Moreno's, Inc. v. Lake Charles Catholic High Schools, Inc.

• Decision Date: 23 June 1975
• Docket Number: No. 55688,55688
• Citation: 315 So.2d 660
• Parties: MORENO'S, INC. v. LAKE CHARLES CATHOLIC HIGH SCHOOLS, INC., et al.
• Court: Louisiana Supreme Court

Page 660

315 So.2d 660

MORENO'S, INC. v. LAKE CHARLES CATHOLIC HIGH SCHOOLS, INC., et al.

No. 55688.

Supreme Court of Louisiana.

June 23, 1975.

Russell T. Tritico Lake Charles, for defendant-applicant.

Allen L. Smith, Jr., Plauche, Smith & Hebert, Lake Charles (Attorney for the Trane Co.), for defendant-respondent.

SUMMERS, Justice.

Plaintiff, Lake Charles Catholic High Schools, Inc., entered into a contract with Bartley, Inc., a general contractor, for the construction of an addition to St. Louis High School in Lake Charles. Bartley subcontracted with Moreno's, Inc., to furnish and install two air conditioning units in accordance with the plans and specifications calling for 'top of the line' units to be warranted for one year. Moreno purchased the units from the Trane Company and installed them with this understanding.

In March 1972, approximately 2 1/2 years after the units were placed in operation, the compressor failed on one of the units because of a malfunctioning internal mechanical part, which in turn led to the breakdown of other working parts within the compressor. Breakdown inspection revealed that at least four of the six pistons and connecting parts and at least six suction valves of the compressor were broken. After the compressor was replaced, the school refused to pay for the replacement compressor or its installation. Moreno's then instituted suit against the school demanding $7,487.55, the cost of replacing the compressor.

The school answered and filed a 'third party demand' against The Trane Company, manufacturer of the unit, contending that the school should be indemnified on the basis of an 'implied warranty of workmanship and materials on the part of the manufacturer.'

Judgment in the trial court was in favor of Moreno's, and the school's third party demand against The Trane Company was rejected. On appeal to the Third Circuit, the judgment was affirmed. 302 So.2d 724. The school's application to this Court for review of the judgments rejecting its third party demand was granted.

The unit on which the compressor failed was put in use in August 1969 before construction of the school building was completed, but the one-year warranty stipulated in the contract between the school and the contractor did not begin to run until the entire project was accepted on April 7, 1970. The compressor failed about eighteen months later on March 2, 1972. Prior to that time numerous service calls by Moreno's were required to maintain the unit in operating condition.

The unit involved is a Model 'E' compressor which, according to the manufacturer, is designed to operate under normal conditions for at least 20,000 hours (about ten years) without failure. To function for this period of time, it was necessary that the compressor be properly manufactured, assembled, installed and maintained.

Evidence in the record established that there was no fault in the installation or maintenance of the compressor or its components. The school contends, therefore, that the failure was necessarily due to a defect in the manufacture and assembly of the compressor or its components by Trane. Such a result is supported, the school asserts, by the testimony that it was 'unreal for a unit of this type to fail in the length of time that it had been in service.'

According to the Trane sales engineer who testified, a consumer could expect the unit to last the design life of 20,000 hours. However, he explained, a certain percentage of these units failed and 'this just happened to be one.' These failures, he explained, were to be expected in a mechanical device.

In a redhibitory action, the plaintiff need only prove that the product contained a hidden vice at the time of the sale, not apparent by ordinary inspection, which subsequently renders the thing unfit for the use intended or that its use became so inconvenient or imperfect that it must be supposed that the purchaser would never have purchased the product had he known of the vice or defect. La. Civil Code arts. 2541--44; Prince v. Paretti Pontiac Co., Inc., 281 So.2d 112 (La.1973); Rey v. Cuccia, La., 298 So.2d 840. When the redhibitory action is against the manufacturer who is not the immediate seller, proof need only be made that the defect complained of was a defect in the manufacture of the product.

The burden of proof may, as in cases generally, be discharged by proving the existence of defects at the time of the sale by direct or circumstantial evidence. Rey v. Cuccia, supra. It is not required that plaintiff negate all other possible causes in order to support his claim. If the proof be by circumstantial evidence it need only exclude other reasonable hypotheses with a fair amount of certainty. Taken as a whole the proof of the fact should be more probable than not. See Jordan v. Travelers Insurance Company, 257 La. 995, 245 So.2d 151 (1971) and cases cited there.

As this Court has recognized for more than fifty years:

'It is not incumbent upon the buyer to seek out, allege, and prove the particular and underlying cause of the defect which makes the thing sold unfit for the purpose intended, particularly when the thing is a complicated piece of machinery; but it suffices if he alleges and afterwards proves as a fact that such defects exist.' Crawford v. Abbott Automobile Co., 157 La. 59, 101 So. 871 (1924).

In this case the proof suffices that there was a defect in the manufacture of the compressor and its components. The evidence supports a finding that there was no fault in the installation and maintenance of the compressor and its components. By the testimony of Trane's representatives it is represented that this compressor was designed to work satisfactorily for ten years, absent the exceptional case where mechanical failure results from indeterminate causes. Failure of the compressor, then, by clear implication, was due to mechanical failure, which in the absence of proof of other causes, would more properly be attributed to faulty manufacture.

When a compressor designed to work satisfactorily for ten years fails in 2 1/2 years, an inference may logically be drawn under these circumstances that a fault exists in its manufacture. Town of Slidell v. Temple, 246 La. 137, 164 So.2d 276 (1964). We are satisfied from the facts in this record that plaintiff has discharged the burden of proving by circumstantial evidence, and logical inferences from established facts, that a defect existed in the manufacture of the compressor at the time of its installation.

There is no merit in Trane's contention that the one-year warranty agreed to by Moreno's with the school exonerates them from any obligation to the school for failure of the compressor after the expiration of that limited warranty. This result does not follow. This suit is the assertion of a claim by the school against the manufacturer based upon an implied warranty owed by the manufacturer by virtue of the sale to Moreno's, a right to which the school is subrogated by law. La. Civil Code art. 2503.

As a general proposition, 'The seller is bound by two principal obligations, that of delivering and that of warranting the thing which he sells.' La. Civil Code art. 2475. This obligation of warranty is implicit in every sale unless expressly restricted or limited by the seller. La. Civil Code arts. 2474 and 2503. No showing has been made by Trane that they imposed restrictions on this generally implied warranty. Although the school's action against Moreno's may be limited by the restricted warranty between Moreno's and the school, there is no showing that Trane is entitled to the benefit of this limitation insofar as the claim asserted by the school is concerned.

And there is no merit to Trane's plea of prescription of one year. The compressor failed in March 1972, and suit was instituted in June 1972 by Moreno's against the school. The school asserted its third party claim against Trane in September 1972 in that same suit. Less than one year tolled, therefore, from the date of discovery of the defect or the incurring of damage.

La. Civil Code art. 2534 provides in part,

'The redhibitory action must be instituted within a year, at the farthest, commencing from the date of the sale.

'This limitation does not apply where the seller had knowledge of the vice and neglected to declare it to the purchaser. * * *'

La. Civil Code art. 2545 speaks also of the seller who knows of the vice of the thing he sells, and for such a seller La. Civil Code art. 2546 provides,

'* * * the action for redhibition may be commenced at any time, provided a year has not elapsed since the discovery of the vice.'

La. Civil Code art. 2531 provides that if a seller is liable because of redhibitory defects he has a corresponding and similar right of action against the manufacturer. The third-party plaintiff has a direct right of action against the manufacturer under the seller's accessory right of action, having proved that a vice existed in the manufacturing of the compressor.

While this Court has so far said that sellers must actually know of the redhibitory vice to delay commencement of prescription until one year after discovery of the defect, we have long held that the manufacturer is conclusively presumed to have knowledge of even latent defects. In Templeman Bros. Lumber Co. v. Fairbanks, Morse & Co., 129 La. 983, 57 So. 309 (1912), the Court held that for a manufacturer the one year prescription for the action in redhibition does not begin to run until the discovery of the vice. The Court said:

'* * * And the defendant (manufacturer) must also be held to have known that the engine had been defectively installed. It was its duty to know it, and it had full opportunity to know it. It must, therefore, be presumed to have known it. * * *'

See also, Tuminello et ux. v. Mawby et al., 220 La. 733, 57 So.2d 666 (1952); George v. Shreveport Cotton Oil Co., 114 La. 498, 38 So. 432 (1905); Doyle v. Fuerst & Kraemer Ltd., 129...