AC hose frosty white when off???

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First time poster - and new owner of two( because one wasn't enough) '92 300D 2.5T's - great cars.

Anyway - I noticed over the weekend that while the AC controls were set to OFF in the cabin - the AC compressor hose (large fat one) was frosty white from condensation. Thinking this was odd - I turned the AC controls ON and the hose lost it's frost nearly immediately.

I have confirmed that the clutch is moving at all times regardless of the AC control settings in the cabin.

The car blows cold - and was converted to R-134 by the dealer back in '99.

This sounds to me like the compressor is on when it's supposed to be off and I would think this would lead to an early failure.

What do you guys think? What would cause this? Fault relay? Which one?

-John