Peters v. Lyons

• Decision Date: 10 June 1969
• Docket Number: No. 53394,53394
• Citation: 168 N.W.2d 759
• Court: Iowa Supreme Court
• Parties: Steve D. PETERS, Plaintiff, v. Fae LYONS and S. S. Kresge Company, a Michigan Corporation, Defendants. Fae LYONS' ESTATE, Cross Plaintiff-Appellee-Cross Appellant, v. S. S. KRESGE COMPANY, a Michigan Corporation, Defendant-Appellant-Cross Appellee. WESTERN FIRE INSURANCE COMPANY, FORT SCOTT, KANSAS, Intervenor-Appellee-Cross Appellant, v. S. S. KRESGE COMPANY, a Michigan Corporation, Defendant and Cross Defendant- Appellant-Cross Appellee.

Page 759

168 N.W.2d 759

Steve D. PETERS, Plaintiff, v. Fae LYONS and S. S. Kresge Company, a Michigan Corporation, Defendants.

Fae LYONS' ESTATE, Cross Plaintiff-Appellee-Cross Appellant, v. S. S. KRESGE COMPANY, a Michigan Corporation, Defendant-Appellant-Cross Appellee.

WESTERN FIRE INSURANCE COMPANY, FORT SCOTT, KANSAS, Intervenor-Appellee-Cross Appellant, v. S. S. KRESGE COMPANY, a Michigan Corporation, Defendant and Cross Defendant- Appellant-Cross Appellee.

No. 53394.

Supreme Court of Iowa.

June 10, 1969.

O'Connor, Thomas, Wright, Hammer & Bertsch, Dubuque, for S. S. Kresge Co., defendant, cross-defendant-appellant-cross appellee.

Fuerste & Carew, Dubuque, for Fae Lyons' Estate, cross plaintiff-appellee-cross appellant, and Western Fire Insurance Co., intervenor-appellee-cross appellant.

BECKER, Justice.

This action for indemnity or contribution was tried to the court as a law action and resulted in judgment for plaintiff-intervenor on the indemnity count. A prayer for attorney's fees for defense of the original action was denied. Both sides appeal.

The original injured party was Steve D. Peters. We first recount the facts pertaining to him. Fae Lyons owned a German shepherd dog, named Sabre, which she kept chained to a tree in her yard in Dubuque, Iowa. Sabre was a strong and active canine about two years old. Mr. Peters, a new neighbor, visited the Lyons' home to use their telephone. He noticed the dog chained to a tree when he entered the home. Having accomplished the purpose of his visit Mr. Peters left the Lyons' home and was proceeding out of the yard when Sabre, no longer tethered, attacked him, knocked him down and bit him. The visitor fought the dog until the Lyons rescued him but he received a broken hip and other injuries.

Later investigation showed the choke collar or chain used to secure Sabre had broken. This collar had been purchased from defendant, S. S. Kresge Company, a few days earlier. Evidence was produced tending to show the chain was defectively welded and would not sustain the strain that could be expected from the lunging of a 120 pound dog.

Actual purchase of the chain was made for Mrs. Lyons by her son. At the time of purchase he told the uniformed clerk he needed a chain to restrain a 100 to 120 pound dog. The clerk picked out the chain and stated, 'It's the best we've got, that ought to do it.'

Mr. Peters sued Mrs. Lyons and S. S. Kresge Company. Mrs. Lyons cross-petitioned against S. S. Kresge Company seeking indemnity by reason of breach of implied warranty.

At this stage of the case Western Fire Insurance Company, as Mrs. Lyons' insurer, settled Mr. Peters' claim for the sum of $10,000. and Mr. Peters dismissed his petition as to Mrs. Lyons. S. S. Kresge Company and Western Fire Insurance Company became the protagonists and will be referred to as Kresge and Western respectively. The settlement is conceded to have been reasonable, as to amount, under the circumstances. Western then filed a petition of intervention setting up its liability policy, settlement with Peters on behalf of Lyons, and claim to indemnity as subrogee of Lyons.

Kresge moved to dismiss the original petition against it because both defendants were discharged by Peters' release to Lyons. The court sustained this part of the motion and neither side complains.

The motion to dismiss also covered Mrs. Lyons' cross-petition against Kresge for the reason that Mrs. Lyons was no longer the real party in interest. She had suffered no loss because Western had fully indemnified her. This part of the motion was overruled and Kresge challenges the ruling.

The third portion of the motion sought dismissal of Western's petition of intervention because it had not complied with the statute and therefore had no right to intervene; i.e., in the words of rule 75, Iowa Rules of Civil Procedure, Western failed by not 'joining with plaintiff or defendant or claiming adversely to both'. The trial court also overruled this part of the motion and Kresge relies on the claimed error.

I. We first consider these procedural problems. Kresge contends, and Western does not seriously dispute, that Mrs. Lyons ceased to be a real party in interest when settlement was made with Peters. Rule 2, R.C.P. provides: 'Every action must be prosecuted in the name of the real party in interest. * * *.'

Western counters by quoting rule 16, R.C.P., 'Transfer of an interest in a pending action shall not abate it, but may be the occasion for bringing in new parties.'

Under this rule the statement in Richardson v. Clark Bros., 202 Iowa 1371, 1372, 212 N.W. 133, 134 is correct: 'An action is not abated by the transfer of any interest therein during its pendency, and new parties may be brought in if necessary. (citations.)

'Substitution of parties plaintiff may, and should always, be granted, unless the defendant will be in some way prejudiced thereby.' (citations.)

Both parties cite Grings v. Great Plains Gas Company, Iowa, 152 N.W.2d 540, 546, recognizing the rule: 'Defendant may question whether plaintiff is the real party in interest when it is necessary to protect him from 'harassment, annoyance or vexation at the hands of other claimants to the same demand or for the same cause, or to protect himself from another suit on the same cause by a different party. * * * or in order that defendant may avail himself of the defenses and counterclaims which he has against the real party in interest, * * * or in order that defendant's payment to plaintiff or plaintiffs' recovery as against him will fully protect him from claims of third persons or in the event of another action on the same cause. On the other hand if such defenses and counterclaims are open to defendant as against plaintiff, and defendant is fully protected against further liability on the same cause of action, defendant may not object on the ground that plaintiff is not the real party in interest. " (Emphasis added.)

It appears Kresge was fully protected. It does not point out wherein it was inhibited in any way by virtue of a lost defense or counterclaim. We see no precedential or logical reason why the trial court should not have proceeded to dispose of the remaining issues before it in the initial case. Western's petition against Kresge for indemnity was not subject to motion to dismiss.

II. As to Western's petition of intervention, rule 75, R.C.P. reads: 'Any person interested in the subject matter of the litigation, or the success of either party to the action, or against both parties, may intervene at any time before trial begins, by joining with plaintiff or defendant or claiming adversely to both.'

Intervention is remedial and should be liberally construed to reduce litigation and expeditiously determine matters before the court. In re Incorporation of Town of Waconia, Iowa, 248 Iowa 863, 869, 82 N.W.2d 762.

Western was interested in the result of the indemnity claim against Kresge and in the success of Mrs. Lyons. Western's petition actually joins with Mrs. Lyons' claim against Kresge although it doesn't use the statutory language In haec verba. The trial court's conclusion included: '* * *. It is true that, as initially plead, Western did not, in so many words, join with Fae Lyons but their attorney was her attorney, the phraseology of the petition of intervention clearly adopts her cross-petition and they did subsequently expressly join with her.'

Under the circumstances here we held the court's ruling on the point was correct.

III. Krege's remaining assignments of error involve substantive law. We do not treat them in the order presented but deal first with the question of implied warranty which was the basis of the court's ruling. The question of whether there was a breach of warranty, express or implied, is largely a question of fact. Ertl Company v. Lange Plastics Company, Iowa, 158 N.W.2d 93, 98. Since this is a law case the trial court's finding of fact are binding on us if supported by substantial evidence. Rule 344(f)(1), R.C.P. Our function in reviewing the trial court's findings is not to weigh the evidence but to decide whether the finding is supported by the substantial evidence required. Ertl Company v. Lange Plastics Co., supra.

This cause occurred before July 4, 1966, the effective date of the Uniform Commercial Code contained in what is now chapter 554 of the 1966 Code. Section 554.16, Code, 1962 reads in part: '* * *. 1. Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, and it appears that the buyer relies on the seller's skill or judgment, whether he be the grower or manufacturer or not, there is an implied warranty that the goods shall be reasonably fit for such purpose.

'2. Where the goods are bought by description from a seller who deals in goods of that description, whether he be the grower or manufacturer or not, there is an implied warranty that the goods shall be of merchantable quality.'

Under the above statute there may be an implied warranty of reasonable fitness of an article notwithstanding seller's lack of knowledge it does not comply with the warranty and the difficulty of discovering this fact. Good faith and lack of seller's negligence are no defense. Reed v. Bunger, 255 Iowa 322, 334, 122 N.W.2d 290. The tendency of the later cases in this court is to enlarge the responsibility of the seller, restrict application of the doctrine of 'caveat emptor', and extend the doctrine of implied warranty in sales of personalty. Reed v. Bunger, supra; Farmers State Bank v. Cook, 251 Iowa 942, 947, 103 N.W.2d 704, 707.

Subsections 1 and 2 of section 554.16, Code, 1962, cover two types of implied warranty described in 2 Frumer and Friedman, Products Liability, section 19.03(2), page 502.8 as follows:

'The basic distinction between a warranty of particular purpose and a warranty of merchantability can best be explained by defining the latter warranty. A...