Randy Knitwear, Inc. v. American Cyanamid Co.

Citation226 N.Y.S.2d 363,11 N.Y.2d 5,181 N.E.2d 399
Parties, 181 N.E.2d 399 RANDY KNITWEAR, INC., Respondent, v. AMERICAN CYANAMID COMPANY, Appellant, et al., Defendants.
Decision Date22 February 1962
CourtNew York Court of Appeals

Walter R. Mansfield, Helmut J. F. Furth and M. Lauck Walton, New York City, for appellant.

Daniel Levy and Jerrold Sonet, New York City, for respondent.

FULD, Judge.

'The assault upon the citadel of privity', Chief Judge Cardozo wrote in 1931, 'is proceeding in these days apace.' (Ultramares Corp. v. Touche, 255 N.Y. 170, 180, 174 N.E. 441, 445, 74 A.L.R. 1139.) In these days, too, for the present appeal, here by leave of the Appellate Division on a certified question, calls upon us to decide whether, under the facts disclosed, privity of contract is essential to maintenance of an action against a manufacturer for breach of express warranty.

American Cyanamid Company is the manufacturer of chemical resins, marketed under the registered trade-mark 'Cyana', which are used by textile manufacturers and finishers to process fabrics in order to prevent them from shrinking. Apex Knitted Fabrics and Fairtex Mills are manufacturers of fabrics who were licensed or otherwise authorized by Cyanamid to treat their goods with 'Cyana' and to sell such goods under the 'Cyana' label and with the guaranty that they were 'Cyana' finished. Randy Knitwear, a manufacturer of children's knitted sportswear and play clothes, purchased large quantities of these 'Cyana' treated fabrics from Apex and Fairtex. After most of such fabrics had been made up into garments and sold by Randy to customers, it was claimed that ordinary washing caused them to shrink and to lose their shape. This action for breach of express warranty followed, each of the 3 parties being made the subject of a separate count. After serving its answer, Cyanamid, urging lack of privity of contract, moved for summary judgment dismissing the cause of action asserted against it, and it is solely with this cause of action that we are concerned. 1

Insofar as relevant, the complaint alleges that Cyanamid 'represented' and 'warranted' that the 'Cyana' finished fabrics sold by Fairtex and Apex to the plaintiff would not shrink or lose their shape when washed and that the plaintiff purchased the fabrics and agreed to pay the additional charge for the cost involved in rendering them shrink-proof 'in reliance upon' Cyanamid's representations. However, the complaint continues, the fabrics were not as represented since, when manufactured into garments and subjected to ordinary washing, they shrank and failed to hold their shape. The damages suffered are alleged to be over $208,000.

According to the complaint and the affidavits submitted in opposition to Cyanamid's motion, the representations relied upon by the plaintiff took the form of written statements expressed not only in numerous advertisements appearing in trade journals and in direct mail pieces to clothing manufacturers, but also in labels or garment tags furnished by Cyanamid. These labels bore the legend,

'A CYANA FINISH

This Fabric Treated for SHRINKAGE CONTROL

Will Not Shrink or Stretch Out of Fit CYANAMID',

and were issued to fabric manufacturers using the 'Cyana Finish' only after Cyanamid had tested samples of the fabrics and approved them. Cyanamid delivered a large number of these labels to Fairtex and Apex and they, with Cyanamid's knowledge and approval, passed them on to garment manufacturers, including the plaintiff, so that they might attach them to the clothing which they manufactured from the fabrics purchased.

As noted, Cyanamid moved for summary judgment dismissing the complaint against it on the ground that there was no privity of contract to support the plaintiff's action. The court at Special Term denied the motion and the Appellate Division unanimously affirmed the resulting order.

Thirty-nine years ago, in Chysky v. Drake Bros. Co., 235 N.Y. 468, 139 N.E. 576, 27 A.L.R. 1533, this court decided that an action for breach of implied warranty could not succeed absent privity between plaintiff and defendant and, some time later, in Turner v. Edison Storage Battery Co., 248 N.Y. 73, 161 N.E. 423, we reached a similar conclusion with respect to express warranties, writing, 'There can be no warranty where there is no privity of contract' (p. 74, 161 N.E. p. 424). 2 This traditional privity limitation on a seller's liability for damage resulting from breach of warranty has not, however, been adhered to with perfect logical consistency (see e. g., Ryan v. Progressive Grocery Stores, 255 N.Y. 388, 175 N.E. 105, 74 A.L.R. 339; Bowman v. Great A. & P. Tea Co., 308 N.Y. 780, 125 N.E.2d 165; Mouren v. Great A. & P. Tea Co., 1 N.Y.2d 884, 154 N.Y.S.2d 642, 136 N.E.2d 715) and, just a year ago, in Greenberg v. Lorenz, 9 N.Y.2d 195, 213 N.Y.S.2d 39, 173 N.E.2d 773, we noted the definite shift away from the technical privity requirement and recognized that it should be dispensed with in a proper case in the interest of justice and reason. More specifically, we held in Greenberg that, in cases involving foodstuffs and other household goods, the implied warranties of fitness and merchantability run from the retailer to the members of the purchaser's household, regardless of privity of contract. We are now confronted with the further but related question whether the traditional privity limitation shall also be dispensed with in an action for breach of express warranty by a remote purchaser against a manufacturer who induced the purchase by representing the quality of the goods in public advertising and on labels which accompanied the goods.

It was in this precise type of case, where express representations were made by a manufacturer to induce reliance by remote purchasers, that 'the citadel of privity' was successfully breached in the State of Washington in 1932. (See Baxter v. Ford Motor Co., 168 Wash. 456, 12 P.2d 409, 15 P.2d 1118, 88 A.L.R. 521; same case after new trial, 179 Wash. 123, 35 P.2d 1090.) It was the holding in the Baxter case that the manufacturer was liable for breach of express warranty to one who purchased an automobile from a retailer since such purchaser had a right to rely on representations made by the manufacturer in its sales literature, even though there was no privity of contract between them. And in the 30 years which have passed since that decision, not only have the courts throughout the country shown a marked, and almost uniform, tendency to discard the privity limitation and hold the manufacturer strictly accountable for the truthfulness of representations made to the public and relied upon by the plaintiff in making his purchase, 3 but the vast majority of the authoritative commentators have applauded the trend and approved the result. 4

The rationale underlying the decisions rejecting the privity requirement is easily understood in the light of present-day commercial practices. It may once have been true that the warranty which really induced the sale was normally an actual term of the contract of sale. Today, however, the significant warranty, the one which effectively induces the purchase, is frequently that given by the manufacturer through mass advertising and labeling to ultimate business users or to consumers with whom he has no direct contractual relationship.

The world of merchandising is, in brief, no longer a world of direct contract; it is, rather, a world of advertising and, when representations expressed and disseminated in the mass communications media and on labels (attached to the goods themselves) prove false and the user or consumer is damaged by reason of his reliance on those representations, it is difficult to justify the manufacturer's denial of liability on the sole ground of the absence of technical privity. Manufacturers make extensive use of newspapers, periodicals and other media to call attention in glowing terms, to the qualities and virtues of their products, and this advertising is directed at the ultimate consumer or at some manufacturer or supplier who is not in privity with them. Equally sanguine representations on packages and labels frequently accompany the article throughout its journey to the ultimate consumer and, as intended, are relied upon by remote purchasers. Under these circumstances, it is highly unrealistic to limit a purchaser's protection to warranties made directly to him by his immediate seller. The protection he really needs is against the manufacturer whose published representations caused him to make the purchase.

The policy of protecting the public from injury, physical or pecuniary, resulting from misrepresentations outweighs allegiance to an old and out-moded technical rule of law which, if observed, might be productive of great injustice. The manufacturer places his product upon the market and, by advertising and labeling, it, represents its quality to the public in such a way as to induce reliance upon his representations. He unquestionably intends and expects that the product will be purchased and used in reliance upon his express assurance of its quality and, in fact, it is so purchased and used. Having invited and solicited the use, the manufacturer should not be permitted to avoid responsibility, when the expected use leads to injury and loss, by claiming that he made no contract directly with the user.

It is true that in many cases the manufacturer will ultimately be held accountable for the falsity of his representations, but only after an unduly wasteful process of litigation. Thus, if the consumer or ultimate business user sues and recovers, for breach of warranty, from his immediate seller and if the latter, in turn, sues and recovers against his supplier in recoupment of his damages and costs, eventually, after several separate actions by those in the chain of distribution, the manufacturer may finally be obliged 'to shoulder the responsibility which should have been his in the first...

To continue reading

Request your trial
180 cases
  • Putman v. Erie City Manufacturing Company
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • November 30, 1964
    ...Court (Desmond, C. J.) also discarded the warranty concept, expanding its earlier holding in Randy Knitwear, Inc. v. American Cyanamid Company, 1962, 11 N.Y.2d 5, 226 N.Y.S.2d 363, 181 N.E.2d 399. The Court observed that "strict liability" was a more accurate phrase than "breach of warranty......
  • Noel v. United Aircraft Corp.
    • United States
    • U.S. District Court — District of Delaware
    • April 24, 1962
    ...(1961); Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69, 75 A.L.R.2d 1 (1960); Randy Knitwear, Inc. v. American Cyanamid Co. et al., 11 N.Y.2d 5, 226 N.Y.S.2d 363, 181 N.E.2d 399 (Ct. of Appeals, N.Y., 1962) and Rogers v. Toni Home Permanent Co., 167 Ohio St. 244, 147 N.E.2d......
  • Westport Marina Inc. v. Boulay
    • United States
    • U.S. District Court — Eastern District of New York
    • March 24, 2010
    ...Opp'n to Mot. for Summ. J. 13–16.) Instead, both parties cite New York case law—in particular, Randy Knitwear, Inc. v. American Cyanamid Co., 11 N.Y.2d 5, 226 N.Y.S.2d 363, 181 N.E.2d 399 (1962), a case that was decided more than two years before the N.Y. U.C.C. went into effect in 1964. Se......
  • Chemtrol Adhesives, Inc. v. American Mfrs. Mut. Ins. Co.
    • United States
    • United States State Supreme Court of Ohio
    • April 19, 1989
    ...or the type of article or goods involved.' " Id. at 61, 207 A.2d at 309 (quoting Randy Knitwear, Inc. v. American Cyanamid Co. [1962], 11 N.Y.2d 5, 15, 226 N.Y.S.2d 363, 370, 181 N.E.2d 399, 404). The court thereafter observed that "the manufacturer's liability may be cast in simpler form,"......
  • Request a trial to view additional results
2 books & journal articles
  • Product-related Privity, Preemption, and the Internet Marketplace
    • United States
    • Full Court Press Journal of Emerging Issues in Litigation No. 1-1, January 2021
    • Invalid date
    ...with Reed Smith LLP. He is also editor of the highly regarded Drug and Device Law Blog. 1. Randy Knitwear, Inc. v. American Cyanamid Co., 181 N.E.2d 399, 402 (N.Y. 1962). 2. Salvador v. Atlantic Steel Boiler Co., 319 A.2d 903, 907 (Pa. 1974). 3. Restatement (Third) of Torts, Products Liabil......
  • Hugh Jones and modern courts: the pursuit of justice then and now.
    • United States
    • Albany Law Review Vol. 65 No. 4, June - June 2002
    • June 22, 2002
    ...71 N.Y.U. L. REV. 591, 593 (1996) (14) Codling v. Paglia, 298 N.E.2d 622, 624-25 (N.Y. 1973). (15) 173 N.E.2d 773 (N.Y. 1961). (16) 181 N.E.2d 399 (N.Y. (17) 191 N.E.2d 81 (N.Y. 1963). See generally Codling, 298 N.E.2d at 626. (18) Cardozo, supra note 11, at 182-83. (19) Codling, 298 N.E.2d......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT