## Facts

- Flying Tiger Line, Inc. leased from Shell Oil Company a gasoline tank truck used to refuel aircraft; the truck had a movable ladder mounted on the tank.
- The lease assigned Flying Tiger responsibility for routine maintenance and certain specified repairs, while other repairs were to be made by Shell upon Flying Tiger’s request.
- In 1962, at Flying Tiger’s request, Shell removed the original ladder and had a replacement ladder furnished and installed under Shell’s direction; Shell and Flying Tiger participated in inspecting the replacement.
- In 1964, Flying Tiger employee Merton Price was climbing the replacement ladder during normal refueling operations when both legs split, causing him to fall and suffer serious injuries.
- Price sued Shell on negligence, warranty, and strict liability theories; Flying Tiger’s workers’ compensation carrier intervened to recover benefits paid.
- The trial court granted nonsuits for Shell on negligence and warranty, submitted only strict liability to the jury, and entered verdicts for Price and the insurer.
- Shell cross-complained for contractual indemnity against Flying Tiger; the trial court granted a nonsuit for Flying Tiger on the cross-complaint.

## Issues

1. Whether strict products liability applies to a commercial bailor/lessor of personal property, not just to sellers.
2. Whether substantial evidence supported imposing strict liability on Shell as the lessor that arranged installation of the replacement ladder.
3. Whether the lease’s indemnity provisions required Flying Tiger to indemnify Shell for Shell’s strict liability to Price and the insurer.

## Decision

- The California Supreme Court affirmed the judgments for Price and the insurer against Shell.
- The court held that strict liability in tort extends to commercial bailors and lessors of personal property.
- The court held substantial evidence supported the jury’s strict-liability verdict against Shell based on Shell’s provision of the replacement ladder as part of the leased equipment and the ladder’s failure during foreseeable use.
- The court affirmed the nonsuit for Flying Tiger on Shell’s indemnity cross-complaint, holding the lease did not clearly require indemnification for Shell’s strict liability.

## Legal Principles

- Strict products liability applies not only to sellers but also to commercial bailors and lessors who place defective products into use as part of a profit-seeking enterprise.
- A lessor may be strictly liable when it supplies a defective component of leased equipment that is used in a foreseeable manner and the defect proximately causes injury, without requiring proof of negligence.
- Indemnity clauses are construed narrowly; absent clear, unequivocal language, a lease will not be read to shift a lessor’s own strict-liability exposure to the lessee.

## Conclusion

The court extended strict products liability to commercial lessors and upheld a verdict against a lessor that arranged installation of a replacement ladder that failed in normal use, while refusing to interpret a lease indemnity clause as covering the lessor’s strict liability without explicit language.


Price v. Shell Oil Co., 466 P.2d 722 (Cal. 1970)