Byrd v. Star Rubber Company

181 S.E.2d 227 (1971) 11 N.C. App. 297 Ira BYRD v. The STAR RUBBER COMPANY, Original Defendant, v. Tom TURNAGE and Caison Turnage, doing business as Nashville Recappers, Third-Party Defendants. No. 717SC286. Court of Appeals of North Carolina. May 26, 1971. Fields, Cooper & Henderson, by Milton P. Fields, Rocky Mount, for plaintiff appellant. Battle, Winslow, Scott & Wiley, P. A., by J. B. Scott, Rocky Mount, for Star Rubber Co., original defendant appellee. Spears, Spears, Barnes & Baker, by Alexander H. Barnes, Durham, for Nashville Recappers, third party defendant. MORRIS, Judge. This appeal raises one single question which is whether a plaintiff, not an ultimate consumer and not one in privity of contract with the manufacturer, has a cause of action for breach of warranty if injured in the use of the product while an employee of a purchaser for resale to the ultimate consumer of the product manufactured by defendant. Our Supreme Court in Corprew v. Geigy Chemical Corp., 271 N.C. 485, 157 S.E.2d *228 98 (1967), held that in a tort action for negligence against a manufacturer, whether privity of contract exists is immaterial when it said "* * * the time has come for us to recognize that the exceptions to the general rule of non-liability of a manufacturer for negligence because of lack of privity of contract have so swallowed up the general rule of non-liability that such general rule for all practical purposes has ceased to exist. Its principle was unsound. It tended to produce unjust results. It has been abandoned by the great weight of authority elsewhere. We have abandoned it in this jurisdiction." (Emphasis ours.) There the Court allowed a cause of action in tort and a cause of action for breach of warranty in an action by the ultimate consumer against the manufacturer. The product was a chemical weed killer, sold in labeled sealed containers, which plaintiff alleged he had used as directed but had suffered damages to his peanut and soy bean crops planted the succeeding year in fields in which he had used the weed killer on his corn crop the previous year. Prior to Corprew, exceptions to the privity rule in negligence had begun to appear; i. e., the dangerous instrumentalities exception, Jones v. Otis Elevator Co., 231 N.C. 285, 56 S.E.2d 684 (1949); food and drink cases, Broadway v. Grimes, 204 N.C. 623, 169 S.E. 194 (1933); Perry v. Kelford Coca-Cola Bottling Co., 196 N.C. 175, 145 S.E. 14 (1928); Broom v. Monroe Coca-Cola Bottling Co., 200 N.C. 55, 156 S.E. 152 (1930). Corprew abolished any privity requirements in negligence cases. However, the question before us was neither raised nor discussed. The most recent decision of our Supreme Court discussing the question now before us is Wyatt v. North Carolina Equipment Co., 253 N.C. 355, 117 S.E.2d 21 (1960). There an action was brought to recover damages for personal injuries sustained by plaintiff while operating, as an employee of Neal Hawkins Construction Company, an International Harvester Loader sold by defendant to the construction company, employer of plaintiff. The matter was heard in the trial court on defendant's demurrer to the amended complaint which attempted to allege two causes of action—one in tort and one alleging a breach of warranty "of merchantability and fitness". The Supreme Court affirmed the trial court in sustaining the demurrer. As to the cause of action in tort, the Court said the factual allegations of the complaint were insufficient to show that plaintiff's injury was proximately caused by the negligence of defendant. As to the cause of action alleging breach of contract, the Court said: "`Subject to some exceptions and qualifications, it is a general rule that only a person in privity with the warrantor may recover on the warranty.' 77 C.J.S., Sales § 305(b); 46 Am.Jur., Sales § 306. Our decisions are in accord. Thomason v. Ballard & Ballard Co., 208 N.C. 1, 179 S.E. 30, and cases cited. Absent privity of contract, there can be no recovery for breach of warranty except in those cases where the warranty is addressed to an ultimate consumer or user. Ordinarily, the rule that a seller is not liable for breach of warranty to a stranger to the contract of warranty is applicable to an employee of the buyer. Berger v. Standard Oil Co., (Ky.), 103 S.W. 245, 11 L. R.A. (N.S.) 238. Negligence is the basis of liability of a seller to a stranger to the contract of warranty. Enloe v. Charlotte Coca-Cola Bottling Co., 208 N.C. 305, 180 S.E. 582, and cases cited; Caudle v. F. M. Bohannon Tobacco Co., 220 N.C. 105, 16 S.E.2d 680." (Emphasis ours.) It is true that there has been some slight erosion in this State of the privity requirement in breach of warranty actions. This has been limited to food and drink and insecticides in sealed containers which had warnings on the label which reached the ultimate consumer. In Terry v. Double Cola Bottling Co., 263 N.C. 1, 138 S.E.2d 753 (1964), Justice Sharp in a concurring opinion made an exhaustive survey of the *229 privity requirement in this State and other jurisdictions and discussed many of the reasons advanced for its loss of vitality in other jurisdictions. Perhaps the rationale for abandoning the requirement in negligence actions applies with equal force to breach of warranty actions. However, we find no case in this State accomplishing for breach of warranty actions what Corprew accomplished for negligence actions. Wyatt remains the applicable rule in this case. To hold otherwise would, in our opinion, require us to ignore or overrule Wyatt. This we cannot do. Affirmed. HEDRICK, J., concurs. BROCK, J., dissents. BROCK, Judge (dissenting). The majority opinion relies upon Wyatt v. North Carolina Equipment Co., 253 N.C. 355, 117 S.E.2d 21, to dispose of the question involved here. It seems to me that the Wyatt rule can stand reexamination in the light of developments in product liability case law in the past ten years. But, in any event, Wyatt was concerned with ruling upon a demurrer to a complaint which was treated as alleging an express warranty made by the defendant to plaintiff's employer. Because of this I view Wyatt as holding that a recovery cannot be had by a person not in privity with the warrantor of an express warranty. My view of this is strengthened by the fact that Wyatt cited Berger v. Standard Oil Co., 126 Ky. 155, 103 S.W. 245 (1907) as authority to exclude an employee of the buyer from the benefits of an express warranty by the seller to the buyer. Both Wyatt and Berger were concerned with allegations of an express warranty to the employer of plaintiff; there appears to have been no allegation or effort to recover on implied warranty. In a later Kentucky case, Dealers Transport Co. v. Battery Distributing Co. (Ky.), 402 S.W.2d 441 (1966) the following is said: "The Berger case actually involved an express warranty, and is not authority for the rule applicable to an implied warranty." In the same case it was also stated: "We are unable to perceive a valid basis for requiring privity of contract in a products liability claim based on breach of implied warranty and disregarding privity in such claims based on negligence." In the case sub judice the allegations of the complaint seem to allege an implied warranty and for that reason is distinguishable from the case relied upon by the majority. I vote to reverse the order of dismissal.