Terry v. Double Cola Bottling Co., 177

• Decision Date: 04 November 1964
• Docket Number: No. 177,177
• Citation: 263 N.C. 1,138 S.E.2d 753
• Parties: Hilda TERRY v. DOUBLE COLA BOTTLING COMPANY, Inc.
• Court: North Carolina Supreme Court

Page 753

138 S.E.2d 753

263 N.C. 1

Hilda TERRY v. DOUBLE COLA BOTTLING COMPANY, Inc.

No. 177.

Supreme Court of North Carolina.

Nov. 4, 1964.

Dolley & Harris, by Steve Dolley, Jr., Gastonia, and Charles J. Katzenstein, Gastonia, for plaintiff appellant.

Hollowell & Stott, by Grady B. Stott, Gastonia, for defendant appellee.

HIGGINS, Justice.

The plaintiff in this action seeks to recover for that: (1) The defendant bottled and sold the drink containing the deleterious substance, knowing that it would be resold for human consumption; (2) the bottler's implied warranty of fitness extended to the ultimate consumer because of the knowledge that the contents of the bottle would be resold in the condition in which it left the bottler's plant. The plaintiff cites as authority the decision in Ward v. Morehead City Sea Food Co., 171 N.C. 33, 87 S.E. 958 (a negligence, not a warranty case); the dissenting opinion in Thomason v. Ballard & Ballard Co., 208 N.C. 1, 179 S.E. 30; Simpson v. American Oil Co., 217 N.C. 542, 8 S.E.2d 813; Davis v. Radford, 233 N.C. 283, 63 S.E.2d 822, 24 A.L.R.2d 906; Perfecting Service Co. v. Product Development & Sales Co., 261 N.C. 660, 136 S.E.2d 56.

Authorities generally hold that the manufacturer, processor and packager of food and the bottler of drinks intended for human consumption are held to a high degree of responsibility to the ultimate consumer to see to it that the food and drink are not injurious to health. Responsibility to the ultimate consumer arises upon a failure to use the required degree of care and is grounded in negligence. Wyatt v. North Carolina Equipment Co., 253 N.C. 355, 117 S.E.2d 21. Warranty--actual or implied--is contractual. It does not extend beyond the parties to the contract. 'Because of the danger to life and health, the manufacturer and packer of foods and the bottler of beverages intended for human consumption, by offering them for sale, impliedly warrant the fitness of their products for such use. As pointed out, however, the warranty extends no further than the parties to the contract of sale.' Prince v. Smith, 254 N.C. 768, 119 S.E.2d 923; Enloe v. Charlotte Coca-Cola Bottling Co., 208 N.C. 305, 180 S.E. 582; Thomason v. Ballard & Ballard Co., 208 N.C. 1, 179 S.E. 30.

'A warranty is an clement in a contract of sale and, whether express or implied, is contractual in nature. Only a person in privity with the warrantor may recover on the warranty; the warranty extends only to parties to the contract of sale. Murray v. Bensen Aircraft Corporation, 259 N.C. 638, 131 S.E.2d 367; Prince v. Smith, 254 N.C. 768, 119 S.E.2d 923; Wyatt v. North Carolina Equipment Co., 253 N.C. 355, 117 S.E.2d 21. A manufacturer is not liable to an ultimate consumer or subvendee upon a warranty of quality or merchantability of goods which the ultimate consumer or subvendee has purchased from a retailer or dealer to whom the manufacturer has sold, for there is no contractual relation between the manufacturer and such consumer or subvendee. Rabb v. Covington, 215 N.C. 572, 2 S.E.2d 705; Thomason v. Ballard & Ballard Co., 208 N.C. 1, 179 S.E. 30. There is an exception to this rule where the warranty is addressed to the ultimate consumer, and this exception has been limited to cases involving sales of goods, intended for human consumption, in sealed packages prepared by the manufacturer and having labels with representations to consumers inscribed thereon. Simpson v. American Oil Company, 217 N.C. 542, 8 S.E.2d 813.' Perfecting Service Co. v. Product Development and Sales Co., 261 N.C. 660, 136 S.E.2d 56, 62.

In this case the evidence fails to show privity of contract between the plaintiff and the defendant. Without such privity there is no warranty liability. The judgment of nonsuit is

Affirmed.

SHARP, Justice (concurring).

When an ultimate consumer sues a manufacturer upon an implied warranty of fitness of the goods which he has purchased from a retailer, there are several hurdles which he must surmount. First, he must prove that there was a defect in the product when it left the defendant's possession; second, that he acquired title to it in the ordinary channels of commerce or came into rightful possession of the property; and third, that he has suffered injury as a result of the defect. Coca-Cola Bottling Co. v. Savage, 228 Miss. 612, 89 So.2d 634; see Wilson, Product Liability, 43 Calif.L.Rev. 614 (Part I), 809 (Part II); Note, 16 U.Miami L.Rev. 765.

In this case plaintiff offered no evidence whatever that at the time she purchased the bottle of Sun-Drop in the Arlington Mill lunchroom it was in the same condition as when it left defendant's bottling plant. Furthermore, the evidence is silent as to who opened the bottle or how long it had been opened before plaintiff drank any of its contents. Her evidence is quite consistent with the practical possibility that that green fly which so upset her digestion got into the bottle after it left defendant's control. For that reason I must concur in the result of the majority opinion. I cannot, however, concur in its premise that plaintiff is not entitled to recover solely because there was no privity between her and defendant.

No one has made a more penetrating, allinclusive survey of the field of products liability than did Professor William L. Prosser in his scholarly article, The Assault Upon the Citadel (Strict Liability to the Consumer), 69 Yale L.J. 1099, hereinafter cited as Prosser. The requirement of privity of contract as a prerequisite to recovery on warranty has already been exhaustively analyzed in countless law-review articles, treatises, and opinions, which have left no byway unexplored. In this opinion I shall advance not a single idea new to legal writers, but I shall try to marshall the most salient of the ideas to support the position I take.

In the absence of privity the common-law rule is that the manufacturer of a defective article is liable neither in tort for negligence nor in contract for breach of warranty. As to tort, this rule has been altered in every state--with the possible exception of two--by the landmark case of MacPherson v. Buick Motor Co., 160 App.Div. 55, 145 N.Y.S. 462, aff'd 217 N.Y. 382, 111 N.E. 1050, L.R.A.1916F, 696, Ann.Cas.1916C, 440; Prosser, 1100; Comment, 30 Fordham L.Rev. 484. The requirement of privity of contract in negligence suits against manufacturers is now almost nonexistent. Anot., Privity of contract as essential to recovery in negligence action against manufacturer or seller of product alleged to have caused injury, 74 A.L.R.2d 1111, 1136, 1189; Note, 51 Ky.L.J. 168; Note, 13 Syracuse L.Rev. 305. North Carolina has followed MacPherson, and it is now the law in this state that a manufacturer of a product is under a duty to the ultimate purchaser, irrespective of contract, to use reasonable care in the manufacture and inspection of the article so as not to subject the purchaser to injury from a latent defect. Gwyn v. Lucky City Motors, Inc., 252 N.C. 123, 113 S.E.2d 302; Tyson v. Long Manufacturing Co., 249 N.C. 557, 107 S.E.2d 170, 78 A.L.R.2d 588.

More slowly, the law of implied warranty is elsewhere undergoing a similar evolution, but as Cardozo, C. J., observed in 1931, in words now famous, 'The assault upon the citadel of privity is proceeding in these days apace.' Ultramares Corporation v. Touche, 255 N.Y. 170, 180, 174 N.E. 441, 445, 74 A.L.R. 1139, 1145, reversing 229 App.Div. 581, 243 N.Y.S. 179 (action on negligence theory). 'If any court wishes to drop the requirement of privity, there is now ample and respectable authority to justify its decision to the legal world.' Spruill, Privity of Contract as a Prerequisite for Recovery for Warranty, 19 N.C.Rev. 551, 565. See the following annotations where the cases are collected: Liability of manufacturer or packer of defective article for injury to person or property of ultimate consumer, who purchased from a middleman (III, b, 2, i); 17 A.L.R. 672, 709; 39 A.L.R. 992, 1000; 63 A.L.R. 340, 349; 88 A.L.R. 527, 534; 105 A.L.R. 1502, 1511; 111 A.L.R. 1239, 1251; 140 A.L.R. 191, 250; 142 A.L.R. 1490, 1494, with supplemental decisions. Today in a clear majority of the jurisdictions which have any definite law on the subject, one who prepares and puts food or drink, intended for human consumption, on the market in sealed containers is held to strict liability, or, in contract terms, liability for breach of implied warranty of fitness, without privity. According to Prosser,

'No new state has rejected it since 1935, and since that year ten new ones have adopted it. A good many of the opinions in the minority group have recognized the trend, but have said that their law is established, and any change must be for the legislature.

'It needs no seer or soothsayer to conclude that the outer defenses of the fortress of strict liability are even now in process of being carried; that so marked a trend will inevitably continue; and that the law of the future is that of strict liability for food.' Prosser, 1110.

Those courts which have eliminated the requirement of privity between the consumer and the maufacturer in food cases have obviously been motivated by considerations of public policy and a recognition of the fact that modern merchandising is not accomplished by direct contract but by advertising. See Note, 36 So.Cal.L.Rev. 291. To arrive at liability within the framework of warranty, the courts have used many theories. They include, but are not limited to, the following: (1) a covenant (analogous to one running with the land) runs from the manufacturer to the ultimate consumer; (2) the retailer is the manufacturer's agent to sell; (3) the retailer assigns his warranty to the buyer; (4) the consumer is the third-party beneficiary of the retailer's contract with the manufacturer; (5) the manufacturer's marketing of the goods is an offer to the consumer to warrant the goods if he will buy; (6) the manufacturer's...