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Pioneer Hi-bred Corn Co. v. Northern Ill. Gas Co.

DECEMBER 28, 1973.

PIONEER HI-BRED CORN COMPANY, PLAINTIFF-APPELLANT,

v.

NORTHERN ILLINOIS GAS COMPANY, DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Bureau County; the Hon. LEONARD HOFFMAN, Judge, presiding.

MR. JUSTICE STOUDER DELIVERED THE OPINION OF THE COURT:

Rehearing denied February 14, 1974.

Plaintiff-Appellant, Pioneer Hi-Bred Corn Company of Illinois, appeals from a judgment entered on the verdict of the jury in favor of Defendant-Appellee, Northern Illinois Gas Company, by the Circuit Court of Bureau County.

Plaintiff owns a plant located less than a mile north of Princeton, Illinois, where corn is processed for resale to farmers. The corn is dried in large portable gas dryers. Defendant, a distributor of natural gas, and plaintiff executed a "Gas Service Contract" in September, 1966 whereby gas was to be supplied to plaintiff at a pressure of approximately 45 pounds per square inch. There were seven dryers in use during 1967, each drawing gas from one of the gas risers or standpipes through a connecting rubber hose ten feet long. On one of the dryers a six foot hose was connected to the ten foot hose by hose clamps.

In the fall of 1967, plaintiff notified defendant it was not receiving the required 45 p.s.i. but was receiving only 20 to 30 p.s.i. The operation supervisor for defendant, Richard Bergeson, went to plaintiff's plant and after checking the meter house found that the pressure was inadequate. Bergeson and John O'Reilly, defendant's marketing engineer, looked over the dryers, the hoses and equipment to determine whether the system could handle the pressure if a bypass of the regulator were used. They then advised the plant manager at Pioneer, Mr. Kensinger, the only way to increase the pressure and quantity was to bypass the regulator since the regulator acts as a restriction on the flow of gas and reduces pressure by a few pounds. They also advised the pressure could rise to 75 p.s.i. during periods of low usage. After looking at the plaintiff's equipment, Bergeson and O'Reilly concluded it could withstand the higher pressure. Kensinger asked the employees of defendant if damage could result from such pressure and was told the only damage would be to the gas pressure gauge on the dryers. Defendant did not suggest any alternative way to increase pressure.

The regulators were bypassed on September 27, 1967 which allowed the gas to flow uncontrolled into plaintiff's pipes except for a regulator upstream with a 75 p.s.i. setting. One of defendant's employees stopped at plaintiff's plant several times a week to check a chart where the pressure entering the plaintiff's lines was recorded. Until October 2, the pressure varied between 74 p.s.i. and 6 p.s.i. with radical changes in pressure within short time periods. On October 2 the regulators were again put in use and plaintiff was supplied a constant pressure of 45 p.s.i. The pressure began to decrease and on October 12, defendant again put the system on bypass. Thereafter high and variable pressure was supplied up until the evening of October 12 when Bartman, a Pioneer employee on the night shift who inspected the dryers hourly, noticed the dryers were all running hot. He attempted to reduce the heat by turning the temperature control value on each dryer. The 6 foot and 10 foot lengths of hose connecting the one dryer were vibrating and bouncing. Shortly thereafter he heard the hose blow. While he was attempting to turn the shutoff valve, the gas exploded causing a fire which injured Bartman and caused property damage amounting to $211,712 (amount stipulated by the parties).

Plaintiff brought this action to recover for damages to property and equipment allegedly caused by defendant's misconduct. Five counts were alleged upon alternative theories of negligence, wilful and wanton misconduct, breach of implied warranty, liability for ultrahazardous activity and breach of contract. The count alleging wilful and wanton misconduct was dismissed on plaintiff's motion. The trial court dismissed at the close of all the evidence all other counts except that of negligence. The jury returned a verdict for defendant. The only assignments of error relate to Count I alleging negligence and Count III alleging breach of implied warranty.

Plaintiff's first assignment of error is the trial court improperly dismissed Count III of the complaint. We agree. The issue which has been contested is the sufficiency of evidence to support the allegations in Count III which charge defendant with a breach of implied warranty. Since the court directed a verdict in favor of the defendant on this count of the complaint at the close of all of the evidence, the propriety of the court's ruling must be tested under the Pedrick rule, which of course means considering all the evidence in its aspect most favorable to plaintiff. Plaintiff has devoted a substantial portion of its brief to support the position that an action for breach of implied warranty may be brought in the case of the sale of natural gas. Since defendant does not dispute that position taken by plaintiff, we will accept it as the applicable rule in this case.

• 1 The plaintiff has also devoted a portion of its brief to justify the form of the products liability count. As indicated, this count is based on implied warranty generally considered a contract theory of recovery, rather than the strict liability in tort theory, illustrated by Suvada v. White Motor Company, 32 Ill.2d 612, 210 N.E.2d 182. Again we note the defendant did not object to this count either because of the theory advanced or because of any failure of allegation or proof of any conditions precedent before liability based on breach of implied warranty could be asserted. Consequently, any deficiencies in the sufficiency of the pleading are waived, and this is particularly true where, as in this case, the defendant has not raised the issue on appeal. However, before considering defendant's specific reasons which the court held were sufficient to warrant dismissal of this count of the complaint, namely the lack of evidence to support plaintiff's assertion that the product was defective and caused the damage, it might be helpful to recall a few of the underlying reasons which have contributed to the evolution of products liability theory.

It should be recalled the liability of a manufacturer predicated upon breach of implied warranties is long standing, having its earliest inception and application to the sale of food. Prior to the Suvada case, a manufacturer's liability for breach of implied warranties was limited to those parties with whom he contracted or who stood in privity with his contracting party, subject however to some exceptions. These exceptions were generally couched in terms of products deemed to be inherently dangerous and where such products were inherently dangerous, liability was extended to injured parties who could not claim standing by virtue of privity of contract. As may be gleaned from the precursors of Suvada, the concept of an inherently dangerous product was difficult, if not impossible, to apply rationally. Furthermore, the concept did not commend itself as a reasonable policy in this industrial era. The principal import of Suvada was to abandon either the necessity for privity of contract or the exception that an inherently dangerous product be involved. In Illinois, we elected to extend the evolving theory of products liability to the tort arena, although continuing to some extent prior ideas of dangerousness by referring to the basis of recovery as depending upon the existence of an unreasonably dangerous condition causing injury. By electing to add a tort theory of liability, Illinois has neither abolished liability predicated on breach of implied warranty nor has it adopted a theory of recovery unrelated to prior theories of recovery based on breach of implied warranty. Many states have expanded a manufacturer's liability for injuries caused by his products by merely expanding the theory of implied warranty and leaving the cause of action as one essentially based on contract. Other jurisdictions, such as Illinois, have sought to achieve the same effect by recognizing the liability as based on tort but characterize the tort as one of strict liability rather than of negligence. "* * * [T]he strict liability theory is essentially the liability of implied warranty divested of the contract doctrines of privity, disclaimer and notice. See Kessler, Products Liability, 76 Yale L.J. 887, 928; Prosser, The Assault Upon the Citadel (Strict Liability to the Consumer), 69 Yale L.J. 1099, 1143; and Lascher, Strict Liability in Tort for Defective Products — The Road to and Past Vandermark, 38 S.Cal. L.Rev. 30, 46." Dunham v. Vaughn & Bushnell Manufacturing Co., 86 Ill. App.2d 315, 229 N.E.2d 684 (affirmed, Dunham v. Vaughn & Bushnell Manufacturing Co., 42 Ill.2d 339, 247 N.E.2d 401.) What emerges from the theories of products liability is a conceptual framework imposing liability for injuries he could have avoided even though the manufacturer's duty to exercise care is not an explicit issue. In other words, we are not so much concerned with how or why the mouse got into the bottle, but are concerned with the nature of the contents of the bottle and its consequences.

• 2 The purpose of the foregoing discussion is twofold. First, the theory of recovery enunciated in the Suvada case and followed in subsequent cases did not purport to eliminate an action for breach of an implied warranty where there was a contractual relationship between the parties. Thus, in the case at bar, while the plaintiff might have brought his action based on strict liability in tort, an action for breach of an implied warranty is an acceptable alternative. The existence of alternative procedures enforcing the same substantive rights was recognized in Van Winkle v. Firestone Tire & Rubber Co., 117 Ill. App.2d 324, 253 N.E.2d 588. Whatever objections the defendant might have had to the form of the action, and in this appeal he has none, could and should have been urged in the trial court where such objections, if any there were, might have been cured by amendment.

• 3 The development of products liability theory from the earlier more restrictive breach of implied warranty theory is significant in a second respect. This is, that our concepts of defect, unreasonably dangerous condition and causation are related to and interchangeable with theories of recovery based on breach of implied warranty. For example, the concept of defect itself is often described in the terminology of implied warranty. Traynor, The Ways and Meanings of Defective Products and Strict Liability, 32 Tenn. L. Rev. 363 (1965), and Note, The Application of Implied Warranties to Predominantly "Service" Transactions, 31 Ohio St. L.J. 580 (1970).

According to defendant, the evidence presented by plaintiff was insufficient to support a breach of implied warranty in a case involving sale of a defective product. First, defendant contends plaintiff failed to prove the existence of a defect. According to the defendant, the gas was not unusual in nature or quality nor did the gas perform in a manner unexpected or unreasonable. On the other hand, the plaintiff claims a defect was proved because the product failed to perform in the manner reasonably expected. Secondly, defendant suggests plaintiff failed to prove the alleged defect was the proximate cause of plaintiff's damage. It is claimed plaintiff must offer evidence to show damage was not caused by something other than the alleged defect and in so doing must show that its equipment was in good working order. Also, defendant contends plaintiff must prove that it was exercising due care.

• 4 With reference to the existence of a defect in a product, different models or definitions have been proposed. As may be anticipated in an evolving area of the law, no single definition necessarily includes the entire range of possibilities which might be expected to arise. Our Illinois Supreme Court recently had occasion to consider at length this aspect of products liability and in Dunham v. Vaughn & Bushnell Manufacturing Co. 42 Ill.2d 339, 247 N.E.2d 401, the Court made the following observations:

"Although the definitions of the term `defect' in the context of products liability law use varying language, all of them rest upon the common premise that those products are defective which are dangerous because they fail to perform in the manner reasonably to be expected in light of their nature and intended function. So, Chief Justice Traynor has suggested that a product is defective if it fails to match the average quality of like products. (Traynor, The Ways and Meanings of Defective Products and Strict Liability, 32 Tenn. L.Rev. 363 (1965).) The Restatement emphasizes the viewpoint of the consumer and concludes that a defect is a condition not contemplated by the ultimate consumer which would be unreasonably dangerous to him. (Restatement, Torts (Second) sec. 402A, comment g.) Dean Prosser has said that `the product is to be regarded as defective if it is not safe for such a use that can be expected to be made of it, and no warning is given.' (Prosser, The Fall of the Citadel, 50 Minn. L.Rev. 791, 826.) Dean Wade has suggested that apart from the existence of a defect `the test for imposing strict liability is whether the product is unreasonably dangerous, to use the words of the Restatement. Somewhat preferable is the expression "not reasonably safe."' (Wade, Strict Tort Liability of Manufacturers, 19 S.W. Law Journal 5, 15.) See also, Dean Keeton, Products Liability-Liability Without Fault and the Requirement of a Defect. 45 Tex. L.Rev. 855, 859."

As observed in Dunham v. Vaughn & Bushnell Manufacturing Co., 86 Ill. App.2d 315, 229 N.E.2d 684 (affirmed Dunham v. Vaughn & Bushnell Manufacturing Co., 42 Ill.2d 339, 247 N.E.2d 401):

"Rather than requiring an element of a physical flaw in the product, we believe that the duty contemplated by the court in Suvada is one of making the chattel safe for the use for which it is supplied."

In applying the foregoing principles to the question of whether a defect could be found to exist with respect to the gas supplied in the instant case, there are two important considerations. First, was the gas in its usual condition as contended by defendant? Second, did it perform as ...


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