Garcia v. Texas Instruments, Inc.

• Decision Date: 27 March 1980
• Docket Number: No. 1302,1302
• Parties: 29 UCC Rep.Serv. 883 Richard Y. GARCIA, Appellant, v. TEXAS INSTRUMENTS, INC., Appellee.
• Court: Texas Court of Appeals

Page 24

598 S.W.2d 24

29 UCC Rep.Serv. 883

Richard Y. GARCIA, Appellant, v. TEXAS INSTRUMENTS, INC., Appellee.

No. 1302.

Court of Civil Appeals of Texas, Tyler.

March 27, 1980.

Thomas Black, San Antonio, Leon Crum, Dallas, for appellant.

David R. Noteware, Thompson & Knight, Dallas, for appellee.

McKAY, Justice.

This is an appeal from a motion for summary judgment granted in favor of appellee Texas Instruments, Inc.

During the period of August 16, 1974, to January 31, 1975, appellee sold and delivered various quantities of highly concentrated sulfuric acid to Mosteck Corporation, the employer of the appellant, Richard Y. Garcia. On February 18, 1975, the appellant was moving cartons of the acid from one location to another. The cartons were constructed of fiberboard and contained four one gallon glass containers. While in the process of transporting one of the cartons, appellant tripped and fell and was severely burned when the containers broke and exposed his body to the acid.

On October 18, 1978, appellant brought suit against appellee for damages for personal injuries alleging that there arose in connection with the sale of acid from appellee to Mosteck Corporation an implied warranty that the acid was of merchantable quality and should have been adequately contained, packaged, labeled, and safe for the use for which it was intended; that appellant was a third party beneficiary of the implied warranty; that appellee breached the implied warranty; that Mosteck Corporation and appellant relied upon the warranty; and that as a proximate result of the breach appellant suffered injuries. Appellee filed a general denial and a motion for summary judgment which alleged that appellant's cause of action is barred by Article 5526, the general two year statute of limitations for personal injuries, ¹ and that no implied warranty ran to appellant because he was not a party to the sales contract. The trial court granted the motion from which appellant has appealed, bringing two points of error.

We affirm.

Appellant's basic position is that, since he properly alleged a breach of implied warranty of merchantability under Section 2.314 of the Texas Uniform Commercial Code, the Code's four year statute of limitations as set forth in Section 2.725 should be applied to the case at bar. In response appellee argues that the U.C.C. does not apply to actions for personal injury and therefore the general statute of limitations for personal injury should be applied. Appellee further argues that appellant cannot recover under the U.C.C. because there is no privity between the parties. Thus, the central issue on appeal is squarely drawn: whether a personal injury action allegedly based upon a breach of implied warranty under the U.C.C. is governed by the four year statute of limitations set forth in Section 2.725 of the U.C.C. or the general two year statute set forth in Article 5526. We note that this issue is one of first impression in this state and, although the question has been decided in other jurisdictions, the decisions are not in agreement.

Representative of those cases which have held that the Code's four year statute of limitations governs all actions grounded upon breach of warranty are Berry v. S. D. Searle & Co., 56 Ill.2d 548, 309 N.E.2d 550 (1974); Sinka v. Northern Commercial Co., 491 P.2d 116 (Alaska 1971); Redfield v. Mead, Johnson & Co., 512 P.2d 776 (Or.1973); Layman v. Keller Ladders, Inc., 224 Tenn. 396, 455 S.W.2d 594 (1970); Val Decker Packing Co. v. Corn Products Sales Co., 411 F.2d 850 (6th Cir. 1960); and Morton v. Texas Welding & Manuf. Co., 408 F.Supp. 7 (S.D.Tex.1976). These cases have analyzed the issue by applying basic rules of statutory interpretation to ascertain the intent of the legislature in adopting the Code, and have relied upon a literal interpretation of its express language. However, after a careful examination of the question, we decline to follow this position but rather hold that in the absence of a contractual relationship between the parties, actions involving breach of implied warranty for personal injury do not come within Section 2.715(b)(2) and therefore, should be governed by Article 5526, the general statute of limitations applicable to personal injury actions. To adequately articulate the rationale involved in our decision we find it necessary to briefly sketch the historical development of the doctrine of strict liability in tort.

The development of the modern doctrine of strict liability has been both tortuous and complex primarily because the doctrine originated from the law of warranty which has historical roots in both contract and tort law. The historical origins of the law of warranty have been artfully traced by Dean Prosser:

The seller's warranty is a curious hybrid, born of the illicit intercourse of tort and contract, unique in the law. In its inception the liability was based on tort, and the action was on the case; and it was not until 1778 that the first decision was reported in which the plaintiffs proceeded upon a contract theory. Thereafter the warranty gradually came to be regarded as a term of contract of sale, express or implied, for which the normal remedy is a contract action. W. Prosser, Law of Torts § 395 at 634 (4th ed. 1971).

The inherent duality of the law of warranty and confusion it produced was recognized in the early Texas decision of Jacob E. Decker & Sons, Inc. v. Capps, 139 Tex. 609, 164 S.W.2d 828 (1942), wherein the Supreme Court held a non-negligent manufacturer who had sold contaminated food to a retailer liable to the ultimate consumer. In explaining the doctrinal basis of the decision the court stated:

While a right of action in such a case is said to spring from a "warranty" it should be noted that the warranty here referred to is not the more modern contractual warranty, but is an obligation imposed by law to protect the public health . . . It is believed that much of the confusion among the courts on this question is due to the failure to note this difference in the use of the term "warranty" . . . Here the liability of the manufacturer and the vendor is imposed by operation of law as a matter of public policy for the protection of the public, and is not dependent on any provision of the contract, either expressed or implied. 164 S.W.2d 831-32.

However, it soon became apparent that utilization of Decker's "implied warranty as a matter of public policy" to impose liability upon a remote manufacturer created both conceptual and practical problems because of the inherent difficulty in maintaining the distinction between the tortuous and contractual branches of the implied warranty tree. The concept "warranty" had become so closely associated with contract theory in the minds of most courts and lawyers that contract rules were assumed to apply to it; this created serious problems where no contract existed between the parties, or where the seller made no representations to the ultimate consumer or where the consumer did not know the identity of the seller. The difficulties were further compounded by the warranty provisions of the Uniform Sales Act and the Uniform Commercial Code which had been drafted only with the intent of governing the relations between immediate buyers and sellers. The traditional sales defenses of notice (U.C.C. § 2.607), disclaimer (U.C.C. § 2.316), and privity (U.C.C. § 2.318) against an action for breach of warranty were completely inconsistent with the far reaching imposition for liability under the "tort" branch of the implied warranty doctrine.

It therefore became apparent that the use of the term "warranty" as a pseudonym for the doctrine of strict liability in tort was creating an impossibly entangled conceptual morass and the obvious suggestion arose to adopt a new theory to accomplish the desired result. ²

The drafters of the Second Restatement of Torts completely discarded the "warranty" label and drafted Section 402A which provides for liability based on strict liability in tort. ³ Because comment m. of 402A makes the intent and scope of Section 402A abundantly clear we take the liberty of quoting extensively from that comment:

m. "Warranty." The liability stated in this section does not rest upon negligence. It is strict liability, similar in its nature to that covered by Chapters 20 and 21. The basis of liability is purely one of tort.

A number of courts, seeking a theoretical basis for the liability, have resorted to a "warranty," either running with the goods sold, by analogy to covenants running with the land, or made directly to the consumer without contract. In some instances this theory has proved to be an unfortunate one. Although warranty was in its origin a matter of tort liability, and it is generally agreed that a tort action will still lie for its breach, it has become so identified in practice with a contract of sale between the plaintiff and the defendant that the warranty theory has become something of an obstacle to the recognition of the strict liability where there is no such contract. There is nothing in this Section which would prevent any court from treating the rule stated as a matter of "warranty" to the user or consumer. But if this is done, it should be recognized and understood that the "warranty" is a very different kind of warranty from those usually found in the sale of goods, and that it is not subject to the various contract rules which have grown up to surround such sales.

The rule stated in this Section does not require any reliance on the part of the consumer upon the reputation, skill, or judgment of the seller who is to be held liable, nor any representation or undertaking on the part of that seller. The seller is strictly liable although, as is frequently the case, the consumer does not even know who he is at the time of consumption. The rule stated in this Section is not governed by the provisions of the Uniform Sales Act, or those of the ...