BROWN ET ux, Aрpellants, v. WESTERN FARMERS ASSOCIATION, Respondent.
Supreme Court of Oregon
April 26, 1974
521 P.2d 537 | 268 Or. 470
Argued February 6, affirmed April 26, 1974
James C. Van Voorhees, Prineville, argued the cause for respondent. With him on the brief were Bodie, Minturn, Van Voorhees & Larson, Prineville.
TONGUE, J.
This is an action against the manufacturer and retailer of chicken feed for damages because the feed was defective. The complaint seeks recovery on a theory of strict liability.1 In addition tо seeking damages for loss of eggs caused to taste bad, for loss of chickens caused to become valueless and which had to be replaced, and for the cost of the defective feed, the complaint seeks to recover lost profits from plaintiffs’ egg business in the sum of $11,000.
The court, on motion by defendant Western Farmers Association, the manufacturer, struck the allegations of loss of profits. Plaintiffs refused to plead further and the court enterеd an order dismissing the case as to that defendant.2 Plaintiffs appeal. We affirm.
It is contended by defendant, however, that regardless of whether recovery under
Because of the importance of this question and
In their supplemental brief plaintiffs state the recognized rule that when a question whether a complaint states a cause of action is raised for the first time on appeal, the complaint will be liberally construed in favor of the plaintiffs. Plaintiffs point out that the complaint, after alleging that the chicken feed was fed to the laying hens, goes on to allege:
“That the said feed so purchased was defectivе and such defect in the feed was such that when the feed was fed to the plaintiffs’ chickens, the chickens were affected adversely and damaged thereby.”
Plaintiffs contend that:
“The obvious inference from these allegations is that the feed was defective and in damaging the chicks to which it was fed it obviously was not fulfilling the reasonable expectations of the plaintiffs, because chicken feed is not expected to damage one‘s chickens so that their eggs taste bad and they quit laying eggs, as is also alleged in paragraph V.”
Plaintiffs then quote from our decision in Heaton v. Ford Motor Co., 248 Or 467, 471, 473, 435 P2d 806 (1967), in which we expressly adopted the rule as stated in
“What this seems to be saying is that if a product does not meet the reasonable expectations of an ordinary consumer it is defective and in a condition unreasonably dangerous to the user.”
Similarly, plaintiffs construe
“What this is obviously saying is that if a product has a defect and because thereof it is in a condition not reasonably contemplated by the ordinary
consumer, the product is by definition unreasonably dangerous.”4
Based upon this reasoning, plaintiffs conclude as follows:
“We submit that under the Restatement and the Heaton case law this complaint has alleged facts, i.e. a defect and a condition not reasonably contemplated by the ultimate consumer which in effect says the product was unreasonably dangerous. That certainly is to be inferred from the language of the complaint. In construing it for the first time on appeal the plaintiffs should have the benefit of all reasonable inferences to be drawn from the facts alleged.”
Defendant responds to these contentions as follows:
“A material and necessary element of strict liability under Section 402A of the Restatement of
Torts 2d is that the property be ‘unreasonably dangerous’ to its user or consumer or to the user or consumer‘s property. Restatement of Torts 2d, Section 402A. HEATON v. FORD MOTOR CO., 248 Or 467, 470-471, 435 P 2d 806 (1967).
“* * * * *
“The defect in the feed is not specified. If the defect was, for example, ground glass, the court could state without any question that the feed itself because of the defect was unreasonably dangerous to the chickens. On the other hand, if the defect was too much of an ingredient, the feed itself might not be unreasonably dangerous, except in the manner in which it was fed or eaten by the chickens.
“Therefore, from the plaintiff‘s complaint it is not clear whether or not the plaintiff is claiming that the defective chicken feed was ‘unreasonably dangerous’ or merely that the feed was defective. Both elements are required.”
In considering these opрosing contentions we recognize that some authorities go even further than plaintiffs and take the position that recovery on a theory of strict liability by a consumer or user of defective goods is not dependent upon proof that such goods are “unreasonably dangerous.”5 This court, however, in its development of a theory of strict liability for application in cases involving defective products, has proceeded on the basis of quite different underlying assumptions.
In the first of these cases, Wights v. Staff Jennings, 241 Or 301, 405 P2d 624 (1965), a personal in-
On the same date, in Price v. Gatlin, 241 Or 315, 405 P2d 502 (1965), we affirmed the dismissal of an action to recover for economic loss resulting from the purchase of a defective tractor by a farmer, a “nonprivity” purchaser, in the absence of proof of “fault,” holding (at 318) that:
“* * * [T]he social and economic reasons which courts elsewhere have given for extending entеrprise liability to the victims of physical injury are not equally persuasive in a case of a disappointed buyer of personal property. See Seely v. White Motor Company, 45 Cal Rptr 17, 403 P2d 145 (1965).”
Two years later, in Heaton v. Ford Motor Co., supra, a personal injury case, we stated (at 470-71) that:
“* * * In the case at bar, we now adopt Section 402A and hold that if the product is in fact unreasonably dangerous the manufacturer is liable for the harms caused by such a defect. It is not necessary to prove that the product is ‘ultrahazardous,’ nor that it was placed оn the market ‘neg-
ligently.’ It is necessary, however, to prove that it is dangerously defective.
“An article is dangerously defective when it is in a condition unreasonably dangerous to the user. Restatement (Second) of Torts § 402A. Unreasonably, in this context, means dangerous to an extent beyond that which would be contemplated by the ordinary purchaser. * * *” (Emphasis added)
Since our decision in Heaton we have consistently held that our adoption of
After reviewing our previous decisions in cases involving actions in strict liability by the purchasers of defective goods, as well as other cases and authorities on this subject,6 we reaffirm our belief that when
The complaint in this case does not, in our judgment, allege facts from which it appears, either directly or by inference, that the chicken feed involved in this case was “unreasonably dangerous,” rather than merely “defective” in some manner that would not make it “unreasonably dangerous.”7 We do not agree with plaintiff‘s contention that “if a product has a defеct and because thereof it is in a condition not reasonably contemplated by the ordinary purchaser, the product is by definition ‘unreasonably dangerous.‘”
Neither do we agree with the contention of the dissenting opinion by O‘CONNELL, C. J., that “the only question is whether the damage caused by the feed was that which would be contemplated by the ordinary purchaser.” This, according to the dissent, would include any damage that would decrease the value of plaintiffs’ prоperty.
Under that rationale, a dog food which caused a champion show dog to lose the gloss of its coat, thus decreasing its value as a show dog, would be “unreasonably dangerous” despite the fact that the health of the dog was in no way impaired. Or inferior baking powder may cause an entire batch of bread in a commercial bakery to not “rise” in the normal manner, thus impairing the saleability of the bread, although not affecting its qualities of nourishment.
The only two decisions by this court in which
As previously pointed out, we held in Price v. Gatlin, supra, that the reasons for extending enterprise liability to the victims of physical injury are not equally persuasive in a case of a disappointed buyer of personal property.
As also stated by HOLMAN, J., concurring, in Price v. Gatlin, supra (at 319):
“* * * In establishing liability in personal injury cases courts have been motivated to overlook any necessity for privity because the hazard to life and health is usually a personal disaster of major proportions to the individual both physically and financially and something of minor importance to the manufacturer or wholesaler against which they can protect themselves by a distribution of risk through the price of the article sold. There has not been the same social necessity to motivate the recovery for strictly economic losses where the dam-
aged person‘s health, and therefore his basic earning capacity, has remained unimpaired. To enforce strict liability for personal injuries because of such necessity and then to allow recovery for purely economic losses because they arise from the same defect is to apply the doctrine of strict liability when the original motivating factor therefor is not present. * * *”
See also State ex rel Western Seed v. Campbell, supra.
We need not decide in this case whether our adoption of the rulе of strict liability, as stated in
We believe, however, that the term “unreasonably dangerous,” as usеd in
For these reasons we hold that the trial court did not err in striking the allegations of the complaint alleging loss of profits or in dismissing the complaint upon plaintiffs’ refusal to plеad further. It follows that we need not decide in this case whether, in an ac-
Both the specially concurring opinion and the dissenting opinion by O‘CONNELL, C. J., propose the adoption of a rule to the effect that the remedy for breach of warranty under the Uniform Commerciаl Code should be the sole remedy in this case, to the exclusion of any remedy under
For all of these reasons, we affirm the judgment of the trial court.
DENECKE, J., specially concurring.
Confusion was created in this field of law because commercial contract concepts covering claims of economic loss were shaped to impose liability for
In the present case the plaintiff is now attempting to reverse the field and use the new tort of strict liability to impose liability with facts which have been governed by commercial contract principles. For example, see Kassab v. Central Soya, 432 Pa 217, 246 A2d 848 (1968), in which plaintiff contended that defective feed lowered the value of his cows. I am of the opinion that the remedy for breach of warranty that a buyer has under the Uniform Commercial Code (UCC) is adequate and should be a buyer‘s sole remedy. It is unnecessary and unwise to bring the confusion of the tort of strict liability to commercial transactions.
I categorize this as a case that should be governed solely by the UCC because of two characteristics: (1) the loss claimed is purеly economic, loss of profits; and (2) the loss was not an “accidental” one such as the loss in Wulff v. Sprouse-Reitz Co., Inc., 262 Or 293, 498 P2d 766 (1972).
The UCC requirement of notice of breach of warranty,
In my opinion there is a need for certainty in this field that outweighs my inability to state more
O‘CONNELL, C. J., dissenting.
The majority holds that the complaint does not allege facts from which it could be found that the defective chicken feed was “unreasonably dangerous” within the meaning of
The complaint alleged that the defect in the feed “was such that when the feed was fed to the plaintiffs’ chickens, the chickens were affected adversely and damaged thereby.” As we noted in Heaton v. Ford Motor Co., 248 Or 467, 435 P2d 806 (1967), the term “unreasonably dangerous” in the context of § 402A “means dangerous to an extent beyond that which would be contemplated by the ordinary purchaser.” It is clear that the section was intended to include the danger of damaging property as well as injuring the user or consumer. See
Since damagе to property falls within the ambit of § 402A, the only question is whether the damage caused by the feed was that which would be contemplated by the ordinary purchaser. I should think that if the feed had killed the chickens, the damage would
The majority оpinion reads plaintiffs’ brief as arguing that a product is unreasonably dangerous under § 402A in every case where the product does not meet the reasonable expectations of an ordinary consumer. I do not so interpret plaintiffs’ argument. Plaintiffs argue only that if a defective product causes damage there is a right to recover, but only if the article is found to be dangerous to an extent beyond that which would be contemplated by the ordinary consumer who рurchases it.
The majority opinion would permit recovery for property damage under § 402A only if the product were found to be unreasonably dangerous to human life. This seems to be the import of the court‘s statement that “[t]he only two decisions by this court in which Section 402A has been applied to property damage have been cases in which the defective product also posed an unreasonable danger to human life and safety.” It is not illogical to argue that recovery under § 402A should be limited to damage for personal injuries,9 but it is incomprehensible to me to say that a product must constitute a risk of injury to human life before recovery will be allowed for property damage, even though in the particular instance in which the property damage occurred no person suffered any harm. Apparently the court would hold that recovery would be allowed for the damage to the chickens if it
The trial court struck the allegations of loss of profit, apparently upon the basis of our holding in Price v. Gatlin, 241 Or 314, 405 P2d 502 (1965). For the reasons set forth in my dissent in that case, I would not preclude recovery for loss of profits in the present case.
I have previously expressed the opinion that this type of case should not be dealt with under § 402A of the Restatement (Second) of Torts since it is controlled by the Uniform Commercial Code (
HOLMAN, J., dissenting.
I agree with that part of the dissenting opinion of the Chief Justice which holds that the feed was unreasonably dangerous to plaintiffs’ property (chickens) as contemplated by
The results in Price v. Gatlin and State ex rel Western Seed v. Campbell, 250 Or 262, 442 P2d 215 (1968), cert. denied, 393 US 1093, 89 S Ct 862, 21 L Ed 2d 784 (1969), are not to the contrary because in neither of these cases was there any damage to property caused by the defective product. There was merely the loss of anticipated business profits because the product did not perform to expectation.
Where there is damage to person or property and the law of damages would normally allow loss of anticipated business profits resulting therefrom, recovery for such loss should follow.
Notes
“i. Unreasonably dangerous. The rule stated in this Section applies only where the defective condition of the рroduct makes it unreasonably dangerous to the user or consumer. Many products cannot possibly be made entirely safe for all consumption, and any food or drug necessarily involves some risk of harm, if only from over-consumption. Ordinary sugar is a deadly poison to diabetics, and castor oil found use under Mussolini as an instrument of torture. That is not what is meant by ‘unreasonably dangerous’ in this Section. The article sold must be dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics. Good whiskey is not unreasonably dangerous merely because it will make some people drunk, and is especially dangerous to alcoholics; but bad whiskey, containing a dangerous amount of fusel oil, is unreasonably dangerous. Good tobacco is not unreasonably dangerous merely because the effects of smoking mаy be harmful; but tobacco containing something like marijuana may be unreasonably dangerous. Good butter is not unreasonably dangerous merely because, if such be the case, it deposits cholesterol in the arteries and leads to heart attacks; but bad butter, contaminated with poisonous fish oil, is unreasonably dangerous.”