decided: May 22, 1974.
ATLANTIC STEEL BOILER CO. ET AL., APPELLANTS
Appeal from order of Superior Court, Oct. T., 1972, No. 1723, reversing order of Court of Common Pleas, Trial Division, of Philadelphia, March T., 1971, No. 5175, in case of Ahmed Salvador v. Atlantic Steel Boiler Co., I. H. English of Phila., Inc., Irwin H. English Co., Walter K. Mueller and Juliet M. Mueller, his wife.
Thomas H. Goldsmith, with him Goushian, Mooradian, Goldsmith & Keller, for appellants.
Carl M. Mazzocone, with him Glenn A. Troutman, and Mazzocone & Quinn, for appellee.
Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Justice Roberts. Mr. Chief Justice Jones took no part in the consideration or decision of this case.
[ 457 Pa. Page 25]
In Kassab v. Central Soya, 432 Pa. 217, 246 A.2d 848 (1968), this Court abolished the requirement of vertical privity in actions for breach of warranty. Today the question is whether the doctrine of horizontal privity should likewise be abandoned.*fn1 We conclude that the
[ 457 Pa. Page 26]
theoretical foundation which once supported horizontal privity has been undermined; we hold that lack of horizontal privity itself may no longer bar an injured party's suit for breach of warranty.
Allegedly as a result of the explosion of a steam boiler on May 22, 1967, at his place of work, Ahmed Salvador suffered the loss of approximately 77 per cent of his ability to hear. On March 29, 1971, Salvador filed a summons in assumpsit naming as defendants his employer, the retail seller of the boiler, and appellants, the manufacturers of the exploding steam boiler. A complaint was filed on February 3, 1972, and the manufacturers filed preliminary objections in the nature of a demurrer. The trial court sustained the preliminary objections and dismissed the complaint in assumpsit because plaintiff-appellee did not allege a contractual relationship with appellants and thus horizontal privity was lacking.*fn2
In an opinion by Judge Cercone, the Superior Court reversed. Salvador v. Atlantic Steel Boiler Co., 224 Pa. Superior Ct. 377, 307 A.2d 398 (1973).*fn3 That court reasoned that the thrust of Kassab was the desire to reach the same result in a lawsuit arising from particular facts whether the action is brought in trespass or assumpsit. Id. at 383-84, 307 A.2d at 402. Concluding
[ 457 Pa. Page 27]
that the adoption of section 402A of the Restatement (Second) of Torts (1965),*fn4 eliminates the logical basis for both vertical and horizontal privity, the Superior Court held that the Kassab rationale dictated abolition of the horizontal privity requirement in breach of warranty actions. The order sustaining preliminary objections was reversed and the complaint reinstated. We granted the manufacturers' petition for allowance of appeal;*fn5 we affirm.
In Hochgertel v. Canada Dry Corp., 409 Pa. 610, 187 A.2d 575 (1963), plaintiff, engaged in his duties as a bartender, was injured by flying glass when a bottle of carbonated soda exploded. He sued Canada Dry, the manufacturer, alleging breach of implied warranties. Because Hochgertel was neither the purchaser, a member of the purchaser's family, nor a guest in purchaser's home, this Court held that he could not establish any horizontal privity relationship with the manufacturer. Hence he could not recover.
That decision was based on the Uniform Commercial Code, section 2-318,*fn6 "A seller's warranty whether express or implied extends to any natural person who is in the family or household of his buyer or who is a guest in his home if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty. A seller may not exclude or limit the operation of this section."
Although this Court determined that Hochgertel as an employee was "definitively in none of these [§ 2-318]
[ 457 Pa. Page 28]
categories,"*fn7 it nevertheless recognized that the Code was not dispositive. "Since the Code was not intended to restrict the case law in this field (see § 2-318, Comment 3 . . .)*fn8 a study of pertinent Pennsylvania authorities is also necessary for the purposes of this decision."*fn9 After examining the relevant case law, this
[ 457 Pa. Page 29]
Court concluded that no Pennsylvania case had extended warranty protection beyond the class of persons enumerated in section 2-318. The Hochgertel Court in 1963 declined to do so.
The limitations imposed by Hochgertel were quickly challenged. Yentzer v. Taylor Wine Co., 414 Pa. 272, 199 A.2d 463 (1964), decided only one year later on almost identical facts, permitted recovery. There, plaintiff, a hotel employee, purchased a bottle of champagne manufactured by defendant. It was undisputed that Yentzer was acting as an agent of his employer. While preparing to serve the wine to hotel guests, the cork ejected and struck plaintiff in the eye. The trial court concluded that Hochgertel controlled, but this Court commented: "We do not think that the rigid construction we placed on a seller's warranty in Hochgertel should be extended to a situation such as this." Yentzer v. Taylor Wine Co., supra at 274, 199 A.2d at 464. We held that even though he acted as the agent of his employer, because the employee had actually purchased the champagne himself, he was a "buyer."*fn10 The dissent properly pointed out that the Court's analysis represented a "clear departure" from Hochgertel.*fn11
[ 457 Pa. Page 30]
Between Yentzer and the present case several significant developments occurred in Pennsylvania products liability law. In 1966, Webb v. Zern, 422 Pa. 424, 220 A.2d 853 (1966), adopted section 402A as the law of Pennsylvania. This section imposes liability on the seller or manufacturer of a defective product regardless of the lack of proven negligence or the lack of contractual relation between the seller and the injured party. On the same day, this Court issued its opinion in Miller v. Preitz, 422 Pa. 383, 221 A.2d 320 (1966), reaffirming the requirement of vertical privity in an action for injuries suffered through a breach of warranty.*fn12
[ 457 Pa. Page 31]
Only two years later Miller was overruled in Kassab v. Central Soya, 432 Pa. 217, 246 A.2d 848 (1968). The Kassabs were purchasers of allegedly defective cattle feed and therefore no question of horizontal privity was presented. The manufacturer of the product, however, argued that it could not be liable because no vertical privity was present, that is, only the retailer and not it, the manufacturer, had a contractual relation with plaintiffs.
We noted that our adoption of section 402A in Webb v. Zern obliterated any logical basis for retaining the demand for vertical privity.
"Under the Uniform Commercial Code, once a breach of warranty has been shown, the defendant's liability, assuming of course the presence of proximate cause and damages, is absolute. Lack of negligence on the seller's part is no defense. Therefore, prior to the adoption of section 402a, it could be said that to dispense with privity would be to allow recovery in contract without proof of negligence, while requiring a showing of negligence in order to recover for the same wrong against the same defendant if suit were brought in tort. To permit the result of a lawsuit to depend solely on the caption atop plaintiff's complaint is not now, and has never been, a sound resolution of identical controversies." 432 Pa. at 228-29, 246 A.2d at 853. The Court concluded that "on this issue [vertical privity], the code must be co-extensive with Restatement section 402a in the case of product liability." Id. at 231, 246 A.2d at 854 (footnote omitted).
Kassab dealt only with the issue of vertical privity.*fn13 The Superior Court nevertheless concluded that Kassab's rationale likewise required the abolition of the requirement of horizontal privity in breach of warranty cases. We believe the Superior Court is correct.
[ 457 Pa. Page 32]
The basic reason for the Hochgertel Court's reticence to impair the horizontal privity requirement was that "[t]o grant such an extension of the warranty, as urged herein, would in effect render the manufacturer a guarantor of his product and impose liability in all such accident cases even if the utmost degree of care were exercised. This would lead to harsh and unjust results." 409 Pa. at 615-16, 187 A.2d at 578.
Today, as the Superior Court correctly recognized, a manufacturer by virtue of section 402A is effectively the guarantor of his products' safety. See Webb v. Zern, supra; Kassab v. Central Soya, supra. Our courts have determined that a manufacturer by marketing and advertising his product impliedly represents that it is safe for its intended use. We have decided that no current societal interest is served by permitting the manufacturer to place a defective article in the stream of commerce and then to avoid responsibility for damages caused by the defect. He may not preclude an injured plaintiff's recovery by forcing him to prove negligence in the manufacturing process. Webb v. Zern. Neither may the manufacturer defeat the claim by arguing that the purchaser has no contractual relation to him. Kassab v. Central Soya. Why then should the mere fact that the injured party is not himself the purchaser deny recovery?
Because the manufacturer is now a guarantor, the "harsh and unjust result" is worked on the plaintiff who may recover for his injury or loss if his complaint is in trespass, but on identical facts would be denied relief if the pleading is captioned "Complaint in Assumpsit." See Kassab, supra at 229, 246 A.2d at 853. This anomalous situation is certainly to be avoided.*fn14 Thus "[w]ith Pennsylvania's adoption of Restatement 402a,
[ 457 Pa. Page 33]
the same demands of legal symmetry which once supported privity now destroy it." Id.
Though we must overrule Hochgertel, this is not an occasion when a court reexamines its precedents and finding them in error returns to a "correct" view. On the contrary, as we have said, when Hochgertel was decided it was clearly the appropriate accommodation between the law of torts and the law of contracts. Since then Pennsylvania products liability law has progressed, and demands of public policy*fn15 as well as legal symmetry compel today's decision.
The order of the Superior Court is affirmed.
Order of Superior Court affirmed.