitioner for respondent's

alleged attorney's fee, attorneys for the parties, in para-

graph 14 of the Agreed Statement of the Case (R. 11, 12),

stipulated to the following:

‘The motion for allowance of attorneys fees for

defense of G. FE. Bass & Company. Ine. in the snit for

damages brovght by Henderson was heard on June

17, 1957. At the hearina, attorneys for G. Eo Base &

Company, Inc. offered statement of their fee for ser-

rices in defrnding and representina G. FEF. Bass &

Company, Ine. in the sum of Two Thousand Dollars

($2,000.00). Ba G Electric Company obiccted to anu

amount, The Court made an award of attorneys fees

18

in the amount of Two Thousand Dollars ($2,000.00)

against B & G@ Electric Company as shown by the

judgment set out in the first paragraph of this agreed

statement, and denied expenses. The Court’s opinion

is referred to in Paragraph 12 hereof and appears

attached hereto and marked Exhibit **F’’. No other

testimony was introduced by either party at the hear-

ing, on June 17, 1957.”’

The summary judgment procedure is not a substitute

for the trial of disputed issues of fact and a summary

judgment will not be awarded where a genuine issue as to

a material fact exists.

Blood v. Fleming

161 F. 2d 292

Fountain v. Filson

69 Sup. Ct. 754 — 336 U. S. 681

Christianson v. Gaines

174 F. 2d 534

Sterneck v. Equit. Life Ins. Co.

237 F. 2d 626

inerrero v. Amer.-Hawaiian S. 8S. Co.

222 F. 2d 238

Durasteel Co. v. Great Lakes Steel Co.

205 F. 2d 438

Kasper v. Baron

191 F. 2d 737

CONCLUSION

Learned adversary counsel is a venerable lawyer of the

school of persuasion, very astute and very persuasive. He

persuaded the lower Courts that his client was entitled to

recover under a contract of indemnity against loss or

damage, to which his client was not a party and in which

he had ne interest, when his client had suffered no loss or

damage. Any claim that the contract was an indemnity

against liability or that his client was a party to the con-

tract is refuted by the record. He persuaded the Court

? 9

of Appeals that these questions were not raised in the Dis-

trict Court when the record shows unequivocally that they

were.

Qur Courts were created 49 de justice among men, and

not to try the abilities of lawyers. We admit to the over-

powering talents of adversary counse! but justice can be

done in this case only by a review and reversal by this

Court. The Courts below have acted contrary to the law

of Mississippi, the applicable decisions ef the Fifth Cireuit

and other Courts of Appeals and the applicable decisions

of this Court, all as hereinabove set out.

No doubt the argument will be advanced by respondent

that by reason of the amount involved, the case is beneath

the dignity of this Court. $2,000.00 may be a trifle to re-

spondent, but it means a lot to petitioner in its struggle

for existence. Perhaps the amount in dollars and cents is

heneath the dignity of this Court, when measured by that

scale alone; but three fundamental principles of law are at

stake which should be decided by this Court.

For the foregeing reasons, we respectfully submit that

this petition for writ of certiorari should be granted and

the Court of Appeals, Fifth Cirenit, summarily reversed.

ROBERT L. TAYLOR,

208 Adams Avenue,

Memphis, Tennessee.

Attorney for Petitioner.

TAYLOR, COSTEN & TAYLOR,

208 Adams Avenue,

Memphis, Tennessee,

SMITH & HURDLE,

Holly Springs, Mississippi,

Of Counsel.

Darep May 1, 1958.

20

Certificate of Service

I, Robert L. Taylor, attorney for petitioner herein, and

a member of the Bar of the Supreme Court of the United

States hereby certify that copies of the foregoing Petition

for Certiorari and Appendices were this day served on

adverse party herein in accordance with Supreme Court

Rules 21 (1) and 33 by depositing the same in the U. S.

Post Office at Memphis, Tennessee, with first class postage

prepaid addressed to Honorable Chester L. Sumners, coun-

sel of record of respondent at his post office address,

Oxford, Mississippi.

May ./.., 1958.

Robert L. Tdylor.

APPENDIX A.

IN THE

United States Court of Appeals

FOR THE FIFTH CIRCUIT

No. 16936

B & G ELECTRIC COMPANY,

Appellant,

VERSUS

G. E. BASS & COMPANY, INC.,

Appellee.

Appeal from the United States District Court for the

Northern District of Mississippi.

(February 25, 1958.)

Before RIVES, TUTTLE and CAMERON, Circuit Judges.

RIVES, Cireuit Judge: Liability vel non of the appel-

lant under an indemnity contract for a $2,000.00 attor-

ney’s fee incurred by the appellee is all of the present

controversy that remains to be decided.

The appellant, B & G, was the electrical work subeon-

tractor under the appellee, Bass, the prime contractor,

22

for the construction of a building at Grenada, Mississippi.

The case turns upon the indemnity provision of the sub-

contract which reads as follows:

‘*The Sub-contractor shall protect and indem-

nify said Contractor against any loss or damage

suffered by any one arising through the negli-

gence of the Sub-contractor or those employed

by him, or his agents or servants; he shal! bear

any expense which the Contractor may have by

reason thereof, or on account of being charged

therewith; and if there are any such injuries to

persons or property unsettled for when the work

herein provided for is finished, final settlement

between the Contractor and Sub-contractor sha!l

be deferred until such claims are adjusted or

suitable special indemnity acceptable to the

Contractor is provided by the Sub-contractor.’’

James R. Henderson, an employee of the subcontractor,

B & G, was injured on the job. He collected workmen’s

compensation from the insurer of B & G, and thereafter

brought a common law action for damages against the

prime contractor, Bass, charging negligence on the part

of Bass. Bass in turn impleaded B & G as a third party

defendant under Rule 14(a), Federal Rules of Civil Pro-

cedure, alleging that negligence on the part of B & G

was the sole proximate cause of Henderson's injury, and

invoking the indemnity provision of the subcontract.

B & G denied the charge of negligence on its part and

filed a counterclaim against Bass for a balance of

$26,181.83 due under its szbeontract. The amount of

that halance was not denied except for the claimed

liability of B & G to indemnify Bass for the attorney's

23°

fee incurred in defending the action brought by

Henderson.

Henderson's action against Bass was tried separately to

the court without a jury and resulted in a judgment for

the defendant from which no appeal was prosecuted.

The court found that Bass was ‘‘guilty of no negligence

of any kind.’’

Thereafter. upon hearing the counterclaim of B & G

for the balance due it and the offsetting counterclaim of

Bass for indemnity for the attorney’s fee, the court

awarded B & G the balance due it less, however, the

sum of $2,000.00 awarded to Bass as attorney's fee in-

eurred in defending the tort action. The court found as

a fact that the sole proximate cause of Henderson's in-

jury was the necligence of the subcontractor B & G.!

Judgment was entered for B & G in the reduced sum

of $24,181.83. B & G had execution issued and Bass paid

i “The Court further finds that the sole proximate cause

of the injury in this case was the negligence of the B & G

Construction Company in removing the safety precautions

which had been put there and knowingly sending a man into

a dangerous place to work.

“Granting for the sake of argument, not actually of course,

but just for the sake of argument, the contention that there

was on Bass and McQuay ‘the owner) the duty to furnish

a reasonably safe place to work, the Court holds that

they complied with that duty when they’ erected this

barrier as it hes been referred to here, and put up signs,

which everybody has testified in this case said made it a reason-

ably safe place to work, particularly for skilled electricians.

“The record shows that B and G Construction Company

for their own purposes and nobody else's, tore that berrier down,

although there is some dispute as to when it was done.

I think from the preponderance of the testimony it indicates

that it was done very shortly before the accident happened,

either the afternoon or morning before the accident.”

24

to B & G that amount, the check reciting that it was ‘‘in

full settlement of judgment * * ®° .’’

The appellee, Bass, insists that B & G, having accepted

the part of the judgment in its favor, cannot take and

prosecute an appeal from the part of the judgment ad-

verse to it. The answer to that insistence is that B & G

was entitled to that much of its demand in any event,

irrespective of the outcome of the appeal.?

Appellant B & G presents four propositions:

1. Since Hendersen’s suit against Bass was based upon

the theory that he was injured as the result of negli-

gence on the part of Bass and not as the result of negli-

gence on the part of B & G, can B & G be liable for

indemnity for the attorney’s fee incurred in defending

that suit? As has been stated, the district ceurt found

that factually Bass was guilty of no negligence, and that

the negligent act charged to Bass was committed by

B & G resulting in Henderson’s injury. It follows that

the negligence of the subcontractor B & G caused Bass

to incur the attorney’s fee to defend Henderson’s suit.

The terms of the indemnity agreement are broad enough,

we think, to cover expenses incurred by reason of the

negligence of B & G, even though the injured party

erroneously ascribed such negligence to Bass.

2. Appellant insists that, since the district court found

in favor of Bass as against Henderson, Bass needed no

further protection. Bass had, however, ineurrd the

2 See Gilfillan v. McKee, 139 US 303, 311; Kaiser v

Standard Oil Co, 5th Cir 1937. 89 F2d 58 56; 2 Am Jur.

Appeal & Error, §215; 4 CJS Appeal & Error, §2!6/c)

25

expense of the attorney’s fee to defend Henderson’s

action, which was based, in fact, upou a negligent act

committed by B & G. Bass needed to be protected or

indemnified for that attorney’s fee.

3. The agreed statement of the case upon which this

appeal is submitted® does not show payment by Bass of

the attorney’s fee. Is the contract one strictly for in-

demnity, upon which judgment can be awarded only

after actual payment?

‘‘Where the contract is strictly one of indem-

nity, that is, ene against loss or damages, the

indemnitee cannot recover until he has made

payment or otherwise suffered an actual loss or

damage, against which the covenant runs; * * * .’’

42 C..S. Indemnity, §14c, p. 589. See also 27 Am. Jur.

Indemnity, §21, p. 470.

A careful reading of the indemnity provision of the

contract shows that B & G agreed both to ‘‘protect and

indemnify’** Bass ‘‘against any loss or damage suffered

by anyone arising through the negligence of * * * °° B&G.

There was no prerequisite that the ‘‘ioss or damage’’

should be sustained by the indemnitee, Bass, but the

“loss er damage’’ might be suffered ‘*by anyone’’, includ-

ing Henderson. Further, B & G agreed to ‘‘bear any

expense which the contractor may have by reason there-

of, or on account of being charged therewith."’ ‘* Bear any

expense’? meant that B & G was not only to pay but was

3 See Rule 76. Federal Rules of Civil Procedure

* Compare Somers Coa! Co v United States. ED Ohio 1942,

79 F Supp 1909. 100i)

26

permanently to sustain any exvense.® ‘‘Any expense”’

includes, of course, attorney’s fees.“ There is no condition

attached to the obligation to bear such expense. As to

the words ‘‘may have,’’ in ordinary usage a person ‘‘has”’

an expense when it is incurred. The phrases ‘‘by reason

thereof, or on account of being charged therewith’’ refer

back to ‘‘any less or damage suffered by any one arising

through the negligence of * * * ’’ B & G. Bass had the

expense of the attorney’s fee by reason of Henderson’s

injury which arose through the negligence of B & G.

Further, Bass had that expense on account of being

charged with a negligent act in fact committed by B & G

which had resulted in Henderson’s injury. We think that,

both within the literal language of the indemnity pro-

vision and according to the intention of the parties, there

was no requirement that the attorney’s fee be actually

paid before B & G could be called on to carry out its

contract. Compare Dickson v. Umited States Fidelity &

Guaranty Co., Miss. 1928, 117 So. 245, 247-248.

4. Finally, the «ppellant calls attention that, according

to the written contract, the indemnitee was a partnership

stvled G. E. Bass & Company, while judgment was ren-

dered in favor of G. E. Bass & Company, Inc. Appellee’s

counsel states that he is ‘‘frankly surprised,’’ ‘‘ This is our

first knowledge or any intimation of error in the names

of parties. The question was never raised in the ‘rial

court and never called to the trial conrt’s attention.’’ In

response, the best that appellant’s counsel can do is te

quote from the points relied upon as expressed in the

5 See Stevenson v Mellor, 252 Pa 219, 97 Atl 393, 394.

6 42 CJS. Inuemnity, §13d, p 586.

27

agreed statement of the case on appeal.? Those quotations

do not pin point the discrepancy. There is no showing

that either the district court or opposing counsel were

faissy apprised upon the trial. If that had been done, it

is probable that the discrepancy might have been re-

moved by amendment or otherwise, for there was but

one prime contractor whether a partnership or incor-

porated. Cf. Grandey v. Pacific Indemnity Co., 5th Cir.

1954, 217 F.2d 27. The question cannot be raised for the

first time on appeal. United States v. Sinor, 5th Cir.

1956, 238 F.2d 271, 277.

Even more conclusive is the fact that the agreed state-

ment of the case on appeal refers to the contract as being

“between B & G Electric Company and G. E. Bass &

Company, Inc.’? That stipulation precludes the appellant

from making a contrary contention.

We find no reversible error in the reeord and the

judgment is

AFFIRMED).

7 Quoted as follows in appellant's reply brief:

“*There was no contract nor common law obligatior on

the part of 3 & G Electric Company to defend the suit for

G. E. Bass & Company, Ine. nor to pay its evpenses in defending

such suit.

““There was no proof that G. E Bass and Compsny

‘Note not G. E. Bass & Company, Inc) had sustained the expense

or paid the attorney's fee in question.

“"There was no obligation on the part of B & G Electric

Company by contract or otherwise to reimburse G E. Bass and

Compeny, Ine. or its surety for this expense or to assume its

obligation in ie premises."

28.

APPENDIX B.

JUDGMENT

Extract from the Minutes of February 25, 1958.

B & G ELECTRIC COMPANY

No. 16936. versus

G. E. BASS & COMPANY, INC.

This cause came on to be heard on the transcript of the

record from the United States District Court for the

Northern District of Mississippi, and was argued by

counsel;

On consideration whereof, It is now here ordered and

adjudged by this Court that the judgment of the said

District Court in this cause be, and the same is hereby,

affirmed ;

It is further ordered and adjudged that the appellant,

B&G Electric Company, be condemned to pay the costs of

this cause in this Court for which execution may be issued

out of the said District Court.

29

APPENDIX C.

ORDER DENYING REHEARING

Extract from the Minutes of April 1, 1958.

B & G ELECTRIC COMPANY

No. 16936. versus

G. E. BASS & COMPANY, INC.

It is ordered by the Court that the petition for renearing

filed in this cause be, and the same is hereby, denied.