Huset v. J. I. Case Threshing Mach. Co.
120 F. 865, 1903 U.S. App. LEXIS 4546, 61 L.R.A. 303 (1903)
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Rule of Law:
A manufacturer is liable for injuries to third parties not in privity of contract if it sells an article that it knows is imminently dangerous to life or limb due to a concealed defect, without providing notice of this danger.
Facts:
- J.I. Case Threshing Machine Co. ('J.I. Case') manufactured and sold a threshing machine.
- The machine included a covering over a cylinder that was intended and necessary for operators to walk upon.
- J.I. Case constructed this covering so that it was incapable of sustaining any weight and would collapse if stepped on.
- This defective and dangerous condition was concealed so that it could not be readily discovered by users.
- J.I. Case knew of this imminently dangerous condition when it sold the machine to Huset's employer.
- While operating the machine in the course of his employment, Huset stepped on the defective covering.
- The covering collapsed, causing Huset to fall and sustain serious injuries.
Procedural Posture:
- Huset sued J.I. Case Threshing Machine Co. in the U.S. Circuit Court for the District of Minnesota (the federal trial court).
- J.I. Case filed a demurrer (a motion to dismiss), arguing that the complaint failed to state a valid claim because Huset was not in privity of contract with the company.
- The trial court sustained the demurrer and entered a judgment dismissing Huset's lawsuit.
- Huset, as the appellant, appealed the dismissal to the U.S. Circuit Court of Appeals for the Eighth Circuit.
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Issue:
Is a manufacturer who sells an article that it knows is imminently dangerous due to a concealed defect liable for injuries to a third party who is not in privity of contract but is injured while lawfully using the article for its intended purpose?
Opinions:
Majority - Sanborn, Circuit Judge
Yes, a manufacturer is liable under these circumstances. While the general rule, established in cases like Winterbottom v. Wright, is that a manufacturer is not liable for negligence to third parties who lack privity of contract, this rule has well-established exceptions. The court identified three exceptions: 1) negligence involving articles intended to preserve or destroy human life (like mislabeled poison); 2) an owner's negligence causing injury to an invitee using a defective appliance on the owner's premises; and 3) when a party sells or delivers an article which it knows to be imminently dangerous to life or limb without notice of its qualities. The facts alleged in Huset's complaint fall squarely within the third exception. By knowingly selling a machine with a concealed, imminently dangerous defect, J.I. Case breached a duty of care owed to any person who might foreseeably use it, including Huset.
Analysis:
This decision represents a significant step in the erosion of the privity of contract doctrine in products liability law. While affirming the general rule from Winterbottom v. Wright, it solidified a critical exception for 'imminently dangerous' articles sold with the manufacturer's knowledge of the defect. This 'knowledge' or 'scienter' requirement expanded manufacturer liability beyond immediate purchasers. The case paved the way for later landmark decisions, such as MacPherson v. Buick Motor Co., which would eventually eliminate the privity requirement for negligence cases involving defective products altogether.
