Summary
In United Pacific Ins. Co. v. Balcrank, Inc., 175 Ohio St. 267, 193 N.E.2d 920, Ohio Supreme Court held that a retailer which is held liable to a purchaser for negligence in failing to discover a defect in a product sold to the retailer by a manufacturer can recoup its loss against the manufacturer on the basis of a breach of warranty.
Summary of this case from Stephenson v. Duriron CompanyOpinion
No. 37610
Decided November 13, 1963.
Warranty — Manufacturer-seller warrants article strong and durable — Buyer-retailer from manufacturer-seller purchases in reliance on warranty — Individual injured by defective article recovers from buyer — Buyer's right of action against manufacturer — Recovery not dependent on negligence or actual knowledge of defect.
1. Where from the evidence it may reasonably be found that injury to an individual was proximately attributable to a defective article which broke and collapsed and which was warranted by the manufacturer and seller thereof to be strong and durable and suited to the purpose for which it was sold, the buyer bought the same directly from the manufacturer and seller in reliance on such warranty, and the injured individual recovers damages from the buyer for the buyer's negligence in failing to discover the defect, the buyer may properly maintain an action against the manufacturer and seller to recoup his loss on the basis of a breach of warranty.
2. Where there is a breach of warranty by the manufacturer and seller of an article, he is subject to liability for damages proximately caused by such breach, and the recovery of damages from him for such breach does not depend on his negligence or his actual knowledge of a defective condition.
3. Where the buyer of an article has been compelled to pay damages to a person for injuries caused by the defective condition of such article, manufactured and supplied by the seller thereof, the buyer has a right of action against the seller based on breach of warranty.
4. The consequential damages sustained on account of a buyer's responsibility for injury to another are not too remote for recovery in an action for breach of warranty against the manufacturer and seller, where the latter was aware of the use to which the buyer intended to put the purchased article.
APPEAL from the Court of Appeals for Hamilton County.
The United Pacific Insurance Company, a Washington corporation and hereinafter called the insurer, as subrogee of its insured, the Boyle Furniture Company of the city of Ogden, Utah, hereinafter called Boyle, instituted this action in the Court of Common Pleas of Hamilton County to recover the sum of $7,762.08, with interest, from Balcrank, Inc., of Cincinnati, being the amount paid by the insurer to satisfy a judgment, plus court costs and expenses, recovered against its insured, Boyle, in the District Court of Weber County, Utah, on account of personal injuries sustained by a Boyle customer.
It appears that Boyle purchased from Balcrank, the manufacturer and distributor, a number of folding aluminum chairs upon the following written representation:
"Designed and constructed to match all competition. Priced to build traffic, big volume sales and profit. A `regular-size' chair — smart in appearance, sturdily constructed with all the important Shott features which make it light weight, durable. roomy and comfortable."
Upon receipt of the chairs, fully assembled and packed four to a carton, Boyle placed some of them on display in its retail store. Visual inspection, upon removal of a protective coating from the aluminum, showed no imperfections. A customer, named Fehlman, who weighed 180 pounds, sat in one of the chairs and moved about in it. It broke and collapsed. He was precipitated to the concrete floor and sustained substantial injuries. Fehlman sued Boyle in an action grounded on negligence. Balcrank was notified of the suit, tendered its defense, and advised that it would be held responsible for any loss incurred. Trial was had, Balcrank made no appearance, and a verdict and judgment were rendered against Boyle as indicated above.
The present action was tried in the Court of Common Pleas, without a jury, upon the petition, alleging warranty of the chair and the breach of such warranty, upon the answer, admitting advice as to the pendency of the action in Utah and denying generally all other allegations of the petition, and upon the pleadings and a transcript of part of the evidence introduced in the Utah trial.
Judgment was rendered for the insurer in the sum of $7,762.08, with interest at six per cent from June 19, 1958, for the following reasons, as stated in the judgment entry:
"1. The defendant [Balcrank] expressly warranted and represented of Boyle Furniture Co. the folding chair in question was sturdily constructed and designed to meet all competition; whereas in fact it was defective and not constructed in keeping with the warranty.
"2. If it be considered there was no express warranty then, without question, there was an implied warranty that the folding chair in question was reasonably safe for the purpose for which it was intended.
"3. Plaintiff's assignor and subrogee was secondarily liable for the wrongful injury to William J. Fehlman, and, having been required to respond in damages to Fehlman it is entitled to recover its loss from the defendant tort-feasor who was primarily liable upon the doctrine of an implied contract of indemnity.
"4. The defendant failed to use reasonable care and skill in the manufacture of the chair in question which caused a defect that ultimately resulted in injury to Fehlman."
An appeal on questions of law to the Court of Appeals resulted in a reversal of the judgment below and final judgment for Balcrank for the reasons stated in the judgment entry (there was no written opinion) that "there is no evidence contained in the record of any defect existing or occurring in the chair in question by reason of the manufacturing process or thereafter while in the possession or control of defendant-appellant and thus no evidence of any negligence or breach of warranty upon the part of defendant-appellant, and for the further reason that plaintiff-appellee having paid and satisfied a judgment against its insured has no greater right of reimbursement than its insured."
Allowance of the insurer's motion to require the Court of Appeals to certify the record brings the cause here for review and decision.
Mr. Milton M. Bloom and Mr. Gordon C. Greene, for appellant.
Messrs. Pogue, Helmholz, Culbertson French and Mr. Edward J. Utz, for appellee.
If the present action against Balcrank was maintainable by Boyle, Boyle's insurer, as subrogee, has a right to bring and maintain the action in its own name, and its rights and position are the same as Boyle's.
We think this case can and should be decided on the basis of warranty. In the case of Rogers v. Toni Home Permanent Co., 167 Ohio St. 244, 147 N.E.2d 612, 75 A.L.R. (2d), 103, this court defined an "express warranty" as "an affirmation of fact by the seller as to a product or commodity to induce the purchase thereof, on which affirmation the buyer relies in making the purchase." Of similar import is the definition contained in applicable Section 1315.13, Revised Code, a part of the now repealed Uniform Sales Act. And see Section 1302.26, Revised Code, a part of the existing Uniform Commercial Code.
To induce the sale of its folding aluminum chairs, Balcrank expressly represented in writing that they were "sturdily constructed" and "durable." In purchasing the chairs, Boyle had a right to rely on such representations and was motivated in making the purchase by such definite affirmations.
Fehlman, Boyle's injured customer, sued Boyle on the theory of negligence, alleging in his complaint that Boyle "caused to be placed upon its showroom floor a defective and dangerous chair * * * when the defendant knew, or should have known, that the chair was defective and dangerous." It is conceivable that the jury rendered its general verdict against Boyle upon a determination that Boyle "should have known" of the chair's dangerous condition, thereby predicating its verdict for Fehlman on that finding.
As pointed out, Boyle's liability to Fehlman was based upon negligence, whereas Balcrank's liability, if any, to Boyle rests upon the claimed breach of an express warranty. The two liabilities are different in character and kind.
Balcrank insists that, if any fault may be attached to it, it and Boyle are in pari delicto, and, therefore, Boyle's insurer as subrogee must be denied recovery. However, Boyle's dereliction was independent of and different from any dereliction on the part of Balcrank in point of both fact and time, and it is difficult to place the two in the category of joint tort-feasors. The present action is one for recovery of indemnity growing out of a breach of warranty, which sounds in contract; it is not an action for contribution in tort. The controlling consideration now confronting us is whether Fehlman's injuries were proximately due to Balcrank's breach of warranty or to Boyle's failure to discover imperfections in the chair which collapsed. Boyle incurred liability to Fehlman because of its failure to discover and guard against the imperfections, and such failure was at least presumptively due to its reliance on Balcrank's guaranty that the chair was "sturdily constructed" and "durable" and adapted for the purpose to which it was to be put.
It is nowhere indicated or suggested that Boyle mishandled or tampered with the chair in any way. It was taken from its container, inspected, cleaned and placed immediately on Boyle's salesroom floor in the condition it was when received. A chair, particularly a new one, assembled, packaged and shipped by the manufacturer directly to the buyer, designed to seat all kinds of people and expressly represented to be sturdy and durable, should not break and collapse even under rough treatment, and, when it does, the reasonable and permissible deduction is that such collapse is directly due to a structural weakness and defect against which it was warranted. Where there is a breach of warranty by the manufacturer and seller of a product, he is subject to strict liability, and the recovery of damages from him for the breach does not depend on negligence or actual knowledge of a defective condition. Basin Oil Co. v. Baash-Ross Tool Co., 125 Cal.App.2d 578, 596, 271 P.2d 122, 132; Ver Steegh v. Flaugh, 251 Iowa 1011, 1025, 103 N.W.2d 718, 726; Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 372, 161 A.2d 69, 77, 75 A.L.R. (2d), 1, 13.
In short, the fact that the buyer of an article becomes liable in damages to a third person for injuries arising from a defect in such article due to the buyer's negligence does not preclude the buyer from recouping his loss from the seller on the basis of a breach of warranty. London Guarantee Accident Co., Ltd., v. Strait Scale Co., 322 Mo., 502, 513, 15 S.W.2d 766, 769, 64 A.L.R., 936, 941.
Section 1315.70, Revised Code, a part of the now repealed Uniform Sales Act, but which governs this case, expressly recited that "the measure of damages for breach of warranty is the loss directly and naturally resulting, in the ordinary course of events from the breach of warranty." So, where a buyer of merchandise has been compelled to pay an injured person damages on account of the defective condition of such merchandise, manufactured and supplied by the seller thereof, the courts have consistently upheld the buyer's right of action against the seller based on breach of warranty. General Aniline Film Corp. v. A. Schrader Son, Inc., 12 N.Y. (2d), 366, 190 N.E.2d 232, 233. See, also, Boston Woven Hose Rubber Co. v. Kendall, 178 Mass. 232, 59 N.E. 657, 51 L.R.A., 781.
The generally accepted rule of law is that the consequential damages sustained on account of a buyer's responsibility for injury to a customer are not too remote for recovery in an action by the buyer for breach of warranty against the manufacturer and seller, where the latter was aware of the use to which the buyer intended to put the purchased article. General Home Improvement Co. v. American Ladder Co., Inc., 26 N.J. Misc., 24, 26, 56 A.2d 116, 117 (disapproved for other reasons in Henningsen v. Bloomfield Motors, Inc., supra [ 32 N.J. 358, 416, 161 A.2d 69, 101, 75 A.L.R. (2d), 1, 38]).
For additional cases and citations supporting the rule that a buyer of warranted goods who is required to pay damages to a third person for injuries due to a defect in those goods, resulting from the seller's breach of warranty, has a right of action against the seller, see Heath v. Channel Lumber Co., 25 N.J. Sup., 6, 9, 95 A.2d 425, 427.
Upon the record before it, we are persuaded that the Court of Common Pleas herein justifiably made its findings and entered judgment against Balcrank, and that the Court of Appeals was in error in reversing that judgment and rendering final judgment against Boyle's insurer. Accordingly, the judgment of the Court of Appeals is reversed and that of the Court of Common Pleas affirmed.
Judgment reversed.
TAFT, C.J., MATTHIAS, O'NEILL, GRIFFITH, HERBERT and GIBSON, JJ., concur.