On Petition for Rehearing

Ames Sand and Gravel Company, Inc., has petitioned for a rehearing, pointing out that this court's opinion did not resolve or discuss the issue of indemnity to Ames Sand and Gravel Company, Inc., from Schultz & Lindsay Construction Company.

In our opinion we directed the district court to enter a judgment on remittitur in favor of the plaintiffs and against the defendants, Schultz & Lindsay Construction[206 N.W.2d 892]

Company and Ames Sand and Gravel Company, Inc., in the amount of $13,043.13, plus interest. There is no challenge to the judgment on remittitur in this petition for rehearing. It appears that the petitioner, Ames Sand and Gravel Company, Inc., has reference to its cross claim contained in its separate answer and cross claim in which it cross-claimed against its coparty defendant, Schultz & Lindsay Construction Company, for "indemnity and/or contribution" should the plaintiffs, the Bjerkens, recover judgment against them.

It appears that in each of the two trials in the district court it entered judgment against the plaintiffs on the counterclaim of Schultz & Lindsay Construction Company, and dismissed the action against the defendant, Ames Sand and Gravel Company, Inc. Thus the trial court did not pass upon the cross-claim.

The lease upon which the Bjerkens sued was entered into by both of the defendants. However, on January 1, 1959, subsequent to the date of the lease of April 5, 1957, an "agreement" was entered into covering the lease and other matters between the respective defendants, subsidiary corporations of Schultz & Lindsay Construction Company, certain individuals, and the widow of a deceased corporate officer of one of the corporations. It also appears that the Bjerkens consented to the agreement by an instrument entitled "Consent to Assignment" but provided therein that nothing contained in the agreement would release or discharge Ames Sand and Gravel Company, Inc., or Schultz & Lindsay Construction Company from their liability as lessees under the lease of April 5, 1957. The business arrangement entered into and contained in the agreement of January 1, 1959, envisions a complicated business arrangement which cannot be determined by this court in the first instance upon the record in this case.

For the reasons set forth above, we modify our decision and direct that the trial court enter judgment on remittitur in favor of the plaintiffs and against the defendants, Ames Sand and Gravel Company, Inc., and Schultz & Lindsay Construction Company, in the amount of $13,043.13, plus interest at the legal rate from April 5, 1967, and also proceed to a trial of the issues involved as a result of the cross claim of the defendant, Ames Sand and Gravel Company, Inc., against Schultz & Lindsay Construction Company, and adjudicate the cross claim on its merits.

Obert C. Teigen
Alvin C. Strutz, C.J.
William L. Paulson
Ralph J. Erickstad