224 Pa. Super. 377 | Pa. Super. Ct. | 1973
Opinion by
This is an action in assumpsit, based, inter alia, on a breach of implied warranty of fitness, to recover for serious personal injuries sustained by the plaintiff-employee when a steam boiler purchased from the defendant by plaintiffs employer exploded. The court below upheld defendant’s preliminary objections that the plaintiff had no standing to institute an action in as-sumpsit for breach of warranty against the seller and plaintiff has appealed.
The Supreme Court had ruled in Hochgertel v. Canada Dry Corp., 409 Pa. 610 (1963), that the Uniform Commercial Code, Act of April 6, 1953, P. L. 3, as amended, 12A P.S. §2-318, did not call for an extension of warranty to an employee of the purchaser. The appellant argues, however, that this decision was impliedly, though not expressly, overruled by the Supreme Court’s later decision in Kassab v. Central Soya, 432 Pa. 217 (1968), in which the Supreme Court held that purchasers could sue remote manufacturers for breach of implied warranty. That decision was based on rea-
Concededly, the Kassab case dealt with vertical privity, that is, it dealt with the question: from whom does the warranty run? It did not deal with, as does the instant case, the issue of horizontal privity, that is, to whom does the warranty run? In fact, the court in Kassab clearly stated in footnotes at pages 228 and 232: “5 ‘Consumer’ as here used is not restricted only to the ‘Purchaser’ of the defective product, but also extends under section 2-318 of the U.C.C. to others who in fact use the defective goods and whose person or property is injured thereby. The exact limits of the class of such other persons (not the purchaser) who may sue a remote manufacturer in assumpsit, or for that matter anyone in the distributive chain, without a showing of privity involves the question of so-called ‘horizontal’ privity, an issue not before us in the present case. See Hochgertel v. Canada Dry Corp., 409 Pa. 610, 187 A. 2d 575 (1963). The requirements of section 2-318 of the Uniform Commercial Code dealing with ‘horizontal privity’ are discussed more fully at note 8, infra, and accompanying text.” . . . “8 Our decision today has no impact on ‘horizontal privity’ our holding being confined solely to the issue of whether a purchaser, a member of his family or household, or a guest in his house, may sue the remote manufacturer of a defective product for breach of warranty. Our decision therefore leaves undisturbed Hochgertel or any
A reading of the Hochgertel decision compels us to agree with this contention of the appellant. The rationale of that 1963 decision was that “to grant such an extension of the warranty, as urged herein, would in effect render the manufacturer a guarantor of his product and impose liability in all such accident cases even if the utmost degree of care were exereised”. That rationale no longer finds support in the law because the Pennsylvania courts have since adopted and have consistently followed the broad social concepts of Section 402A, which section does indeed render the manufacturer liable for a defective product regardless of its lack of negligence and its exercise of due care and this liability has been permitted to be availed of by an employee of the purchaser.
It was this change in the law which caused the court in Kassab v. Central Soya, supra, to overrule Miller v. Preits, 422 Pa. 383 (1966), which had upheld the requirement of vertical privity. The court in the Kassab
“However, with Pennsylvania’s adoption of Restatement 402a, the same demands of legal symmetry which once supported privity now destroy it.
“. . . the Court in Miller nevertheless retreated from the modern view because of a belief that section 2-318 of the Uniform Commercial Code requires privity in suits against a remote manufacturer. We no longer adhere to such a belief for we are convinced that, on this issue, the code must be co-extensive with Restatement section 402a in the case of product liability.” This reasoning in support of the elimination of the requirement of vertical privity is equally pertinent to and governing in this case with regard to the requirement of horizontal privity. It is true, as stated by the defendant, that liability in assumpsit for breach of warranty is contractual in nature, but so was the liability
An extension of horizontal privity to others than those specifically referred to in Section 2-318 was recognized by the framers of the Uniform Commercial Code when in their comment to Section 2-318 they stated: “3. This section expressly includes as beneficiaries within its provisions the family, household, and guests of the purchaser. Beyond this, the section is neutral and is not intended to enlarge or restrict the developing case law on whether the seller’s warranties, given to his buyer who resells, extend to other persons in the distributive chain.” Other jurisdictions have without difficulty interpreted Section 2-318 to be no bar to an employee’s right to sue for breach of an implied warranty. In Speed Fasteners, Inc. v. Newsom, 382 F. 2d 395 (10th Cir. 1967), an employee of the purchaser was injured when a stud being driven by a fellow employee
If the Commercial Code is to be construed, as was done in the Kassab case, as “co-extensive with Restatement Section 402A in the case of product liability”, therefore eliminating the necessity of vertical privity, it reasonably follows that the Code must be similarly construed so as to eliminate the necessity of horizontal privity in this suit by an employee as well. To hold otherwise would be to perpetuate without any sound
The unreasonableness of this result caused the court in Delta Oxygen Co. v. Scott, 383 S.W. 2d 885 (Ark. Sup. Ct. 1964), to overrule prior decisions and to hold an injured employee of the purchaser entitled to sue for breach of implied warranty under Section 2-318 of the Uniform Commercial Code. The court there reasoned: “Thus, as to a natural person who is in the family or household of the buyer or is a guest in his household, etc., the Legislature has abolished the defense of privity in a breach of warranty action. Why then should we keep this old rule of ‘privity’ against an action for breach of warranty brought by the servant or employee of the original purchaser, as is the situation here? Delta sold the oxygen to Harry Scott, the brother of appellee Tommy Scott. If Harry Scott had resold the oxygen to Tommy Scott, then there would have been the factual situation similar to that which existed in Nelson v. Armour, supra. But Tommy Scott was the servant and employee of Harry Scott, who directed him to use the oxygen in the work. In short, there was no resale of the oxygen by the purchaser from Delta and we see no sound reason why the employee or servant of a purchaser, using the product in the course of employment as directed, should be barred from suing on the warranty because of any shield of privity.
“To apply the strict rule of privity against such an employee as here, would mean that if the purchaser of the oxygen from Delta had been a corporation then there would never have been anyone to sue on the
Plaintiff’s right of recovery should not be made to depend on a narrow distinction between horizontal privity and vertical privity, which is a distinction without a difference as far as concerns lack of contractual relationship. If either horizontal or vertical privity is lacking between plaintiff and defendant, the result is the same: a lack of contractual relationship. Since such lack of contractual relationship was held in Kas-sab not to be a bar to recovery in assumpsit for breach of implied warranty, we determine that in this case as well, plaintiff-employee is not barred from his assump-sit action based on implied warranty. Since plaintiff’s rights and defendant’s liabilities in an assumpsit action can now be determined, as stated in the Kassab decision, in a scope co-extensive with that of Section 402A, the basis of the Hochgertel decision no longer exists. Today, the elimination of the requirement of horizontal privity would not, as it would have at the time of the Hochgertel decision, impose upon a seller any greater liability to the purchaser’s employee than would otherwise exist in tort. Nor does dispensing with the requirement of privity in this suit by an employee do violence to the contractual theory of the action for breach of warranty. As was pointed out by Dean William L. Prosser in his learned treatise “Strict Liability
We hold, therefore, that the plaintiff-employee is entitled to maintain his action in assumpsit for breach of implied warranty. The fact that the statute of limitations has run on his tort action thus becomes immaterial. A personal injury claim based upon a breach of warranty is distinct from a personal injury claim based on negligence and can be commenced within four years after the cause of action has occurred: Uniform Commercial Code of 1953, P. L. 3, §2-725, as amended; Gardiner v. Philadelphia Gas Works, 413 Pa. 415 (1964).
For example, in Woods v. Pleasant Hills Motor Co., 219 Pa. Superior Ct. 381 (1971) the applicability of section 402A to a suit by an employee was not questioned, the new trial there being awarded defendant because plaintiff-employee’s evidence did not meet the burden placed on him by section 402A.
In a comment in 14 Prac. Law 76 (1968), the “Significance” of this decisión is stated as follows: “Oklahoma adopted the ‘regular’ version of section 2-318 . . . which extends warranties to the family or household of the buyer or a guest in his homo, when ihere is personal injury. . . Nevertheless, the Federal Oourt, applying Oklahoma law, did not hesitate to hold the manufacturer liable to the buyer’s employee on a warranty theory. Privity was disregarded.” “. . . Comment to section 2-318 should permit extension of warranty protection to those who expect to use the product or be affected by it.”
“ See also comment, 65 W.Va.L.Rev. 326, 328 (1963). Originally an action grounded on breach of warranty, sounded in tort rather than contract. Ames, History of Assumpsit, 2 Harv. L. Rev. 1, 8 (1888). It was not until late in the 18th century that a contract action derived for breach of warranty. Today, because of this mistake in legal history, warranty has become a hybrid of both tort and contract and may operate between parties not in privity of contract.”