London Guar. & Acc. Co., Ltd., of London, England v. Strait Scale Co.

• Citation: 15 S.W.2d 766,322 Mo. 502
• Parties: London Guarantee & Accident Company, Limited, Appellant, v. Strait Scale Company
• Decision Date: 29 March 1929
• Court: United States State Supreme Court of Missouri

15 S.W.2d 766

322 Mo. 502

London Guarantee & Accident Company, Limited, Appellant, v. Strait Scale Company

Supreme Court of Missouri

March 29, 1929

Appeal from Jackson Circuit Court; Hon. O. A. Lucas, Judge.

Reversed and remanded.

Battle McCardle and Langworthy, Spencer & Terrell for appellant.

The court committed error in giving the jury at the close of plaintiff's case its peremptory instruction directing the jury to return its verdict in favor of the defendant. (1) The defendant breached its implied warranty to plaintiff's assured, the Roberts & Schaeffer Company. Kellogg Bridge Co. v. Hamilton, 110 U.S. 108; Busch & Latta Co. v Const. Co., 310 Mo. 419; Barton v. Dowis, 315 Mo. 226. The damages claimed were within the contemplation of the parties and not too remote. (a) The decided cases permit recovery by the purchaser from the manufacturer where the manufacturer's breach of warranty has subjected the purchaser to legal liability by reason of injuries to third persons. Mark v. Cooperage Co., 204 Mo. 242; Mayfield v. Richardson Mach. Co., 208 Mo.App. 206; Wood Preserve Co. v. Gas & Elec. Co., 243 S.W. 239; Linen Thread Co. v. Shaw, 9 F.2d 17; Shipbuilding Corp. v. Gutradt, 10 F.2d 769; Dushane v. Benedict, 120 U.S. 630; Busch & Latta Co. v. Const. Co., 310 Mo. 419; Boston Rubber Co. v Kendall, 178 Mass. 232; Mowbray v. Merryweather (1895), 2 Q. B. 640; Vogan v. Oulton, 81 L. T. (N S.) 435; Otis Elevator Co. v. Cameron (Tex. Civ. App.), 205 S.W. 852; Mallory S. S. Co. v. Druhan (Ala.), 84 So. 874; Alaska S. S. Co. v. Gypsum Co., 71 Wash. 379; John Wanamaker v. Otis Elevator Co., 175 N.Y.S. 78; Lord & Taylor, Inc., v. Mfg. Co., 230 N.Y. 132; Dayton Power Co. v. Elec. & Mfg. Co., 287 F. 439; London Guarantee Co. v. Elevator Co. (Ind.), 155 N.E. 182; Tyler v. Moody, 111 Ky. 191. (b) The evidence adduced by plaintiff is amply sufficient to bring the case at bar within the application of the above authorities. The loss being the proximate result of the breach of warranty, the purchaser (or one standing in its place) is entitled to recover indemnity therefor, in an action sounding in breach of warranty. (2) The breach of warranty was the proximate cause of the injury to the workman. Having been compelled to pay damages on account of the injuries to the workmen, the Roberts & Schaeffer Company (appellant's subrogor) had a direct right of action over against Strait Scale Company. Oceanic Steam Nav. Co. v. Compania Transatlantica Espanola, 134 N.Y. 461; Grant v. Maslen, 151 Mich. 466; Dayton Power Co. v. Elec. & Mfg. Co., 287 F. 439; London Guarantee Co. v. Elevator Co. (Ind.), 155 N.E. 182; Lord & Taylor, Inc. v. Mfg. Co., 230 N.Y. 132. (3) The record does not establish or even disclose that the Roberts & Schaeffer Company and defendant, Strait Scale Company, were joint tortfeasors. Ry. Co. v. Ellis, 78 Okla. 150; Boston v. Worthington, 10 Gray (Mass.) 496; Littleton v. Richardson, 34 N.H. 179; Boston Railroad Co. v. Brackett, 71 N.H. 494; George A. Fuller Const. Co. v. Elevator Co., 245 U.S. 489; Colonial Motor Corp. v. Railroad, 228 N.Y.S. 508; Busch & Latta Co. v. Const. Co., 310 Mo. 419. (4) Plaintiff insurance company, having discharged the liability of the Roberts & Schaeffer Company was subrogated to the latter's cause of action against defendant; having paid the loss in its entirety, it is entitled to sue in its own name. Busch & Latta Co. v. Const. Co., 310 Mo. 411; Hartford Ins. Co. v. Wabash, 74 Mo.App. 106; Norwich Ins. Co. v. Standard Oil Co., 59 F. 987; Travelers' Ins. Co. v. Engineering Co., 184 F. 431; John Wanamaker v. Elevator Co., 175 N.Y.S. 78; London Guarantee Co. v. Elevator Co. (Ind.), 155 N.E. 182; 14 R. C. L. 1410, sec. 574; Lord & Taylor, Inc. v. Mfg. Co., 230 N.Y. 132.

Morrison, Nugent, Wylder & Berger and Howard L. Hassler for respondent.

The court committed no error in instructing the jury at the close of plaintiff's case to return a verdict in favor of defendant. (1) This case is properly determined by the law of Missouri and not that of Illinois. (2) Plaintiff failed to make a prima-facie case of the right of Roberts & Schaeffer Company, its subrogor, to recover over against defendant. (a) The only inference from the evidence is that Wolfe and Ingle recovered judgments against Roberts & Schaeffer because of the independent positive negligence of Roberts & Schaeffer, and not on account of its passive negligence only. Roberts & Schaeffer were therefore in pari delicto and fall within the rule prohibiting contribution among joint tortfeasors. Gregg v. Page Belting Co., 69 N.H. 247; City of Tacoma v. Bonnell, 65 Wash. 505; City of Weatherford v. Water Co., 196 S.W. 986; Aberdeen Const. Co. v. City of Aberdeen, 165 P. 1058; Seattle v. Ry. Co., 103 Wash. 294; N. C. Elec. Co. v. Mfg. Co., 181 N.C. 597; Boott Mills v. Railroad, 218 Mass. 593; Ry. Co. v. Boomer, 194 Mich. 52; Alaska S. S. Co. v. Flour Co., 211 P. 761; Bowman v. City of Greensboro, 190 N.C. 611; Wash. & Berkeley Bridge Co. v. Penn. Steel Co., 215 F. 32; Ry. Co. v. Ry. & Light Co., 9 Ga.App. 628; Union Stock Yards Co. v. Railroad, 196 U.S. 217. (b) No mere passive negligence of Roberts & Schaeffer can be inferred. State v. Trimble, 274 S.W. 391; Newell v. Mfg. Co., 166 Mo.App. 555; Ry. Co. v. Ry. & Lt. Co., 9 Ga.App. 628. (3) The former judgment is conclusive as to the independent negligence of Roberts & Schaeffer Company, and constitutes no evidence as to defendant's liability. Seattle v. Andrews Peterson & Co., 99 Wash. 533; St. Joseph v. Union Ry. Co., 116 Mo. 636; Ry. Co. v. Warehouse Co., 139 Ga. 29; Roth Tool Co. v. New Amsterdam Co., 161 F. 709; Scott v. Curtis, 195 N.Y. 424; Littleton v. Richardson, 34 N.H. 188; McArthor v. Ogletree, 4 Ga.App. 429; Commrs. of Lexington v. Aetna Ind. Co., 155 N.C. 219. (4) There was no implied warranty. A warranty is not necessarily implied because the seller knows the buyer is buying for a specific purpose. The facts of each case determine the existence or non-existence of an implied warranty, and superiority of the seller and reliance thereon by the buyer are essential. Machinery Co. v. Foundry Co., 131 Mo.App. 540; Hoe v. Sanborn, 21 N.Y. 563; Manufacturing Co. v. Crites, 178 Mo.App. 218; Martin & Co. v. Roehm, 92 Ill.App. 87. (5) The damages are too remote. Damages recoverable in cases of this class are only such as may be deemed to have been in contemplation of the parties at the time of making their contract. Mark v. Cooperage Co., 204 Mo. 265; Birdsinger v. Mfg. Co., 183 N.Y. 487; Railroad v. Roydhouse, 267 Pa. 368. (6) Defendant's alleged breach of warranty was not the proximate cause of the accident. Kennedy v. Const. Co., 291 S.W. 475; St. Joseph v. Union Ry. Co., 116 Mo. 636; Seattle v. Erickson, 99 Wash. 543; Seattle v. Ry. Co., 103 Wash. 294.

OPINION

Ragland, J.

This is a suit to recover damages growing out of the breach of an alleged implied warranty. In the early part of 1916, the Roberts & Schaeffer Company of Chicago, Illinois, hereinafter called the Construction Company, built for the Chicago & Great Western Railroad Company, hereinafter referred to as the Railroad Company, at Hayfield, Minnesota, a locomotive coaling station. It was built under a contract by which the Construction Company furnished all of the labor and material. As a part of the equipment a set of suspension scales was installed: the scales were purchased by the Construction Company from the defendant. After the structure had been completed and before delivery to the Railroad Company and while the machinery and appliances for hoisting and weighing coal were being tested by representatives of the Construction Company and operatives of the Railroad Company, one of the principal beams which supported the scales, owing to a latent structural defect, broke, causing the scales and a considerable portion of the structure to suddenly fall to the ground. One of the Railroad Company's employees was killed and another seriously injured. Thereafter the injured employee and the personal representative of the one deceased recovered against the Construction Company in a district court of the United States, in Minnesota, judgments aggregating $ 13,740.55. Defendant was duly notified of the institution and pendency of the actions which culminated in these judgments and was given an opportunity to appear therein and defend, but declined to avail itself of such opportunity.

Prior to the accident just referred to plaintiff had issued to the Construction Company a policy of insurance, whereby it had agreed to indemnify the Construction Company for loss from the liability imposed by law for damages on account of bodily injuries, including death, suffered by any person or persons not in its employ. In accordance with the terms of its policy, plaintiff defended the actions against the Construction Company, incurring in so doing an expense of $ 1248.97, and thereafter paid the judgments recovered therein.

The contract of insurance contained a clause providing: "In case of payment of loss or expense under this policy the Company shall be subrogated to the amount of such payment to all rights of the assured against any person, firm or corporation as respects such loss or expense. . . ."

The warranty asserted, and alleged to have been breached, is disclosed by the following excerpt from the petition:

"That the said scales so as aforesaid delivered by the defendant under said contract to said Roberts & Schaeffer Company was not according to the terms of aforesaid order or the warranty therein, said scales were not of suitable material and quality and were not manufactured with reasonable skill and correctness, or in workmanlike manner, and were not reasonably fit for the purpose contemplated in and by said contract and the warranty therein when used...