Speed Fastners, Inc. v. Newsom, 8827.

• Decision Date: 26 September 1967
• Docket Number: No. 8827.,8827.
• Citation: 382 F.2d 395
• Parties: SPEED FASTNERS, INC., a corporation, now doing business as the Speed Fastners, Inc., a foreign corporation, a division of Elco Tool and Screw Corporation, Appellant, v. Ray NEWSOM and American Employers Insurance Company, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

382 F.2d 395 (1967)

SPEED FASTNERS, INC., a corporation, now doing business as the Speed Fastners, Inc., a foreign corporation, a division of Elco Tool and Screw Corporation, Appellant, v. Ray NEWSOM and American Employers Insurance Company, Appellees.

No. 8827.

United States Court of Appeals Tenth Circuit.

September 26, 1967.

Paul C. Duncan, Oklahoma City, Okl. (Robert S. Baker and Pierce, Duncan, Couch & Hendrickson, Oklahoma City, Okl., of counsel, on the brief), for appellant.

Don Manners, Oklahoma City, Okl. (James D. Grigsby, Oklahoma City, Okl. of counsel, on the brief), for appellees.

Before WILBUR K. MILLER^*, LEWIS, and BREITENSTEIN, Circuit Judges.

BREITENSTEIN, Circuit Judge.

The jury awarded appellee-plaintiff Newsom $100,000 in damages for injuries received in an industrial accident occurring in Oklahoma. A fellow workman was using a powder-loaded gun to drive studs through a steel I-beam for the purpose of attaching a 2 × 6 piece of wood thereto. The head and shank of the stud separated with the shank ricocheting out of the wood and striking the plaintiff. Suit was brought against the manufacturer of the stud, appellant-defendant Speed Fastners, Inc., on the theory of breach of both express and implied warranties. Jurisdiction is based on diversity.

Plaintiff was a carpenter foreman employed by Oak Creek Development Company in the construction of an Oklahoma City motel. On the day of the accident plaintiff adjusted the gun and gave it to a fellow employee, Gilbert Hensley, for use. Hensley had difficulty in getting the desired penetration and changed to a heavier powder charge and a shorter plunger setting. The effect of these changes was to increase the driving force of the gun.

The ricocheting shank of the stud hit plaintiff in the abdomen and lodged in a nerve center of the pelvic region. According to the medical testimony, it cannot be removed safely. The gun used by Hensley was a "Ramset" which is manufactured by a competitor of defendant Speed Fastners. The powder charge was contained in "Omark" cartridges, the product of another manufacturer. No claim is made by either party of a defect in the gun or the cartridge.

Speed Fastner asserts that the evidence does not establish that the stud which separated was manufactured by it. Both Ramset and Speed Fastner studs were used on the job and in the area where Hensley was working separated heads of both types were found. On the day of the accident a quantity of Speed Fastner studs had been delivered to the employer. Plaintiff testified positively that Hensley was using Speed Fastner studs. Hensley did not say what brand he was using. He said that the studs and shells were brought out to him and that he put them in the nail pocket of his apron. He described the studs thus:

"There\'s some that\'s an inch-and-a-half nail, that there was a — in a red and white box, and they had a little plastic affair around them to keep them from going — a little white plastic farrow ferrule, to keep them from going through the gun."

Speed Fastner studs come in a red and white box. No showing was made of the type of box for Ramset studs. Speed Fastner studs have a white plastic ring or ferrule around the shank about midway between the head and the point. Ramset studs have a red plastic cap which covers the point and extends a short distance up the shank. Although the plaintiff's self-serving statement may be suspect, it finds support in the quoted testimony of Hensley. Taken together, they amount to more than a scintilla and are sufficient to justify the submission to the jury of the question of identity of the stud. The jury resolved that issue in favor of the plaintiff and we cannot say as a matter of law that the verdict was wrong in this regard.

The plaintiff's theory is that the manufacturer of the stud is liable under either an express or an implied warranty. The court submitted the case to the jury on each theory and specifically instructed that the plaintiff need not prove negligence on the part of the manufacturer.

On the question of express warranty, the evidence is that, prior to the accident, some unknown person gave to the plaintiff a copy of a pamphlet which was issued by the manufacturer and which described certain of its products. Failure to prove agency of the distributor of the pamphlet is said to be unimportant because the pamphlet was an advertisement to the public and, hence, within the modern concept of express warranty.¹ The point is unimportant because the representations were made to the plaintiff — not to the purchasing employer. There is no showing that the plaintiff had or exercised any control or right of suggestion over the purchase of studs. He supplied his crew with the studs furnished by the employer.

In any event, the record does not establish a breach of an express warranty as the cause of the accident. The plaintiff relies on statements in the pamphlet that there is an elimination of the possibility of an overdriven stud and of the possibility of a ricochet. Such statements in the pamphlet refer to a "Safti-Flite Speed Fastner" gun — not to the studs. The only pertinent references to the studs are that they are "aus-tempered" and "tested by Pittsburgh Testing Laboratory." The studs were made of "Tempered Martensite." The terms "aus-tempered" and "Tempered Martensite" refer to a manufacturing process. There is no evidence that one process is better than the other. The studs were not tested in the Pittsburgh Laboratory but no connection is shown between the lack of such testing and the separation of the head and shank of the stud.

Oklahoma has the Uniform Commercial Code. It provides that express warranties are created by an affirmation of fact or promise which becomes a part of the bargain and by a description of the goods which is made a part of the bargain.² The plaintiff did not buy the studs. Nothing shows that the employer when purchasing the studs relied on any statement in the pamphlet, any promise, or any description of the product. Without regard to the privity question, the proof fails to establish an express warranty and the submission of that issue to the jury is prejudicial and reversible error.

The implied warranty issue is more difficult. The Uniform Commercial Code, adopted in Oklahoma, provides for an implied warranty of merchantability.³

The first question is whether the manufacturer's liability extends to a person who is neither a purchaser nor a user. Under the Oklahoma law the warranty extends "to any natural person who is in the family or household of his buyer or who is a guest in his home."⁴ The manufacturer argues that this clause has the effect of excluding all those not within the mentioned categories. We are convinced that this was not the legislative intent.⁵

The plaintiff was neither the buyer nor the user. The buyer was his employer and the user was a fellow workman. The plaintiff insists that in the situation presented the principle of strict liability applies and that even a bystander might recover. The manufacturer argues that, except in food and drink cases, Oklahoma has never applied the theory of strict liability in implied warranty cases. It points out that in Marathon Battery Company v. Kilpatrick, Okl., 418 P.2d 900, the Oklahoma Supreme Court extended to a purchaser from a retailer the right to recover against the manufacturer for breach of implied warranty but did not extend that right to a person who was neither a purchaser nor user. No Oklahoma decision has considered the specific issue with which we are confronted.

The extension of a manufacturer's liability to anyone injured by a product not suitable for the use intended has been the subject of much discussion.⁶ In general, privity is not essential where an implied warranty is imposed by the law on the basis of public policy. We believe that the injured employee stands in the shoes of his employer and that his cause of action based on implied warranty is not barred by the shield of privity.⁷ The manufacturers know that most businesses are carried on through employees who will actually use the product purchased by their employers. In the absence of an Oklahoma decision to the contrary, we are satisfied that the employee may sue on the theory of implied warranty.

The issue then narrows to consideration of whether the evidence sustains a finding of breach of implied warranty. The aforementioned decision in Marathon Battery Company v. Kilpatrick, Okl., 418 P.2d 900, is pertinent. A manufacturer was sued...