cadillace motor car co v. johnson and 1915 and second circuit

MacPherson v. Buick, that famous 1916 Court of Appeals decision (New York) written by Justice Cardozo, is excerpted in every major torts and contracts casebook today. It is a magisterial decision, and in it Cardozo boldly hacks away at the dense overgrowth of the common law privity doctrine as he tries to clear a path for the brave new world of 20th century automobiles. But we must realize as we read MacPherson (discussed in the next essay) that it an example of the now-ritually-despised judicial activism. It is one of the key decisions of the first third of the 20th century in tort and contract law, and it is an activist decision. The purpose of this essay is to discuss a case from the previous year which appears in no case book but really more accurately stated the law at the time. The next essay will consider MacPherson. Through these two essays I not only want to bring you into another world, a world long gone, but to see the very moment when the doctrine of privity relaxed its deathlike grip on modern tort and contract law.

The Issue in Cadillac

The Second Circuit Court of Appeals stated the issue in Cadillac Motor Car Co. v. Johnson succinctly:

"In March, 1909, Johnson, the plaintiff below, bought of a dealer an automobile known as the Cadillac motor model 30, manufactured by the defendant. In July of the same year, while driving at from 12 to 15 miles an hour, the front right wheel broke, the car turned over, and Johnson sustained most serious injuries. He brought this suit to recover damages therefor, charging the defendant with simple negligence in respect to the wheel. There can be no question that the wheel was made of dead and ‘dozy‘ wood, quite insufficient for its purposes" Cadillac Motor Car Co. v Johnson, 221 F. 801 (2nd Cir, 1915).

The question was simply stated. Was there to be recovery for Johnson against the auto manufacturer in tort when there was no contractual relationship between Johnson and Cadillac? Johnson had a contract with the dealer only. At common law for the sale of goods you could only successfully sue the person with whom you were in contractual privity. Any other system, as one old English case said, would be "outrageous."

At trial the judge proceeded on the theory that even though an automobile was not an inherently dangerous thing, it becomes so when fitted with parts which would make the vehicle dangerous--such as a "weak and insufficient wheel." With this approach to the law, judgment was awarded to plaintiff. The Second Circuit, in a split decision, reversed and dispatched this approach quickly: "We do not understand this to be the law" (Id. at 802). The court rehearsed the history of exceptions to the common law doctrine of privity of contract, finding only that the case law supported exceptions for "an article dangerous in its nature or likely to become so in the course of the ordinary usage to be contemplated by the vendor." Thus, a manufacturer who mislabeled pills that ended up injuring a subsequent user would be liable in tort to that user, despite that fact that the user was not in contractual privity with the manufacturer.

Giving Us the Law

But the Second Circuit drew a line in the sand right there. Well, it gave one more exception:

"On the other hand, one who manufactures articles dangerous only if defectively made, or installed, e.g., tables, chairs, pictures or mirrors hung on the walls, carriages, automobiles, and so on, is not liable to third parties for injuries caused by them, except in case of willful injury or fraud," Id. at 803.

As an example of fraud, the court cited a case of a manufacturer who, unbeknownst to the end user, concealed a defect in a gun which made it more dangerous and likely to explode. Such an extension of the principle articulated first in Winchester to include fraudulent concealment was "logical and consistent with authorities." But the court woudn't go further. Why?

Lawyers and judges pride themselves on making legally-significant distinctions and on hewing to precedent. So, let's pause and hear what they are saying on this one. At common law, as we know, there was no liability of a party to another in the sale of goods if there was no contractual privity between the two. Beginning in 1852 (in the Winchester case), this rule was relaxed to include manufacturer liability to end users for mislabeled pills. Later, the rule was relaxed further to include something normally safe but which became harmful under ordinary use (i.e., exploding cans). Though this exception seemingly would have been sufficient to allow recovery for Johnson, there was yet another rule, articulated by the judge in Winchester, that hung up the courts. Sometimes what a court will do is to slam the door after it has briefly opened it and allowed one formerly unwelcome visitor to enter. So, Justice Ruggles did that in 1852. While allowing recovery against a manufacturere for a defendant injured by injesting mislabeled pills, Ruggles closed the door against other injuries. He said:

"If A. build a wagon and sell it to B., who sells it to C. and C. hires it to D., who in consequence of the gross negligence of A. in building the wagon is overturned and injured, D. cannot recover damages against A., the builder. A.'s obligation to build the wagon faithfully, arises solely out of his contract with B. The public have nothing to do with it. * * * So, for the same reason, if a horse be defectively shod by a smith, and a person hiring the horse from the owner is thrown and injured in consequence of the smith's negligence is shoeing; the smith is not liable for the injury," 6 NY 397, 408 (1852).

Bingo. Though the court in Cadillac didn't cite these precise words from Winchester (they are quoted in the dissent in MacPherson), they no doubt formed the mental or conceptual world which aided it in its decision. The law as they understood it was that a wrongdoer is not liable to the injured party "where the wrongful act [in this case by the manufacturer] is not immediately dangerous to the lives of others." Or, in other words, "Misfortune to third persons not parties to the contract would not be a natural and necessary consequence of the builder's negligence, and such negligence is not an act imminently dangerous to human life," Id. at 804.

Conclusion

Thus, the court felt on secure ground by reiterating the law as it had evolved. Manufacturer liability to parties not in privity of contract would only attach if the article was inherently dangerous, was mislabeled, exploded unexpectedly and thus created imminent harm, or if a dangerous defect was fraudulently concealed. Though there seemingly was an avenue for the court to take to relax the rule yet further (when a non-inherently dangerous object became dangerous because of a negligently-installed item), there was also the tradition in New York law (and New York was the big jurisdiction in 1915), that says that manufacturers can't be held liable for carriage-type accidents. The citadel of privity still seemed to be holding up pretty well in 1915. But then, you have the activists come in and ruin everything. The next case describes that.

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