CACEY et al. v. VIRGINIAN RY. CO., 85 F.2d 976

NORTHCOTT, Circuit Judge.

This is an action at law, in assumpsit, brought by the appellee, a Virginia corporation, herein referred to as the plaintiff, against the appellants, citizens of the state of ,West Virginia, herein referred to as the defendants, in the District Court of the United States for the Southern District of West Virginia, to recover, under an indemnity agreement executed by the defendants, the amount of a judgment paid by the plaintiff to one Okley Stike, an infant, who was struck by a passenger train, operated by the plaintiff, while crossing the tracks of the plaintiff’s railroad at Matoaka, W. Va.

The amount of the judgment paid, together with attorneys’ fees, was $13,181.95. By stipulation the cause was submitted to the court in lieu of a jury, and after a hearing, at which evidence was taken, the judge below entered an order giving judgment for the plaintiff for said sum. From this action this appeal was brought. In the year 1905, Pawama Coal & Coke Company operated a coal mine at Matoaka, W. Va. Shortly thereafter, the plaintiff laid the track of its railroad through the town. This track separated the mining camp of the coal company from its offices and store and from the town proper.

The building of the railroad left a precipitous embankment in front of the mining camp, which camp was south of the town. In order to enable its employees and tenants to conveniently cross the Virginian track to the office, store, and town, the coal company built wooden steps down the embankment. On the other side of the railroad track were steps leading up a less precipitous bank to the town. These latter steps were afterwards torn down, leaving a path up the bank next to the town.

At the time of the injury to the minor, Stike, the flight of steps on one side of the railroad track, the path on the opposite side, and the intervening tracks of the railroad constituted a walkway or crossing over the tracks. The mining of coal was stopped by the company that has succeeded to the ownership of the property, and the defendant Cacey, on April 1, 1929, purchased the houses constituting the camp, thirty-five in number, thirty-one of them being located on the south side of the railroad track.

In October, 1929, the defendant Hughes purchased a one-half interest in the property, and Cacey and Hughes have owned it since that time. When the steps were first built, they were partly located on plaintiff’s right of way, and the coal company was required, by the plaintiff, to enter into a lease agreement.

Cacey & Hughes were required to execute a similar lease dated November 3, 1928, which was in the usual printed form of encroachment lease taken by the railway company and contained the following indemnity clause: “The party of the second part agrees to indemnify The Virginian Railway Company and save it harmless from any and all claims and costs that may arise or be made, for injury, death, loss or .damage resulting to the Railway Company’s employees or property, or to other persons or their property, including the lessee, or the occupants of said premises, by reason or in consequence of the occupancy or the use of the said premises, or the use of the property of the Railway Company adjacent thereto.” This lease was in full force and effect on March 14, 1931, at which time Okley Stike, eight years and five months of age, was struck and seriously injured by a passenger train of the Virginian Railway Company.

Okley Stike lived about one mile south of the Virginian tracks and at the time of his injury was on his way to Matoaka to deliver milk for his father. He did not live on the property owned by Cacey & Hughes. He had just descended the steps i and was standing on the ties at t ■* of the eastbound track wait-i n on the westbound track to I standing there, an eastbound passenger train struck him. He instituted an action against the plaintiff and recovered a judgment for $10,000. This judgment was-affirmed hy the Supreme Court of Appeals of West Virginia. Stike v.

Virginian Railway Company et al., 114 W.Va. 832, 174 S.E. 418. Cacey & Hughes were notified by the railway company of the claim set up by Okley Stike for damages on account of his injury, and of the institution of the suit against the railway company for damages, and demand was made upon them by the railway company to defend the suit, or assist in defending it, and also to reimburse the railway company for what it had been compelled to pay, which they declined and refused to do. The plaintiff paid off the Stike judgment and brought this action.

The only question involved is whether the indemnity clause of the contract of lease entered into by the defendants covered the judgment recovered by the infant Stike and paid by the railway company. It is contended on behalf of the defendants that the lease agreement did not indemnify the railway company for injuries occurring on its tracks and caused solely by the negligence of the railway employees, and that even if intended to indemnify against claims for injuries to certain classes of persons the indemnity did not extend to the Stike claim. When we read the indemnity clause and give to the words used the

interpretation demanded by their plain, ordinary meaning, we are forced to the conclusion that the first contention on behalf of the defendants is not sound. The language used is broad, comprehensive, and without-ambiguity. If the words used ' did ' not mean - to indemnify against claims of the character of the Stike claim, then they meant nothing. There was no other class of claims that could be brought against the railway company against which to indemnify. This

interpretation of the indemnity clause is emphasized when we look at the circumstances surrounding the execution of the lease. “ ‘To ascertain the intent of the parties is the fundamental rule in the construction of agreements (Chesapeake & O. Canal Co. v. Hill, 15 Wall. 94, 21 L.Ed. 64); and in such construction courts look to the language employed, the subject-matter, and: the surrounding circumstances.

They are never shut out from the same light which the parties enjoyed when the contract was executed, and in that view they are entitled to place themselves in the same situation which the parties who made the contract occupied, so as to view the circumstances as they viewed them, and so to judge of the meaning of words and of the correct application of the language to the things described.’” Town of Ashland v. Newman, 163 Va. 500, 175 S.E. 724, 726, 176 S.E. 470.

In entering into the lease contract the railway company was acting in a private character as a property owner and entirely outside the scope of a common carrier. The lease was entered into for a nominal consideration ($1) and solely for the benefit of the defendants.

The maintenance of the steps could not possibly be of the slightest benefit to the railway company in any capacity, and in no way aided it in its business, and the company would evidently not have consented to incur the additional risk-of accidents from the existence of the right of way for practically no rental, unless it were indemnified in some way. It has been repeatedly held that a railway company not acting as a common carrier may exempt itself, by contract, from liability for negligence. National Transit Co. v. Davis, Director General of Railroads (C.C.A.) 6 F.(2d) 729; Sunlight Carbon Co. v. St.

Louis & S. F. R. Co. (C.C. A.) 15 F.(2d) 802; Hartford Fire Insurance Co. v. Chicago, M. & St. P. R. Co., 475 U.S. 91, 20 S.Ct. 33, 44 L.Ed. 84; Santa Fe, P. & P. R. Co. v. Grant Brothers Construction Co., 228 U.S. 177, 33 S.Ct. 474, 57 L.Ed. 787. See, also, Markham v. Duke Land & Imp. Co. et al., 201 N.C. 117, 158 S.E. 852; St. Louis, etc., R. Co. v. Stewart et al. (Mo.Sup.) 187 S.W) 836; Buckeye Cotton Oil Co. v. Louisville & N. R. Co. (C.C.A.) 24 F.(2d) 347. The location and use of the steps and the adjacent railroad tracks added greatly to the hazard of injury by passing trains.

An examination of the decision of the West Virginia Court in the Stike Case, supra, shows that the railway was held liable for the injury to Stike because the presence of the steps consented to by the railway company constituted an invitation to the public to cross the track at that point and cast upon the railway company all the duties .necessary to a public crossing. The court held that the injured boy was an invitee and not a licensee. But for the steps there would have been no liability and consequent loss to the plaintiff..

Against any loss of this character the defendants contracted to hold the railway company harmless. The consequences may be harsh, but contracts that are plain must be enforced. The decisions relied upon on behalf of the defendants deal with indemnity clauses contained in contracts from which the indemnitee derived some benefit, either direct or indirect, and they are not controlling here. The contention that Stike did not come within the class of persons covered by the indemnity clause is not sound. The language of the clause, “or to other persons,” is general and all inclusive.

At the time of the execution of the lease by Cacey & Hughes, the crossing over the railroad tracks, down the steps, was in use by the public generally, and this fact was known to the defendants. The judgment is affirmed.