Contracts II

Lewis v. Mobil Oil Corp.

United States Court of Appeals for the Eighth Circuit, January 7, 1971

Facts:

Plaintiff, a sawmill operator, decided to convert his power equipment to hydraulic equipment. He purchased a used hydraulic system from a competitor and installed it in his plant. The prior owner used Pacemaker oil for it, but plaintiff had been a customer of Mobil's for many years. He contacted a local Mobil oil dealer, Rowe, and requested the proper type of oil for the system. Rowe said that he did not know the proper type of oil but that he find out. However, he only knew that he was looking for lubricant for a gear-type pump. He contacted a Mobil representative for a recommendation and sold plaintiff Ambrex 810.

Within a few days, plaintiff noticed that the oil changed color, foamed over, and got hot. Plaintiff changed the oil in the system a number of times with no improvement. In six months, the equipment broke down and a completely new system had to be installed. Plaintiff suspected the oil may have caused this and so requested Rowe be sure that he had the right kind of oil, but Rowe continued to sell plaintiff Ambrex 810.

Plaintiff continued to have trouble with the machine, as six pressurizing pumps broke and had to be replaced. Plaintiff cleaned the metal oil filter daily as instructed. After a year, plaintiff changed the pump to one that used a disposable filter in addition to the metal strainer. Ambrex 810 continued to be used until the pump completely broke down three weeks later. Representatives from Mobile and the pump maker came and examined it. The system was flushed and cleaned, a new pump was installed, and a new oil was implemented. After this, the system worked flawlessly for the 2½ years since.

Procedural History:

The jury returned a verdict for $89,250 for plaintiff.

Issue:

Was there a warranty of fitness for the oil plaintiff used?

Rule:

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[T]here are two requirements for an implied warranty of fitness:

  1. that the seller have "reason to know" of the use for which the goods are purchased, and
  2. that the buyer relies on the seller's expertise in supplying the proper product.

Reasoning:

Plaintiff made it clear that he did not know what type of oil to get and that was relied on defendant to supply the proper product. If defendant needed more information before giving a recommendation, it was their duty to get it. Defendant clearly would have been able to provide the proper oil had they known, as evidenced by their quick provision of the proper kind of oil when a Mobil engineer visited the plant.

Holding:

There was an implied warranty of fitness of the oil for plaintiff's purpose. Reversed and remanded for the issue of damages. Petitions for rehearing denied.

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