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Speyer Inc. v. Humble Oil and Refining Co.

decided: November 12, 1968.

SPEYER, INC., AND YELLOW CAB COMPANY OF ERIE, APPELLANTS,
v.
HUMBLE OIL AND REFINING COMPANY AND A. O. SMITH CORPORATION. SPEYER, INC., APPELLANT IN NO. 17057. YELLOW CAB COMPANY OF ERIE, APPELLANT IN NO. 17058



McLaughlin, Kalodner and Aldisert, Circuit Judges.

Author: Aldisert

Opinion OF THE COURT

ALDISERT, Circuit Judge:

A gasoline fire destroyed plaintiff Speyer's garage and sixty-five taxicabs owned by plaintiff Yellow Cab Company of Erie, a tenant of Speyer. A diversity suit to recover the fire damage was instituted in the District Court against Humble Oil and Refining Company, a gasoline supplier, and A. O. Smith Corporation, successor-in-interest to the manufacturer of a certain gasoline pump. A twelve-day non-jury trial followed, and the court, after receiving 2,000 pages of transcribed testimony, rendered judgment in favor of both defendants.*fn1 Both plaintiffs have appealed from the trial judge's findings and conclusions.

In April, 1954 an Erie Meter Systems Model #910 gasoline pump was installed in the garage by Cemico, then the gasoline supplier of Yellow Cab. The pump was purchased from Erie Meter Systems by Cemico. In October, 1955 Yellow Cab changed its supplier from Cemico to Humble, and purchased Cemico's pump. As an accommodation to its new customer, Humble purchased the pump from Yellow Cab and leased it back on a free basis. Yellow Cab employed no regular gasoline pump attendants; each driver filled his cab's tank at the completion of his shift.

As required by the equipment lease, Humble serviced and repaired the equipment from time to time, either through its own employees or through the services of independent contractors. In October, 1963 one of these contractors, Jabe, installed, a new type heavy-duty flexsteel hose on the pump.*fn2 In April, 1964 two mishaps occurred. On April 20, the bumper of a cab hooked the flexsteel hose, and, as the driver drove his vehicle in the garage, the hose stretched extensively, and a quantity of gasoline leaked from the pumping equipment to the floor. Yellow Cab then shut down the pump. An investigation by the service contractor disclosed that a metal meter casting had fractured within the pump; the entire meter unit, including the metal cover casting was replaced, and the pump returned to service.

Nine days later, on April 29, a similar incident occurred. One of the drivers failed to remove the hose from his cab's tank before driving away from the pump. This caused the hose to jerk and stretch violently, bending the metal pipe coupling to which it was attached at the pump. Although most of the Yellow Cab employees witnessing this misadventure were aware of the leakage which had followed the accident nine days before, no one inspected the pump. Instead, another driver who had observed the violent jerking of the hose proceeded to place the pump in operation to fill his own tank. Shortly thereafter, gasoline was discovered on the floor near the pump. This time the spilled gasoline erupted into flames, and the entire building and a large number of cabs were destroyed.

All parties agreed that the leakage of gasoline had been caused by the inability of the pump mechanism to relieve excess pressure which had been created within the system. The basic factual dispute was on the issue of what caused a dysfunction of certain pressure-relief valves.

The pre-trial statement of the plaintiffs and their evidence presented at trial disclose that they proceeded on various theories of liability. As to Humble: (1) defendant should be held to "the strict liability doctrine as applied to suppliers as well as manufacturers of equipment"*fn3; (2) defendant breached the high degree of care to which it should be held because the equipment dispensed "a highly volatile and dangerous substance"*fn4; (3) defendant failed to inspect and maintain the equipment properly, "and as a result thereof, the relief valve system malfunctioned" due to "* * * either a clogging with excessive grit or dirt, or to improper adjustment by Humble Oil Company or its agents"; (4) defendant provided a pump containing a casting which was "not adequate or proper".

As to A. O. Smith: (1) defendant improperly designed the meter head, furnishing a casting of "relatively poor grade material and the thickness of the casting was less than required under good engineering principles and practices"; (2) defendant failed to provide "fail safe" devices to furnish a warning relating to the buildup of pressures.*fn5

The defendants contended that the proximate cause of the fire was the negligence of the Yellow Cab driver in failing to remove the nozzle from the tank prior to the cab's pulling away from the pump. They produced testimony that the pulling of the hose caused the steel components of the hose to contract, creating a buildup of pressure which led to the fracture of the casting.*fn6

The court agreed with the defendants. It concluded that the fire was caused by the negligence of the plaintiff Yellow Cab, specifically indicating that the fire resulted from:

"* * * the failure of the driver whose duty it was to remove the nozzle from the filler pipe before driving away from the pump, so to do. Nor is it a defense to argue as plaintiff does, that he could not have been aware of the exact nature of the danger involved; it is sufficient that he be, or should be, reasonably aware that the natural consequences of his act be dangerous."

The court said it had no difficulty in finding that the failure to remove the nozzle from the tank was negligence and that "such negligence ...


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