Dippel v. Sciano

Citation155 N.W.2d 55,37 Wis.2d 443
Parties, 4 UCC Rep.Serv. 1033 Donald DIPPEL, Appellant, v. Tony SCIANO et al., Defendants, Pioneer Sales and Service, Inc., a domestic corporation, Respondent.
Decision Date29 December 1967
CourtWisconsin Supreme Court

Wherry & Wherry, Milwaukee, Michael R. Wherry, Milwaukee, of counsel, for appellant.

Gibbs, Roper & Fifield, Milwaukee, for respondent.

BEILFUSS, Justice.

The plaintiff-appellant states the issue to be:

'Does a cause of action based upon breach of implied warranty, arising from the sale of a product intended for use by the general public, exist in the absence of privity of contract between the seller and the ultimate user?'

Under the facts alleged and our view of the law to be applied, we deem the issue to be: Is the lack of privity of contract between the seller of the offending product and its ultimate user or consumer fatal to the injured user's claim of strict liability in tort against the seller?

The plaintiff concedes that the law of Wisconsin has always required privity of contract in an action for a breach of implied warranty. 1 Prinsen v. Russos (1927), 194 Wis. 142, 215 N.W. 905; Kennedy-Ingalls Corp. v. Meissner (1958), 5 Wis.2d 100, 92 N.W.2d 247; and Strahlendorf v. Walgreen Co. (1962), 16 Wis.2d 421, 114 N.W.2d 823.

During the past several years few legal subjects in the field of civil liability have undergone such change and variety of change as products-liability. In addition to the case law and statutory change, products-liability has been the topic of discussion and comment by many authoritative text writers and eminent authors of law review articles. 2 The rule that there could be no liability upon warranty, express or implied, without privity of contract came into being in England in Winterbottom v. Wright (1842), 10 M & W 109, 152 Eng.Rep. 402. It was an outgrowth of the beginning of the industrial revolution when it was thought it was necessary to protect struggling and unstable industry against an onslaught of disastrous claims. Typical of the disregard of the claims of persons injured by products is a quotation from Winterbottom, "it is, no doubt, a hardship upon the plaintiff to be without a remedy, but by that consideration we ought not to be influenced." 3 We have long since passed from the unsure days of industrial revolution to a settled and affluent society where we must be concerned about the just claims of the injured and hapless user or consumer of industrial products. The doctrines of laissez nous faire and daveat emptor have given way to more humane considerations.

Without belaboring its development it can now be said that the majority of the jurisdictions of the United States no longer adhere to the concept of no liability without privity of contract. 4 The reason, which has been reiterated most often, is that the seller is in the paramount position to distribute the costs of the risks created by the defective product he is selling. He may pass the cost on to the consumer via increased prices. He may protect himself either by purchasing insurance or by a form of self-insurance. In justification of making the seller pay for the risk, it is argued that the consumer or user has the right to rely on the apparent safety of the product and that it is the seller in the first instance who creates the risk by placing the defective product on the market. A correlative consideration, where the manufacturer is concerned, is that the manufacturer has the greatest ability to control the risk created by his product since he may initiate or adopt inspection and quality control measures thereby preventing defective products from reaching the consumer.

A different consideration which has often been expressed is that the abolition of privity in implied warranty or the imposition of strict liability avoids circuitry of action. 5 In a single suit the plaintiff may proceed against all or the most affluent member in the distributive chain.

This court has been sensitive to the policies and trends in the products-liability area. Even before the now famous Henningsen decision, 6 our court took a step in that direction in Smith v. Atco Co. (1959), 6 Wis.2d 371, 94 N.W.2d 697, 74 A.L.R.2d 1095. While many courts were laboring under the privity requirement in both the warranty and the negligence area, with most creating some exceptions in cases of food for human consumption and of inherently dangerous of imminently dangerous products, this court took a step forward. Speaking through Mr. Justice CURRIE, the court said, at pp. 383, 384, 94 N.W.2d at p. 704:

'We deem that the time has come for this court to flatly declare that in a tort action for negligence against a manufacturer, or supplier, whether or not privity exists is wholly immaterial. The question of liability should be approached from the standpoint of the standard of care to be exercised by the reasonably prudent person in the shoes of the defendant manufacturer or supplier. Such an approach will eliminate any necessity of determining whether a particular product is 'inherently dangerous.' If a manufacturer or supplier is hereafter to be relieved from liability as a matter of law by the courts, such result should be reached on the basis that there was no causal negligence established against the defendant rather, than that the product was not inherently dangerous.'

It was recognized in a footnote in the Atco Case that Wisconsin still requires privity between the plaintiff user and the manufacturer, or the supplier in breach-of-implied-warranty cases. Citing Cohan v. Associated Fur Farms (1952), 261 Wis. 584, 589, 53 N.W.2d 788, and Kennedy-Ingalls Corp. v. Meissner, supra.

The extension of liability created in Atco was based on negligence, tort,--rather than contract. Between that time and time of this court's decision in Strahlendorf v. Walgreen Co., supra, the wholesale abandonment of 'privity' in implied warranty cases, spurred by Henningsen, swayed the country's thinking toward the 'implied warranty' approach. Recognizing this trend and the limitation of its tort approach in Atco, the court, thinking in tort, indicated that privity in implied warranty cases would soon fall as a requirement in Wisconsin.

'Plaintiffs make a strong argument urging this court to abandon its prior holdings that privity between plaintiff and defendant is an essential requirement of a cause of action for breach of implied warranty. This court is not insensible to the present trend in the law toward striking down the existing barriers to recovery in products liability cases. We took a decided step in that direction in Smith v. Atco Co. (1959), 6 Wis.2d 371, 94 N.W.2d 697, 74 A.L.R.2d 1095.

'A striking illustration of this liberalizing trend is found in the American Law Institute's Tentative Draft No. 7, Restatement, Torts (2d) (p. 14) sec. 402A, and the accompanying notes of the reporter, Dean Prosser. This section imposes absolute liability, regardless of privity or negligence, upon a seller of defective food for human consumption or other products for intimate bodily use which are in a defective condition unreasonably dangerous to the consumer. The reporter's notes point out that 'intimate bodily use' includes items such as hair dye, soap, detergent coming in contact with hands, permanent-wave solution, cigarettes, surgical pins for setting bone fractures, and poliomyelitis vaccine.

'When this court declared by footnote in Smith v. Atco Co., supra, p. 383, 94 N.W.2d 697, that Wisconsin requires privity in breach-of-implied-warranty cases, it was merely stating the then present status of our law. This does not mean that this court will adhere to this rule forever, regardless of the persuasiveness of the arguments made, or authorities cited, in favor of changing it. However, we do not deem the instant case a proper one in which to give consideration to this question.' Strahlendorf v. Walgreen Co., supra, 16 Wis.2d at p. 435, 114 N.W.2d at p. 830.

Our reluctance to take the step in Strahlendorf has not proved a mistake. Treading lightly, this court was slowly moving in the direction of implied warranty without privity while others, in our opinion, were doing so without due consideration of the legal fictions they were creating. Dean Prosser, in his recent article, The Fall of the Citadel, 50 Minn.L.Rev. (1966), 791, 801, reviewed the problem:

'Until 1962 warranty had held the field, and no court proceeded on any other basis, although a good many of them had realized that this was a new and different kind of 'warranty,' not arising out of or dependent upon any contract, but imposed by law, in tort, as a matter of policy.

'There were, however, difficulties. 'Warranty' had become so closely identified to the legal profession with a contract between the plaintiff and the defendant, that it was attended by contract rules. Traditionally it has always required some reliance by the plaintiff upon an express or implied assertion; and this was often lacking on the part of the user. The Sales Act limited warranties expressly to 'buyer' and 'seller,' and limited their scope. It required notice of the breach of the warranty within a reasonable time after the buyer knew, or ought to have known, of the breach. It also made the warranty subject to disclaimer by the seller. There were other minor problems, as to the recoverable damages, a possible election of remedies and the like.'

Dean Prosser's reference to the Uniform Sales Act elucidates the most distressing problem with adopting the 'implied warranty' fiction in the present case. The Uniform Sales Act as enacted by Wisconsin is the controlling law. 7 Sec. 15 of the Act, (sec. 121.15, Stats. of 1961), specifically provides that there are no implied warranties of quality other than those set forth in the Act. These are the implied warranties between the 'buyer' and the 'seller.' By sec. 76 of the Act (sec. 121.76, Stats. of 1961), the term 'buyer' and 'seller' includes...

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