In Gainesville Glass, Judge Eberhardt, writing for the majority, cited Schmitt for the proposition that a subsequent consumer cannot recover on the warranty made to the initial consumer.Summary of this case from Lee v. Mylan Inc.
ARGUED JANUARY 10, 1974.
DECIDED APRIL 12, 1974. REHEARING DENIED MAY 9, 1974.
Action for damages. Hall State Court. Before Judge Smith.
Telford, Stewart Stephens, Charles W. Stephens, John E. Girardeau, for appellant.
Whelchel, Dunlap Gignilliat, George L. Simpson, III, for appellees.
An express warranty as to the quality, character, soundness, title, etc., to personalty runs only to the original purchaser unless the clear language of the contract of sale, including the warranty, makes it clear that it is also intended to extend to some identifiable third party or parties. The warranty does not run with the chattel. Second and subsequent buyers of the property, not being in privity with the original seller, generally may not enforce the warranty.
ARGUED JANUARY 10, 1974 — DECIDED APRIL 12, 1974 — REHEARING DENIED MAY 9, 1974 — CERT. APPLIED FOR.
W. W. Stewart brought suit against Gainesville Glass Company, Inc. and two other corporations, Shatterproof Glass Corporation and Shatterproof of Georgia, Inc. (parent-subsidiary corporations hereafter jointly referred to as "Shatterproof"), seeking to recover for breach of express and implied warranty with respect to insulating window glass installed in his home which later proved to be defective and failed to comply with the warranties. Shatterproof moved for summary judgment on the grounds, insofar as pertinent here, that plaintiff was not in privity of contract with it and therefore could not recover for breach of either express or implied warranty. The trial court agreed and granted summary judgment to Shatterproof on that basis, and plaintiff appeals with the assertion that lack of privity of contract is no defense to an action against the manufacturer of personal property for breach of express, as opposed to implied, warranty.
The record shows that in 1967 Shatterproof's subsidiary, Thermoproof Glass Company, manufactured the glass units in question and sold them to Gainesville Glass, Thermoproof's warranty responsibilities having been assumed by Shatterproof for purposes of this litigation. Gainesville Glass, as subcontractor, in turn sold the units to Hoyt Nix Construction Company, as general contractor, during the construction of the home, with the installation work being performed by Gainesville Glass as subcontractor. Apparently Hoyt Nix built the house for someone who in turn sold it to the plaintiff since the record shows by way of a pretrial order that "Parties agree that plaintiff was not the original owner of the property at the time of installation of the windows." In any event plaintiff purchased the home, whether from Hoyt Nix or from someone else, with the windows installed, one of the reasons for his purchase being the "nice view of Lake Lanier then visible through said glass."
During this period of time Thermoproof and, for purposes here, Shatterproof, had promulgated a set of papers which appear in the record bearing the notation "A. I. A. File No. 26-A-9," captioned "Therm-O-Proof Insulating Glass — made more ways to fit more ideas," and depicting "Specially fabricated bronze units in Western Michigan University Student Center, Kalamazoo, Michigan." The papers, which are several pages in length, contain technical material and descriptions as to how the insulating glass is made, "What to Specify," "How Therm-O-Proof Performs," "Approved Glazing Instructions," and other matter generally extolling the advantages and virtue of Thermoproof Insulating Glass. Included is the following: "Thermoproof Glass Company is a subsidiary of Shatterproof Glass Corporation of Detroit, Michigan with an international reputation for exceptional quality and reliable service. Each Therm-O-Proof insulating glass unit is backed by a 10 year warranty plus Shatterproof's 44 years of glass fabricating experience... The name Therm-O-Proof appears lightly etched on every unit ... your sign of the quality which is backed by the 10 year warranty. The trademark should be visible from the inside in the lower right-hand corner when glazed."
The express warranty contained in the papers is as follows: "Therm-O-Proof 10-year Warranty: Thermoproof Glass Company makes no warranty, express or implied, except that for a period of ten (10) years from the date of manufacture it warrants that under normal conditions, material obstruction of vision resulting from film formation or dust collection between the interior glass surfaces of Therm-O-Proof insulating glass units will not occur. This warranty will become void if Therm-O-Proof units are not handled and installed in accordance with the Therm-O-Proof Approved Glazing Instructions as printed on the Therm-O-Proof product label factory-affixed to all Therm-O-Proof units, in the current edition of Sweet's Architectural File 7a/th, and in other Therm-O-Proof nationally distributed literature; and it will be void [on certain other conditions with respect to improper handling, installation, etc.]. Thermoproof Glass Company reserves the right to have all units reported as being defective under this warranty field-inspected by a qualified factory representative and returned to the factory. Our maximum liability under this warranty shall be the delivery of replacement Therm-O-Proof units to the shipping point nearest the place of installation. This warranty does not apply to such replacement lights beyond the ten-year period applying to the original unit; nor does it apply when Therm-O-Proof units are used in ships, moving vehicles or outside Continental United States." According to Thermoproof's affidavit, the above warranty and glazing instructions were in effect in 1967 when the units were manufactured and installed.
Approximately four years after manufacture and installation in the home purchased by plaintiff, the units in question became hardened and brittle and developed a material obstruction of vision because of film formation, moisture and dust collection inside the glass surfaces. Shatterproof faulted Gainesville Glass for failure to install in accordance with the Approved Glazing Instructions and contended below that the warranty was thus violated. Since the trial court limited its judgment to the privity issue, no other is before us and we must likewise limit our consideration to that matter.
While we agree that the result sought by appellant is a very desirable one and that it is compatible with general commercial practices extant in this country, yet we have been unable to square it with the law as heretofore decided and by which we are bound.
Prior to 1957 when the Manufacturer's Liability statute was adopted (Ga. L. 1957, p. 405), there could be no tort liability against the manufacturer of an item beyond the first purchaser or consumer. An exception appeared when sealed packages were sold first to a wholesaler and then to a retailer before it reached the consumer in the channels of trade, the courts having considered that the wholesaler or retailer was but a conduit from the manufacturer to the consumer. Armour Co. v. Miller, 169 Ga. 201 ( 149 S.E. 698). The same was true as to items which were, by their nature, inherently dangerous. Blood Balm Co. v. Cooper, 83 Ga. 457 ( 10 S.E. 118); Watson v. Augusta Brewing Co., 124 Ga. 121 ( 52 S.E. 152).
The Act of 1957 provided for an implied warranty of fitness from the manufacturer to the purchaser and to members of the purchaser's household or his guests, who might reasonably be expected to use the goods and who might suffer harm from an ordinary use of them. But that statute was expressly repealed by the adoption of the Uniform Commercial Code in 1962. Code Ann. § 109A-10-103.
Tort liability against the manufacturer of a defective item sold as new property, was provided irrespective of privity, to any person who might use or consume the property and be adversely affected by Ga. L. 1968, p. 1166 (Code Ann. § 105-106).
But the law as to liability under a warranty still requires privity.
We have recently held that liability does not go beyond the first user or purchaser where there is reliance upon an implied warranty and that another cannot recover thereon because of a lack of privity. Chaffin v. Atlanta Coca-Cola Bottling Co., 127 Ga. App. 619 (1) ( 194 S.E.2d 513); Verddier v. Neal Blum Co., 128 Ga. App. 321 ( 196 S.E.2d 469); Evershine Products, Inc. v. Schmitt, 130 Ga. App. 34 ( 202 S.E.2d 228).
This was in keeping with prior holdings relative to implied warranties of fitness in Dukes v. Nelson, 27 Ga. 457, 463, and in Van Winkle Co. v. Wilkins, 81 Ga. 93, 105 ( 7 S.E. 644), where it was asserted that "Such covenant or warranty would not pass with the machinery to the corporation or second purchaser, so as to shift the right of action to the new party. No principle is in sight which would either divest the first purchasers of their right of defense as against the purchase money, or invest the new party with any right whatever as against the manufacturers or first vendors." Further, "In a sale of personal property the warranty is not negotiable or assignable, and does not run with the article sold." Smith v. Williams, 117 Ga. 782 (1) ( 45 S.E. 394). Any cases from this court which may conflict with these Supreme Court cases must yield.
Here we deal with an express warranty, rather than an implied warranty, and it would appear that the privity requirement applies with even more force. See Broughton v. Badgett, 1 Ga. 75. The implied warranty is raised by statute, while the express warranty is by contract. Elgin Jewelry Co. v. Estes Dozier, 122 Ga. 807 (1) ( 50 S.E. 939). The express warranty is a representation or statement made by the seller at the time of the sale and as a part thereof, having reference to the quality, character, or title to the goods, and of course is a part of the transaction between the seller and the purchaser.
It has long been the law of this state that an action on a contract must be brought in the name of the party in whom the legal interest in the contract vests. Code Ann. § 3-108. Even a third-party beneficiary could not sue on it until this section was amended in 1949 to provide that "The beneficiary of a contract made between other parties for his benefit may maintain an action against the promisor on said contract." Since the Supreme Court has already held that a warranty of personalty does not run with the chattel and does not pass to the second or subsequent purchasers, we can not see how plaintiff here can qualify as a third-party beneficiary. The mere fact that he would benefit by a performance of the warranty does not make him a third-party beneficiary. McWhirter Material Handling Co. v. Georgia Paper Stock Co., 118 Ga. App. 582 ( 164 S.E.2d 852). It must clearly appear from the contract that it was intended for the plaintiff's benefit, as, for example, in a trust or an insurance policy. Cf. Clarke v. Fanning, 127 Ga. App. 86 (1) ( 192 S.E.2d 565). A third-party beneficiary contract is one in which the promisor engages to the promisee to render some performance to a third person. Slate v. Boone County Abstract Co. (Mo.) 432 S.W.2d 305, 307. It must appear that both parties to the contract intended that a third person should be the beneficiary. Spires v. Hanover Fire Ins. Co., 364 Pa. 52 ( 70 A.2d 828).
It may well be time that some change in our law should come relative to manufacturers' warranties. The Supreme Court, by whose decisions we are bound could declare a new policy, or the General Assembly could do so and thus make warranties of the kind here involved apply to any purchaser or user of the chattel within the designated warranty period. We do not have that power.
Since there is clearly no privity here, the judgment is affirmed.
Judgment affirmed. Pannell, J., concurs. Evans, J., concurs specially.
I concur in the majority opinion most reluctantly. "There ought to be a law" that would protect the ultimate consumer against the manufacturer of products where same are defective. But alack and alas! In the State of Georgia, unless there is privity between the parties (which in terms of the law means unless the ultimate consumer actually bought the products from the manufacturer) there is no liability under an express warranty or under an implied warranty. To make it very plain, if John Jones purchases goods from a hardware store, and the goods are completely worthless, he cannot go back on the manufacturer, simply because he did not purchase directly from the manufacturer. If some middleman sells the product to the purchaser, as is almost always the case, then the purchaser may as well forget express warranty or implied warranty by the manufacturer, because of a lack of privity. Judge Pannell makes this quite clear in the case of Evershine Products, Inc. v. Schmitt, 130 Ga. App. 34, 35 36 ( 202 S.E.2d 228), but points out that warranty to a purchaser includes the members of his household or family and guests in his home. Code Ann. § 109A-2-318.
Code Ann. § 105-106, at first blush, appears to give rise to a cause of action, but in Evershine Judge Pannell, at page 37, shows that such a suit is not based on negligence of the manufacturer, but because the manufactured product is not merchantable, and that as this would be a suit under an implied warranty, it is barred.
In Chafin v. Atlanta Coca Cola Bottling Co., 127 Ga. App. 619, at 620 ( 194 S.E.2d 513), Judge Bell comments on the fact that the ultimate buyer cannot sue the manufacturer directly on implied warranty, unless the purchase was made directly by the purchaser from the manufacturer.
Thus, the party who finally comes into possession of inferior products, unless he purchased directly from the manufacturer, is without a remedy.