State Ex Rel. Western Seed Production Corp. v. Campbell

442 P.2d 215, 250 Or. 262, 5 U.C.C. Rep. Serv. (West) 584, 1968 Ore. LEXIS 747
Oregon Supreme Court·Decided June 14, 1968·Published·Cited by 111 cases

Opinions

GOODWIN, J.

This is an original mandamus proceeding to review the trial court’s refusal to quash service of summons upon Western Seed Production Corp., an Arizona corporation. The validity of the challenged • “long-arm” service, under ORS 14.035, depends upon whether the originating complaint alleges the “commission of a [265] tortious act within.this state.”. OES 14.035(1)(b). There is no allegation of facts that constitute “the transaction of any business within this state.” ORS 14.035(1) (a).

In'this opinion, we will refer to the parties as they are designated in the pending damage action. The complaint therein alleges that the plaintiffs are Oregon sugar-beet growers who purchased through their local supplier seed which had been propagated by Western Seed in Arizona and then sold in Arizona to the plaintiffs’ supplier. The supplier and Western Seed are both named as defendants in the damage action. Plaintiffs claim that defects in the seed caused crop losses and that because their land was occupied for one year in growing a worthless crop their property was damaged. Plaintiffs seek to hold Western Seed responsible for a breach of implied warranty and, in the alternative, on the theory of negligence. If plaintiffs have stated a cause of action on either theory, then it will be necessary to consider whether, for the purposes of “long-arm” jurisdiction, a “tortious act” has been committed within this state.

I. IMPLIED WARRANTY

In Price v. Gatlin, 241 Or 315, 405 P2d 502 (1965), we held that a purchaser of a defective tractor could not hold the wholesaler, with whom he had no contract, strictly liable where the defect had resulted only in a loss of profits to the purchaser’s business. In the present case, plaintiffs lost the profits they expected to derive from a normal sugar-beet crop. There was no damage'to their land; there was only a loss of use thereof. The alleged damage is, therefore, essentially of. the same character as that suffered in Price v. Gatlin.

[266] The pending action, in the context of mandamus, is against a producer rather than against a wholesaler. But since each case involved a remote seller, there is no substantive basis on these facts for distinguishing Price v. Gatlin. In either situation, the question is whether a purchaser of a defective product who suffers only economic loss should be allowed to maintain an action for breach of warranty against one with whom he has had no dealings.

A buyer’s interest in obtaining what he has bargained for is protected by the law of sales. Statutory sales law has recently undergone comprehensive review and revision in the Uniform Commercial Code. ORS ch 72. The code provides a scheme of warranty recovery, in which fault is irrelevant, for all types of loss resulting from “unmerchantable” products. Remedies under the code are subject to certain conditions not associated with common-law tort actions: notice of breach of warranty must be given, ORS 72.6070; remedies for breach of warranty can be limited, ORS 72.7190; certain warránties can be disclaimed, ORS 72.3160. Further, the statute of limitations for warranty actions is four years, ORS 72.7250, while in tort actions it is two years, ORS 12.110. The code is silent, however, as to privity requirements for breach-of-warranty actions. This aspect of sales law has been left to the courts in jurisdictions adopting the code. See Comment 2 to ORS 72.3130, in Oregon’s Uniform Commercial Code, published in 1962 by the Legislative Counsel Committee.

Because of social pressure to compensate innocent victims of personal injuries, and because remedies for such injuries have traditionally been provided by tort law, this court has joined those which have abolished privity requirements in actions for personal in[267] juries from defective products.. We have assumed that such a cause of action sounds in tort and thus is unhampered by the statutory impediments to relief for breach of warranty. See Heaton v. Ford Motor Co., 248 Or 467, 435 P2d 806 (1967); Wights v. Staff Jennings, Inc., 241 Or 301, 405 P2d 624 (1965). Where a product is defective within the meaning of the Bestatement-(Second) of Torts § 402A (1965) and causes personal injury, the injured party can recover for his injuries against any seller of the defective product, without regard to such- warranty notions as notice, disclaimer, or whether the warranty was express or implied.

Where the damages sought do not involve personal injury, however, this court has not yet decided to abandon the traditional remedies under the law of sales. In Heaton v. Ford Motor Co., supra, a personal-injuries case, we said that products liability was ¡a form of strict liability as formulated in the Bestatement (Second) of Torts § 402A. We had no occasion then to decide, and do not now decide, whether strict liability should be imposed upon remote sellers of products which cause property damage instead of personal injury. The application of Section 402A to property-damage is, in this state, an open question.

The risk that a product may not perform as it should exists in every purchase transaction. A buyer who chooses his seller with care has an adequate remedy should any warranties be breached. A buyer whose seller proves to be irresponsible will understandably seek relief further afield. But to allow a nonprivity warranty action to vindicate every disappointed consumer would unduly complicate the code’s scheme, which recognizes the consensual elements of commerce. Disclaimers and limitations of certain warranties and [268] remedies are matters for bargaining. Strict-liability actions between buyers and remote sellers could lend themselves to the proliferation of unprovable claims by disappointed bargain hunters, with little discernible social benefit. Because the buyer and his seller will normally have engaged in at least one direct transaction, litigation between these parties should ordinarily be simpler and less costly than litigation between buyer and remote seller. For these reasons we retain the rule statéd in Price v. Gatlin, supra: Where the purchaser of an unmerchantable product suffers only loss of profits, his remedy for the breach of warranty is against his immediate seller unless he can predicate liability upon some fault on the part of a remote seller.

Plaintiffs, therefore, have not stated a cause of action for breach of warranty against Western Seed, a remote seller. It follows that in the attempted statement of a warranty cause of action the plaintiffs have described no “tortious act committed within this state.”

Free access — add to your briefcase to read the full text and ask questions with AI

State Ex Rel. Western Seed Production Corp. v. Campbell, 442 P.2d 215, 250 Or. 262, 5 U.C.C. Rep. Serv. (West) 584, 1968 Ore. LEXIS 747 (Or. 1968).

442 P.2d 215 (State Ex Rel. Western Seed Production Corp. v. Campbell) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Clark v. Eddie Bauer LLC
532 P.3d 880 (Oregon Supreme Court, 2023)
Derick Ortiz, v. Sig Sauer, Inc.
596 F. Supp. 3d 339 (D. New Hampshire, 2022)
Rains v. Stayton Builders Mart, Inc.
336 P.3d 483 (Court of Appeals of Oregon, 2014)
Wright v. Turner
322 P.3d 476 (Oregon Supreme Court, 2014)
Phelps v. Wyeth, Inc.
938 F. Supp. 2d 1055 (D. Oregon, 2013)
Lindell v. Kalugin
297 P.3d 1266 (Oregon Supreme Court, 2013)
Tuscumbia City School System v. Pharmacia Corp.
871 F. Supp. 2d 1241 (N.D. Alabama, 2012)
Wright v. State Farm Mutual Automobile Insurance
196 P.3d 1000 (Court of Appeals of Oregon, 2008)
State v. Castilleja
168 P.3d 1177 (Court of Appeals of Oregon, 2007)
Chaurasia v. General Motors Corp.
126 P.3d 165 (Court of Appeals of Arizona, 2006)
Southwest Pet Products, Inc. v. Koch Industries, Inc.
89 F. Supp. 2d 1115 (D. Arizona, 2000)
Hansen v. Abrasive Engineering & Manufacturing, Inc.
856 P.2d 625 (Oregon Supreme Court, 1993)
G&M Farms v. Funk Irrigation Co.
808 P.2d 851 (Idaho Supreme Court, 1991)
Prairie Production, Inc. v. Agchem Division-Pennwalt Corp.
514 N.E.2d 1299 (Indiana Court of Appeals, 1987)
Whitaker v. Lian Feng MacHine Co.
509 N.E.2d 591 (Appellate Court of Illinois, 1987)
Szajna v. General Motors Corp.
503 N.E.2d 760 (Illinois Supreme Court, 1986)
Spring Motors Distributors, Inc. v. Ford Motor Co.
489 A.2d 660 (Supreme Court of New Jersey, 1985)