Houseboating Corp. of America v. Marshall
| Decision Date | 18 July 1977 |
| Parties | HOUSEBOATING CORPORATION OF AMERICA, Petitioner, v. James A. MARSHALL et al., Respondents. 553 S.W.2d 588 |
| Court | Tennessee Supreme Court |
Frank S. King, Jr., Nashville, Robert J. English, Knoxville, for petitioner.
McCord & Cockrill, P.C., Knoxville, for respondents.
This case involves a claim for indemnification by a distributor against the manufacturer of a houseboat. The distributor had sold the boat, after some alterations and additions, to a customer, but in prior litigation the customer was allowed rescission of the contract of purchase and a refund of the purchase price because of a defective condition in the vessel. It was established in that litigation that the defect occurred during the manufacturing process. Since the customer sought only rescission, however, and not damages, he was allowed recovery against the distributor alone and not the manufacturer, although the latter was a party to that litigation.
After being held liable in the prior case, the distributor, Lake Flite Plastics, paid the judgment, representing the entire sale price to the original purchaser. It notified the manufacturer that it proposed to sell the boat at a price considerably below the original sale price, and called on the manufacturer to assume responsibility for the difference. When the manufacturer refused, the distributor did sell the boat at a reduced price and in the present action, by way of counterclaim, sought indemnification from the manufacturer for its loss.
Both the trial court and the Court of Appeals allowed the claim of the distributor, and this Court granted certiorari to give further consideration to the issue.
The present litigation was instituted by the manufacturer to recover its sale price to the distributor of a second and different houseboat. The distributor set up its claim arising out of the previous transaction, described above, by way of counterclaim. It sought indemnification, based upon its original demand after it had been held liable in its customer's suit. By amendment, it also claimed a right of recovery based upon numerous other theories, including breach of implied warranty, strict liability in tort, and tortious misrepresentation. In the present case the trial judge found that privity of contract existed between the manufacturer and the distributor, although in the prior litigation it had been established that there was no privity between the ultimate consumer and the manufacturer.
We are of the opinion that the distributor is entitled to be indemnified by the manufacturer for the defective condition of the vessel, which resulted from the permeation of the interior with a chemical that emitted irritating fumes. It is not questioned in the present litigation that this defective condition resulted from the original manufacturing process.
The usual basis for recovery by a retailer or dealer against the manufacturer of a product is a claim for indemnification, arising out of a contractual obligation or out of a claim of active-passive negligence. See Frumer & Friedman, Products Liability, §§ 44.02(3) et seq. (1976).
Principles of indemnification are well settled in Tennessee law. In the case of Southern Coal & Coke Co. v. Beach Grove Mining Co., 53 Tenn.App. 108, 381 S.W.2d...
To continue reading
Request your trial
-
Hill v. Joseph T. Ryerson & Son, Inc.
...Equipment, Ltd., 270 Or. 322, 527 P.2d 711 (1974); Drier v. Perfection, Inc., 259 N.W.2d 496 (S.D.1977); Houseboating Corp. of America v. Marshall, 553 S.W.2d 588 (Tenn.1977). While most courts acknowledge the availability of the remedy of implied indemnity in product liability cases, an ex......
-
Owens v. Truckstops of America
...expressed, or an obligation to indemnify may arise by implication from the relationship of the parties...." Houseboating Corp. of Am. v. Marshall, 553 S.W.2d 588, 589 (Tenn.1977). The right of indemnity is not impaired by the Uniform Contribution Among Tort-Feasors Act. Section 29-11-102(f)......
-
AutoZone, Inc. v. Glidden Co.
...defendant to be liable to a plaintiff, the defendant is entitled to indemnification from the third party. See Houseboating Corp. of Am. v. Marshall, 553 S.W.2d 588, 589 (Tenn.1977) ( "The right to indemnity rests upon the principle that everyone is responsible for the consequences of his ow......
-
Winter v. Smith
...wrongdoers should be liable to persons who are required to pay damages that the wrongdoers should have paid. Houseboating Corp. v. Marshall, 553 S.W.2d 588, 589 (Tenn.1977); Southern Coal & Coke Co. v. Beech Grove Mining Co., 53 Tenn.App. 108, 116, 381 S.W.2d 299, 302 (1963). To further the......