Keystone Diesel Engine Co. v. Irwin
| Decision Date | 04 June 1963 |
| Citation | 191 A.2d 376,411 Pa. 222 |
| Parties | , 1 UCC Rep.Serv. 184 KEYSTONE DIESEL ENGINE COMPANY, a corporation, v. Floyd T. IRWIN, Appellant. |
| Court | Pennsylvania Supreme Court |
Lee L. Leonard, Valencia, William J. Krzton, Pittsburgh, for appellant.
Henninger & Robinson, W. C. Robinson, Butler, for appellee.
Before BELL, C. J., and MUSMANNO, JONES, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ.
This is an appeal from the order of the court below striking off a counterclaim filed in an action in assumpsit.
The plaintiff, Keystone Diesel Engine Company, Inc., (Keystone) is a dealer in diesel engines, and the defendant, Floyd T. Irwin, (Irwin) operates tractor-trailers as a contract carrier. Sometime prior to July 1960, Keystone sold Irwin a diesel engine for approximately $3000. which was subsequently installed in a tractor. The engine did not function properly and the plaintiff Keystone performed certain modifications and repairs to the engine at its own expense. Subsequent repairs were required and the plaintiff performed the additional work allegedly based upon an oral contract with the defendant whereby the defendant agreed to pay the plaintiff for the additional work. The defendant refused to pay for the last mentioned repairs and the plaintiff brought this action in assumpsit to recover the amount due of $623.08. Defendant filed a counterclaim for loss of profits totalling $5150. The basis for this latter claim was the inability of the defendant to use the tractor for 27 days because of various breakdowns of the engine furnished by the plaintiff, all in contravention of an implied warranty to merchantability.
The lower court struck off the counterclaim on the basis that the claim for loss of profit was too speculative to permit recovery. For the purpose of this appeal, we must assume that all allegations of the defendant are true, and determine whether or not the counterclaim was properly stricken as a matter of law.
Where a contract is breached without legal justification, the injured party is entitled to recover (absent contrary provisions in the contract) whatever damages he suffered, provided 1) they were such as would naturally and ordinarily follow from the breach; 2) they were reasonably foreseeable and within the contemplation of the parties at the time they made the contract; 3) they can be proved with reasonable certainty. Taylor v. Kaufhold, 368 Pa. 538, 84 A.2d 347, 32 A.L.R.2d 575 (1951); Adams v. Speckman, 385 Pa. 308, 122 A.2d 685 (1956); Restatement, Contracts § 330, § 331. There is no doubt that in a contract of this nature a breach causing malfunction of the engine would produce a halt in productive capacity and some damage could flow therefrom. Moreover, there would be no difficulty in measuring these damages with reasonable accuracy. The real issue to be determined is whether the damages sought for loss of profit were within the contemplation of the parties to the contract here in dispute.
The Uniform Commercial Code provisions which are appropriate in the instant case read as follows:
'The measure of damages for breach of warranty is the difference at the time and the place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances 1 show proximate damages of a different amount.' 2
'In a proper case any incidental and consequential damages under the next section may also be recovered.' 3
'Consequential damages resulting from the seller's breach include (a) any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise.' 4
'Special circumstances' entitling the buyer to damages in excess of the difference between the values as warranted and the value as accepted exist where the buyer has communicated to the seller at the time of entering into the contract sufficient facts to make it apparent that the damages subsequently claimed were within the reasonable contemplation of the parties. Wolstenholme, Inc. v. Jos. Randall & Bro., 295 Pa. 131, 144 A. 909 (1929). The language in Globe Refining Co. v. Landa Cotton Oil Co., 190 U.S. 540, at 545, (1903), 23 S.Ct. 754 at 756, 47 L.Ed. 1171, gives the rationale of the foregoing rule as follows: ...
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