Smith v. Atco Co.

• Decision Date: 03 February 1959
• Citation: 94 N.W.2d 697,74 A.L.R.2d 1095,6 Wis.2d 371
• Parties: , 74 A.L.R.2d 1095 Stephen J. SMITH, Respondent, v. ATCO CO., a corporation, et al., Appellants.
• Court: Wisconsin Supreme Court

Page 697

94 N.W.2d 697

6 Wis.2d 371, 74 A.L.R.2d 1095

Stephen J. SMITH, Respondent, v. ATCO CO., a corporation, et al., Appellants.

Supreme Court of Wisconsin.

Feb. 3, 1959.

Rehearing Denied April 7, 1959.

Arnold, Philipp & Murray, Samuel Weitzen, Milwaukee, for appellants.

Wickham, Borgelt, Skogstad & Powell, Milwaukee, Kurt H. Frauen, John J. Ottusch, Milwaukee, of counsel, for respondent.

Emmet Horan, Milwaukee, amicus curiae.

CURRIE, Justice.

The following issues are raised on this appeal:

(1) Is the first question of the verdict, which inquires as to the misbranding of Penta-Mix, properly included in the verdict, and does it sustain the judgment in the absence of any finding that such misbranding was causal?

(2) In order to hold the manufacturer or supplier of an article liable to the ultimate consumer on the theory of negligence, where there is no privity between the plaintiff and defendant, is it necessary that the article be of a category classified as 'inherently dangerous' in the law?

(3) Are the jury's findings that Penta-Mix is inherently dangerous to mink, and that Penta-Mix caused the plaintiff's losses, sustained by the evidence?

(4) Was prejudicial error committed during the course of the trial which would necessitate a new trial?

(5) Is Delta liable to the plaintiff as well as Atco?

(6) Are the damages excessive?

(7) Is the plaintiff entitled to interest on the verdict from December 1, 1952?

(1) Misbranding.

The 30-gallon drum of Penta-Mix sold by Atco to Cavan bore a label which contained the following statement, 'When dry, wood treated with Penta-Mix can be handled freely without danger of contamination to humans or animals.' It was the position of the learned trial court in submitting the first question of the special verdict to the jury that it constituted negligence on the part of the defendants to have placed such statement on the drum label if Penta-Mix dipped nesting boxes, even after they had dried, were harmful to mink housed therein. We agree with such conclusion.

Counsel for plaintiff contend that the wording on the label violated sec. 94.67, Stats., 1949, which forbade the manufacture or sale of any insecticide or fungicide which was misbranded within the meaning of sec. 94.70, Stats., 1949. However, ch. 516, Laws of 1951, repealed such two sections and recreated substantially the essential provision of the same as sec. 94.70, Stats., 1951. Such ch. 516, Laws of 1951, provided that newly created sec. 94.70, Stats., should not take effect until six months after publication of the act. This was due to the inclusion of a newly enacted registration provision in order to afford manufacturers a reasonable period of time in which to register their products. Both the sale of the Penta-Mix by Atco to Cavan, and from Cavan to Smith, occurred during such six-month period. We find no merit to the position advanced by defendants' counsel that secs. 94.67 and 94.70, Stats., 1949, were repealed effective with the passage and publication of ch. 516, Laws of 1951, so as to leave a six-month hiatus period during which no labeling statute was applicable to a fungicide such as Penta-Mix. Such interpretation would lead to an absurd result that we do not deem the legislature could have contemplated.

One of the more troublesome questions in connection with the misbranding issue is whether, in addition to submitting question No. 1 in the verdict, the trial court should not have also submitted a question inquiring as to whether the found misbranding was a cause of Smith's losses and damages. The trial court, in instructing the jury with respect to question No. 1 of the verdict limited the issue of misbranding solely to the statutory violation. ¹ Therefore, the issue of causation must be approached from the standpoint of whether the violation of sec. 94.67, Stats., 1949, was causal. Such violation consisted of the fact that the label stated that wood treated with Penta-Mix, when dry, could be handled freely without danger of contamination to animals.

Even though a violation of sec. 94.67, Stats., 1949, constitutes negligence per se it does not follow that such negligence was a cause of Smith's losses and damage. For example, sec. 346.63, Stats., 1957, and predecessor statutes, made it unlawful for one to operate an automobile on the highway while under the influence of intoxicating liquor, and an operator who violates such statute is guilty of negligence per se. However, this does not automatically make him liable to others merely because the vehicle he is operating is involved in an accident. In order to predicate liability there must have been some causal connection between the statutory violation and the accident. Frey v. Dick, 1956, 273 Wis. 1, 76 N.W.2d 716, 77 N.W.2d 609; McNamer v. American Ins. Co., 1954, 267 Wis. 494, 66 N.W.2d 342; and Steinkrause v. Eckstein, 1920, 170 Wis. 487, 175 N.W. 988. At page 490 of 170 Wis. at page 989 of 175 N.W. in the Steinkrause case there are listed a number of cases of the occurrence of a statutory violation where liability was not found because of the lack of any causal connection between the violation and the accident.

As stated by Mr. Justice Eschweiler in the Steinkrause case, sometimes such causal connection may be so clear upon undisputed facts as to make the determination of causation one of law for the court, while in other situations it becomes one of fact for the jury. The statutory violation in the instant case clearly falls in the latter category.

Counsel for the defendants, in their motions after verdict, raised no issue as to the failure of the trial court to include a question in the verdict with respect to the misbranding being causal. Under the provisions of sec. 270.28, Stats., we must assume that the trial court determined such causation issue in favor of the plaintiff in conformity with the judgment entered. This brings us to the question of whether there is any credible evidence to sustain such a finding. We find none.

There is no direct evidence that Smith ever saw the label on the drum of Penta-Mix from which the 15 gallons purchased by Smith was drawn by employees of Cavan and delivered in 5-gallon cans to Smith's premises. However, Smith testified that before he used any of the Penta-Mix he was party to a conversation on the Cavan premises in which one Thiel, a sales representative of Atco, and Cavan participated. He further testified that in such conversation Thiel stated that, if the nesting boxes were treated with Penta-Mix according to the formula suggested by Atco, there would be no injury to mink after ten days to two weeks. Smith was then asked this question and gave the following answer thereto:

'Q. Where was that [the formula for mixing Penta-Mix with kerosene or fuel oil]? A. On the label on the drum.'

From this it could be inferred that Smith did see the label on the drum. However, such evidence does not establish that he read the alleged misleading statement on the drum, which constituted the misbranding. Furthermore, there is no evidence that he relied on such statement on the label in using the Penta-Mix to treat his nesting boxes. It is, therefore, our conclusion that there was no credible evidence to sustain a finding that the misbranding was causal. For this reason the judgment cannot be sustained upon the finding of misbranding made by the jury in answering question No. 1 of the verdict. If the judgment on the issues of liability is to be sustained, it must be upon the basis of the jury's answers to other questions in the verdict.

No question was submitted to the jury as to whether Thiel's verbal statement constituted an actionable misrepresentation and that issue is not before us on this appeal. Such verbal statement would have some slight materiality in the jury's consideration of question No. 4 of the verdict. This is because it discloses that Atco knew that Penta-Mix was being used for treatment of mink nesting boxes.

(2) 'Inherently Dangerous.'

Counsel for the defendants contend that the jury's answer to question No. 2 of the verdict, whereby the jury found that the Penta-Mix sold to Cavan was inherently dangerous to mink, cannot be permitted to stand because Penta-Mix is not an 'inherently dangerous' product as a matter of law.

Courts, when first faced with the problem of whether a manufacturer was liable in negligence to remote vendees, or other third persons, formulated a 'general rule' that there was no such liability in the absence of privity of contract. From time to time exceptions have been engrafted onto such general rule. For an excellent review of the origin of such general rule and of the recognized exceptions thereto formulated by the American courts over the years, see Comment Note by A. W. Gans entitled, 'Manufacturer's Liability for negligence causing injury to person, or damage to property, of ultimate consumer or user,' 164 A.L.R. 569.

One of such recognized exceptions to the general rule of non-liability is when the manufacturer put out or sells articles which are 'inherently dangerous.' Hasbrouck v. Armour & Co., 1909, 139 Wis. 357, 364, 121 N.W. 157, 23 L.R.A., N.S., 876, and Coakley v. Prentiss-Wabers Stove Co., 1923, 182 Wis. 94, 101, 195 N.W. 388. Counsel for defendants place particular reliance upon Beznor v. Howell, 1930, 203 Wis. 1, 233 N.W. 758, which held as a matter of law that a sparkler in the hands of a small child was not an inherently dangerous instrumentality.

The Massachusetts court in the case of Carter v. Yardley & Co., 1946, 319 Mass. 92, 64 N.E.2d 693, 164 A.L.R. 559, carefully reviewed the development of the law of products liability of manufacturers and suppliers for negligence where no privity of contract exists. That court came to the conclusion that the exceptions had so swallowed up the general rule of non-liability that such general rule for all practical purposes had ceased to exist. The conclusion reached was expressed as...