Losee v. . Clute
51 N.Y. 494 (1873)
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Rule of Law:
A manufacturer of a product is not liable for negligence to a third party who is injured by that product after the purchaser has tested, accepted, and taken exclusive control of it.
Facts:
- The defendants, Clute, manufactured a steam boiler for the Saratoga Paper Company.
- Clute knew the boiler was to be used in a village, in the immediate vicinity of dwelling-houses and stores.
- The boiler was allegedly constructed improperly and of poor iron.
- The Saratoga Paper Company tested the boiler to its satisfaction and formally accepted it.
- After acceptance, the Saratoga Paper Company had sole and exclusive ownership, management, and control of the boiler.
- Approximately three months after the company began using the boiler, it exploded.
- The explosion caused damage to the plaintiff's adjacent property.
Procedural Posture:
- The plaintiff sued the defendants, Clute, in a New York trial court to recover for property damage.
- At the conclusion of the plaintiff's case at trial, the court dismissed the complaint.
- The plaintiff then appealed the trial court's dismissal to the higher court hearing this case.
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Issue:
Is a manufacturer liable to a third party for damages caused by a negligently constructed product after the product has been accepted and is under the exclusive control of the purchaser?
Opinions:
Majority - Lott, Ch. C.
No. A manufacturer is not liable to a third party for damages caused by a negligently constructed product once it has been accepted and is controlled by the purchaser. The defendants, Clute, contracted with the Saratoga Paper Company, and their duty was owed to the company, not to the plaintiff. Once the company tested and accepted the boiler, Clute ceased to have any control or responsibility over it; all subsequent responsibility devolved upon the company. Under the principle from The Mayor, etc., of Albany v. Cunliff, a builder is answerable only to their employer for a lack of care or skill, and is not liable for injuries that occur after the work is completed and accepted. Clute owed no duty to the plaintiff, either by contract or by law, at the time of the explosion. The court distinguished this case from Thomas v. Winchester, which involved an inherently dangerous, mislabeled product, finding that exception inapplicable here.
Analysis:
This case exemplifies the 19th-century doctrine of privity of contract, which strictly limited a manufacturer's tort liability to only those with whom they had a direct contractual relationship. By insulating manufacturers from third-party claims, the decision reinforced a significant barrier to recovery for consumers and bystanders injured by defective products. This ruling represents a legal standard that would be systematically dismantled over the next century, most notably by cases like MacPherson v. Buick Motor Co., which expanded the concept of duty and paved the way for modern products liability law.
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