Kinlaw v. Long Mfg. N.C., Inc.

• Decision Date: 17 April 1979
• Docket Number: No. 7813SC629,7813SC629
• Citation: 40 N.C.App. 641,253 S.E.2d 629
• Parties: , 26 UCC Rep.Serv. 359 James N. KINLAW v. LONG MFG. N.C., INC.
• Court: North Carolina Court of Appeals

Page 629

253 S.E.2d 629

40 N.C.App. 641, 26 UCC Rep.Serv. 359

James N. KINLAW v. LONG MFG. N.C., INC.

No. 7813SC629.

Court of Appeals of North Carolina.

April 17, 1979.

R. C. Soles, Jr., Tabor City, for plaintiff-appellant.

Hester, Hester & Johnson by Worth H. Hester, Elizabethtown, and Biggs, Meadows, Batts, Etheridge & Winberry by William D. Etheridge and Auley M. Crouch, III, Rocky Mount, for defendant-appellee.

CARLTON, Judge.

The sole question presented by this appeal is whether the trial court properly allowed the motion to dismiss under G.S. 1A-1, Rule 12(b)(6) for failure of the complaint to state a claim upon which relief can be granted. We agree with the trial court's ruling.

The test on a motion to dismiss for failure to state a claim upon which relief can be granted is whether the pleading is legally sufficient. 11 Strong, N.C. Index 3d, Rules of Civil Procedure, § 12, p. 294. A complaint may be dismissed on motion filed under Rule 12(b)(6) if it is clearly without merit; such lack of merit may consist of an absence of law to support a claim of the sort made, absence of facts sufficient to make a good claim, or the disclosure of some fact which will necessarily defeat the claim. Hodges v. Wellons, 9 N.C.App. 152, 175 S.E.2d 690 (1970). For the purpose of a motion to dismiss, the allegations of the complaint are treated as true. Smith v. Ford Motor Co., 289 N.C. 71, 221 S.E.2d 282 (1976).

We now turn to the question of whether the complaint states a claim upon which relief can be granted for alleged breach of an express warranty in a situation where no privity exists between plaintiff-purchaser and defendant-manufacturer. We do not have before us the question of whether there was privity between plaintiff and defendant; the parties stipulated that no privity existed. All transactions leading to the purchase took place between plaintiff and defendant's authorized dealer.

The well-established rule in North Carolina requiring privity in breach of warranty actions is periodically assailed and is often a subject of serious debate. Unquestionably, it is a rule which should stand reexamination in light of modern merchandising techniques. However, we cannot do what plaintiff, by this appeal, requests of us; it is not our prerogative to overrule or ignore clearly written decisions of our Supreme Court. The North Carolina rule was stated by Justice Moore in Perfecting Service Co. v. Product Dev. & Sales Co., 261 N.C. 660, 668, 136 S.E.2d 56, 62 (1964):

A warranty is an element in a contract of sale and, whether express or implied, is contractual in nature. Only a person in privity with the warrantor may recover on the warranty; the warranty extends only to parties to the contract of sale. Murray v. Aircraft Corp., 259 N.C. 638, 131 S.E.2d 367; Prince v. Smith, 254 N.C. 768, 119 S.E.2d 923; Wyatt v. Equipment Co., 253 N.C. 355, 117 S.E.2d 21. A manufacturer is not liable to an ultimate consumer or subvendee upon a warranty of quality or merchantability of goods which the ultimate consumer or subvendee has purchased from a retailer or dealer to whom the manufacturer has sold, for there is no contractual relation between the manufacturer and such consumer or subvendee. Rabb v. Covington, 215 N.C. 572, 2 S.E.2d 705; Thomason v. Ballard & Ballard Co., 208 N.C. 1, 179 S.E. 30. There is an exception to this rule where the warranty is addressed to the ultimate consumer, and this exception has been limited to cases involving sales of goods, intended for human consumption, in sealed packages prepared by the manufacturer and having labels with representations to consumers inscribed thereon. Simpson v. Oil Company, 217 N.C. 542, 8 S.E.2d 813.

Plaintiff contends that if the express warranty is directed to the ultimate consumer it runs with the product to the consumer, and therefore falls within an exception to the general rule and privity is not required. He relies primarily on the Court's language in Simpson v. Oil Company, supra.

The language of several decisions does seem to lay the basis for further erosion of the privity requirement. Some believe the requirement should be eliminated completely. "If any court wishes to drop the requirement of privity, there is now ample and respectable authority to justify its decision to the legal world." Spruill, Privity of Contract as a Prerequisite for Recovery on Warranty, 19 N.C.L.R. 551, 565 (1941). See generally the concurring opinion of Justice (now Chief Justice) Sharp in Terry v. Double Cola Bottling Company, 263 N.C. 1, 138 S.E.2d 753 (1964) for a thorough survey of the law in other jurisdictions. Indeed, our Supreme Court has eliminated the privity requirement in tort actions for Negligence against a manufacturer. Corprew v. Geigy Chemical Corp., 271 N.C. 485, 157 S.E.2d 98 (1967).

We cannot, however, find a total abandonment of the rule in situations similar to the one at bar. Nor do we believe that Simpson creates such an exception. The Supreme Court clearly considered the Simpson rule to be limited to cases involving sales of goods intended for human consumption, as indicated in the language quoted above from Perfecting Service Co. v. Product Dev. & Sales Co., supra. See also Terry v. Double Cola Bottling Company,supra; Byrd v. Star Rubber Company, 11 N.C.App. 297, 181 S.E.2d 227 (1971); Coffer v. Standard Brands, Inc., 30 N.C.App. 134, 226 S.E.2d 534 (1976). Professor Hodge wrote, "In short, this case seems to stand for the proposition that any relaxation of the privity requirement in warranty cases can apply only in isolated sales of articles for human consumption." Hodge, "Products Liability: The State of the Law in North Carolina." 8 W.F.L.Rev. 481, 489 (1972).

Whether the rationale for abandoning the requirement in negligence actions applies with equal force to breach of warranty actions is not for us to say. There are obvious and valid distinctions between goods intended for human consumption and defective mechanical products. In the former, the item is usually consumed very soon after being removed from a sealed container. There is little, if any, opportunity for anyone to alter the contents between the time the product leaves the manufacturer and reaches the ultimate consumer. Mechanical gadgets, however, are normally used over a considerable period of time and are more subject to misuse by intermediate and ultimate handlers. See Green, "Should the Manufacturer of General Products be Liable Without Negligence?", 24 Tenn.L.Rev. 928 (1957). On the other hand, modern advertising techniques by manufacturers are obviously designed to reach the ultimate consumer. But these are considerations for another day. For now, our law requires that only a person in privity with the warrantor may recover on the warranty for mechanical devices. For that reason the order of the trial court is

Affirmed.

HEDRICK, J., concurs.

PARKER, J., dissents.

PARKER, Judge, dissenting.

Plaintiff purchased from one of defendant's authorized dealers a new "Long 900" farm tractor manufactured by defendant. He alleges that he paid $15,970.26 for the tractor with certain accessory equipment and that, because of defective and missing parts, the tractor "for all practical purposes was, has been, and still is worthless and useless." He brings this action against the manufacturer to recover damages for breach of an express written warranty of the tractor. The trial court allowed defendant's Rule 12(b)(6) motion to dismiss the complaint for failure to state a claim upon which relief can be granted on the grounds that the plaintiff "fails to allege facts to establish privity of contract between the plaintiff and the defendant manufacturer." The majority opinion affirms the dismissal on the same grounds. Because I think the result comports neither with reason nor controlling authority, I dissent.

A complaint should not be dismissed for failure to state a claim upon which relief can be granted unless it appears to a certainty that plaintiff is entitled to no relief upon any state of facts which could be proved in support of the claim. Sutton v. Duke, 277 N.C. 94, 176 S.E.2d 161 (1970). No such certainty appears in the present case. On the contrary, it appears to me that if plaintiff proves his allegations as to the defective condition of the tractor, he may be entitled to recover damages from the defendant for breach of its express written promissory warranty. In my view this would result simply from application of traditional notions of contract law without the necessity of making any further assault upon the crumbling citadel of privity. See concurring opinion by Sharp, J. (now C. J.) in Terry v. Bottling Co., 263 N.C. 1, 138 S.E.2d 753 (1964).

A copy of the written warranty upon which plaintiff sues was attached as an exhibit to plaintiff's complaint. In its answer defendant admitted that "the printed document marked Exhibit A and attached to the Complaint as amended, is the Long Mfg. N.C., Inc. warranty, applicable to Model 900 tractors manufactured by the defendant Long." The printed warranty is as follows:

LONG MFG. N.C. INC. TRACTOR WARRANTY

Long Mfg. N.C. Inc., warrants that (except as set forth in the third paragraph) each new farm or agricultural tractor sold by it and its authorized dealers will be free from defects in material and workmanship under normal use and service for a period of one year or one-thousand (1,000) hours of operation, whichever occurs first from date of purchase. Long's obligation under this warranty is limited to repairing or replacing at its option in an authorized Long Tractor Dealer's place of business any part or parts that, which within the applicable period previously stated, are returned to its factory in Tarboro, North Carolina, or one of its distributing branches in Tifton, Georgia; Carrollton, Texas; Memphis, Tennessee, or Davenport, Iowa, with transportation charges prepaid. Long's examination must show that the returned part or...