Hebel v. Sherman Equipment

• Decision Date: 22 October 1982
• Docket Number: No. 55877,55877
• Citation: 92 Ill.2d 368,65 Ill.Dec. 888,442 N.E.2d 199
• Parties: , 65 Ill.Dec. 888 Rohn HEBEL, Appellee, v. SHERMAN EQUIPMENT, Appellant.
• Court: Illinois Supreme Court

Page 199

442 N.E.2d 199

92 Ill.2d 368, 65 Ill.Dec. 888

Rohn HEBEL, Appellee, v. SHERMAN EQUIPMENT, Appellant.

No. 55877.

Supreme Court of Illinois.

Oct. 22, 1982.

Braun, Lynch, Smith & Strobel, Ltd., Chicago, for plaintiff-respondent; James W. Ford, Chicago, Ill., of counsel.

Wildman, Harrold, Allen & Dixon, Chicago, for defendant-petitioner; Howard T. Brinton, William J. Rogers, Ruth E. Van Demark, Chicago, Ill., of counsel.

CLARK, Justice:

In this products liability action, summary judgment for the defendant, Sherman Equipment (Sherman), was entered by the circuit court of Cook County. A divided appellate court reversed. (100 Ill.App.3d 1054, 56 Ill.Dec. 562, 427 N.E.2d 967.) We granted Sherman's petition for leave to appeal, and we now reverse the appellate court.

The following is a summary of the salient facts. On February 22, 1976, plaintiff, Rohn Hebel, then 16 years old, was working at the Glenbrook Standard Service Station and Car Wash in Northbrook when his foot was caught in the car conveyor and mangled by the conveyor's drive chain. Hebel's amended complaint, alleging that the "car washing machine" at the Glenbrook Standard Station had been designed, manufactured and sold by Sherman and that it was in a defective and unreasonably dangerous condition, was filed on July 31, 1978.

The Glenbrook Standard Station purchased its car-washing equipment in 1971 from Haverberg Auto Laundry Equipment Company in Chicago. Haverberg (which is sometimes referred to in the pleadings by its trade name, Flapan Car Wash Equipment Company) is primarily engaged in selling, installing and servicing automatic car-washing equipment, but it also manufactures some car-washing equipment itself. Haverberg is a distributor for Sherman Industries, Inc. (the actual corporate name of Sherman Equipment), a New Jersey-based manufacturer of automatic car-washing machinery. Apart from the conveyor, nearly all of the equipment purchased by Glenbrook from Haverberg was manufactured by Sherman. This included a large washer shaped like an inverted "U," with enormous brushes, of the kind commonly seen at a tunnel-type car wash, as well as a similarly shaped rinser, dryer, and "wax actuator." Each of these machines prominently displayed Sherman's trade name and rather distinctive logo ("Sherman Supersonic Systems, Palmyra, N.J."). The conveyor--an 80-foot-long track with rollers that emerge from beneath the floor to push automobiles along under the various washing and rinsing units--bore no identifying name or serial number. Hebel admits in his brief that the conveyor was designed and manufactured by Haverberg, not by Sherman.

Sherman moved for summary judgment in the circuit court on the ground that it did not manufacture, design or sell the allegedly defective conveyor that injured the plaintiff. It supported the motion with the affidavits of employees of Sherman and Haverberg stating that Haverberg, not Sherman, designed and manufactured the conveyor. Hebel's response to the motion asserted that Sherman "had held itself out to be the manufacturer of the automatic car washing system" at the Glenbrook Standard Station, including the defective conveyor which was a "component of the system," and that Sherman was therefore liable as though it were the actual manufacturer. The appellate court, in reversing the summary judgment, found that a factual issue existed as to whether Sherman held itself out as the manufacturer of the conveyor, apparently on the basis of evidence from which the court thought it could be inferred that Sherman had authorized Haverberg's use of its name in advertising the conveyor. 100 Ill.App.3d 1054, 1059-60, 56 Ill.Dec. 562, 427 N.E.2d 967.

Decision of this case requires us first to examine the "holding out" or "apparent manufacturer" doctrine. The imposition of tort liability based on a defendant's status as the "apparent manufacturer" of a harm-causing product predates by some years the advent of the doctrine of strict liability in tort of suppliers of unreasonably unsafe chattels. The rule evolved in cases in which a retailer or distributor of a product manufactured by another was found to have held itself out to the public as the product's manufacturer, and therefore to be subject to the same liability as the actual manufacturer. (2 Hursh & Bailey, American Law of Products Liability sec. 7:2 (2d ed. 1974), and cases there cited.) The rationale for imposing liability on the apparent manufacturer was a species of estoppel: the vendor who, through its labeling or advertising of a product, caused the public to believe that it was the manufacturer and to buy the product in reliance on the vendor's reputation and care in making it, was held to have assumed the obligations of a manufacturer and to be estopped to deny its identity as the manufacturer. (Davidson v. Montgomery Ward & Co. (1912), 171 Ill.App. 355, 367, 369; Burkhardt v. Armour & Co. (1932), 115 Conn. 249, 264-65, 161 A. 385, 391.) The Restatement (Second) of Torts formulation of the rule states: "One who puts out as his own product a chattel manufactured by another is subject to the same liability as though he were its manufacturer." (Restatement (Second) of Torts sec. 400 (1965).) According to the Restatement comment: "The actor puts out a chattel as his own product in two types of cases. The first is where the actor appears to be the manufacturer of the chattel. The second is where the chattel appears to have been made particularly for the actor. In the first type of case the actor frequently causes the chattel to be used in reliance upon his care in making it; in the second, he frequently causes the chattel to be used in reliance upon a belief that he has required it to be made properly for him and that the actor's reputation is an assurance to the user of the quality of the product. * * * Thus, one puts out a chattel as his own product when he puts it out under his name or affixes to it his trade name or trademark. When such identification is referred to on the label as an indication of the quality or wholesomeness of the chattel, there is an added emphasis that the user can rely upon the reputation of the person so identified." (Restatement (Second) of Torts sec. 400, comment d (1965).) Another justification sometimes given for the rule is that where a defendant puts out a product as its own, the purchaser has no means of ascertaining the identity of the true manufacturer, and it is thus fair to impose liability on the party whose actions effectively conceal the true manufacturer's identity. Burkhardt v. Armour & Co. (1932), 115 Conn. 249, 264-65, 161 A. 385, 391; Dudley Sports Co. v. Schmitt (1972), 151 Ind.App. 217, 224-25, 279 N.E.2d 266, 273.

"Holding out" cases usually involve either (a) a defendant's labeling or affixing to the product its own name, trade name, or trademark; or (b) advertising identifying the defendant as the maker of the product. Representative examples are: Lill v. Murphy Door Bed Co. (1937), 290 Ill.App. 328, 8 N.E.2d 714 (defendant sold the "Murphy In-A-Dor Bed" to building owner, who installed it in plaintiff's apartment; bed was made by Simmons Company, but defendant's name was engraved on bed's metal castings; further, defendant's catalog and brochures declared that it was the maker of the bed, that the bed was sturdy and the castings were of "iron that does not break"; defendant was liable for negligence in manufacture, leading to plaintiff's injury when bed frame broke); Davidson v. Montgomery Ward & Co. (1912), 171 Ill.App. 355 (plaintiff was injured when balance wheel on wood-saw frame, ordered from defendant's catalog, burst; catalog stated that defendant was a manufacturer, that implements were shipped directly from the factory, and that all implements were "thoroughly tested" and known by defendant's reputation to be "the best made"; saw frame also bore defendant's initials, and there was no indication that frame had been made by another; held, defendant intended public to believe it was manufacturer of the saw frame and to act on such belief, and therefore held to assume all obligations and responsibilities of a manufacturer); Sears, Roebuck & Co. v. Morris (1961), 273 Ala. 218, 136 So.2d 883 (retailer which sold a boat trailer under its trade name "Elgin" had a manufacturer's liability for injury when metal wheel disintegrated as plaintiff was inflating tire); Burckhardt v. Armour & Co. (1932), 115 Conn. 249, 161 A. 385 (plaintiff sustained injury resulting in death from jagged piece of tin in canned corned beef; product had been packed by Argentine corporation under agreement with defendant distributor; legend on label, "Armour Veribest Products," was exclusive trademark of defendant, and label did not identify actual packer, so that reasonable purchaser would infer that defendant was packer; defendant, by selling product under its own name, held to have put it out as its own). See cases cited 2 Hursh & Bailey, American Law of Products Liability sec. 7:2 (2d ed. 1974); Annot., 51 A.L.R.3d 1344, 1361-63 (1973).

It is noteworthy that the apparent-manufacturer doctrine was developed in the context of suits by consumers against sellers of dangerous chattels. Nearly all the cases imposing liability on this basis involve defendants who were retailers or distributors. The aim of the doctrine clearly was to provide a remedy for consumers injured by unsafe products. Today, of course, this objective is achieved by the doctrine of strict products liability; all sellers of dangerously defective chattels are now strictly liable to injured purchasers--that is, they have the same liability as the manufacturer--without regard to whether or not they held themselves out to the public as the maker of the product. (Dunham v. Vaughan & Bushnell Manufacturing Co. (1969), 42 Ill.2d 339, 247 N.E.2d 339.) The function of the apparent-manufacturer doctrine has, as it were, been absorbed by the theory of sellers'...