Coleman v. Neel

590 So. 2d 1278, 1991 La. App. LEXIS 3227, 1991 WL 255261
CourtLouisiana Court of Appeal
DecidedNovember 22, 1991
DocketNo. CA 90 1657
StatusPublished

This text of 590 So. 2d 1278 (Coleman v. Neel) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Coleman v. Neel, 590 So. 2d 1278, 1991 La. App. LEXIS 3227, 1991 WL 255261 (La. Ct. App. 1991).

Opinion

FOIL, Judge.

Plaintiff, buyer of a thoroughbred horse, appeals from a judgment denying his action in redhibition to rescind the sale and granting the seller’s reconventional demand. We affirm.

FACTS

Robert E. Coleman is in the thoroughbred race horse business and owns Coleman Farms in Folsom, Louisiana. He previously purchased horses valued at roughly $2,000,000.00 from Clay Neel at Nekaala Farms in Oklahoma. These gentlemen had an informal buy-sell arrangement. They never put the sales in writing, but instead dealt on a “handshake” basis.

In 1983, Coleman sought to purchase a son of the horse “In Reality” for breeding purposes. Neel acquired “Greek Reality,” an “In Reality” stallion, and offered to sell him to Coleman for $200,000.00. The horse was six years old and raced for four years. Neel informed Coleman that the horse had never been bred before. The horse also had a bilateral laryngeal hemiplegia which caused problems with breathing. Neel told Coleman that the horse’s throat problem could be corrected by surgery. The parties dispute whether Neel advised Coleman about the throat condition before or after the sale. After Coleman examined the horse twice at Nekaala Farms, he purchased Greek Reality from Neel in October of 1983 for $150,000.00. Neel advised Coleman to buy fertility insurance covering the horse because its semen had never been collected and evaluated. Coleman purchased insurance on the horse, but unknown to him, fertility was not covered under the policy.

Greek Reality took a standard health test when he arrived at Coleman Farms, but he was not tested for fertility. James Fowler, who later became the manager of Coleman Farms, believed that Greek Reality was covered by fertility insurance. He did not test the horse for breeding soundness because he assumed that Greek Reality had to pass a fertility test to be covered by insurance.

Fowler scheduled Greek Reality to stand at stud for a book of 35 mares when breeding season began in 1984. Starting on January 31, Greek Reality covered four mares on seven occasions. Three of the mares came back into heat and were later settled by other stallions. After breeding on February 21, Greek Reality settled the mare “Dynamic Deb” who foaled the filly “Face Reality” in the spring of 1985.

Fowler became suspicious when Greek Reality only settled one mare off of the first breedings and the other three mares came into foal after cover with other studs. For ten days in early March, he collected semen from Greek Reality daily and examined it under a microscope. He observed a handful of sperm the first time, which appeared dead. Then he saw fewer and fewer until finally, he saw none. One cubic centimeter of semen usually contains 250,-000,000 to 500,000,000 sperm.

[1280]*1280On April 13, 1984, Fowler took Greek Reality to the L.S.U. School of Veterinary Medicine for a breeding soundness examination. Dr. Mushtaq Memon, head of the theriogenology (animal reproduction) department, conducted the examination. He collected the semen twice, one hour apart, and found a few immotile sperm. Dr. Memon concluded that Greek Reality was not a sound breeder at that time. The examination also revealed that Greek Reality already had surgery on his throat.

Coleman filed this suit against Neel demanding rescission of the sale and return of the purchase price. Coleman seeks to avoid the sale on the grounds of two redhi-bitory vices: (1) he purchased the horse for breeding purposes and the horse was later diagnosed as an unsound breeder; and (2) the horse has the absolute vice of “defect of wind.”

Neel answered the petition and claimed that the breeding defect did not exist at the time of sale. He also asserted that the breathing condition pertains to the horse’s soundness to race, which was not a consideration of the sale.

In addition to his answer, Neel filed a reconventional demand against Coleman for $105,000.00. The facts show that Neel and Coleman together bought the stallion “Smoking Gun.” Coleman owned 75% of the horse and Neel owned the remaining 25%. They both signed a promissory note for the purchase price of $400,000.00 payable to Louisiana National Bank one year from the date of the loan. Coleman later paid the principal and interest in full when the note became due. The parties dispute why Neel did not pay his share of the note. After he purchased Greek Reality, Coleman purchased two mares and a filly from Neel, who agreed to accept a post-dated check in payment of the purchase price of $105,-000.00. When Coleman paid in full the bank debt on Smoking Gun, he stopped payment on the check he wrote to Neel, claiming he was entitled to off-set that amount against the amount Neel owed on the promissory note. In his reconventional demand, Neel asserts that plaintiff stopped payment on the check to secure the return of a portion of the purchase price of Greek Reality. Neel claims that he had no obligation on the promissory note and that Coleman owes him $105,000.00. Coleman does not deny that the money is due on the $105,000.00 horse transaction. Rather, he pleads the affirmative defense of set-off against Neel’s indebtedness on the Louisiana National Bank note.

The trial judge found that Coleman failed to carry his burden of proving a defect existed in Greek Reality’s breeding ability at the time of the sale. For that reason, the trial judge denied Coleman’s action in redhibition. The judge’s written reasons for judgment did not mention Coleman’s allegation of the defect of wind. The trial judge denied Coleman’s defense of set-off against Neel’s reconventional demand and awarded judgment to Neel for $105,000.00. Coleman appealed.

The issues on appeal are whether the trial judge erred in: (1) rejecting Coleman’s demand to rescind the sale for redhibitory vices, either on the ground that the horse was an unsound breeder at the time of sale or that the horse had the absolute defect of wind; and (2) denying Coleman a set-off of $105,000.00.

REDHIBITION

Coleman seeks to rescind the sale of Greek Reality on the first ground that he purchased the horse for breeding purposes, and the horse was later found to be an unsound breeder. He argues that the evidence shows that the defect existed at the time of sale, and had he known of the defect, he would not have purchased the horse.

The applicable Civil Code articles on redhibition are as follows:

Art. 2520. Redhibition, definition
Redhibition is the avoidance of a sale on account of some vice or defect in the thing sold, which renders it either absolutely useless, or its use so inconvenient and imperfect, that it must be supposed that the buyer would not have purchased it, had he known of the vice.
[1281]*1281Art. 2521. Apparent defects discoverable by buyer
Apparent defects, that is, such as the buyer might have discovered by simple inspection, are not among the number of redhibitory vices.
Art. 2522. Latent defects made known to buyer
The buyer can not institute the redhibi-tory action, on account of the latent defects which the seller has declared to him before or at the time of the sale. Testimonial proof of this declaration may be received.

Under article 2520, the buyer must prove that the defect existed at the time of the sale. See Smith v. Andrepont, 378 So.2d 479 (La.App.

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Related

Gravois v. New England Ins. Co.
553 So. 2d 1034 (Louisiana Court of Appeal, 1989)
Rosell v. Esco
549 So. 2d 840 (Supreme Court of Louisiana, 1989)
Smith v. Andrepont
378 So. 2d 479 (Louisiana Court of Appeal, 1980)

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590 So. 2d 1278, 1991 La. App. LEXIS 3227, 1991 WL 255261, Counsel Stack Legal Research, https://law.counselstack.com/opinion/coleman-v-neel-lactapp-1991.