{ "id": 2773942, "name": "Charles M. SUTTON, Individually and Administrator and Personal Representative of the Estate of Mona Ray Sutton, Deceased, Plaintiff-Appellant, v. CHEVRON OIL COMPANY et al., Defendants-Appellees", "name_abbreviation": "Sutton ex rel. Sutton v. Chevron Oil Co.", "decision_date": "1973-06-06", "docket_number": "No. 1065", "first_page": "604", "last_page": "615", "citations": [ { "type": "official", "cite": "85 N.M. 604" }, { "type": "parallel", "cite": "514 P.2d 1301" } ], "court": { "name_abbreviation": "N.M. Ct. App.", "id": 9025, "name": "Court of Appeals of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "501 P.2d 1163", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1972, "opinion_index": 0 }, { "cite": "104 Cal.Rptr. 443", "category": "reporters:state", "reporter": "Cal. Rptr.", "year": 1972, "opinion_index": 0 }, { "cite": "8 Cal.3d 136", "category": "reporters:state", "reporter": "Cal. 3d", "case_ids": [ 2321942 ], "year": 1972, "opinion_index": 0, "case_paths": [ "/cal-3d/8/0136-01" ] }, { "cite": "501 P.2d 1153", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1972, "opinion_index": 0 }, { "cite": "104 Cal.Rptr. 433", "category": "reporters:state", "reporter": "Cal. Rptr.", "year": 1972, "opinion_index": 0 }, { "cite": "8 Cal.3d 121", "category": "reporters:state", "reporter": "Cal. 3d", "case_ids": [ 2321916 ], "year": 1972, "opinion_index": 0, "case_paths": [ "/cal-3d/8/0121-01" ] }, { "cite": "466 P.2d 722", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1970, "opinion_index": 0 }, { "cite": "85 Cal.Rptr. 178", "category": "reporters:state", "reporter": "Cal. Rptr.", "year": 1970, "opinion_index": 0 }, { "cite": "2 Cal.3d 245", "category": "reporters:state", "reporter": "Cal. 3d", "case_ids": [ 2310891 ], "year": 1970, "opinion_index": 0, "case_paths": [ "/cal-3d/2/0245-01" ] }, { "cite": "83 N.M. 730", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5336986 ], "weight": 4, "year": 1972, "opinion_index": 0, "case_paths": [ "/nm/83/0730-01" ] }, { "cite": "71 N.M. 320", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5348732 ], "weight": 2, "year": 1963, "opinion_index": 0, "case_paths": [ "/nm/71/0320-01" ] }, { "cite": "57 N.M. 661", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 8843047 ], "weight": 2, "year": 1953, "opinion_index": 0, "case_paths": [ "/nm/57/0661-01" ] }, { "cite": "231 S.C. 404", "category": "reporters:state", "reporter": "S.C.", "case_ids": [ 2100412 ], "weight": 2, "year": 1957, "opinion_index": 0, "case_paths": [ "/sc/231/0404-01" ] }, { "cite": "241 Ala. 62", "category": "reporters:state", "reporter": "Ala.", "case_ids": [ 5152983 ], "weight": 2, "year": 1941, "opinion_index": 0, "case_paths": [ "/ala/241/0062-01" ] }, { "cite": "382 S.W.2d 953", "category": "reporters:state_regional", "reporter": "S.W.2d", "case_ids": [ 10178625 ], "opinion_index": 0, "case_paths": [ "/sw2d/382/0953-01" ] }, { "cite": "30 L.Ed.2d 57", "category": "reporters:federal", "reporter": "L. 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Ct.", "opinion_index": 0 }, { "cite": "404 U.S. 829", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6210945, 6211204, 6210472, 6210027, 6211852, 6210221, 6209774, 6211408, 6212090, 6211612, 6210686 ], "opinion_index": 0, "case_paths": [ "/us/404/0829-06", "/us/404/0829-07", "/us/404/0829-04", "/us/404/0829-02", "/us/404/0829-10", "/us/404/0829-03", "/us/404/0829-01", "/us/404/0829-08", "/us/404/0829-11", "/us/404/0829-09", "/us/404/0829-05" ] }, { "cite": "437 F.2d 308", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 2209773 ], "year": 1971, "opinion_index": 0, "case_paths": [ "/f2d/437/0308-01" ] }, { "cite": "174 F.2d 311", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 306319 ], "year": 1949, "opinion_index": 0, "case_paths": [ "/f2d/174/0311-01" ] }, { "cite": "48 N.M. 556", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1560840 ], "weight": 2, "year": 1944, "opinion_index": 0, "case_paths": [ "/nm/48/0556-01" ] }, { "cite": "78 N.M. 36", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5321971 ], "weight": 2, "year": 1967, "pin_cites": [ { "page": "38" }, { "page": "12" } ], "opinion_index": 0, "case_paths": [ "/nm/78/0036-01" ] }, { "cite": "80 N.M. 171", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5364052 ], "weight": 2, "year": 1968, "opinion_index": 0, "case_paths": [ "/nm/80/0171-01" ] }, { "cite": "203 P. 539", "category": "reporters:state_regional", "reporter": "P.", "year": 1922, "opinion_index": 0 }, { "cite": "27 N.M. 564", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 8842961 ], "year": 1922, "opinion_index": 0, "case_paths": [ "/nm/27/0564-01" ] }, { "cite": "74 N.M. 799", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2804140 ], "weight": 2, "year": 1965, "opinion_index": 0, "case_paths": [ "/nm/74/0799-01" ] }, { "cite": "63 N.M. 342", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2775970 ], "weight": 3, "year": 1957, "opinion_index": 0, "case_paths": [ "/nm/63/0342-01" ] }, { "cite": "505 P.2d 139", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1972, "opinion_index": 0 }, { "cite": "8 Wash.App. 83", "category": "reporters:state", "reporter": "Wash. App.", "case_ids": [ 475804 ], "year": 1972, "opinion_index": 0, "case_paths": [ "/wash-app/8/0083-01" ] }, { "cite": "511 P.2d 566", "category": "reporters:state_regional", "reporter": "P.2d", "opinion_index": 0 }, { "cite": "85 N.M. 240", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2770441 ], "opinion_index": 0, "case_paths": [ "/nm/85/0240-01" ] }, { "cite": "42 N.M. 190", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1569666 ], "weight": 3, "year": 1937, "opinion_index": 0, "case_paths": [ "/nm/42/0190-01" ] }, { "cite": "74 N.M. 708", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2801957 ], "weight": 2, "year": 1961, "opinion_index": 0, "case_paths": [ "/nm/74/0708-01" ] }, { "cite": "69 N.M. 155", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2787921 ], "weight": 2, "year": 1961, "opinion_index": 0, "case_paths": [ "/nm/69/0155-01" ] }, { "cite": "74 N.M. 700", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2799003 ], "weight": 7, "opinion_index": 0, "case_paths": [ "/nm/74/0700-01" ] }, { "cite": "84 N.M. 211", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2766687 ], "weight": 2, "year": 1972, "opinion_index": 1, "case_paths": [ "/nm/84/0211-01" ] }, { "cite": "82 N.M. 90", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5328233 ], "weight": 2, "year": 1970, "opinion_index": 1, "case_paths": [ "/nm/82/0090-01" ] }, { "cite": "83 N.M. 789", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5334147 ], "weight": 3, "year": 1972, "opinion_index": 1, "case_paths": [ "/nm/83/0789-01" ] }, { "cite": "30 L.Ed.2d 57", "category": "reporters:federal", "reporter": "L. Ed. 2d", "opinion_index": 1 }, { "cite": "92 S.Ct. 65", "category": "reporters:federal", "reporter": "S. Ct.", "opinion_index": 1 }, { "cite": "404 U.S. 829", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6210945, 6211204, 6210472, 6210027, 6211852, 6210221, 6209774, 6211408, 6212090, 6211612, 6210686 ], "opinion_index": 1, "case_paths": [ "/us/404/0829-06", "/us/404/0829-07", "/us/404/0829-04", "/us/404/0829-02", "/us/404/0829-10", "/us/404/0829-03", "/us/404/0829-01", "/us/404/0829-08", "/us/404/0829-11", "/us/404/0829-09", "/us/404/0829-05" ] }, { "cite": "437 F.2d 308", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 2209773 ], "year": 1971, "opinion_index": 1, "case_paths": [ "/f2d/437/0308-01" ] }, { "cite": "78 N.M. 36", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5321971 ], "weight": 2, "year": 1967, "pin_cites": [ { "parenthetical": "Concurring opinion by Moise, J." }, { "parenthetical": "Concurring opinion by Moise, J." } ], "opinion_index": 1, "case_paths": [ "/nm/78/0036-01" ] }, { "cite": "80 N.M. 171", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 5364052 ], "weight": 2, "year": 1968, "opinion_index": 1, "case_paths": [ "/nm/80/0171-01" ] }, { "cite": "74 N.M. 708", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2801957 ], "weight": 2, "year": 1961, "opinion_index": 1, "case_paths": [ "/nm/74/0708-01" ] }, { "cite": "69 N.M. 155", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2787921 ], "weight": 2, "year": 1961, "opinion_index": 1, "case_paths": [ "/nm/69/0155-01" ] }, { "cite": "74 N.M. 700", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 2799003 ], "weight": 4, "opinion_index": 1, "case_paths": [ "/nm/74/0700-01" ] } ], "analysis": { "cardinality": 1244, "char_count": 31711, "ocr_confidence": 0.702, "pagerank": { "raw": 6.844968735684574e-08, "percentile": 0.4173125537434808 }, "sha256": "debecc31bc8bc9743e75d03139368e7303a01ec3900e05843a3de671b612b0a4", "simhash": "1:24d5ac96e8a6564c", "word_count": 5197 }, "last_updated": "2023-07-14T15:38:26.265107+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "LOPEZ, J., concurs.", "HERNANDEZ, J., specially concurring." ], "parties": [ "Charles M. SUTTON, Individually and Administrator and Personal Representative of the Estate of Mona Ray Sutton, Deceased, Plaintiff-Appellant, v. CHEVRON OIL COMPANY et al., Defendants-Appellees." ], "opinions": [ { "text": "OPINION\nSUTIN, Judge.\nPlaintiff appeals from a summary judgment granted Chevron Oil Company (Chevron) arising out of a claim for damages for wrongful death caused by alleged negligence of defendant Sharp, the lessee and operator of a Chevron oil station.\nWe reverse.\nChevron did business as Standard Oil Company of Texas (Standard).\nOn June 15, 1968, Standard, lessor, leased the service station and premises, located at 845 Juan Tabo Blvd., N.E., Albuquerque, New Mexico, to defendant, Leland A. Sharp. This was entitled \u201cDealer Lease.\u201d It did not authorize Sharp to make necessary repairs to vehicles owned by the public, but it did not deny Sharp this right.\nOn June 15, 1968, Standard, as Seller, entered into a \u201cSales Agreement\u201d with Sharp as Buyer, in which Standard agreed to sell and deliver gasoline, motor fuel, lubricating oil and petroleum products to Sharp, and Sharp agreed to purchase and sell.\nThe \u201cDealer Lease\u201d provided in part that Sharp was \u201c * * * engaged in an independent business, and nothing herein contained shall be construed as granting to [Standard] any right to control [Sharp\u2019s] business or operations, or the manner in which the same shall be conducted.\u201d\nThe Sales Agreement, in addition, provided in part that Standard \u201c * * * has no right to exercise any control over any of [Sharp\u2019s] employees, all of whom are entirely under the control and direction of [Sharp], who shall be responsible for their actions and omissions. * * * \u201d\nSharp, by deposition, testified that as far as he knew he was an independent contractor operating on his own and not for someone else.\nWhile the Dealer Lease and Sales Agreement were in effect, the plaintiff\u2019s Toyota had been entrusted to Sharp for maintenance and repairs. The accident, which resulted in the fatality of plaintiff\u2019s wife, occurred when the brakes failed and the right front wheel of the Toyota came off.\nThe trial court found:\n* * * [T]here is no genuine issue as to any material fact and as grounds therefor the Court relies upon the decision of the New Mexico Supreme Court in the case of Shaver v. Bell, et al., 74 N.M. 700 [397 P.2d 723], and the authorities cited in the movant\u2019s Memorandum Brief, there being an absence of fact which would support a conclusion that Chevron Oil Company exercised_ or had the right of control over the operations of the station by the lessee, Sharp, or his employee, Buss. [Emphasis added]\nThe issue on this appeal is: Was there an absence of fact which would support a conclusion that Chevron exercised or had the right of control over the operation of Sharp\u2019s Chevron Service Station?\nWe believe the trial court erred in two respects: (1) There is a genuine issue of fact whether Chevron exercised or had the right to exercise control over the operation of the station by Sharp or his employee, Buss; (2) \u201ccontrol\u201d is not the exclusive method of determining liability of Chevron for the negligence of Sharp and Buss.\n(1) There is a Genuine Issue of Fact Whether Chevron Exercised or had the Right to Exercise Control.\nA. The Private Agreement Between Chevron and Sharp is not Binding on the Public.\nThe first point, to determine is whether an innocent member of the public who deals with a nationally known service station operation is bound by the private agreements between Chevron and Sharp. We say \u201cno.\u201d .\nThe \u201cDealer Lease\u201d created a landlord-tenant relationship between Chevron and Sharp. The \u201cSales Agreement\u201d created a purchase agreement between Chevron and Sharp. These agreements are secret, private documents which establish the legal relationship between these parties. They govern their respective rights and duties and determine the liability of each party to the other arising out of litigation in which each party seeks relief from the other.\nThe motoring public is not aware of the existence of these documents, have no notice of the existence of these documents, nor any knowledge of their contents.\nFirst, it has long been the rule that a third person who deals with an agent is not bound by any secret or private instructions given to an agent by the principal. South Second Livestock Auction, Inc. v. Roberts, 69 N.M. 155, 364 P.2d 859 (1961); Sterling v. B. & E. Constructors, Inc., 74 N.M. 708, 397 P.2d 729 (1961); Douglass v. Mutual Ben. Health & Accident Ass\u2019n, 42 N.M. 190, 76 P.2d 453 (1937); Echols v. N. C. Ribble Company, 85 N.M. 240, 511 P.2d 566 decided March 2, 1973.\nSutton believed that Sharp and Buss were agents and servants of Chevron. He was not bound by the provisions of the documents that Sharp was engaged in an independent business, not subject to any control by Chevron.\nSecond, it is a matter of common and general knowledge that Chevron, under various names, owns, possesses and operates service stations throughout the United States, including the State of New Mexico and the City of Albuquerque; that it engages in substantial national advertising; that it issues Chevron credit cards, sells Chevron products, uses Chevron uniforms, insignia, signs; that its station operators perform services on automobiles; that the purpose of owning, possessing and operating service stations is to encourage the patronage of the motoring public for the benefit of other stations supplied by Chevron. It invites the motoring public to use the facilities of its service stations and it knows the public will make use of its premises, its operators, and seek the services of its operators as well as make purchases of its products, without knowledge of the legal relationship between the parties.\nThird, the motoring public has no duty to inquire about the legal relationship between Chevron and Sharp, or to determine whether a master-servant, principal-agent, landlord-tenant or independent business relationship exists, or to request the production of all written documents for inspection, nor any duty to request the presence of Chevron personnel for examination, nor any duty to obtain an oral or written opinion from Chevron that it has no control over Sharp, and is not liable for the negligence of Sharp. The motoring public relies upon the integrity, the reliability, and the economic and financial status of Chevron. The legal relationship is usually discovered after injury has occurred or litigation has begun.\nFourth, we weigh the balance between the value of the private documents of Chevron, and Chevron\u2019s duty to the motoring public. We believe the burden rests on Chevron to make known to the public at each -service station that the possessor is engaged in an independent business; that Chevron has no right to exercise any control over any of the possessor\u2019s business operations and employees; that all of the business operations of the possessor are under his control and direction, and the possessor, not Chevron, is responsible for its actions and omissions.\nFifth, the written agreement between Chevron and Sharp does not determine the issue of control. Jackson v. Standard Oil Company of California, 8 Wash.App. 83, 505 P.2d 139 (1972). After stating contract provisions, identical with those in this case, Judge Pearson wrote:\nIt is manifest, however, from what we have already said, that a written contract provision disclaiming control is not determinative on the question of control. The relationship of the parties, as amplified by the operating manual, the nature of the undertaking itself, and the amount of control actually exercised in performance of the undertaking, are the determinative factors.\nWe, therefore, rule that the \u201cDealer Lease\u201d and \u201cSales Agreement\u201d cannot be used by Chevron as an escape from liability to a third person as a matter of law. These agreements govern the rights and duties of Chevron and Sharp in their business operations. See, Lommori v. Milner Hotels, 63 N.M. 342, 319 P.2d 949 (1957).\nB. There was an Issue of Fact over Chevron\u2019s Right of Control.\nThe facts most favorable to plaintiff show the following:\nPlaintiff was the owner of a Toyota. He entrusted the Toyota to defendant Sharp for maintenance and repairs. Defendant Buss was an employee of Sharp. In connection with the regular service station, Sharp operated a \u201cFour Wheel Drive Center\u201d in which he specialized in repairing four wheel drive vehicles. But Sharp considered himself to be just a service station. His jeep had painted on its side, \u201cFour Wheel Drive Center, Lee Sharp Chevron, Albuquerque, New Miexico.\u201d He had calling cards advertising \u201cLee Sharp Chevron\u201d and \u201cFour Wheel Drive Equipment.\u201d He had one telephone number for both operations and one set of books and accounts.\nChevron personnel cautioned Sharp about keeping the place clean, but never questioned Sharp about the \u201cFour Wheel Drive Center\u201d operation. A reasonable inference can be drawn that Chevron knew about this operation. But Chevron never protested, nor did Chevron prohibit Sharp from using the premises for maintenance and repair of four wheel drive vehicles for public patrons, nor did Chevron contend it was a violation of the \u201cDealer Lease\u201d agreement. Chevron ratified the acts of Sharp. Grandi v. LeSage, 74 N.M. 799, 399 P.2d 285 (1965); Terry v. Humphreys, 27 N.M. 564, 203 P. 539 (1922).\nPrior to authorizing Chevron and Sharp to repair his Toyota, Sutton relied on statements made to him that Chevron had more skillful repairmen, was superior, and specialized in servicing and repair work on vehicles of his kind, the Toyota; that Sharp and Buss were agents and employees of Chevron. In addition to signs, uniforms, credit cards and credit privileges, Sutton relied on Chevron advertising in the classified section of the Albuquerque telephone directory. Here, Chevron states:\nAt the Sign of the Chevron, we take better care of your car with famous Chevron Gasolines and Motor Oils. Also Atlas Tires, Batteries, and Accessories sold on the Chevron Easy-Payment Plan.\n\u201cWHERE TO GET SERVICE\u201d\nDealers [Emphasis added].\nBelow are listed a large number of Chevron service station operations among which are included those which perform auto repairs, tune-ups, brakes, American and foreign car repair, and other forms of service. It advertises \u201cA Mechanic on Duty.\u201d This advertising can'lead the public to believe Chevron exercises control over its service stations.\nChevron owned the premises of Sharp\u2019s Chevron station. It exercised some control over the premises. It dealt directly with Sharp on the sales of Chevron products. Sharp had a duty to diligently promote the sale of Chevron products, to give those products prominent and convenient positions, to keep the premises open for Chevron\u2019s benefit, to keep the premises, buildings and equipment in good appearance, clean and orderly to avoid an adverse effect on the motoring public\u2019s patronage of other stations supplied by Chevron. There were other miscellaneous restraints on Sharp as well as rights reserved to Chevron.\nThere is a genuine issue of fact to support a conclusion that Chevron exercised or had the right of control over the operations of the Chevron service station by Sharp and his employee, Buss. McCauley v. Ray, 80 N.M. 171, 453 P.2d 192 (1968); Jackson, supra.\nChevron relies strongly on Shaver v. Bell, 74 N.M. 700, 397 P.2d 723 (1964). This case does not clothe Chevron with a cloak of immunity from liability.\nBell had leased the premises from an estate, sublet the premises to Cosden Petroleum Corporation (Cosden), which in turn orally sublet the premises to Bell, and Bell in turn placed others in possession of the property to operate the station. Bell was an intermediate party. Cosden had no direct interest in the premises, never sent its personnel to check the premises, nor did it deal directly with the operator of the station on sales of its products. \"Cosden placed no restraints on Bell as sublessee and had no control of any sort over his use of the premises.\u201d\nAfter citation of authority, Justice Moise said [p. 705, 397 P.2d p. 727]:\nWe would call attention to [two Texas cases], which serve to emphasize that even in the same jurisdiction slight changes in facts may result in different conclusions as to the presence of an issue for determination by the jury. A great number of cases dealing with this subject are annotated [citations]. A study of these cases will reveal that although each case may be used to point out the view courts have taken on specific indicia of control, every case must ultimately be decided on its unique facts. . [Emphasis added]\nIn a special concurring opinion in Platco Corporation v. Shaw, 78 N.M. 36, 38, 428 P.2d 10, 12 (1967), Justice Moise said:\nHowever, control is not the exclusive qualification [in determining whether a given individual is an employee or independent contractor].\nWe agree because apparent authority, estoppel, public use of premises may be other indicia which determine whether an individual is a servant or independent contractor. These rules of law were not discussed in Shaver, supra.\nThe facts in the present case differ in some respects from those in Shaver, supra, and Shaver is not controlling.\n(2) \u201cControl\" is not the Exclusive Method of Determining Chevron\u2019s Liability.\nAlthough \u201ccontrol\u201d is one method of determining whether a station operator is an employee of an oil company or an independent contractor, Shaver v. Bell, supra, it is not the exclusive method of determination.\nA. Apparent Authority\nChevron may be liable to plaintiff for the apparent authority with which Chevron has clothed Sharp. Douglass, supra; Raulie v. Jackson-Horne Grocery, 48 N.M. 556, 154 P.2d 231 (1944); McNutt Oil & Refining Co. v. Mimbres Valley Bank, 174 F.2d 311 (10th Cir. 1949).\nThis principle of law has been applied to service station operations. Gizzi v. Texaco, Inc., 437 F.2d 308 (3rd Cir. 1971), cert. den. 404 U.S. 829, 92 S.Ct. 65, 30 L.Ed.2d 57; Clark v. Texaco, Inc., 382 S.W.2d 953 (Civ.App.Tex.1964); Standard Oil Co. v. Gentry, 241 Ala. 62, 1 So.2d 29 (1941). Possession of the service station by an operator is prima facie evidence that the operator is the agent of the oil company and is not an independent contractor. Cooper v. Graham, 231 S.C. 404, 98 S.E.2d 843 (1957). Apparent authority is a question of fact for the jury.\nFrom the facts set forth above, we believe apparent authority is an issue of fact for the jury.\nB. Dangerous Activity\nThere is evidence that Sharp was engaged in an independent business free from control by Chevron. Nevertheless, one who employs an independent contractor may be liable for his negligence when the work is intrinsically and inherently dangerous. Pendergrass v. Lovelace, 57 N.M. 661, 262 P.2d 231 (1953). In fact, there are many exceptions to the general rule of non-liability for the negligence of an independent contractor. Srader v. Pecos Construction Company, 71 N.M. 320, 378 P.2d 364 (1963).\nA landlord-tenant relationship existed between Chevron and Sharp. Nevertheless, there are exceptions to non-liability of the landlord for injuries to third persons when the injury occurs off the premises. The landlord continues liable for ordinary negligence to third persons arising from dangerous activities carried on by the tenant. Lommori v. Milner Hotels, supra.\nIn the instant case, the claimed negligence of Sharp and Buss was their failure to detect, inspect, discover, properly repair or replace a broken spindle on Sutton\u2019s Toyota automobile, or to warn Sutton or the decedent, his wife, of that dangerous condition which resulted in the death of decedent.\nAn issue of fact exists whether the work performed was a dangerous activity or inherently dangerous. Jackson, supra.\nWe made the preceding analysis to meet Chevron\u2019s contentions of non-liability based on lack of control over the operations of the station by Sharp. To avoid confusion over the liability of national oil companies for negligent acts of station operators, we desire to move forward in the spirit of the Supreme Court of this state to establish a new basis for liability regardless of whether the relationship of principal and agent, master and servant exist. The Supreme Court adopted the doctrine of strict liability in Stang v. Hertz Corporation, 83 N.M. 730, 497 P.2d 732 (1972).\nC. Chevron is Strictly Liable Under the Doctrine of Administration of Risk.\nIn Stang, supra, the Supreme Court set forth the historical development of strict liability in tort as applied to products liability cases. It extended the doctrine to apply to the lessor of an automobile. It held the Hertz Corporation strictly liable in tort for the death and injuries resulting from an automobile accident which occurred when a tire blew out on the rented vehicle even though the manufacturer of the tire was exonerated by verdict of the jury.\nThe philosophical basis of the rule rested on the conditions and needs of the times whch made it appropriate to effect changes. It also followed this principle:\nThe basis of risk distribution was that the loss should be placed on those most able to bear it and they could then distribute the risk loss to users of the product in the form of higher prices.\nThe demands of public policy applicable to sellers of a defective product is stated in Restatement of Torts (2nd), \u00a7 402A, Comment (c). It provides in part:\n* * * [P]ublic policy demands that the burden of accidental injuries caused by products intended for consumption be placed upon those who market them, and be treated as a cost of production against which liability insurance can be obtained; and that the consumer of such products is entitled to the maximum of protection at the hands of someone, and the proper persons to afford it are those who market the product.\nThe same public policy should apply to oil companies \u201cfor their station operators\u2019 torts regardless of whether the relationship of master and servant exist.\u201d Lackey, Liability of Oil Company for its Lessee\u2019s Torts, U of 111. Law Forum, 1965, p. 915. The author said [pp. 919-20] :\nThe most persuasive of these (reasons) fall within what has been called the administration of risk. That term includes risk prevention, risk shifting, and risk distribution.\nIn defining the \u201crisk\u201d terminology, the author transplants public policy from the doctrine of strict liablity to administration of risk. We agree.\nThe lessor-lessee strict liability doctrine in Stang, supra, was applied to Shell Oil Company because it was a \u201cCommercial Lessor.\u201d Price v. Shell Oil Company, 2 Cal.3d 245, 85 Cal.Rptr. 178, 466 P.2d 722 (1970). The court said:\nWe hold in this case that the doctrine of strict liability in tort which we have heretofore made applicable to sellers of personal property is also applicable to bailors and lessors of such property.\nFor further protection of the consumer, the Supreme Court of California extended the doctrine of strict liability in Cronin v. J.B.E. Olson Corporation, 8 Cal.3d 121, 104 Cal.Rptr. 433, 501 P.2d 1153 (1972); Luque v. McLean, 8 Cal.3d 136, 104 Cal.Rptr. 443, 501 P.2d 1163 (1972).\nThe doctrine of strict liability began with the manufacturer of a product. It was extended to seller, bailor and lessor. The burden of establishing a claim for relief was lessened for the consumer, but the burden of maintaining an adequate defense was. increased for the commercial interests.\nIn Jackson, supra, the doctrine of strict liability was extended further against Standard Oil Company in the distribution of its oil products. Standard Oil sold its unadulterated oil to a wholesale distributor under contract. A corporation carried out the wholesale distributorship contract with Standard Oil. An employee of the latter corporation delivered the oil in a gasoline truck to a storage tank owned by a state agency. At the time the oil was poured into the tank, it became adulterated with gasoline in the hose. Subsequently, the residue in the tank was drained for repairs. During repair work the tank exploded causing the death of the repairman. Standard Oil was held strictly liable because it \u201cretained the right to control purity of the product until delivered to the customer (DNR).\u201d Jackson erased from the doctrine of strict liability the essential ingredient that the \u201cdefect\u201d must exist at the time the product left the hands of Standard Oil. \u201cControl\u201d was substituted for original place of defect. Strict liability became derivative liability.\nThis rule leads us into the doctrine of strict liability for defects which result from risks in the administration of service stations. It is' comparable to strict liability in the distribution of its products through independent agencies. Both are administrative processes, the risks of which are imposed on the oil companies for the protection of the public.\nIn the instant case, there is evidence to support a genuine issue of fact that (1) a defect of brakes (2) existed at the time the Toyota was under the control of Standard Oil (3) which was not contemplated by decedent (4) rendered the automobile unreasonably dangerous and unsafe to decedent, and (5) that the defect was the proximate cause of decedent\u2019s death.\nOil companies which lease or operate service stations fall within the strict liability doctrine as developed. For the protection of the motoring public, they have a duty to supervise station operators, exercise care in the selection of lessees, insure greater safety and promote accident prevention. . Liability risk must be shifted from lessee to the oil company because it is more able than the lessee to bear the costs of accidents or distribute the cost of liability insurance and protect the public from judgment-proof lessees. The distribution of oil products is a part of the business of oil companies, and the costs should be borne by them. \u201cOil companies should not be permitted to sever this part of their business to avoid the responsibility for injuries resulting in the conduct of that business.\u201d Lackey, supra.\nWe hold that Chevron is strictly liable for the torts of Sharp and Buss regardless of the legal relationship created by Chevron. This responsibility is placed on Chevron for the protection of the motoring public who consumes the product or uses the services of the station operator.\nThe summary judgment is reversed.\nIt is so ordered.\nLOPEZ, J., concurs.\nHERNANDEZ, J., specially concurring.", "type": "majority", "author": "SUTIN, Judge." }, { "text": "HERNANDEZ, Judge\n(specially concurring).\nI concur in the reversal of the judgment of the trial court solely for the reasons stated below.\nThe issue dispositive of this appeal is whether a genuine issue of fact exists with respect to the relationship between Chevron, the lessor, and Sharp, the lessee as this relationship affected the plaintiff. \u201cWhether or not a genuine issue of fact exists depends on the peculiar facts of each case.\u201d Goodman v. Brock, 83 N.M. 789, 498 P.2d 676 (1972). In ruling on a motion for summary judgment, all reasonable inferences drawn from the matters before the court are to be drawn in favor of the party opposing the motion. Goodman v. Brock, supra. Montoya v. City of Albuquerque, 82 N.M. 90, 476 P.2d 60 (1970).\nPlaintiff was the owner of a Toyota automobile which he had had repaired by defendant Sharp at the defendant\u2019s service station. Sharp, in addition to operating the service station, also maintained a \u201cfour wheel drive center\u201d on the premises and advertised this repair center by a sign on a jeep vehicle kept at the station. Sharp stated that as far as he was concerned the service station and the repair center were \u201call one business.\u201d\nSharp, operated the service station pursuant to a lease agreement between himself as lessee and Chevron Oil Company as lessor. The station was advertised as a Chevron station, sold Chevron products and dispensed gasoline and oil provided by the . Chevron organization. Both Sharp and his employees wore uniforms containing a Chevron emblem. Calling cards used as advertising materials by Sharp billed the station as \u201cLee Sharp Chevron.\u201d Customers of the Sharp station were permitted to charge purchases of both products and repairs on Chevron credit cards.\nBy the terms of the agreement running between Chevron and Sharp, Sharp was obligated to purchase his petroleum products from Chevron. He had an obligation to promote the sale of various other Chevron products and to display those products in prominent and convenient places. His hours of operation were regulated by the agreement and Chevron had the right of inspection of the premises to ensure that the Chevron image was not tarnished by improper or inefficient operation. The operation of the repair center was an integral part of the operation of the service station as a whole.\nAn examination of the telephone book advertising for Chevron stations shows that the Sharp station was included in a listing entitled \u201cWhere to get service.\u201d Moreover, Chevron owned the premises on which the Sharp station was located; and the Chevron organization operated other stations in the Albuquerque area directly without a lease arrangement. There is no evidence in the record that any advertising or publicity distinctions are drawn between the leased stations and those stations operated by Chevron sufficient to alert the general public to the differences.\nOn this appeal Chevron has attempted to set up the lease and operating agreements running between itself and Sharp as dis-positive of the issue of Chevron\u2019s liability to plaintiff. The \u201cDealer Lease\u201d and the \u201cSales Agreement\u201d set out in the record do, on their terms, significantly limit Chevron\u2019s control and thereby limit its liability to third parties for the negligent acts or omissions of Sharp or Sharp\u2019s employees. However, it appears from the record that neither of these agreements were made known to patrons of Chevron\u2019s service stations or to the public generally. Secret or private agreements between principal and agent or master and servant cannot, as a general rule, be used to bind third parties who deal with the servants or agents with no knowledge of the agreements. Sterling v. B. & E. Constructors, Inc., 74 N.M. 708, 397 P.2d 729 (1964); South Second Livestock Auction, Inc. v. Roberts, 69 N.M. 155, 364 P.2d 859 (1961). If plaintiff had no knowledge in fact of the agreements between Chevron and Sharp, the agreements cannot be used by Chevron to insulate itself from liability to third parties. Sterling v. B. & E. Constructors, Inc., supra.\nI believe that Chevron may be liable under the doctrine of respondeat superior for Sharp\u2019s actions. That doctrine \u201cis applicable during the period of time in which the prinicpal has the right to control an agent\u2019s or servant\u2019s physical actions.\u201d McCauley v. Ray, 80 N.M. 171, 453 P.2d 192 (1968). Since the relationship existing between Sharp and Chevron is crucial to a determination of liability I believe that the proper test is that set out in Shaver v. Bell, 74 N.M. 700, 397 P.2d 723 (1964) :\n\u201cWhether a station operator is an employee of an oil company or an independent contractor depends on the facts of each case, the principal consideration being the control, or right to control, of the operation of the station.\u201d\nInferences drawn from the record give me reason to believe that Chevron by its various advertising schemes, encouraged its lessee/operators to establish automobile repair facilities on the station premises. The telephone book advertising, for example, lists the Chevron stations in the Albuquerque area under a subheading of \u201cWhere to Get Service.\" The advertising schemes of Chevron indicate that Chevron attempts to convey the idea that service stations carrying its emblem are \u201cfull-service\u201d establishments able to perform most tasks of automobile maintenance and repair.\nFurthermore, there is evidence in the record from which it can be inferred that Chevron personnel knew of, and at least tacitly approved of, Sharp\u2019s establishing of the repair center at the station. Under the terms of the \u201cdealer lease\u201d Chevron had the authority to make periodic inspections of the Sharp station premises to ensure that the facilities were kept clean and neat, that the Chevron products were given proper display and that the station\u2019s operation conformed to the provisions of the agreements between Chevron and Sharp. There is evidence in the record that Chevron personnel did inspect the station while the repair center was in operation. No protests were lodged with Sharp and no complaints were made. At no time did Chevron contend that the operation of the repair center violates the terms of the \u201cdealer lease.\u201d\nChevron argues that the case of Shaver v. Bell, supra, renders them immune from liability here because the New Mexico Supreme Court in that case held that the defendant lessor was not liable in a slip and fall accident which occurred on the premises of a leased station. In Shaver, the service station operator was a sub-lessee of the corporate defendant, Cosden Petroleum Corporation. The only significant aspects of control to be found in that record were the use of the oil company\u2019s name and the sale of company products. \u201cCosden did not, at any time, send its personnel to check the premises, nor did it deal directly with the operator of the station on sales of its products to him.\u201d Shaver v. Bell, supra. While I do not believe that plaintiff has shown such control by Chevron over Sharp as to make Sharp an employee as a matter of law, I do believe that there are sufficient indicia of control to be found in this record to warrant the submission of the issue to a jury.\nMoreover, the element of control is not the exclusive factor in determining whether Sharp\u2019s actions may bind Chevron. Cf. Platco Corporation v. Shaw, 78 N.M. 36, 428 P.2d 10 (1967) (Concurring opinion by Moise, J.) Chevron may be liable on a theory of either apparent authority or agency by estoppel. There is a genuine question of material fact as to whether plaintiff here entered into the transaction under the reasonable belief that Sharp was authorized to bind Chevron in a valid contract or whether Chevron, having permitted Sharp to operate the repair center, should now be estopped from denying the agency. I agree with the reasoning in Gizzi v. Texaco, Inc., 437 F.2d 308 (3d Cir.), cert. denied, 404 U.S. 829, 92 S.Ct. 65, 30 L.Ed.2d 57 (1971), that\n\u201cThe concepts of apparent authority, and agency by estoppel are closely related. Both depend on manifestations by the alleged principal to a third person. . The manifestations of the principal may be made directly to the third person, or may be made to the community, by signs or advertising.\u201d\nI further agree with Gizzi that the plaintiff must have relied on the \u201cindicia of authority originated by the principal\u201d and that \u201csuch reliance must have been reasonable under the circumstances.\u201d\nThe issues of apparent authority and agency by estoppel as well as the element of reasonable reliance by the plaintiff are essentially questions of fact and must be resolved by the jury. Pribble v. Aetna Life Ins. Co., 84 N.M. 211, 501 P.2d 255 (1972).\nI specifically disagree with the discussion of the issues captioned \u201cdangerous activity\u201d and \u201cstrict liability.\u201d These issues were not raised by the pleadings, nor were they raised at the hearing on summary judgment or by any of the materials submitted by either party. Furthermore, they were not briefed or argued here.", "type": "concurrence", "author": "HERNANDEZ, Judge" } ], "attorneys": [ "Arthur O. Beach, Joseph L. Smith, Smith & Ransom Law Offices, Albuquerque, for plaintiff-appellant.", "Donald L. Jones, K. Gill Shaffer, Shaffer & Butt, Albuquerque, for defendantsappellees." ], "corrections": "", "head_matter": "514 P.2d 1301\nCharles M. SUTTON, Individually and Administrator and Personal Representative of the Estate of Mona Ray Sutton, Deceased, Plaintiff-Appellant, v. CHEVRON OIL COMPANY et al., Defendants-Appellees.\nNo. 1065.\nCourt of Appeals of New Mexico.\nJune 6, 1973.\nCertiorari Granted July 18, 1973.\nArthur O. Beach, Joseph L. Smith, Smith & Ransom Law Offices, Albuquerque, for plaintiff-appellant.\nDonald L. Jones, K. Gill Shaffer, Shaffer & Butt, Albuquerque, for defendantsappellees." }, "file_name": "0604-01", "first_page_order": 666, "last_page_order": 677 }