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Goldstein v. G.d. Searle & Co.

OPINION FILED JUNE 2, 1978.

ROCHELLE GOLDSTEIN, PLAINTIFF-APPELLANT,

v.

G.D. SEARLE & CO., DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Cook County; the Hon. DAVID A. CANEL, Judge, presiding.

MR. PRESIDING JUSTICE SULLIVAN DELIVERED THE OPINION OF THE COURT:

Rehearing denied July 27, 1978.

Plaintiff appeals the grant of summary judgment in favor of defendant and presents the following issues for review: (1) whether, to maintain an action for breach of implied warranty, a subpurchaser must give notice of breach to a remote manufacturer; and (2) whether the trial court erred in finding that her notice to the remote manufacturer was unreasonable as a matter of law.

At the time summary judgment was entered, the trial court had before it the pleadings, plaintiff's answers to defendant's interrogatories, plaintiff's discovery deposition, and defendant's stipulation of certain facts. These documents revealed that in 1966, at the age of 39, plaintiff began taking an oral contraceptive (Ovulen) manufactured by defendant. In her complaint she alleged that on October 15, 1967, she last purchased a supply of the drug from a retailer (not a party to this action); that from October 16 to 21, 1967, she ingested quantities of the drug in accordance with her physician's instructions; that she relied upon defendant's implied warranty that such drug was safe for human consumption; that on October 21, 1967, after ingesting the drug and as a proximate result of defendant's breach of implied warranty, she suffered a cerebral vascular accident (stroke) from which she became and will continue to remain partially paralyzed for the remainder of her life; that by filing suit on October 15, 1971, she gave reasonable notice of breach to defendant and that notice of the blood clotting effect of the drug which constitutes the basis for the breach of warranty was given to defendant prior to October 21, 1967.

Defendant stipulated that at the time of and prior to plaintiff's injury, it was aware of complaints by Ovulen consumers of injuries similar to those allegedly sustained by plaintiff and, in her deposition, plaintiff testified that she first learned of Ovulen's potential for causing strokes when she read of the Nelson Senate Committee Hearings regarding oral contraceptives in January 1970.

The trial court found that section 2-607(3)(a) of the Uniform Commercial Code (the Code) (Ill. Rev. Stat. 1975, ch. 26, par. 2-607(3)(a)) required plaintiff, a subpurchaser, to give notice of breach to defendant, a remote manufacturer, as a prerequisite to maintaining suit for breach of implied warranty and that as a matter of law such notice was not given by plaintiff within a reasonable time.

OPINION

Plaintiff first contends that suit for breach of implied warranty is not barred by the failure of a subpurchaser to give notice of breach to a remote manufacturer.

Initially, it should be noted that plaintiff relies heavily upon decisions which have held that third-party beneficiaries need not give notice as a prerequisite to maintaining a suit for breach of implied warranty (e.g., Tomczuk v. Town of Cheshire (1965), 26 Conn. Sup. 219, 217 A.2d 71; Chaffin v. Atlanta Coca Cola Bottling Co. (1972), 127 Ga. App. 619, 194 S.E.2d 513; Frericks v. General Motors Corp. (1976), 278 Md. 304, 363 A.2d 460), and she argues that those decisions encompass issues analogous to those in the case at bar, because a subpurchaser and a third-party beneficiary stand upon the same footing in relation to remote manufacturers. We cannot agree, for the obvious reason that a subpurchaser, unlike a third-party beneficiary, is a buyer in the distributive chain. Likewise, we do not find helpful the authority cited by defendant for the proposition that a subpurchaser must give notice of breach to a remote manufacturer. Those cases, Pritchard v. Liggett & Myers Tobacco Co. (3d Cir. 1961), 295 F.2d 292, Redfield v. Mead, Johnson & Co. (1973), 266 Ore. 273, 512 P.2d 776, and San Antonio v. Warwick Club Ginger Ale Co. (1968), 104 R.I. 700, 248 A.2d 778, have all assumed the existence of such a requirement without revealing all supporting legal reasoning.

The Code provides that an injury action grounded upon breach of implied warranty be brought within four years (Ill. Rev. Stat. 1975, ch. 26, par. 2-725), but only if there is compliance with all Code requirements (Berry v. G.D. Searle & Co. (1974), 56 Ill.2d 548, 309 N.E.2d 550). The issue presented here is whether such compliance mandates that a subpurchaser notify a remote manufacturer of breach under the terms of section 2-607(3)(a).

• 1-3 This section provides that "[w]here a tender has been accepted the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy * * *." (Ill. Rev. Stat. 1975, ch. 26, par. 2-607(3)(a).) The Code generally defines the terms buyer as "a person who buys or contracts to buy goods" (Ill. Rev. Stat. 1975, ch. 26, par. 2-103(1)(a)) and seller as "a person who sells or contracts to sell goods" (Ill. Rev. Stat. 1975, ch. 26, par. 2-103(1)(d)). However, as a matter of syntax, such definitions are limited by the introductory phrase "[w]here a tender has been accepted." (See Tomczuk v. Town of Cheshire.)

"The term `tender' is used in this Article in two different senses. In one sense it refers to `due tender' which contemplates an offer coupled with a present ability to fulfill all the conditions resting on the tendering party and must be followed by actual performance if the other party shows himself ready to proceed. Unless the context unmistakably indicates otherwise this is the meaning of `tender' in this Article and the occasional addition of the word `due' is only for clarity and emphasis. At other times it is used to refer to an offer of goods or documents under a contract as if in fulfillment of its conditions even though there is a defect when measured against the contract obligation. Used in either sense, however, `tender' connotes such performance by the tendering party as puts the other party in default if he fails to proceed in some manner." (Ill. Ann. Stat., ch. 26, par. 2-503, Uniform Commercial Code Comment, at 357-58 (Smith-Hurd 1963).)

Thus, as a condition precedent to buyer's duty to accept the goods and to pay for them, the seller must tender them by placing and holding conforming goods at the buyer's disposal. (Ill. Rev. Stat. 1975, ch. 26, pars. 2-503, 2-507.) As admitted by defendant during oral argument before this court, the only tender which could have been accepted by plaintiff was that of her immediate seller, the retailer. Therefore, because section 2-607(3)(a) provides for notification to the seller "[w]here a tender has been accepted," we believe that the word "seller" as used in that section necessarily refers only to the immediate seller and, accordingly, we conclude that a buyer is required to give notice of breach only to his immediate seller.

This conclusion, however, does not end our inquiry because, under the Code (as will be detailed hereafter), giving or the failure to give notice to the immediate seller does affect the remote manufacturer. Defendant, in making its argument that notice to the remote manufacturer is required, relied heavily upon the following comment concerning decisions which have interpreted ...


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