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Vlases v. Ward

decided: May 10, 1967.

PAUL VLASES
v.
MONTGOMERY WARD & COMPANY, INC., APPELLANT



McLaughlin, Hastie and Freedman, Circuit Judges.

Author: Mclaughlin

Opinion OF THE COURT

GERALD McLAUGHLIN, Circuit Judge.

This case revolves around the charge that defendant-appellant, Montgomery Ward, was liable for the breach of implied warranties in the sale of one day old chickens to the plaintiff-appellee, Paul Vlases. The latter came to this country from Greece when he was sixteen and until 1954 his primary occupation was that of a coal miner. He had always raised chickens but because of his job as a miner his flocks were small, ranging from between twenty-five to one hundred chicks. In 1958 plaintiff began the construction of a two story chicken coop large enough to house 4,000 chickens and a smaller side building where he could wash, grade and sell the eggs. Vlases worked alone on the coop, twelve hours a day, fifty-two weeks a year, until its completion in 1961. In November of 1961 plaintiff placed an order at defendant's outlet store in Brownsville, Pennsylvania for the purchase of 2,000 one day old chicks. The chickens selected by the plaintiff from Ward's catalogue were hybrid Leghorns and were noted for their excellent egg production. On December 21, 1961 plaintiff received the 2,200*fn1 chickens and placed them on the first floor of the coop which had been equipped with new brooders, feeders and within a short time, waterers. As a further hygienic precaution wire and sugar cane were placed on the ground so the chickens would not come in contact with the dirt floor. For the first six months Vlases slept in the coop in order to give the new chicks his undivided attention.

During the first few weeks after delivery the chickens appeared to be in good health but by the third week plaintiff noticed that their feathers were beginning to fall off. This condition was brought to the attention of Mr. Howard Hamilton who represented the Agway Corporation which was supplying the plaintiff with feed on credit. In February of 1962 Mr. Hamilton took five chickens to the Bureau of Animal Industry Diagnostic Laboratory where they were examined by Dr. Daniel P. Ehlers. The examination revealed signs of drug intoxication and hemorrhagic disease involving the weakening of blood vessels. Four chicks were brought to Dr. Ehlers in May of 1962 and were found to be suffering from fatigue. On the 14th of August 1962 Mr. Hamilton brought three chickens to the laboratory where Dr. Ehlers' report noted that two of the chicks were affected with visceral leukosis, one with ocular leukosis, one had bumble foot and one had been picked. Visceral and ocular leukosis are two types of avian leukosis complex or bird cancer which disease infected plaintiff's flock either killing the chicks or causing those remaining to be destroyed.

Plaintiff in this two count suit in assumpsit charged negligence and breach of warranty with jurisdiction resting on the diversity provisions of 28 U.S.C.A. § 1332. After the second day of trial the negligence claim was dropped leaving the breach of warranty as the sole problem for the jury's consideration. A verdict was returned in favor of the plaintiff in the amount of $23,028.77. Montgomery Ward appeals from the resultant judgment.

I

Appellant takes the position that an action for breach of implied warranties will not lie for the sale of one day old chicks where there is no human skill, knowledge or foresight which would enable the producer or supplier to prevent the occurrence of this disease, to detect its presence or to care for the sickness if it was present. The jury was instructed by the court that recovery on behalf of the plaintiff required a finding that the chickens were afflicted with leukosis at the time defendant made delivery. The expert testimony for both sides indicated that there was no way of determining whether newly hatched chicks have leukosis and that there is no medication available to prevent the disease from occurring.*fn2 Assuming the chickens were diseased upon their arrival the thrust of appellant's argument questions the sufficiency of the law to support a finding that Ward is liable under Pennsylvania law for the breach of implied warranties.

The two implied warranties before us are the implied warranty of merchantability, 12A P.S. § 2-314,*fn3 and the implied warranty of fitness for a particular purpose, 12A P.S. § 2-315.*fn4 Both of these are designed to protect the buyer of goods from bearing the burden of loss where merchandise, though not violating a promise expressly guaranteed, does not conform to the normal commercial standards or meeting the buyer's particular purpose, a condition upon which he had the right to rely.

Were it to be assumed that the sale of 2,000 chickens infected with avian leukosis transgressed the norm of acceptable goods under both warranties, appellant's position is that the action will not lie in a situation where the seller is unable to discover the defect or cure the damage if it could be ascertained. That theory does not eliminate the consequences imposed by the Code upon the seller of commercially inferior goods. It is without merit.

The fact that avian leukosis is nondetectable could be an important issue but only as bearing on the charge of negligence, which is no longer in this suit. The Pennsylvania decision in Vandenberg & Sons, N.V. v. Siter, 204 Pa. Super. 392, 204 A.2d 494 (1964), buttresses our conclusion in upholding the implied warranties. There latent defects in certain tulip and hyacinth bulbs went undetected in the face of two inspections and the court, though aware that the imperfections could only be uncovered after growth, limited its concern to the question of whether the seller's express provision that notice of any breach be communicated within a certain time, was reasonable. The entire purpose behind the implied warranty sections of the Code is to hold the seller responsible when inferior goods are passed along to the unsuspecting buyer. What the Code requires is not evidence that the defects should or could have been uncovered by the seller but only that the goods upon delivery were not of a merchantable quality or fit for their particular purpose. If those requisite proofs are established the only exculpatory relief afforded by the Code is a showing that the implied warranties were modified or excluded by specific language under Section 2-316.*fn5 Lack of skill or foresight on the part of the seller in discovering the product's flaw was never meant to bar liability. The gravamen here is not so much with what precautions were taken by the seller but rather with the quality of the goods contracted for by the buyer. Even a provision specifically disclaiming any warrant against avian leukosis would not necessarily call for the defendant's freedom from liability. Section 1-102(3)*fn6 of the Code's General Provisions states that standards which are manifestly unreasonable may not be disclaimed and prevents the enforcement of unconscionable sales where, as in this instance, the goods exchanged are found to be totally worthless.

II

Appellant contends that plaintiff failed to meet the burden of proof that the chickens were delivered with avian leukosis and further asserts that the verdict is against the weight of the evidence. The argument advanced is founded on the fact that avian leukosis may be contracted in two ways, either inherited through the egg or acquired by reason of an unhealthy environment. Appellant urges that since the disease was first diagnosed when the chickens were nine months of age and since there was evidence indicating the existence of other maladies aside from leukosis, that plaintiff failed to show the presence of avian leukosis at delivery and also that the disease was the cause of the inability of the chicks to produce eggs and of their deaths. Upon consideration of all the trial testimony, appellant's argument must be rejected.

It was firmly established by the evidence that with reference to inherited as opposed to environmental leukosis, incidents of the latter are minimized where proper care and health standards are strictly observed. Testimony revealed that environmental infection will more than likely occur where the chicks are housed in a coop previously occupied by a diseased flock, where leukosis is present in nearby chickens or where the young chicks come in contact with contaminated equipment. On behalf of the plaintiff it was shown that the chicks were placed by him in a newly constructed coop with new equipment. There was no evidence that the disease was then present on the farm or had ever affected other chickens raised by Vlases. Plaintiff's expert witness, Dr. Frank A. Bartus, had examined the chickens six or seven months after the first diagnosis of the disease and testified that at that time "this disease [avian leukosis complex] was just running rampant through the whole flock." In the opinion of Dr. Bartus the leukosis found in plaintiff's chickens was transmitted through the egg. That opinion was based on the witness' expertise and factually supported by the consideration that "* * * he [Vlases] has raised chickens in the past, and the fact that he was a fairly good husbandry ...


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