Pabon v. Hackensack Auto Sales, Inc.

• Decision Date: 31 October 1960
• Docket Number: No. A--514,A--514
• Parties: Alphonse PABON, an infant, by his guardian ad litem, Alphonso Pabon, and Alphonso Pabon, Individually, Plaintiffs-Appellants, v. HACKENSACK AUTO SALES, INC., a body corporate, and Ford Motor Company of Delaware, a corporation of the State of New Jersey, Defendants-Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 476

63 N.J.Super. 476

164 A.2d 773

Alphonse PABON, an infant, by his guardian ad litem, Alphonso Pabon, and Alphonso Pabon, Individually, Plaintiffs-Appellants, v. HACKENSACK AUTO SALES, INC., a body corporate, and Ford

Motor Company of Delaware, a corporation of the

State of New Jersey, Defendants-Respondents.

No. A--514.

Superior Court of New Jersey

Appellate Division.

Argued Oct. 10, 1960.

Decided Oct. 31, 1960.

Albert L. Cohn, Paterson, for plaintiffs-appellants (David & Albert L. Cohn, Paterson, attorneys; Daniel Crystal, Paterson, on the brief).

Sidney Dincin, Englewood, for defendant-respondent Hackensack Auto Sales, Inc. (Reid & Flaherty, East Orange, attorneys; Henry J. Bendheim, Englewood, of counsel).

William R. Morrison, Hackensack, for defendant-respondent Ford Motor Co. of Delaware (Morrison, Lloyd & Griggs, Hackensack, attorneys; Bruce M. Ramer, Hackensack, on the brief).

Before Judges GOLDMANN, FREUND and KILKENNY.

The opinion of the court was delivered by

FREUND, J.A.D.

This appeal is from a judgment of involuntary dismissal, with prejudice, entered at the close of the plaintiffs' case. Suit was instituted for both personal injuries and property damage by Alphonso Pabon, as guardian Ad litem of Alphonse Pabon, and also Per quod.

On October 19, 1957, at about 2:30 A.M., on Route 4 in Paramus, Alphonse Pabon, then 19 years of age, was injured while driving a new Ford automobile purchased the previous month from defendant Hackensack Auto Sales, Inc. (Hackensack), a franchised Ford dealer. Alphonse testified that he was traveling westerly, driving in the inside lane at about 35 to 45 miles per hour, and had decided to move over to one of the two slower lanes. When he turned his steering wheel to the right, it 'locked,' and he could not turn it back to the left. He stepped on the gas, thinking that this would free the wheel. When he realized that the wheel was still locked, he jammed on the brakes. The car continued out of control, hit and jumped the curb, and smashed into a pole at the side of the highway. The automobile was damaged to the extent of $1,800, and Pabon suffered injuries.

In addition to a claim of breach of warranty, plaintiffs alleged negligence on the part of defendants Hackensack and Ford with reference to a defective steering mechanism in Pabon's automobile. Negligence was charged in Ford's manufacturer of an automobile containing a defective ball bearing assembly, in the sale by Hackensack of such defective vehicle, and in the failure of Hackensack to repair the defect after Pabon had reported to the dealer that the movement of the steering wheel was uneven and was accompanied by a 'clicking' sensation. The allegations of breach of implied warranties of merchantability and fitness for a particular purpose were likewise predicated on the asserted defect in the vehicle. At the time of the accident, the car had been driven approximately 3,000 miles, over a period of about six weeks.

The trial of the action was commenced before the Law Division, Bergen County, sitting with a jury. At the close of plaintiffs' evidence, the trial judge entered an involuntary dismissal on the following grounds. With respect to the alleged warranties, the court held that Alphonse, and therefore his father and guardian Ad litem, were barred by lack of privity of contract, since the car had been purchased in the name of the infant plaintiff's sister, Maxine Pabon. The trial judge refused to admit evidence that Alphonse, to the knowledge of Hackensack, had actually provided the consideration for the automobile in question and was its sole user, and that Maxine had taken title at the suggestion on Hackensack's salesman because of Alphonse's status as a minor. In regard to the allegations of negligence, the court referred to evidence in the record that the ball bearings in the steering wheel were manufactured for Ford by the New Departure Corporation, and concluded that the type of defect disclosed by plaintiffs' proofs, a .03 inch flaw in the construction of one of the balls in the assembled bearing, could not have been discovered by Ford or Hackensack in the exercise of reasonably careful inspection.

On the appeal, plaintiffs assert that the trial court erred in its determinations with respect to both defendants and with respect to both of the issues, warranty and negligence. We will consider these contentions in the order in which they are raised.

I. Warranty

The trial of this case was completed before our Supreme Court rendered its decision in Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 413, 161 A.2d 69, 100 (1960), establishing the rule that an implied warranty of merchantability extends in favor of all persons who, 'in the reasonable contemplation of the parties to the warranty, might be expected to become a user of the automobile.' Henningsen also struck down, as violative of public policy, the standard disclaimer and limitation of liability clauses contained in automobile manufacturers' and dealers' warranties. Ibid., at p. 404, 161 A.2d at p. 95.

Plaintiffs allege, and defendants appear to concede, that the Henningsen rationale should be taken into account in deciding the instant appeal. The general rule in civil cases is that a change of the established law by judicial decision is retrospective. Fox v. Snow, 6 N.J. 12, 14, 76 A.2d 877 (1950); Johnson v. State, 18 N.J. 422, 428, 114 A.2d 1 (1955); Yonadi v Homestead Country Homes, Inc., 42 N.J.Super. 521, 528, 127 A.2d 198 (App.Div.1956); Terracciona v. Magee, 53 N.J.Super. 557, 563, 148 A.2d 68 (Cty.Ct.1959). Defendants do not attempt to bring themselves within the exception to this rule by showing that the retrospective application of the Henningsen decision would divest them of contract or property rights or impose upon them extreme hardship. See 14 Am.Jur., Courts, § 130, p. 345.

Defendants conceded, on oral argument, that Henningsen renders incorrect the ruling of the court below that Alphonse Pabon was barred by lack of privity from bringing suit against Hackensack and Ford for his personal injuries. Not only was Alphonse a member of the family of the nominal purchaser, Maxine Pabon, but it was Alphonse who first approached Hackensack with interest in the purchase of an automobile, who provided the consideration for the automobile--all within the knowledge of Hackensack's salesman--and for whose use the automobile was bought. Alphonse is clearly within the 'distributive chain.' Henningsen, supra, at p. 415, 161 A.2d at p. 101.

With respect to plaintiffs' claim for damage to the automobile, the trial court cited Eggerding v. Bicknell, 20 N.J. 106, 118 A.2d 820 (1955), for the proposition that title to a motor vehicle may be transferred only in accordance with the statutory directive, N.J.S.A. 39:3--3 et seq., noted that title had not been so transferred to Alphonse, and therefore concluded that lack of privity prevented recovery by anyone other than Maxine Pabon.

Midway through the trial, plaintiffs attempted to amend their complaint to make Maxine Pabon a party plaintiff. Defendants resisted such amendment, and the court denied the request to amend. Considering the liberality with which our amendment rule, R.R. 4:15, has been construed, see Ajamian v. Schlanger, 14 N.J. 483, 103 A.2d 9 (1954), it is not clear in what manner defendants would have been surprised and prejudiced by the addition of Maxine Pabon as a party plaintiff. But the question is moot, as we are of the opinion that error was committed in barring suit by the present plaintiffs for the property damage.

Where one purchases real or personal property in the name of a brother or sister, there is no inference that a gift was intended, but rather a presumption of a resulting trust. Pope v. Bain, 5 N.J.Super. 541, 546, 68 A.2d 569 (Ch.Div.1949), reversed on other grounds, 8 N.J.Super. 263, 74 A.2d 317 (App.Div.1950), which was reversed in 6 N.J. 351, 78 A.2d 820 (1951). 4 Scott, Trusts (2d ed. 1956), § 442, p. 3034. It is not contested that Alphonse supplied the consideration for the automobile in question. In the instant case, the presumption of a trust is strengthened by the proffered evidence of the negotiations between Alphonse and Hackensack's salesman, and the suggestion that Maxine took title only at the behest of the salesman and because of Alphonse's age. Additionally, there is testimony that Maxine bought a car for herself at the same time that she took title to the automobile to be driven by Alphonse. Moreover, the record clearly indicates that Alphonse was the sole and exclusive user of the automobile from the date of purchase to the date of the accident.

As beneficiary of the resulting trust, Alphonse was clothed with equitable ownership of the automobile. Damage to the vehicle affected his equitable rights, and he was entitled to recover for such damage as a real party in interest. R.R. 4:30--1. See Goldstein v. Commonwealth Trust Co., 19 N.J.Super. 39, 46, 87 A.2d 555 (Cty.Ct.1952); 67 N.J.S. Parties § 10, p. 911. Had the consideration for the automobile actually been furnished by Maxine, the attendant circumstances might well have given rise to the conclusion that Alphonse was a third-party beneficiary, and entitled to sue in that capacity. N.J.S. 2A:15--2, N.J.S.A. See Burlew v. Hillman, 16 N.J.Eq. 23, 25 (Ch.1863). A fortiori, as Alphonse himself provided the consideration, and as a gift from him to Maxine is negated by the facts, he has standing to sue on the contract.

Even granting that plaintiffs are not barred by lack of privity by virtue of the Henningsen decision, defendants argue that breach of an implied warranty of merchantability, R.S. 46:30--20, N.J.S.A., or implied warranty of fitness for a specified purpose, R.S. 46:30--21(1), N.J.S.A., must still be proved by a preponderance of the probabilities, and urge that plaintiffs' proofs were sorely deficient in this respect. While it has been held that recovery for...