Murray P. Haydon, 59, a retired auto worker who lived 16 months with a permanent Jarvik-7 artificial heart, died yesterday morning at the Louisville hospital that had been his only home since the implant.

Haydon was the third of five patients in the world to receive the controversial permanent artificial heart since 1982. His death leaves one survivor, William J. Schroeder, 54, who has suffered three strokes since his implant Nov. 25, 1984, and remains bedridden at Humana Hospital-Audubon in Louisville where Haydon was a patient.

Dr. William K. DeVries, the only U.S. surgeon with federal permission to implant the permanent metal-and-plastic heart pump, praised Haydon yesterday as a patient and "good friend" whose willingness to be an experimental subject was "enormously beneficial in leading up to a better mechanical device and improved patient treatment."

Haydon, whose home had been in Louisville, spent most of his life since the Feb. 17, 1985, implant in the intensive care unit, where a respirator helped him breathe. He was weakened by infection in the last two weeks, and when his kidney function deteriorated, his family decided against dialysis on the grounds that it would not improve the quality of his life, hospital officials said.

Haydon's kidneys failed, and he was pronounced brain-dead at 10:45 a.m. yesterday, nine days short of his 60th birthday. The machine driving his heart was then turned off, hospital spokesman Tom Noland said.

Haydon's family said, in a statement read to reporters by DeVries, "We are sad now that he is no longer with us. We are also grateful that he lived 16 months longer than he would have without the artificial heart."

Over the past year, debate has grown over further use of the permanent mechanical heart developed by Dr. Robert Jarvik of Salt Lake City-based Symbion Inc. There also has been increased use of artificial hearts as a temporary "bridge" for patients awaiting human heart transplants and more willingness to perform transplants on older patients.

DeVries' four patients have suffered serious complications, particularly debilitating strokes and blood problems. While he has permission for three more implants, the Food and Drug Administration recently imposed stricter standards, asking for a case-by-case review of his patients.

DeVries vowed yesterday to continue, saying "as soon as we find a patient, we'll be back in business."

But he said his referrals have dwindled to about two a week. He noted that if Haydon had come to Humana today, he would have been a candidate for a transplant instead of an artificial heart. At the time of his surgery, transplants were restricted to patients in their early 50s or younger.

Haydon was afflicted with cardiomyopathy, degeneration of the heart muscle, and doctors said he had a few days to live when he was accepted at Humana last year. His family visited him yesterday, but hospital officials did not say if they were there when he died.

DeVries' first patient, Seattle dentist Barney B. Clark, lived 112 days on the artificial heart he received at the University of Utah hospital in Salt Lake City on Dec. 2, 1982. In 1984, DeVries joined the Humana Heart Institute International, sponsored by the Louisville for-profit hospital chain, and performed Schroeder's operation.

DeVries' fourth patient, Jack C. Burcham, 62, received the Jarvik-7 heart on April 14, 1985, and died 10 days later. A fifth man, Leif Stenberg, received a Jarvik-7 heart at a Swedish hospital on April 7, 1985, and survived until November.