State Farm Mut. Auto. Ins. Co. v. Anderson-Weber, Inc.

• Decision Date: 15 August 1961
• Docket Number: No. 50340,ANDERSON-WEBE,INC,50340
• Citation: 110 N.W.2d 449,252 Iowa 1289
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a Corporation, and Lester J. Bahl, Appellants, v., and Ford Motor Company, Corporations, Appellees.
• Court: Iowa Supreme Court

Page 449

110 N.W.2d 449

252 Iowa 1289

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, a Corporation, and Lester J. Bahl, Appellants, v. ANDERSON-WEBER, INC., and Ford Motor Company, Corporations, Appellees.

No. 50340.

Supreme Court of Iowa.

Aug. 15, 1961.

Clewell, Cooney & Fuerste, Dubuque, for appellants.

Kenline, Roedell, Hoffmann & Reynolds, Dubuque, for appellee Anderson-Weber, Inc.

O'Connor, Thomas, McDermott & Wright, Dubuque, for appellee Ford Motor Co.

SNELL, Justice.

This is an action at law by auto purchaser and subrogated insurance carrier against dealer and manufacturer for breach of warranty. Plaintiff Bahl purchased from defendant, Anderson-Weber, Inc., the Dubuque Mercury dealer, a new Mercury automobile manufactured by defendant, Ford Motor Company, and insured it against loss by fire with plaintiff, State Farm Mutual Automobile Insurance Company. Ten days and about 300 miles later, while driven by plaintiff Bahl, the car burst into flames and except for small salvage value was destroyed.

The insurance company paid its insured under the fire insurance policy and to the extent thereof is subrogated to the claim of Bahl.

The car was delivered to Mr. Bahl on December 29, 1956. There was no detailed discussion as to the form or content of either implied or express warranty. Neither party has any definite recollection of the delivery of an authorized Mercury dealer's service policy, a form prepared by the manufacturer on the back of which is printed a 'dealer warranty,' but it is admitted that if this was not delivered, it should have been as a matter of custom. Both parties assumed that there was the usual new car warranty. The dealer warranty referred to warrants the product to be free under normal use and service from defects in material and workmanship for a period of 90 days or until such product has been driven for a distance of 4,000 miles, whichever event shall first occur. The dealer's obligation is limited to replacement of, without charge to purchaser, such parts as shall be returned to dealer, with transportation charges prepaid and as shall be acknowledged by dealer to be defective. It also states that it is expressly in lieu of all other warranties, express or implied. This so-called dealer's warranty is not prepared by the dealer but is forwarded with the car by the manufacturer to the dealer. It fits into the business pattern by which the manufacturer directs the purchasing public to its authorized dealers rather than to the manufacturer.

The purchase of the car was accompanied by a signed order of the purchaser on a form prepared by the local dealer describing the car and the conditions incident to the purchase. On the back there is a so-called manufacturer's warranty.

The manufacturer denies that there was any authority in the dealer to make any warranty binding upon the manufacturer. Although there is now attempted reliance on the restrictions therein, the dealer has no recollection of ever having read or considered this so-called warranty in its entirety.

Paragraph 7, as it appears on the back of the order, provides as follows:

'It is expressly agreed that there are no warrants, express or implied, made by either the dealer or the manufacturer on the motor vehicle, chassis or parts furnished hereunder except as follows:

"The manufacturer warrants each new motor vehicle (including original equipment placed thereon by the manufacturer except tires), chassis or part manufactured by it to be free from defects in material or workmanship under normal use and service. Its obligation under this warranty being limited to making good at its factory any part or parts thereof which shall, within ninety (90) days after delivery of such vehicle to the original purchaser or before such vehicle has been driven 4,000 miles, whichever event shall first occur, be returned to it with transportation charges prepaid and which its examination shall disclose to its satisfaction to have been thus defective; this warranty being expressly in lieu of all other warranties expressed or implied, and all other obligations or liabilities on its part, and it neither assumes nor authorizes any other person to assume for it any other liability in connection with the sale of its vehicles. This warranty shall not apply to any vehicle which shall have been repaired or altered outside of an authorized service station in any way so as in the judgment of the manufacturer to affect its stability and reliability, nor which has been subject to misuse, negligence or accident.'

'The dealer agrees to install any part or parts furnished under the manufacturer's warranty above on the motor vehicle covered in this order without charge to the owner of such motor vehicle.

'This warranty does not apply to second-hand cars or cars not mentioned in the above order.

'The dealer also agrees to promptly perform and fulfill all terms and conditions of the owner service policy.'

After delivery of the car, plaintiff Bahl noticed some minor difficulty with the windshield wipers and the electric clock. These difficulties were remedied by the dealer.

The fan on the car heater operated, but very little heat was delivered. An odor described as a funny smell like rubber burning was noted, but the source was not discovered. At least part of the gas for the car was obtained by Mr. Bahl from his personal farm tank located on a four legged stand near his barn. The tank had an exposed nozzle.

On January 8, 1957, while driving at a speed of 30 to 35 miles per hour, going up a slight incline, and with about 305-306 miles on the car, there was a flash of flame against the windshield. Mr. Bahl pulled the car off onto a side road to the right of the highway and jumped therefrom. The car rolled ahead 100 to 150 feet and stopped in a shallow ditch. Flames as high as 10 feet were coming up around the hood.

A local fire department was alerted and upon arrival extinguished the fire but not until, for all practical purposes, the car was destroyed.

At the trial testimony, both lay and expert, was introduced as to the condition of the car and such parts thereof as could be identified and examined. Parts of the wiring system showing a fusing or balling of the wires were introduced as exhibits.

There was testimony by witnesses, claiming to be experienced in investigating fire losses, that the cause of the fire was a short circuit within the electrical circuit of the car. The competency of these witnesses, the admissibility of the testimony and the probative value thereof were, in each instance vigorously assailed by defendants.

I. It is not for us to pass upon the probative value, nor to say what the jury should believe, but there was evidence to be considered by a jury.

In addition to denying that there was any evidence of mechanical defect in the car, defendants' witnesses expressed the opinion that dirt or chaff injected into the car's gas tank through the exposed nozzle of the farm gas tank caused gas to overflow from the car's carburetor onto hot portions of the engine causing the sudden fire.

At the close of plaintiffs' evidence and again at the close of all of the evidence, each defendant moved for a directed verdict. The grounds set forth in these motions are numerous, with subdivisions and assumptions arguendo, and cover 10 pages in the record.

Each ground urged has been considered, but for the purpose of this opinion the controversial issues may be summarized as follows: That the case was not tried on any theory of implied warranty; that such express warranties as were given, if any, negative any implied warranty; that there are no provisions in the express warranty under which plaintiff has any right to recover; that there was no proof of causation, nor of measure of damage; that there was no return of defective parts as required by the warranty; that there was no proof of privity of contract between the plaintiff and the Ford Motor Company, no authority from the dealer to issue any warranty binding on the manufacturer, and no subrogated right in the insurance carrier to recover.

The trial court sustained both motions on all grounds.

The issue before us is the sufficiency of the evidence for submission to the jury. It is for us to determine what a jury could find and not what a jury should find.

The cause of the fire was a question of fact. If the fire was caused as claimed by plaintiffs, were the defendants, or either of them, liable for breach of warranty?

II. This case is bottomed squarely upon the law of warranty and is not based upon liability for negligence. The doctrine of res ipsa loquitur, frequently resorted to in negligence cases, is not applicable as such in the field of warranty, although the usual resort to circumstantial evidence in attempting to establish a breach of warranty indicates some of the same thinking found in res ipsa loquitur cases.

III. Liability of a manufacturer for breach of an implied warranty is not new in Iowa. While such liability is frequently applied in connection with food or drink products, it is not limited thereto. As subsequently noted, it has recently been applied in other jurisdictions in a much wider field such as automobiles.

The general and early rules as to implied warranty are of long standing. In Alpha Checkrower Co. v. Bradley & Co., 105 Iowa 537, 75 N.W. 369, 372, a case involving corn cutters, the court quoted with approval: '* * * where a chattel is to be made or supplied to the order of the purchaser, there is an implied warranty that it is reasonably fit for the purpose for which it is ordinarily used * * *.' The rule of exclusion by expressed warranty 'does not extend to the exclusion of warranties implied by law, where they are not excluded by the terms of the contract.'

In many instances such as sales at public auction or where the purchaser has made his own inspection, there may be a sale without warranty, but the cases cited by defendant, Ford Motor...