U.S. Fidelity & Guaranty Co. v. Truck & Concrete Equipment Co.

• Decision Date: 25 March 1970
• Docket Number: No. 69-352,69-352
• Citation: 50 O.O.2d 480,21 Ohio St.2d 244,257 N.E.2d 380
• Parties: , 50 O.O.2d 480, 7 UCC Rep.Serv. 662 UNITED STATES FIDELITY & GUARANTY CO., Appellant, v. TRUCK & CONCRETE EQUIPMENT CO., Appellee.
• Court: Ohio Supreme Court

Page 244

21 Ohio St.2d 244

257 N.E.2d 380, 50 O.O.2d 480, 7 UCC Rep.Serv. 662

UNITED STATES FIDELITY & GUARANTY CO., Appellant, v. TRUCK & CONCRETE EQUIPMENT CO., Appellee.

No. 69-352.

Supreme Court of Ohio.

March 25, 1970.

Syllabus by the Court

1. In order to maintain an action in contract for injury to personal property based upon a contract of sale which injury is alleged to be caused by a 'breach of an implied warranty of merchantability' under the provisions of the Ohio Uniform Commercial Code covering contracts of sale, the plaintiff must establish a contractual relationship with the defendant.

2. An action in tort for damage to personal property, which is based upon the breach of a duty assumed by the manufacturer-seller of a product by reason of the manufacturer's implicit representation of good and merchantable quality and fitness for the intended use when he sells the product, is limited as to the time in which it shall be brought by the provisions of Section 2305.10, Revised Code, which provides that 'An action for * * * injuring personal property shall be brought within two years after the cause thereof arose.'

The appellant, the United States Fidelity & Guaranty Company, alleges in the amended petition that the appellee sold a truck to Auto Fleet Lease Company. The Auto Fleet Lease Company leased the truck to Nicholson Concrete & Supply Company. The lessee, Nicholson, insured the entire unit with the appellant. On May 14, 1964, while the lessee was using the unit, it collapsed, The concrete mixer fell off the truck chassis, causing damage to both the chassis and the mixer. The appellant-insurer paid the amount of the damage to the lessee and then, as subrogee, brought this action for the recovery of $6,921.79, which was the amount paid to Nicholson, the lessee.

Appellant's original petition was filed June 23, 1966, some two years and forty days after the cause of action arose.

The original petition alleged that the damage was 'solely and proximately caused by the negligence of the defendant in failing to secure adequately the concrete mixing unit to the chassis of the truck.' (Emphasis added.)

The trial court sustained a demurrer to the petition on the ground that the action was barred by the two-year statute of limitations. Section 2305.10, Revised Code.

Appellant filed an amended petition, alleging that the mixing unit was defective as sold and installed, thus 'breaching the defendant-seller's implied warranty of merchantability.' Appellant, by this allegation, contends that he has asserted a cause of action under the provisions of the Ohio Uniform Commercial Code, and that, therefore, he is entitled to the benefit of the four-year statute of limitations provided in the Uniform Commercial Code, Section 1302.98, Revised Code.

Appellee demurrer to the amended petition the ground that the action was barred by the two-year statute of limitations, Section 2305.10, Revised Code.

The trial court overruled the demurrer, holding that the specific four-year statute of limitations of the Uniform Commercial Code, Section 1302.98, Revised Code, prevails over the general limitations set out in Section 2305.10, Revised Code.

Appellee's answer to the amended petition included a general denial and raised the statute of limitations as a second defense. Subsequently, appellee filed a motion for summary judgment on the ground that appellant's cause of action was barred by the two-year statute of limitations provided by Section 2305.10, Revised Code. The motion for summary judgment was sustained. Upon appeal, the Court of Appeals affirmed that judgment.

The cause is before this court pursuant to the allowance of a motion to certify the record.

Spengler, Nathanson, Heyman, McCarthy & Durfee and Norman J. Rubinoff, Toledo, for appellant.

Slabaugh, Walker, Pflueger, Roderick & Myers and Robert L. Myers, Akron, for appellee.

O'NEILL, Justice.

The question which this cause presents is whether the statute of limitations to be applied is the two-year statute of limitations, provided by Section 2305.10, Revised Code, or the four-year statute of limitations of the Ohio Uniform Commercial Code, Section 1302.98, Revised Code.

Section 1302.98, Revised Code, provides:

'(A) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.' (Emphasis added.)

The cause of action referred to in Section 1302.98, Revised Code, is an action in contract based upon a contract for sale.

Nicholson, the appellant's subrogor, was not a party to the contract between the appellee and the Auto Fleet Lease Company.

Appellant attempts to rely upon the case of Val Decker Packing Co. v. Corn Products Sales Co. (6th Cir. 1969), 411 F.2d 850.

The question which the Court of Appeals considered in that case was whether the four-year statute of limitations provided in the Uniform Commercial Code, Section 1302.98, Revised Code, or the two-year statute of limitations, Section 2305.10, Revised Code, applicable to all actions for injury to personal property, was controlling.

In Val Decker, supra, the plaintiff brought an action for the breach of an implied warranty of a written contract for sale. The plaintiff and the defendants were parties to that contract. That dispute between the parties in the District Court was as to whether the 15-year statute of limitations, applicable to contracts in writing (Section 2305.06, Revised Code), should be applied to a case arising from a breach of an implied warranty of a written contract for sale, or the two-year statute of limitations provided in Section 2305.10, Revised Code, should be applied. The Uniform Commercial Code's four-year statute of limitations Section 1302.98, Revised Code, was not brought to the attention of the District Court. The District Judge held that the two-year statute of limitations, Section 2305.10, Revised Code, was controlling on authority of Andrianos v. Community Traction Co. (1951), 155 Ohio St. 47, 97 N.E.2d 549. The court apparently reasoned that the two-year statute of limitations, Section 2305.10, Revised Code, was a specific statute with regard to actions for injury to personal property, and that the 15-year statute of limitations, Section 2305.06, Revised Code, was a general statute and that, therefore, on authority of Andrianos, supra, paragraph one of the syllabus, the special statutory provision relating to a specific subject matter is controlling over a general statutory provision which might otherwise be applicable.

Upon appeal, the United States Court of Appeals, Sixth Circuit, took judicial notice of the four-year statute of limitations in the Ohio Uniform Commercial Code, Section 1302.98, Revised Code, reversed the District Court and held that where the plaintiff and defendant were parties to a written contract and the cause of action was for the breach of an implied warranty of a contract for sale in writing, the specific four-year statute of limitations provided in the Uniform Commercial Code, Section 1302.98, Revised Code, was controlling, rather than the general two-year statute of limitations, Section 2305.10, Revised Code, applicable to all actions for injury to personal property. Since the question had not been decided by this court or any Ohio court, the United States Court of Appeals relied upon cases decided in other jurisdictions which have considered the question. Gardiner v. Philadelphia Gas Works (1964), 413 Pa. 415, 197 A.2d 612, rehearing denied, February 28, 1964; Rufo v. Bastian-Blessing Co. (1965), 417 Pa. 107, 207 A.2d 823; Bobo v. Page Engineering Co. (W.D.Pa.1964), 285 F.Supp. 664.

The court did apply the reasoning of the Andrianos case, supra, as indicated by the following language from the opinion:

'Applying the criteria in Andrianos, it follows that the specific statute of limitations relating to the specific subject matter of sales in the Ohio Uniform Commercial Code controls over the general statute of limitations dealing with actions for injuries to person or property.'

The question which was considered and determined by the court in Val Decker, supra, is not presented by the instant case, because there is no contractual relationship between the plaintiff and the defendant as there was in Val Decker, supra.

Plaintiff attempts to rely upon Lonzrick v. Republic Steel Corp. (1966), 6 Ohio St.2d 227, 218 N.E.2d 185, for authority to bring his action in contract under the provisions of the Uniform Commercial Code ^* and thereby gain the benefit of the four-year statute of limitations. Lonzrick, supra, does not support plaintiff's position. In Lonzrick, supra, at page 229, 218 N.E.2d at page 188 it is stated:

'* * * In such a case (a products liability case), there are three possible causes of action which the plaintiff may pursue:

'* * * '(2) A cause of action which is based upon contract. Such a cause of action requires that there be a contractual relationship between the plaintiff and the defendant. * * *'

Plaintiff cannot rely upon Lonzrick in this regard, since he does not allege a contractual relationship between the plaintiff and the defendant. On the undisputed facts in the instant case, there was no contractual relationship between the plaintiff and the defendant nor between the plaintiff's subrogor and the defendant because neither the plaintiff nor his subrogor was a party to the contract for sale.

Andrianos, supra, is not dispositive of the instant case. In Andrianos, the petition alleged that the plaintiff and the defendant were parties to a contract not in writing.

In that case, the plaintiff alleged that he entered into a contract with the defendant for safe passage as a paying passenger on defendant's bus and that the defendant, in violation of its contract to provide safe passage, breached that contract and by...