Blitzstein v. Ford Motor Company

• Decision Date: 08 June 1961
• Docket Number: No. 18552.,18552.
• Citation: 288 F.2d 738
• Parties: Jacob BLITZSTEIN, Appellant, v. FORD MOTOR COMPANY, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

288 F.2d 738 (1961)

Jacob BLITZSTEIN, Appellant, v. FORD MOTOR COMPANY, Appellee.

No. 18552.

United States Court of Appeals Fifth Circuit.

March 10, 1961.

Rehearing Denied June 8, 1961.

Kenneth Perrine, Sam Tenenbaum, Birmingham, Ala., for appellant.

Ralph B. Tate, S. R. Starnes, Birmingham, Ala., for appellee.

Before RIVES and WISDOM, Circuit Judges, and WRIGHT, District Judge.

RIVES, Circuit Judge.

On February 28, 1959, appellant Jacob Blitzstein purchased an "Anglia" or "English Ford" automobile from Vulcan Lincoln-Mercury, Inc., of Birmingham, Alabama. On the morning of March 2, 1959, Mr. Blitzstein had the car filled with gasoline, went for a short ride, returned to his home and parked the car in the street adjoining his house. About two hours later he again entered the automobile. As he turned on the ignition, there was an explosion followed by a flash fire, as a result of which appellant alleged he received severe injuries about his face, leg and hands.

Appellant attributed the explosion to the following circumstances. In the English Ford which he purchased the gasoline tank was located inside the trunk. The gasoline tank had a small crack in its upper part, not visible to the naked eye, which appellant claimed was a defect in its manufacture. Because of this defect, when the tank was filled gasoline leaked into the trunk. The trunk had no floor openings which would permit this gasoline to drain off. Thus, the leaked gasoline accumulated in the trunk. When the rays of the sun heated the trunk compartment, the trapped gasoline vaporized, collecting first in the trunk and then saturating the closed car. When Mr. Blitzstein switched on the ignition, the spark generated by the contact ignited the gasoline vapors, resulting in the explosion and fire.

Appellant filed suit in an Alabama State Court against the Ford Motor Co., Ltd., an English corporation,¹ the manufacturer of the automobile, and the Ford Motor Company,² a Delaware corporation with its principal place of business in Dearborn, Michigan, which serves as the exclusive American distributor for the products of the English Company. The case was removed to the Federal District Court on the ground of diversity of citizenship.

Appellant's complaint, as amended, alleged four separate theories as a basis for recovery against the defendants. Count one averred in general terms that the "automobile was defectively constructed or assembled and was not reasonably safe for the use and purpose for which it was sold or delivered, or when used in the usual and customary manner, but on the contrary, said automobile was defective and imminently and inherently dangerous and when gasoline was placed in the same * * * said automobile was likely to explode * * *," that the danger was or should have been known to the defendants had they exercised due diligence and that said condition was "not known to the plaintiff and was not revealed to the plaintiff by the defendant." Count two averred that the gasoline tank was "defective and defectively constructed or assembled." The third count³ alleged "that the defendants * * impliedly warranted to the public * * * that the article * * * was fit and safe for the purpose for which it was manufactured and to be used by the consumer as a vehicle of transportation * * *" (emphasis added); that appellant relied on said warranty, and that said warranty was breached. The last count⁴ sounded in express warranty wherein plaintiff averred "that the defendants * * * did warrant in writing all of such parts of said automobile to be free from defects in workmanship or material and did authorize and direct the dealer to warrant to the purchaser each part of each Ford Motor Company English Ford Line, to be free from defects * * *"; that such warranty was delivered to and relied on by appellant; and that said warranty was breached by defendants.

Upon receipt of notice of the litigation, English Ford moved to dismiss on the ground, inter alia, of lack of jurisdiction over the person. The motion was granted by the district court.

At the outset appellee contests appellant's right to raise here the issue of dismissal of the English Company. The notice of appeal in this cause, wherein appellant is required by Rule 73(b), Federal Rules of Civil Procedure, 28 U.S. C.A., to specify "the judgment or part thereof appealed from," states that appeal is taken "from the final judgment rendered on the 29th day of March, 1960, and the motion for a new trial overruled and denied on the 10th day of May, 1960." The English Company was dismissed by order of March 18, 1960. Although Rule 73(b) is mandatory, and compliance therewith is a prerequisite to our jurisdiction,⁵ the rule was "intended to take the place of more complicated procedures to obtain review, and the notice should not be used as a technical trap for the unwary draftsman."⁶ In overruling appellee's objection, we reaffirm our view that in determining whether Rule 73(b) has been complied with, we may look to "the statement of points and designation of contents of record on appeal."⁷ Both of those portions of the record before us clearly indicate that appellant intended to here raise the issue of the sufficiency of process over English Ford.

Since English Ford had not qualified to do business in Alabama, service was attempted to be made on it pursuant to Section 193 of Title 7 of the Code of Alabama.⁸ That Statute provides for service "wherever a foreign corporation has carried on or transacted business in this state without qualifying to do business herein * * *." English Ford claimed in its motion to dismiss that at no time relevant to this lawsuit had it done any business in the United States, let alone in Alabama.

English Ford automobiles are manufactured in Dagenham, England, by the Ford Motor Company, Ltd. Those destined for America are "sold" to the American Company at Dagenham, pursuant to monthly purchase orders from the American Company. Although the English Company selects the ships on which the cars are to be transported, the American Company pays the freight and costs of marine insurance. Upon arrival in America, the cars are unloaded at independently-owned warehouses, where they are held until orders are received from local auto dealers. The local dealer has no contact with English Ford. He deals solely with American Ford.

English Ford does not solicit orders in Alabama. It has no employees in Alabama. It maintains no office, warehouse or other business establishment in Alabama. It has no property in Alabama, no bank accounts in Alabama, et cetera. The domestic distribution of English Ford products, training of mechanics to work on English Fords, and stocking of parts for those cars is completely handled by the Imported Car Division of American Ford. 54.6% of the stock of English Ford is owned by American Ford.

Appellant urges upon us recent cases giving broad scope to the concept of "doing business." Most of these authorities are not relevant, however, for we are not here concerned with whether Alabama could constitutionally claim jurisdiction over English Ford. Rather, we face the more narrow question of whether English Ford has "carried on or transacted business" in Alabama within the meaning of Section 193 of Title 7.⁹ We agree with the court below that it has not.¹⁰

Appellant's principal contention on this point is that by virtue of the 54.6% stock ownership English Ford is in reality the alter ego of American Ford, and that English Ford does business in Alabama in the guise of American Ford. We cannot deny that this argument has some appeal, especially when we consider the consequences to plaintiff of a dismissal of the English Company. Yet, we cannot say that Alabama decisions under which we are bound would extend that State's jurisdiction to the English Company. And there is persuasive authority to the contrary.¹¹

Much of appellant's case left with the departure of the English Company. Though mortally wounded by this blow, appellant fought on bravely until the trial court administered the coup' de grâce — a directed verdict in favor of American Ford.

Appellant's action on implied warranty failed because there was no privity between appellant and American Ford. Appellant bought his car from Vulcan Lincoln-Mercury and not directly from American Ford. Alabama law is clear that there can be no action on implied warranty in the absence of privity of contract.¹²

On his express warranty theory, appellant met with the same measure of success — none. The record reveals that the only express warranty which appellant ever received was the written dealer's warranty given by Vulcan Lincoln-Mercury. Appellant attempts to claim the benefit of a warranty from American Ford to Vulcan in which American Ford agreed to reimburse the dealer for costs of defective parts replaced on the English Ford car within the first four thousand miles of use. Appellant's theory is that this warranty "runs with the car" so as to give him an action against American Ford. But the Alabama law is dead against him.¹³

Reaching the negligence counts, the district court ruled that the "Manufacturers Liability Doctrine" was inapplicable for the obvious reason that American Ford was not the manufacturer. Appellant attempted to clear this hurdle by invoking the rule of Swift & Company v. Blackwell, 4 Cir., 1936, 84 F.2d 130, which holds that "one who labels a product with his own name or otherwise represents it to be his own, is to be treated on the same basis as if he had manufactured it * * *." Appellant's argument on this point is that American Ford held out the English Ford as its product. The facts do not sustain this contention. If anything, American Ford sought to distinguish the English Ford as a "foreign car." In the advertisements submitted in evidence, the emphasis is on the name "Anglia." The circulars and brochures which are distributed by the local auto dealers inform the public that the...