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ATLAS ALUMINUM CORP. v. BORDEN CHEM. CORP.

July 30, 1964

ATLAS ALUMINUM CORPORATION
v.
BORDEN CHEMICAL CORPORATION



The opinion of the court was delivered by: HIGGINBOTHAM

Since Justice Cardozo's classic opinion in MacPherson v. Buick Motor Company, 217 N.Y. 382, 111 N.E. 1050, L.R.A. 1916F, 696 (1916), the walls of the 'privity' *fn1" defense have crumbled in most jurisdictions as to causes of action involving personal injuries or death claims. *fn2" Thus, in such jurisdictions a manufacturer may be held liable in personal injury or death claims to a subpurchaser who has not dealt directly with the manufacturer. Under Pennsylvania substantive law, *fn3" this case raises precisely the issue as to whether a manufacturer can be liable to a subpurchaser on the theory of implied warranty when the two following conditions have occurred:

(1) The only damages sustained are property damages or related commercial losses without any personal injury; and

 (2) There have been no representations, advertisements, or express warranties from the manufacturer to the subpurchaser.

 While I am mindful of the steady erosion of the privity prerequisite in many fields and in several jurisdictions, I must nevertheless conclude that under Pennsylvania substantive law the privity defense has not been vanquished where the claim is based on an implied warranty and the damages sustained are solely property damages or commercial losses without personal injury.

 I.

 Plaintiff, Atlas Aluminum Corporation, hereinafter referred to as 'Atlas', is a Pennsylvania corporation which manufactures, distributes and sells aluminum sash windows and associated lines.

 Defendant, borden Chemical Company, hereinafter referred to as 'Borden', is a New Jersey corporation engaged in the manufacture and sale of chemicals, adhesives and other products.

 Plaintiff claims that in 1960, for the purpose of glazing aluminum frames and glass to aluminum window frames, it obtained and used two shipments of adhesive manufactured and sold by defendant. Plaintiff alleges that the adhesive failed to hold the glass thereby requiring it to 'reglaze thousands of window panes at great expense * * * (and) to curtail its normal fabrication operations', causing considerable loss of business and goodwill amounting to damages of $ 100,000.00.

 Defendant's prior motion to dismiss was denied on June 13, 1962, by Judge C. William Kraft, Jr., because of the 'novel and possibly intricate questions of law', and thus in the absence of a factual record, Judge Kraft appropriately ruled that it was 'advisable that action be deferred until all the facts have been fully developed. Certainly the case is not so clear as to warrant a summary disposition of the issues at this time.' Subsequent to Judge Kraft's order, the facts have been fully developed by defendant, taking the depositions of Stanley Freedman, president of Atlas, Jerome Donald Jerome, an engineer for Atlas, and Samuel Wachtel, a supervisor of inventory control for Atlas. There was substantial additional discovery through the Interrogatories and Answers filed by each party. As a result of the pretrial discovery, and the present uncontradicted factual posture of the case, defendant has filed a motion for summary judgment to dismiss on the grounds that defendant is entitled to judgment as a matter of law since there is no genuine issue as to any material fact. Defendant states this motion is based upon:

 '(a) As to plaintiff's averment of negligence: the complaint which clearly indicates that plaintiff is not claiming damages for bodily injury.

 '(b) As to plaintiff's averment of breach of warranty: the depositions of plaintiff's employees, which clearly indicate a lack of privity of contract between plaintiff and defendant and no representations or advertisements by the defendant relating to the product in question.'

 In its brief, which is corroborated by the depositions, plaintiff admits that:

 '(a) It never entered into any contractual relationship with the defendant concerning the sale ...


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