O’CONNELL, J.
This is an action to recover damages for personal injuries suffered by plaintiff in the explosion and burning of a pleasure boat sold by defendant to plaintiff’s husband. The jury returned a verdict for defendant. Plaintiff appeals from a judgment dismissing her complaint.
Plaintiff’s husband purchased a “Chris Craft Constellation” motor boat from defendant. He installed a butane fuel system for the purpose of supplying fuel to cooking and heating units in the boat. Two butane tanks were mounted in the stern of the boat below the decks. Fuel lines ran from each of the tanks to the center of the boat where they were attached to a pressure valve which controlled the supply of fuel from the tanks. A single fuel line ran along the bottom of the boat from the pressure valve to the stove and heater. Soon after the boat was purchased it exploded and burned.
Plaintiff’s case is based upon the theory that the explosion was caused by the ignition of gasoline vapor discharged from a ruptured fuel line or connection between the gasoline fuel pump and the carburetor of the port engine.
It is defendant’s theory that the explosion was caused by a defect in the butane system. Defendant contends that the judgment should be affirmed because there was no evidence that the explosion was caused by any defective part of the gasoline fuel system.
A marine .salvage expert called as a witness by plaintiff testified that “the fire was caused by gasoline discharging from a rupture or a malfunction between the fuel pump and/or within the carburetor of the port engine.”
We are of the opinion that the jury reasonably could have drawn this inference with the aid of the expert’s opinion. The objections interposed to the testimony of plaintiff’s expert witness were properly overruled by the trial judge.
Since plaintiff was not the purchaser of the boat we must decide as a preliminary matter whether a person not in privity with the seller of a defective product may recover for breach of an implied warranty of merchantability.
A majority of the courts have held that there can be no liability for the breach of an implied warranty unless there is privity between the plaintiff and the defendant.
An increasing number of courts have taken the contrary view.
The majority view is predicated upon the theory that liability for the breach of an implied warranty in the sale of goods arises solely out of a contractual relationship of the plaintiff and defendant. It has been pointed out, however, that “the obligation is imposed upon the seller, not because he has assumed it voluntarily, but because the law attaches such consequences to his conduct irrespective of any agreement; and in many cases, at least, to hold
that a warranty ‘is a contract is to speak the language of pure fiction.’ ”
The word “warranty,” with its connotation of contract has tended to obscure the fact that the liability imposed upon the seller for harm resulting from defective goods sold by him may rest entirely upon principles of tort law. Courts which see this have discarded the language of warranty and have described the seller’s obligation to furnish goods of merchantable quality in terms of the tort principle of strict liability.
With the seller’s liability so identified as a part of the law of torts it is apparent that privity of contract is as irrelevant in determining the scope of the seller’s strict liability as it is in determining his liability for negligent or intentional conduct. It is now firmly established by our previous cases that where a seller or supplier of chattels is charged with negligent conduct privity is not essential to plaintiff’s cause of action.
We see no reason for requiring privity if it is assumed that the defendant seller should be strictly liable. The important inquiry is whether the seller not in privity should ever be held strictly liable and if so, under what circumstances.
Until recently the cases have contained little ex
planation for the imposition of liability upon a seller •of goods who is free from fault in the usual legal sense.
Usually liability has been predicated on a breach of an implied warranty without explaining why the warranty was judicially implied. When the action was brought by the buyer against his immediate seller, it seemed enough that the plaintiff and defendant were parties to a contract, the warranty being born in some mysterious way out of the contractual relationship even in the absence of any promise express or implied in fact made by the seller. When the action was brought by a purchaser against a remote seller, the absence of a contractual relationship was usually regarded as a sufficient explanation for non-liability.
The clearer recognition of the seller’s obligation as a species of strict liability in tort has brought with it the effort to analyze more carefully the basis for imposing such liability. The various explanations, both by courts and text writers, for imposing strict liability are concisely summarized by Prosser.
Mr.
Justice Traynor in a concurring opinion in
Escola v. Coca Cola Bottling Co. of Fresno,
24 Cal2d 453, 150 P2d 436, 440-41 (1944), explains the principle as follows:
“* * * Even if there is no negligence * * * public policy demands that responsibility be fixed wherever it will most effectively reduce the hazards to life and health inherent in defective products that reach the market. It is evident that the manufacturer can anticipate some hazards and guard against the recurrence of others, as the public cannot. Those who suffer injury from defective products are unprepared to meet its consequences. The cost of an injury and the loss of time or health may be an overwhelming misfortune to the person injured, and a needless one, for the risk of injury can be insured by the manufacturer and distributed among the public as a cost of doing business. It is to the public interest to discourage the marketing of products having defects that are a menace to the public. If such products nevertheless find their way into the market it is to the public interest to place the responsibility for whatever injury they may cause upon the manufacturer, who, even if he is not negligent in the manufacture of the product, is responsible for its reaching the market. However intermittently such injuries may occur and however haphazardly they may strike, the risk of their occurrence is a constant risk and a general one. Against such a risk there should be general and constant protection and the manufacturer is best situated to afford such protection.”
Substantially the same reasons for imposing strict liability upon sellers of defective chattels have been advanced in several other cases and in various texts and articles.
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O’CONNELL, J.
This is an action to recover damages for personal injuries suffered by plaintiff in the explosion and burning of a pleasure boat sold by defendant to plaintiff’s husband. The jury returned a verdict for defendant. Plaintiff appeals from a judgment dismissing her complaint.
Plaintiff’s husband purchased a “Chris Craft Constellation” motor boat from defendant. He installed a butane fuel system for the purpose of supplying fuel to cooking and heating units in the boat. Two butane tanks were mounted in the stern of the boat below the decks. Fuel lines ran from each of the tanks to the center of the boat where they were attached to a pressure valve which controlled the supply of fuel from the tanks. A single fuel line ran along the bottom of the boat from the pressure valve to the stove and heater. Soon after the boat was purchased it exploded and burned.
Plaintiff’s case is based upon the theory that the explosion was caused by the ignition of gasoline vapor discharged from a ruptured fuel line or connection between the gasoline fuel pump and the carburetor of the port engine.
It is defendant’s theory that the explosion was caused by a defect in the butane system. Defendant contends that the judgment should be affirmed because there was no evidence that the explosion was caused by any defective part of the gasoline fuel system.
A marine .salvage expert called as a witness by plaintiff testified that “the fire was caused by gasoline discharging from a rupture or a malfunction between the fuel pump and/or within the carburetor of the port engine.”
We are of the opinion that the jury reasonably could have drawn this inference with the aid of the expert’s opinion. The objections interposed to the testimony of plaintiff’s expert witness were properly overruled by the trial judge.
Since plaintiff was not the purchaser of the boat we must decide as a preliminary matter whether a person not in privity with the seller of a defective product may recover for breach of an implied warranty of merchantability.
A majority of the courts have held that there can be no liability for the breach of an implied warranty unless there is privity between the plaintiff and the defendant.
An increasing number of courts have taken the contrary view.
The majority view is predicated upon the theory that liability for the breach of an implied warranty in the sale of goods arises solely out of a contractual relationship of the plaintiff and defendant. It has been pointed out, however, that “the obligation is imposed upon the seller, not because he has assumed it voluntarily, but because the law attaches such consequences to his conduct irrespective of any agreement; and in many cases, at least, to hold
that a warranty ‘is a contract is to speak the language of pure fiction.’ ”
The word “warranty,” with its connotation of contract has tended to obscure the fact that the liability imposed upon the seller for harm resulting from defective goods sold by him may rest entirely upon principles of tort law. Courts which see this have discarded the language of warranty and have described the seller’s obligation to furnish goods of merchantable quality in terms of the tort principle of strict liability.
With the seller’s liability so identified as a part of the law of torts it is apparent that privity of contract is as irrelevant in determining the scope of the seller’s strict liability as it is in determining his liability for negligent or intentional conduct. It is now firmly established by our previous cases that where a seller or supplier of chattels is charged with negligent conduct privity is not essential to plaintiff’s cause of action.
We see no reason for requiring privity if it is assumed that the defendant seller should be strictly liable. The important inquiry is whether the seller not in privity should ever be held strictly liable and if so, under what circumstances.
Until recently the cases have contained little ex
planation for the imposition of liability upon a seller •of goods who is free from fault in the usual legal sense.
Usually liability has been predicated on a breach of an implied warranty without explaining why the warranty was judicially implied. When the action was brought by the buyer against his immediate seller, it seemed enough that the plaintiff and defendant were parties to a contract, the warranty being born in some mysterious way out of the contractual relationship even in the absence of any promise express or implied in fact made by the seller. When the action was brought by a purchaser against a remote seller, the absence of a contractual relationship was usually regarded as a sufficient explanation for non-liability.
The clearer recognition of the seller’s obligation as a species of strict liability in tort has brought with it the effort to analyze more carefully the basis for imposing such liability. The various explanations, both by courts and text writers, for imposing strict liability are concisely summarized by Prosser.
Mr.
Justice Traynor in a concurring opinion in
Escola v. Coca Cola Bottling Co. of Fresno,
24 Cal2d 453, 150 P2d 436, 440-41 (1944), explains the principle as follows:
“* * * Even if there is no negligence * * * public policy demands that responsibility be fixed wherever it will most effectively reduce the hazards to life and health inherent in defective products that reach the market. It is evident that the manufacturer can anticipate some hazards and guard against the recurrence of others, as the public cannot. Those who suffer injury from defective products are unprepared to meet its consequences. The cost of an injury and the loss of time or health may be an overwhelming misfortune to the person injured, and a needless one, for the risk of injury can be insured by the manufacturer and distributed among the public as a cost of doing business. It is to the public interest to discourage the marketing of products having defects that are a menace to the public. If such products nevertheless find their way into the market it is to the public interest to place the responsibility for whatever injury they may cause upon the manufacturer, who, even if he is not negligent in the manufacture of the product, is responsible for its reaching the market. However intermittently such injuries may occur and however haphazardly they may strike, the risk of their occurrence is a constant risk and a general one. Against such a risk there should be general and constant protection and the manufacturer is best situated to afford such protection.”
Substantially the same reasons for imposing strict liability upon sellers of defective chattels have been advanced in several other cases and in various texts and articles.
Summarized, the thesis is that a
loss resulting from the use of defendant’s defective goods “is a casualty produced by the hazards of defendant’s enterprise, so that the risk of loss is properly a risk of that enterprise,”
a view commonly described as the theory of enterprise liability.
The theory is a corollary of the broader thesis urged by -some writers, particularly Harper and James on Torts, that compensation of the victim rather than fault of the defendant should be the objective in the adjudication of accident cases.
The broad proposition is stated by Professor Fleming James, Jr., as follows:
“* * * Strict liability is to be preferred over a system of liability based on fault wherever you have an enterprise or activity, beneficial to many, Which takes a more or less inevitable accident toll of human life and limb. This is true at least where the accident victims are as a class economically ill-equipped to carry the burden of serious accident losses. The impact of -such losses on the individual in terms of human hardship is often crushing and
the repercussions of this blow reach far beyond the individual and pose a significant social problem.” James, General Products — Should Manufacturers be Liable Without Negligence?,
24
Tenn L Rev 923 (1957).
The rationale of risk spreading and compensating the victim has no special relevancy to eases involving injuries resulting from the use of defective goods. The reasoning would seem to apply not only in cases involving personal injuries arising from the
sale
of defective goods, but equally to any case where an injury results from the risk creating conduct of the seller in any stage of the production and distribution of goods. Thus a manufacturer would be strictly liable even in the absence of fault for an injury to a person struck by one of the manufacturer’s trucks being used in transporting his goods to market. It seems to us that the enterprise liability rationale employed in the
Escola
case proves too much and that if adopted would compel us to apply the principle of strict liability in all future cases where the loss could be distributed.
Although we believe that it is the function of the judiciary to modify the law of torts to fit the changing needs of society, we feel that the judicial extension of the theory of strict liability to all cases where it is convenient for those engaged in commerce to spread the risk would not be advisable. If enterprise liability is to be so extended, there is a strong argument for limiting the victim’s measure of recovery to some scheme of compensation similar to that employed in workmen’s compensation. The legislature alone has the power to set up such a compensation scheme. The court cannot put a limit upon the jury’s verdict.
Although we reject the theory of enterprise liability standing alone as a basis for recovery in the so-called products liability cases, this does not mean that a seller not in privity with the plaintiff is never to be held strictly liable for injuries caused by defective goods. We believe that strict liability may be imposed upon the seller in appropriate circumstances through the application of established tort principles directly or by analogy.
Thus the seller may be strictly liable for physical harm resulting from the sale of a product which creates an ultrahazardous condition. In such a case the basis for liability is the same as that employed in other cases imposing strict liability, as for
example where the harm results from the use of high explosives, or the use of chemicals.
The present case falls within this principle. A defective fuel system which permits the escape of gas fumes into the engine compartment of a boat can be found to create an extrahazardous condition for which the defendant could be held strictly liable. Whether a supplier of a defective product is strictly liable for personal injuries when his conduct is not extrahazardous we need not now decide.
We now consider plaintiff’s assignments of error. Plaintiff’s first assignment of error is directed at the action of the trial court in sustaining defendant’s demurrer to plaintiff’s second amended complaint. The demurrer was sustained on the ground that there was an improper joinder of a cause of action for breach of warranty and a cause of action in tort. The complaint contained a count alleging, in effect, a breach of an implied warranty of merchantability and a second count alleging negligence on the part of the defendant.
As we have already explained, a common law action for personal injuries resulting from a defective product based upon an implied warranty of merchantability rests upon the theory of strict liability in tort. Therefore, the court erred in sustaining the demurrer.
Defendant argues that if there was error in sustaining the defendant’s demurrer to plaintiff’s second amended complaint, plaintiff waived the error by filing a third amended complaint in which plaintiff deleted the negligence count and stated only a count for a breach of an implied warranty of merchantability. Since the judgment must be reversed on another ground which is discussed below, it is not necessary to decide whether plaintiff waived the error by answering after the demurrer was sustained.
Plaintiff contends that the court erred in giving the following instruction to which exception was made :
“If you find from the testimony and evidence in this case therefore that the plaintiff failed to give defendant notice of the fact that in his opinion defendant had breached the alleged warranty as set forth in plaintiff’s third amended complaint, then and in that event your verdict must be in favor of defendant.”
Apparently it was assumed by the trial court that ORS 75.490 was applicable.
The statute is derived from Section 49 of the Uniform Sales Act. The better reasoned cases hold that Section 49 does not apply where the plaintiff who is not in privity with defendant sues
to recover damages f or personal injuries.
We adopt this view. Therefore, the instruction was erroneous.
Defendant contends that if there was error in giving the instruction it was invited by plaintiff. The alleged invitation to err arose out of the following circumstances. Plaintiff’s complaint contained an allegation that notice had been given to defendant. Plaintiff offered evidence to prove notice. Defendant objected. In replying to defendant’s objection, plaintiff asserted that notice was not necessary under her theory of the case. The trial judge sustained the objection, apparently reasoning that if by plaintiff’s own admission notice was not necessary the evidence would be immaterial. Plaintiff then rested and defendant moved for a nonsuit, stating as one ground the absence of evidence of notice. It appears that the trial court deemed notice necessary to plaintiff’s cause of action.
To avoid a nonsuit plaintiff moved to reopen her ease for the purpose of proving notice. The motion to re-open was granted and evidence of notice was received over defendant’s objection. The court then instructed the jury that notice was necessary.
We find no invitation to err in the foregoing circumstances. The allegation in the complaint that
notice was given does not require plaintiff to prove notice if it is not essential to her cause of action. In such case the allegation is merely surplusage.
Plaintiff’s motion to re-open her case and the introduction of evidence of notice cannot be regarded as inviting error because it was done in order to avoid a threatened nonsuit.
The instruction may have had the effect of turning the case in defendant’s favor. It is possible that the jury concluded that no notice was given but that if it had been given or if it was not necessary to give it plaintiff would have made out her case on the theory of breach of the implied warranty of merchantability.
The judgment is reversed and the cause is remanded for a new trial.