Larrance Tank Corp. v. Burrough

• Decision Date: 03 November 1970
• Docket Number: No. 42526,42526
• Citation: 476 P.2d 346
• Parties: 8 UCC Rep.Serv. 337 LARRANCE TANK CORPORATION , a Corporation, Plaintiff in Error, v. H. R. BURROUGH, Defendant in Error.
• Court: Oklahoma Supreme Court

Page 346

476 P.2d 346

8 UCC Rep.Serv. 337

LARRANCE TANK CORPORATION , a Corporation, Plaintiff in Error, v. H. R. BURROUGH, Defendant in Error.

No. 42526.

Supreme Court of Oklahoma.

Nov. 3, 1970.

Syllabus by the Court

1. Laches, although a good defense in equity, is not a defense at law.

2. The burden of proving that damages could have been reduced or minimized is on the party asserting it.

3. When breach of contractual obligation with resulting damage has once been established, mere uncertainty as to exact amount of damages will not preclude right to recovery, but it will be enough if evidence shows extent of damages as a matter of just and reasonable inference.

Appeal from the District Court of Choctaw County; Howard Phillips, Judge.

Appeal by Larrance Tank Corporation (defendant) from a judgment rendered on jury verdict in favor of H. R. Burrough (plaintiff) for loss suffered by plaintiff when gasoline escaped from an alleged defective tank sold by defendant to plaintiff. Affirmed.

Nicklas, Parrish & Saenz by W. F. Parrish, Jr., Lawton, for plaintiff in error.

Hal Welch, Hugo, for defendant in error.

DAVISON, Justice.

Larrance Tank Corporation (defendant below) appeals from a judgment rendered on jury verdict in favor of H. R. Burrough (plaintiff below) for the sum of $2501.25, including interest. We will refer to the parties by their trial court designation.

Plaintiff's action was to recover the value of gasoline that had escaped from an allegedly defective tank that defendant had sold to plaintiff. His petition alleged a breach of waranty, and loss of 150 gallons per week for 60 weeks, at 22 cents per gallon, and additional expense of $167.00 incurred in removing and reinstalling the tank for a total of $2147.00. Defendant denied the tank was defective and sought recovery of $185.00 as expense of picking up the tank, testing it, and returning it to plaintiff.

There appears to be no dispute concerning certain facts. Plaintiff's filling station was located in Hugo, Oklahoma, and defendant's tank manufacturing business was in Lawton, Oklahoma. A short time prior to March 20, 1963, plaintiff orally placed an order with defendant for the purchase of two $10,000 gallon tanks for use as underground gasoline storage tanks. The tanks were constructed from quarter-inch steel sheets, and were 96 inches in diameter and 27 feet in length. They were delivered by defendant to plaintiff on March 20, 1963, and placed end to end in an excavation prepared by plaintiff, with about a two foot space between the ends. In this space plaintiff constructed a vertical board 'well,' which he covered with a five gallon can. Plaintiff then covered the tanks and 'well' so that they were covered with about a 2 1/2 foot layer of sand and dirt, topped with crushed rock. One tank was used as storage for regular and the other for ethyl gasoline. The first delivery of regular gasoline to plaintiff was on March 23, 1963, the next delivery was on April 28, 1963, and thereafter deliveries were about a week or less apart, until June 20, 1964, when a total of 252,302 gallons of regular gasoline had been delivered.

Plaintiff and two witnesses (one an employee and the other a former employee) testified that from the initial delivery, the number of gallons of regular gas delivered did not agree with the gallons, shown by the pumps to have been sold and the amount remaining in the tank at periodic gauging. Their collective testimony was that there was a loss of about 150 gallons per week.

Plaintiff's testimony was that in June, 1964, the covering was removed from the 'well' between the tanks and that 5 feet of gasoline was standing in the well. His testimony and that of other witnesses was that, upon further excavation, it was found that a seam in the end of the tank had not been properly welded for about 1/4 of an inch, and gasoline was running from the seam. Further testimony described how gasoline flowed back into the excavation from the adjoining soil after the tank was emptied and removed, and that gasoline saturated soil was found in the bottom of a 4 foot hole dug 17 feet from the tank excavation.

Plaintiff notified defendant on June 23, 1964, as to the condition of the tank, and defendant picked up and took the tank to its plant in Lawton, Oklahoma. Defendant claimed and produced testimony that it tested the tank and found no leak, and so notified plaintiff. Defendant then returned the tank to plaintiff, who replaced it in the hole and used it for gasoline storage without any further complaint. Plaintiff stated that he could not see where the tank had been rewelded because it was covered with tar. Defendant's witness stated no tar was applied by defendant. Defendant billed plaintiff for the expense of picking up and returning the tank.

On October 1, 1965, plaintiff filed the present action. The jury returned a verdict in favor of plaintiff for the full amount sued for.

Defendant contends that plaintiff failed to prove any warranty or breach of warranty, either express or implied.

Plaintiff testified in substance that he acquired a paper, from a source other than the defendant, bearing the name and location of defendant and reflecting the sizes, dimensions, and prices or underground gasoline tanks; that he called defendant by telephone and order two tanks of 10,000 gallon capacity each, 96 inches in diameter and 27 feet long, specifying that he wanted the type of tank that was to be buried. No point is raised that plaintiff ordered any different tank for a use other than for storage for gasoline underground.

Plaintiff alleged that there was an implied warranty that the tanks were free from defects for the purposes for which they were designed, sold and purchased. The trial court instructed the jury on the law of implied warranty applicable to the circumstances. No objection was made to this instruction.

Our statute, 12A O.S.1961, § 2--315, of the Uniform Commercial Code provides as follows:

'Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.'

We find nothing in the 'next section,' Sec. 2--316, applicable to the present situation and the provisions of § 2--315 stand unaffected.

It is our conclusion that under the provisions of § 2--315 the evidence of plaintiff was sufficient to show that an implied warranty of fitness accompanied the sale of the tanks to plaintiff.

Defendant contends that the evidence shows that plaintiff's claim should be barred by reason of laches.

The grounds for this contention are that plaintiff delayed in reporting his loss of gasoline and that plaintiff ignored defendant's charge for picking up the tank, testing the same, and returning the tank.

This is an action at law and is not an action or proceeding in equity.

In 30A C.J.S. Equity § 113, p. 28, it is stated that the defense of laches is peculiar to courts of equity and that the defense of laches does not apply in actions at law.

We followed this rule of law in Van Antwerp v. Schultz, 203 Okl. 84, 217 P.2d 1034, and Burtrum v. Gomes, 207 Okl. 349, 249 P.2d 717, and held that laches, although a good defense in equity, is not a defense at law.

The defense of laches is not applicable in the present case.

Defendant further argues in a proposition related to the above contention that plaintiff's remedy was barred because he did not give defendant notice...