Plaintiff appeals from a judgment on a directed verdict of no cause of action. The verdict was directed at the opening of trial, after the trial judge had granted defendants’ motion for summary judgment.
*705 Plaintiff leased a semi-tractor to Hess Cartage Company, a commercial trucking firm. The tractor, while driven by defendant Santee, was totally destroyed. Plaintiff claims the loss was caused by defendants’ negligence. Defendants’ contention that plaintiff has no cause of action is based on the following lease provision:
"The lessee shall not be liable for the loss of, or damage to, the aforesaid equipment, however caused, while in use under the terms of this lease.”
First, can the language of this clause be fairly construed to absolve defendants of liability for damage caused by their own negligence? The provision in question is essentially an indemnity agreement; the lessor is protecting the lessee from liability for damage to lessor’s equipment. The •provision, here was drafted by the indemnitee, Hess Cartage. Indemnity clauses are construed most strictly against the party who drafts them and the party who is indemnitee.
Baker Contractor Inc v Chris Nelson & Son Inc,
The clause in question does not specifically refer to damages caused by defendants’ "negligence”. However, it does say "the lessee shall not be liable for the loss of, or damage to, the aforesaid equipment, however caused * * * ”. (Emphasis sup *706 plied.) We think these words are unequivocal. The provision absolves defendants of liability for damage to the tractor, even if caused by their own negligence.
The question then becomes: Is this clause void as against public policy? Plaintiif says such contract provisions encourage unsafe acts by common carriers and should be declared illegal. Defendants say this clause simply puts the risk of loss on the plaintiif and that such clauses are common in mutual benefit bailments of vehicles.
Generally a party may contract against liability for harm caused by his negligence in performance of a contractual duty, but he may not do so with respect to his gross negligence.
Shelby Mutual Insurance Co v Grand Rapids,
A contract of indemnity against one’s own negligence is not necessarily invalid.
Buffa v General Motors Corp,
An exception to the above rules is made for contracts of common carriers and other public
*707
servants. In a bargain to render service as a common carrier for compensation, a provision exempting the carrier from liability for its negligence is illegal. 6A Corbin on Contracts, § 1472, p 592; Restatement of Contracts, § 575. In
Santa Fe, P & R R Co v Grant Brothers Construction Co,
"It is the established doctrine of this Court that common carriers cannot secure immunity from liability for their negligence by any sort of stipulation. * * * The rule rests on broad grounds of public policy, justifying the restriction of liberty of contract because of the public ends to be achieved. The great object of the law governing common carriers was to secure the utmost care in the rendering of a service of the highest importance to the community. A carrier who stipulates not to be bound through the exercise of care and diligence 'seeks to put off the essential duties of his employment.’ * * * For these reasons, the common carrier, in the prosecution of its business as such, is not permitted to drop its character and transmute itself by contract into a mere bailee, with right to stipulate against the consequences of its negligence.”
However, this special rule for common carriers only applies where the carrier is contracting in the capacity of a common carrier.
Santa Fe, P & R R Co, supra,
"If the provision against liability for negligence * * * is for some performance that the common carrier or other public servant is not required to perform as a part of its public duty, it is valid and enforceable to the same extent as it would be if made by one not engaged in public service at all.” 6A Corbin on Contracts, § 1472, p 594.
In the lease here, Hess Cartage is not contract *708 ing in its capacity as a common carrier. This is not a contract between Hess Cartage and a member of the public for the shipment of goods. Here, Hess Cartage was simply procuring equipment for use in its business. Thus the special rule for common carriers is inapplicable here.
Plaintiff contends; however, that even though this is not a contract by a common carrier in his role as such, the same public policy which prohibits a common carrier from limiting his liability for negligence in his contracts with the public prohibits the limitation in this lease. Plaintiff says the clear tendency of this contract provision is to increase the risk of harm to the public by virtue of Hess Cartage’s freedom from liability for damage to its equipment. He reasons that since this lease provision allows defendant to cause substantial damage on the highway without liability for any damage to the leased equipment, defendant is likely to be negligent in the operation of its vehicles. Plaintiff concludes that because this provision encourages negligence on our highways it must be declared illegal.
We think the plaintiff’s argument is unpersuasive. This contract does not encourage negligent acts by defendants. The provision does not absolve defendants of their liability for negligently caused injuries to third persons. Moreover, it is essential for Hess Cartage, like any commercial trucking firm, to maintain a public reputation for safety on the highways. It is unlikely that the public would knowingly entrust their goods to a company with a propensity for negligence. Thus, there are very strong inducements on the defendants to exercise a high standard of care on the highways. These inducements are unaffected by the provision in question.
*709 Plaintiff contends that the words "however caused” could be construed to exempt defendants from liability for gross negligence or intentional acts of misconduct. If this clause was so construed, it would, to that extent, violate public policy. But here, plaintiff alleges only negligence. An indemnity provision which would be invalid if applied to indemnify a person from liability for his wilful and wanton wrongdoing may, nevertheless, be validly applied to indemnify him from liability for his negligent acts. Thomas v Atlantic C L R Co, supra, 170.
We hold, therefore, that this lease provision, exempting defendants from liability for the negligently caused damage to plaintiff’s tractor, does not violate public policy. The trial judge correctly granted defendants’ motion for summary judgment.
Affirmed. Costs to appellees.