Tedder v. Pepsi-Cola Bottling Co. of Raleigh, N. C., Inc.

154 S.E.2d 337 (1967) 270 N.C. 301

Ella Mae TEDDER
v.
PEPSI-COLA BOTTLING COMPANY OF RALEIGH, N. C., Inc. and Colonial Stores, Inc., t/a K-Mart Foods.

No. 541.

Supreme Court of North Carolina.

May 10, 1967.

Yarborough, Blanchard, Tucker & Yarborough, Raleigh, for plaintiff appellant.

Teague, Johnson, Patterson, Dilthey & Clay, by I. Edward Johnson, Raleigh, for defendant Bottling Co.

Smith, Leach, Anderson & Dorsett by Henry A. Mitchell, Jr., Raleigh, for defendant Colonial Stores.

HIGGINS, Justice.

The testimony presented at the trial was free from material conflict. The President of Pepsi-Cola Bottling Company of Raleigh, N. C., Inc. was adversely examined as plaintiff's witness. He testified: "During the month of June, 1965, we would run 200,000 bottles per day. It is not uncommon to run 10,000 cases or 240,000 bottles a day on the equipment. * * * during the month of June, 1965, to my knowledge we received no complaint from anyone saying that they had purchased Pepsi or Diet Pepsi containing foreign or deleterious substance." During the month, approximately 8 million bottles were filled. Under the rules heretofore applied, liability of the bottler on the basis of negligence is not established by showing that one bottle out of 8 million contained a deleterious substance. Enloe v. Charlotte Coca-Cola Bottling Co., 208 N.C. 305, 180 S.E. 582; Collins v. Lumberton Coca-Cola Bottling Co., 209 N.C. 821, 184 S.E. 834; Jenkins v. Harvey C. Hines Co., 264 N.C. 83, 141 S.E.2d 1.

If the bottling company is to be held liable in this case, it must be on implied warranty. The cases are many which hold that warranty of fitness, either express or implied, is contractual; that the contract extends no further than the parties to it and that privity to the contract is the basis of liability. Murray v. Bensen Aircraft Corp., 259 N.C. 638, 131 S.E.2d 367; Terry v. Double Cola Bottling Co., 263 N.C. 1, 138 S.E.2d 753. However, our Court has heretofore relaxed the privity rule in certain cases involving food and drink because of their importance to health. "Authorities generally hold that the manufacturer, processor and packager of food and the bottler of drinks intended for human consumption are held to a high degree of responsibility to the ultimate consumer to see to it that the food and drink are not injurious to health." Terry v. Double Cola Bottling Co., supra. The liability generally has been based on negligent failure to discharge this high degree of responsibility. However, in Terry, liability to the consumer on warranty (contract law) may arise if the warranty is by representation addressed to the ultimate consumer by label attached to the container. See also Perfecting Service Co. v. Product Development & Sales Co., 261 N.C. 660, 136 S.E.2d 56.

To a certain extent, the Court has already chipped away some of the rigidity which heretofore has limited warranty liability to the parties to the contract. The limitation of warranty to the contracting parties has been under vigorous assault over all the country. The assault has been successful in all but a few jurisdictions. See Prosser, The Assault Upon The Citadel, 69 Yale L.J. 1099; 50 Minn. L.Rev. 791; 18 Hastings L.J. 9; 36 S.Cal.L.Rev. 291; 16 Baylor L.Rev. 337; 37 Mich.L.Rev. 1; 19 N.C.L.Rev 551; 24 Va.L.Rev. 134; 74 A.L.R.2d 1111. In addition, see many authorities cited and discussed by Sharp, J., concurring in Terry v. Double Cola Bottling Co., 263 N.C. 1, 138 S.E.2d 753; 77 A.L.R.2d 215. In these citations, hundreds of cases are listed.

Under our present rules, this is where we are in the sale of food and drink for human consumption. The retailer sells to the consumer under implied warranty of fitness. For breach of that warranty the damaged consumer may recover. The retailer bought the product under an implied warranty of fitness from the jobber, whom he may hold for breach of warranty. The jobber, in line, by showing loss, may go back to the manufacturer, processor, or bottler on whom the final responsibility rests. Step by step the liability goes back to the source. Perfecting Service Co. v. Produce Development & Sales Co., supra; Ashford v. H. C. Shrader Co., 167 N.C. 45, 83 S.E. 29; 77 C.J.S. Sales § 384, p. 1338. Admittedly there are some objections to holding the manufacturer, processor, or bottler of food or drink as implied warrantors in favor of the ultimate consumer: (1) Lack of control over the product after the first delivery and (2) extending the implied warranty from the producer to the ultimate consumer opens the door for fraudulent claims. Most appellate courts have brushed aside these objections on the ground they apply horse and buggy law to the jet age.

In this case these are the facts before us: Pepsi-Cola Bottling Company of Raleigh, N. C., Inc. advertised its product over TV stations in Raleigh and Durham, addressing its appeal to the consumers, intending thereby to promote sales. The bottler's agent completed the delivery of the bottles to Colonial's store by placing them on Colonial's shelves. The plaintiff took a six pack of Diet Pepsi from the shelf, paid Colonial, placed the bottles in the cabinet at home, and the following day plaintiff drank the deleterious substance, became sick, and suffered harmful result. Only the bottler and the plaintiff actually handled the drink. The Colonial Store sold it to the claimant who drank it. Implied warranty attached and made out a case for the jury against Colonial. Under the authorities and for the reasons herein discussed, we hold the bottler, by advertising and sales promotion addressed to the consumer, induced her to "Come Alive" and that she was "in the Pepsi Generation". The advertising was intended to promote the use by the consumer to whom the advertising was addressed. The evidence in this case was sufficient to go to the jury on the theory of implied warranty resulting from the manner in which the Pepsi-Cola was advertised and traveled from the bottler to the plaintiff.

The questions whether by marketing food and drink in sealed containers the processor thereby impliedly warrants fitness for human use and whether the warranty extends directly to the ultimate consumer who breaks the seal, are questions not fully presented on this record. The answers will come when the facts present the questions.

If damages are to be assessed, the question of primary and secondary liability may be fixed by the judgment. The case should go back for a jury trial as to both defendants.

Reversed.

PARKER, C. J., concurs in result.