William B. Schultz, and Cross-Appellant v. Tecumseh Products, a Corporation, and Cross-Appellee

WEICK, Circuit Judge

(dissenting).

The District Judge, sitting in Michigan, in a diversity case, was confronted with difficult problems of conflict of laws when the time arrived for him to charge the jury. No issue as to the law of Kentucky had been previously raised in the pleadings or in the issues of law and fact set forth in the pre-trial order.

At the request of plaintiff, the court charged the jury on implied warranty under the provisions of the Kentucky statute which was also in force in Michigan in substantially the same language. Counsel for plaintiff cited to the court only one Kentucky decision, namely, *434North American Fertilizer Co. v. Combs, 307 Ey. 869, 212 N.W.2d 526 which indicated, by way of dicta, that privity was not required in Kentucky. Counsel for defendant cited no Kentucky decisions to the court, but objected to the court’s charge on implied warranty on the ground “that the law applicable to this case does not and did not warrant the submission of the theory of implied warranty.”

The only applicable law submitted to the court was the decision of the Court of Appeals of Kentucky in North American Fertilizer Co., supra, and the decision of the Supreme Court of Michigan in Spence v. Three Rivers Builders & Masonry Supply, Inc., 353 Mich. 120, 90 N.W.2d 873. In Spence, the Supreme Court of Michigan held that privity was not required.

The court applied the Michigan rule on privity since it had not been shown to him that Kentucky law was any different. In so doing, he followed Michigan decisions which held that there is a presumption that the law of a sister state is the same as Michigan until the contrary is shown. Slayton v. Boesch, 314 Mich. 1, 23 N.W.2d 134; Walton School of Commerce v. Stroud, 248 Mich. 85, 89, 226 N.W. 883; Crane v. Hardy, 1 Mich. 56, 63. This rule also prevails in Kentucky. Lovejoy v. Reed, 302 Ky. 153, 156, 193 S.W.2d 1013.

Fairness would seem to require the parties to bring to the attention of the court applicable decisions of the courts of sister states if they rely on foreign law. While the judge may well know and have at his finger tips the decisions of the Supreme Court of his own state, it is certainly too much to expect that he would know the common law of other states which may be entirely different. When foreign law is not injected into a ease until the judge is ready to charge the jury, he does not have much time to make an independent investigation of his own. Foreign law is generally regarded as a fact. 20 Am.Jur. § 48, p. 73. The Kentucky decisions now relied on by appellant were not cited to the District Court until after the verdict had been returned and when the case was being heard on motion for a new trial. Since the Kentucky decisions now relied on were not timely brought to the court’s attention appellant should be precluded from claiming as error that the court failed to apply them. The principle is analogous to objections to a court’s charge which must be specific. Rule 51, Federal Rules of Civil Procedure; Palmer v. Hoffman, 318 U.S. 109, 119, 63 S.Ct. 477, 87 L.Ed. 645; McPherson v. Hoffman, 275 F.2d 466, 471 (C.A.6); Ostapenko v. American Bridge Division of U. S. Steel Corp., 267 F.2d 204 (C.A. 2).

If this case had been tried in the state court in Michigan, the judgment of the trial court would be affirmed instead of reversed. The trial judge would not have been required to apply Kentucky law not proven or called to his attention. He could presume, as did the District Court, that the law of Kentucky was the same as Michigan since the contrary was not shown.

It may be argued that this presumption is merely procedural and not binding on the federal court which can apply its own rules of procedure. In my judgment, the rule is more than procedural in the present case because by our not applying it plaintiff has not only lost his verdict, but also his cause of action for implied warranty.

But even if the presumption was only procedural, I still think the District Court was correct in applying it. The rule in Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 is not to be narrowly construed. The Supreme Court, I believe, sought to avoid a situation where, in diversity cases, the federal court sitting in the same community applies law differently than the state court.

In Guaranty Trust Co. v. York, 326 U.S. 99, 109, 65 S.Ct. 1464, 89 L.Ed. 2079, the Court held that Erie R. Co. v. Tompkins ought not to be thwarted by technical *435niceties between substance and procedure. Mr. Justice Frankfurter said:

“The nub of the policy that underlies Erie R. Co. v. Tompkins is that for the same transaction the accident of a suit by a non-resident litigant in a federal court instead of in a State court a block away should not lead to a substantially different result. And so, putting to one side abstractions regarding ‘substance’ and ‘procedure,’ we have held that in diversity cases the federal courts must follow the law of the State as.to burden of proof, Cities Service Co. v. Dunlap, 308 U.S. 208, [60 S.Ct. 201, 84 L. Ed. 196], as to conflict of laws, Klaxon Co. v. Stentor Co., 313 U.S. 487, [61 S.Ct. 1020, 85 L.Ed. 1477], as to contributory negligence, Palmer v. Hoffman, 318 U.S. 109, 117, [63 S.Ct. 477, 87 L.Ed. 645]. And see Sampson v. Channell, 110 F.2d 754, Erie R. Co. v. Tompkins has been applied with an eye alert to essentials in avoiding disregard of State law in diversity cases in the federal courts. A policy so important to our federalism must be kept free from entanglements with analytical or terminological niceties.”

See also: Byrd v. Blue Ridge Rural Electric Cooperative, Inc., 356 U.S. 525, 78 S.Ct. 893, 2 L.Ed.2d 953.

In Tracy v. Finn Equipment Co., 290 F.2d 498 at 500 (C.A.6), we applied the Tennessee statutory two-issue rule which relates to procedure. Judge Simons, who wrote the opinion for the Court, said:

“While the Act is in this respect procedural, the United States Supreme Court has postulated a policy that in diversity cases the federal courts must follow even the procedural rules of the state in which it sits where an application of a different rule would cause a substantial likelihood of a different result had the matter been tried in the state court.”

The majority recognizes that the District Court was required to follow the conflict of laws rule in Michigan. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477. Under that rule, Michigan applies its own common law unless the highest court of the sister state has declared the law on the particular subject involved with “absolute certainty.” Bostrom v. Jennings, 326 Mich. 146, 154, 40 N.W.2d 97, 101.

It is my position that the common law of Kentucky on the subject of privity has not been declared with absolute certainty.

The dictum in North American Fertilizer Co. would seem to indicate, as the District Judge thought, a trend away from privity.

In Gaidry Motors, Inc. v. Brannon, 268 S.W.2d 627 (Ky.), plaintiff was struck by a used automobile which had been purchased by one Hensley from Gaidry Motors. The court affirmed a judgment in favor of plaintiff based on negligence. Three judges dissented citing Olds Motor Works v. Shaffer, 145 Ky. 616, 140 S.W. 1047, 37 L.R.A.,N.S., 560; Davis v. Glass Coffee Brewer Corp., 296 Ky. 706, 178 S.W.2d 407, and Nehi Bottling Co. v. Thomas, 236 Ky. 684, 33 S.W.2d 701.

In Nehi, the court had held:

“The general rule is that a contractor, manufacturer or furnisher of an article is not liable to third parties who have no contractual relation with him for negligence in the construction, manufacture, or sale of such article * *

Davis was to the same effect.

In C. D. Herme, Inc. v. R. C. Tway Co., 294 S.W.2d 534 (Ky.), Herme purchased a trailer from an independent dealer which was manufactured by Tway. An accident was caused by a king-pin connecting the tractor and trailer which was defectively constructed. In allowing a recovery against the manufacturer in negligence in favor of one who had no contractual relations with it the court said:

“The ancient so-called ‘general rule’ of the manufacturer’s non-liability for negligence to persons-*436with whom he has no contractual relation, followed by this Court in the Olds Motor case, has been abandoned by substantially all modern authorities. * * * Upon reconsideration, we now determine also to abandon it, and we hereby expressly overrule the Olds Motor case.”

The impact of Herme was considered in 74 A.L.R.2d at p. 1195 where the annotator states:

“The C. D. Herme decision, supra, must be taken to have overruled not only the Olds Motor Works case, but also the following cases supporting the general rule requiring privity: Heindirk v. Louisville Elevator Co., (1906) 122 Ky. 675, 92 S.W. 608, 5 L.R.A.,N.S., 1103; Berger v. Standard Oil Co. (1907), 126 Ky. 155, 103 S.W. 245, 11 L.R.A..N.S., 238; * * * Payton’s Admr. v. Childers’ Electric Co. (1929), 228 Ky. 44, 14 S.W.2d 208; Davis v. Glass Coffee Brewer Corp. (1944), 296 Ky. 706, 178 S.W.2d 407.”

Finally, in Snead v. Waite, et al., 306 Ky. 587, 208 S.W.2d 749, Mr. Waite purchased from Snead barbecued mutton for immediate consumption. He and his wife and two children became ill from food poisoning, but only the husband and wife filed suit to recover damages for their injuries. Recovery was allowed to each on implied warranty. The question of privity in the wife’s suit was not raised or even mentioned by Kentucky’s highest court.

In the present case, the relationship between plaintiff and the manufacturer was not far removed since plaintiff purchased the defective compressor from the manufacturer’s distributor. The article was assembled by defendant in Marion, Ohio, where it was sold, crated and shipped to the distributor in Louisville, Kentucky who in turn sold and delivered it in its original package to plaintiff.

I would affirm the judgment of the District Court.