Grey v. Hayes-Sammons Chemical Co.

• Decision Date: 07 November 1962
• Docket Number: No. 19133.,19133.
• Citation: 310 F.2d 291
• Parties: F. O. GREY, Appellant, v. HAYES-SAMMONS CHEMICAL CO., Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

310 F.2d 291 (1962)

F. O. GREY, Appellant, v. HAYES-SAMMONS CHEMICAL CO., Appellee.

No. 19133.

United States Court of Appeals Fifth Circuit.

November 7, 1962.

Walter R. Bridgforth, Bridgforth & Love, Yazoo City, Miss., for appellant.

W. F. Goodman, Jr., Jackson, Miss., J. D. Thames, Vicksburg, Miss., Elizabeth W. Grayson, Jackson, Miss. (Voller & Thames, Vicksburg, Miss., Watkins & Eager, Jackson, Miss., of counsel), for appellee.

Before TUTTLE, Chief Judge, and RIVES and WISDOM, Circuit Judges.

WISDOM, Circuit Judge.

This is a products liability case. The culprit is a growth hormone, 2-4D or 2-4-5T, a weed killer, minute quantities of which kill cotton.

Mississippi law controls the substantive issues.

F. O. Grey, a cotton grower in Yazoo County, Mississippi, filed suit in the state court against the Hayes-Sammons Chemical Company, a Texas manufacturer of insecticides, for $11,423.75 for damage to his 1957 crop allegedly caused by a harmful herbicide contained in a sealed can of insecticide purchased from Hayes-Sammons through a distributor, T. A. Quinn Chemical & Fertilizer Company. Hayes-Sammons removed the suit to the federal court. The plaintiff predicates his claim on (1) breach of warranty, (2) negligence, and (3) an agreement to settle. The defendant contends (1) that there can be no recovery on breach of warranty because there was a lack of privity; (2) that the plaintiff failed to allege negligence in the complaint and failed to try the case on the theory of negligence; (3) that there was no agreement to settle. The district judge withheld from the jury the question whether the parties had entered into a settlement agreement, on the grounds that the evidence failed to show consideration and the alleged agreement was too indefinite to be a valid contract. He did not expressly instruct the jury on negligence¹ and refused to instruct on res ipsa loquitur. The court gave instructions on the implied warranties of fitness and merchantability² without referring to privity.³ It is fair to say that the jury had to decide only one issue: causation. In his charge to the jury the district judge summed up the case: "Now the case, of course, narrows down to the proposition, `Where did the poison come from that damaged this crop?'" The jury decided that it came from the defendant and returned a verdict for the plaintiff in the amount of $8,750. On the defendant's motion, the district court granted judgment for the defendant notwithstanding the verdict. The court ruled, first, that a disclaimer or non-warranty clause on the insecticide cans relieved Hayes-Sammons of any liability: "It follows from that warning to the plaintiff that he assumed all risks, and under the law of Mississippi this is a valid provision." Second, although the court did not in terms refer to privity, it held that in Mississippi, except for food products, no warranty runs from a manufacturer to a consumer. We reverse and render.

I. The Facts

The case requires careful consideration of the facts, especially as they bear on the issues of privity and causation.

In 1957 Grey rented and farmed two tracts of land in Yazoo County. He planted 45.6 acres of cotton on one tract, the "Potato Hill Place", and 19 acres on the other, the "16th Section". The two cleared fields are separated by a wooded area about three-quarters of a mile wide. There was plenty of moisture that summer, the land was well fertilized, and by the end of July the crop was beginning to fruit heavily. Grey expected a good yield, about a bale and a half an acre or better.

Toward the end of June, Grey began spraying his cotton every five days using only "Mission Brand Chemicals" insecticides manufactured by Hayes-Sammons and purchased from Quinn at the Satartia warehouse. The insecticide was packaged in uniform, sealed five gallon cans. The invoices listed the insect poisons as Dynatox, Malathion (Mala-Tox), Methyl Parathion, DDT, and Endrin. Except for one occasion when the spraying was done by an airplane, Grey did his own spraying, using a tractor mounted with a fifty-five gallon metal drum or barrel and spraying equipment that would cover four rows of cotton at a sweep. Beginning at the Potato Hill Place, he followed a regular pattern through the cotton fields so that the cotton would be trained to let the tractor through. In mixing the spray he used a gallon jug for measuring the insecticide. He poured the gallon of insecticide into the drum and then filled the drum with water from Potato Hill Bayou. The bayou is a running stream. Later investigation showed that it was free from any dead or distorted vegetation. One drumload of spray was enough to cover twenty-five acres. The first load would therefore spray a little more than half of the 45.6 acre tract. The second load would finish that planting and also spray the North Quarter of the 19-acre tract in the 16th Section. A third part-load would finish the job. Grey never had any 2-4D or 2-4-5T or any other growth hormone herbicide or weed killer.

About July 25 the cotton blooms were turning black, drying up, hanging on the stalks. The squares began to turn red and burst open. New leaves grew in distorted patterns. The damage was uniform throughout the 45.6 acre tract and the North Quarter of the 19-acre tract; the remainder of the 19-acre tract was only slightly damaged. Grey notified John Book, an employee of Quinn's in charge of the Satartia Warehouse. Book notified another Quinn employee who reported the matter to Andrew White, manager of the Dixie Division of Hayes-Sammons. White was in charge of all Hayes-Sammons operations outside of the state of Texas. He and one of the defendant's entomologists examined the plaintiff's crop. They agreed that the damage resulted from some type of growth hormone herbicide, such as 2-4D or 2-4-5T. They inspected Potato Hill Bayou and found no evidence of contamination there. They noted that there was no damage to growth surrounding the cotton fields, an indication that the herbicide did not fall on the cotton from the air.⁴

In response to White's request that Grey cooperate in an investigation to determine the cause of the damage, Grey gave White eighteen five-gallon cans which had contained the insecticide. White sent these to two laboratories for examination. The laboratories informed him that there was no acceptable test for determining whether the cans had contained a herbicide. Grey testified that White agreed to pay for the loss if he would cooperate with the investigation and not tell other people about the damage. White testified that he agreed to pay for the loss only if it were found that the company's insecticide had caused the damage. White acknowledged that he did ask Grey to keep the matter quiet, since the insecticide business is "seasonal and very subject to misinformation and scare-type of programs." Grey said that they did not discuss the amount of damage and that he did not then know how great his loss was or how much Hayes would pay him. Book, Quinn's employee, testified: "Mr. White told Mr. Grey that he wanted him to keep this under his hat. * * * And I agreed with him on that part because I was selling their product there. * * * He said there would be an adjustment made on the cotton crop."

Grey testified that he assembled his spraying equipment himself, and that he and his brother took turns using it. His brother farmed a tract of land about a mile away. When his brother was not using the spray equipment it was kept at Grey's house. Grey said he did not know what kind of poison his brother was using. When asked, "You don't know if he used any weed killer or not?" Grey answered, "I'm sure he did."

Several witnesses testified that cotton is highly susceptible to a growth hormone herbicide. One stated that damage would result from an application of as little as twenty-four ten-thousandths of a pound per acre. White said that even a tiny dosage was dangerous; for example, there was widespread damage to cotton crops in 1947 and 1948 when 2-4D was first sold and used cans were reused for packaging insecticides.

White testified that Hayes-Sammon's original plant is in Texas and that during 1957 a second plant was opened at Indianola, Mississippi. Operations at both plants are nearly identical. The principal equipment is a large tank used for mixing batches of insecticides. Each batch of insecticide contains 165 gallons and is used to fill either five fifty-three gallon cans or fifty-three five gallon cans. The plants use only new cans for packaging the products. The cans are sealed almost immediately after being filled. The same equipment is used to mix different types of insecticides but no herbicides are mixed. The company sells certain growth hormone herbicides, including 2-4D, but it purchases these already packaged and labeled under another brand, and it is careful to keep these in a separate warehouse at the Texas plant and to store the empty cans in a part of the building separate from the liquid mixing area. White stated that if 2-4D were placed in a tank it would not be possible to wash it out. He said also that Hayes-Sammons received no other complaints during 1957 that crop damage had been caused by use of its insecticides.

II. The Requirement of Privity under Mississippi Law

A. Courts and commentators have exposed the historical error in making privity an essential element of warranty on the theory that warranty is contractual in concept.⁵ "The action for breach of warranty was originally one on the case, sounding in tort and closely allied to deceit, from which it was not distinguished".⁶ However, the close association of "warranties" with contracts and sales has been of such long standing that many courts which no longer require privity, when recovery is based on negligence, still require privity when recovery is based on warranty. "In products liability cases based upon the theory of breach of warranty, the Mississippi courts require...