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Shell Oil Co. v. Hercules Const. Co.

AUGUST 8, 1966.

SHELL OIL COMPANY, A CORPORATION, FOR THE USE OF THE TRAVELERS INDEMNITY COMPANY, A CORPORATION, PLAINTIFF-APPELLEE,

v.

HERCULES CONSTRUCTION COMPANY, A CORPORATION, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Madison County; the Hon. HAROLD O. CLARK, Judge, presiding. Judgment affirmed.

CRAVEN, J.

In 1955, the Shell Oil Company erected a number of buildings and improvements at its refinery at Roxana, Illinois. In connection therewith, it issued a purchase order to the defendant, Hercules Construction Company, for certain work and materials. The purchase order or contract contained an indemnification or hold harmless agreement, by the terms of which Hercules agreed to indemnify Shell for injury to or the death of persons arising out of or in connection with the performance of the contract, except where such injury or death resulted from the negligence of Shell without negligence or fault on the part of Hercules.

During the course of performing the work covered by the contract, one Roy Braden, an employee of Hercules, was injured while standing on a scaffold constructed by one of Hercules' employees.

An action for damages under the Structural Work Act (Ill Rev Stats 1965, par 60, et seq., c 48) was filed in Madison County. Both Shell and Hercules were named as defendants, but Hercules was dismissed as a party-defendant. Shell made, or caused to be made, demands on Hercules that the latter defend the action and save Shell harmless pursuant to the indemnification agreement. In fact, three such demands were made. Hercules did not defend.

At the trial, an instruction was given substantially in the language of par 69, c 48, Ill Rev Stats 1955, that for any injury occasioned by any "wilful" violation of the act or by "wilful failure" to comply with the act a right of action would accrue for the damages sustained. Judgment was entered on a verdict for Braden in the amount of $18,500. On appeal, this was affirmed. Braden v. Shell Oil Co., 24 Ill. App.2d 252, 164 N.E.2d 235 (1960).

In the course of its opinion, in affirming the judgment, the court found no reversible error in the instructions, and at 254, 255 (164 N.E.2d at 236) stated:

". . . `wilful violations' of the Act referred to have been construed to include liability by an employer not only when dangerous conditions are known to him but also when by the exercise of reasonable care the existence of such dangerous condition could have been discovered and known to him (Schultz v. Henry Ericsson Co., 264 Ill. 156 [106 NE 236]). In Kennerly v. Shell Oil Co., supra, [13 Ill.2d] at page 439 [150 N.E.2d at page 139], the Court stated that the word `wilfully' was synonymous with `knowingly,' and it was not necessary that there should be a reckless disregard of the statutory provision." . . .

Travelers Indemnity Company, the insurer of Shell, paid the judgment, interest, costs and attorneys' fees pursuant to the terms of a comprehensive liability policy then in force. That policy contained what we take to be the usual subrogation clause.

This action by Shell, for the use of Travelers, is to recover from Hercules the amount of the judgment, interest, costs and attorneys' fees. The case was heard on a stipulation of facts, including the record of the Braden personal injury action. Judgment was entered for plaintiff, and the defendant appeals.

The first count of the complaint sought recovery on a common-law indemnity theory asserting the defendant to be the active wrongdoer, whereas, Shell's fault was merely passive. The second count is based upon liability by reason of the contractual indemnification and Travelers' rights under subrogation. If the plaintiff is entitled to recovery on either theory, the judgment must be affirmed.

Hercules contends that Shell must be classed as an active wrongdoer guilty of a wilful violation and, therefore, cannot recover under a theory of active-passive negligence. It is true, under the instructions given in the personal injury action, there was an issue of wilful violation. It does not follow, however, that a finding of liability under the Scaffold Act necessarily precludes indemnification by reason of that fact alone.

The theory of active and passive wrongdoing is one whereby tort liability is shifted from a party who is exposed to liability but is only passively or technically guilty of wrongdoing to the one who actively produced the injury.

This theory was first announced in John Griffiths & Son Co. v. National Fireproofing Co., 310 Ill. 331, 141 N.E. 739 (1923). This rule has often been repeated, and in Hyten v. Kleffman, 31 Ill. App.2d 273, 175 N.E.2d 632 (1961), we find this statement of the rule:

". . . in scaffolding cases, the rule forbidding contribution between tort-feasors does not apply between the parties where one is the active and primary wrongdoer and the other bears a ...


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