Poole v. Functional Construction Co.

• Decision Date: 29 August 1960
• Docket Number: HOBBS-SESAK
• Citation: 7 Cal.Rptr. 391
• Court: California Court of Appeals Court of Appeals
• Parties: Robert J. POOLE et al., Plaintiffs, v. FUNCTIONAL CONSTRUCTION CO. et al., Defendants. James P. ACED, dba Functional Construction Co., Defendant, Cross-Complainant and Respondent, v.PLUMBING CO., a co-partnership, Cross-Defendant and Appellant. Civ. 18770.

Page 391

7 Cal.Rptr. 391

Robert J. POOLE et al., Plaintiffs, v. FUNCTIONAL CONSTRUCTION CO. et al., Defendants.

James P. ACED, dba Functional Construction Co., Defendant, Cross-Complainant and Respondent, v. HOBBS-SESAK PLUMBING CO., a co-partnership, Cross-Defendant and Appellant.

Civ. 18770.

District Court of Appeal, First District, Division 2, California.

Aug. 29, 1960.

Hearing Granted Oct. 26, 1960.

Opinion vacated 12 Cal.Rptr. 257.

Crist, Peters, Donegan & Brenner, Palo Alto, for appellant.

Ropers, Majeski & Kane, Redwood City, for respondent.

GOOD, Justice pro tem.

This is an appeal from an order granting defendant and cross-complainant Aced a new trial in an action instituted by the owners of a home built by Aced as general contractor to recover damages for costs of repair and eventual replacement of a radiant heating system installed in a concrete slab floor. Aced, respondent herein, cross-complained against several parties including Hobbs-Sesak Company, appellant herein, a partnership sub-contractor that furnished and installed the tubing for said system. During the second day of trial respondent stipulated that judgment in favor of the owners be entered against him for $7,715.54. The trial then proceeded on the cross-complaint against the sub-contractor and the manufacturer and distributor of the particular tubing on the theory of a breach of implied warranty of merchantability. The court found that appellant had entered into a written contract with respondent to furnish the necessary labor and material to install the radiant heating as per the plans and specifications and, pursuant to said contract had sold the tubing and other materials to respondent; that within three months thereafter the sub-contract had been completely performed; that some ten months later the tubing began to leak. During the ensuing year attempts to repair were made but the entire system had to be replaced. The owners filed their suit against respondent as general contractor some three years and nine months after appellant had completed his sub-contract and the cross-complaint was filed about four months later.

The particular tubing used was made of steel coated with a plastic to deter corrosion, copper being in short supply due to the Korean conflict. The installation of the system began with a fill of gravel which was covered by a membrane, wire mesh and the tubing laid on top of and fastened to the mesh. When the slab was poured the wire mesh and tubing was lifted into the concrete until it rested two inches below the surface. There was evidence that the tubing could have leaked from several possible causes such as by being left on the ground or from chipping or other damage to the plastic coating from being stepped on during installation or from the abrasive action of the concrete aggregates and, also, from checking or cracking when bending it to the required shapes. Without specifying detail the court found that there were several possible causes of the leaks in the system but that cross-complainant had failed to prove that the leaks resulted from unmerchantable quality. Judgment was accordingly entered in favor of the cross-defendants. Motion for new trial was granted upon the issues of the cross-complaint. Hobbs-Sezak is the only cross-defendant appealing. The order granting the motion does not specify insufficiency of evidence as the basis for the order and it is therefore presumed it was grounded upon errors of law. Townsend v. Gonzalez, 150 Cal.App.2d 241, 309 P.2d 878.

We are mindful of the procedural rules and presumptions applicable to the review of the particular order as discussed in Follett v. Brown, 118 Cal.App. 198, 5 P.2d 51; Verzola v. Russi, 135 Cal.App.2d 330, 287 P.2d 166; Estate of Baird, 198 Cal. 490, 246 P. 324; Renfer v. Skaggs, 96 Cal.App.2d 380, 215 P.2d 487, and Brandelius v. City and County of San Francisco, 47 Cal.2d 729, 306 P.2d 432 and other cases cited by the parties. Repetition thereof would serve no purpose.

Appellant's principal contention is that under the circumstances of the case there can be no warranty of merchantability because (a) there was no sale and (b) he was not a dealer. Under Civil Code sections 1735 and 1721 an implied warranty of merchantability arises only when there is a sale, i. e. a transfer of property in goods for a consideration. The question is whether the sub-contract involved herein was a contract for labor and materials and, therefore, one for services rather than a sale within the meaning of the Uniform Sales Act. In contending it was not a sale appellant relies on Steiger Terra Cotta & Pottery Works v. City of Sonoma, 9 Cal.App. 698, 100 P. 714. There a contractor who engaged to build a city hall defaulted and the sub-contractor who was to furnish and set the roofing tile was allowed to replevy tiles that had been delivered to the site and stored to await use. The court held that the contract was one for labor and materials and, because it was not sale and the tile had not been installed or affixed to the building, title did not pass. It should be noted, however, that the case was decided before California adopted the Uniform Sales Act and turned largely on property aspects of the law of fixtures and the provisions of the Mechanic's and Materialman's Lien Law. Under the Uniform Sales Act, whether a contract is one of sale or for labor and materials depends on the old 'Massachusetts Rule' wherein the test is whether the goods supplied were specially manufactured for the recipient and not suitable for sale to others in the ordinary course of business. Williston on Sales, § 55a, 1948 ed. The test was applied even before enactment of the Uniform Sales Act in Golden Eagle Milling Co. v. Old Homestead Bakery, 59 Cal.App. 541, 211 P. 56 and United Iron Works v. Standard Brass Casting Co., 69 Cal.App. 384, 231 P. 567. In the former case (barley flour of a type milled and sold generally by plaintiff) the transaction was held to be a sale. In the latter case (check valves cast to a special design furnished by defendant and not ordinarily manufactured by plaintiff) it was held that the contract was not a sale. Granting that the test originated in cases wherein the principal issue was whether a contract was within the purview of the Statute of Frauds, as noted by Williston, supra, and § 563 it is equally applicable to the question before us and was adopted by enactment of the Uniform Sales Act. Similar installations, including an air cooling system, a refrigeration unit for a meat packing plant, a conveyor belt in a glass factory and the intake tower, filtration house and other units of a municipal water works were held to be contracts of sale in Carver v. Denn, 117 Utah 180, 214 P.2d 118; Burge Ice Machine Co. v. Weiss, 6 Cir., 219 F.2d 573; Service Conveyor Co. v. Shatterproof Glass Corp., 6 Cir., 219 F.2d 583; and Wiseman v. Gillioz, 192 Ark. 950, 96 S.W.2d 459. Appellant attempts to distinguish these cases on the ground that the litigation in each instance was between the seller and ultimate consumer. The distinction does not affect the principles involved. The fact that a transaction goes through a contractor to the owner as ultimate consumer does not destroy or alter its nature. The case cited by appellant, Rino v. Statewide Plumbing & Heating Co., 74 Idaho 374, 262 P.2d 1003, depends upon the law of fixtures (citing Steiger Terra Cotta & Pottery Works v. City of Sonoma, supra) and the Massachusetts rule under which it was determined that a furnace of special design was not suitable for sale to the general trade.

The tubing in question was manufactured by a subsidiary of General Motors and was not specially designed for the particular installation. As in Carver v. Denn, supra the appellant undertook not only to install but to furnish the materials necessary for the installation, presumably at a profit. As said in Carver [117 Utah 180, 214 P.2d 121]: 'We fail to see how (he) can be the seller for the purpose of receiving the profits from the transaction and then successfully establish himself a mere installer for the purpose of avoiding the responsibilities of a seller'. We are of the opinion that the finding of a contract of sale in these circumstances was not erroneous.

The implied warranty of merchantability arises under Civil Code section 1735(2) when 'goods are bought by description from a seller who deals in goods of that description (whether he be the grower or manufacturer or not).' There is evidence that the tubing was bought by description since in letting the contract respondent furnished appellant with the pertinent information as to intended use and requisite temperature specifications. Appellant contends that the phrase 'seller who deals in goods' in said code section refers...