Eli v. Murphy

In Eli v. Murphy (1952) 39 Cal.2d 598, the plaintiffs were injured when their car was hit by a tractor-trailer owned by Leo Murphy and driven by James Murphy. At the time of the accident, the Murphys were transporting freight under a contract with California Motor Transport Co. (C.M.T.), a motor carrier (then called a "highway common carrier") licensed by the Public Utilities Commission. Plaintiffs sued the Murphys and C.M.T., and the trial court instructed the jury that if it found James liable to the plaintiffs, it should also find Leo and C.M.T. liable. (39 Cal.2d at pp. 598-599.) C.M.T. appealed from the resulting verdict against it, contending that because Leo was an independent contractor, it was not liable for the negligence of Leo's driver/employee. The Supreme Court disagreed. Citing section 428 of the Restatement Second of Torts (work performed under a public franchise), the court noted that C.M.T., operating as a highway common carrier, "is engaged in a 'business attended with considerable risk' citations, and the Legislature has subjected it and similar carriers to the full regulatory power of the Public Utilities Commission to protect the safety of the general public." (Eli v. Murphy, supra, 39 Cal.2d at pp. 599-600.) The effectiveness of the Public Utilities Commission's regulatory authority necessarily would be impaired if the carrier were permitted to conduct business "by engaging independent contractors over whom it exercises no control. If by the same device it could escape liability for the negligent conduct of its contractors, not only would the incentive for careful supervision of its business be reduced, but members of the public who are injured would be deprived of the financial responsibility of those who had been granted the privilege of conducting their business over the public highways." (Id. at p. 600.) Accordingly, "both to protect the public from financially irresponsible contractors, and to strengthen safety regulations, it is necessary to treat the carrier's duties as nondelegable. ." (Ibid.) "Highway common carriers may not, therefore, insulate themselves from liability for negligence occurring in the conduct of their business by engaging independent contractors to transport freight for them." (Id. at p. 601.)