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THOMAS B. MARTINDALE v. GORMAN (01/12/50)

January 12, 1950

THOMAS B. MARTINDALE, INC.
v.
GORMAN



COUNSEL

Abram P. Piwosky, Sacks & Piwosky, Philadelphia, for appellant.

No book or appearance for appellee.

Before Rhodes, P. J., and Dithrich, Ross, Arnold and Fine, JJ.

Author: Dithrich

[ 165 Pa. Super. Page 613]

DITHRICH, Judge.

In this action in assumpsit instituted by plaintiff to recover a fixed amount of liquidated damages for the alleged breach of an option to repurchase an automobile, the learned court below, before whom the case was tried without a jury, found for the plaintiff but awarded it nominal damages only.

In finding for the plaintiff, in what was admittedly an effort to keep a 'new' automobile off the 'used' car market, the decision of the court was in line with the decisions in practically every case that has been brought to our attention or that we have been able to discover. There is no Pennsylvania appellate court decision directly in point. But in a comprehensive article in 10 U. of Pitt.L.Rev. 42, 53, it is stated that 'The repurchase contracts are being upheld in nearly every case.' And in 62 Harv.L.Rev., at page 320, it is noted in a discussion of Larson Buick Co., Inc., v. Mosca, Sup., 79 N.Y.S.2d 654, a leading case on the subject -- also discussed in 10 U. of Pitt.L.Rev., supra -- that repurchase options have been upheld wherever challenged. In the Larson case the Court said, 79 N.Y.S.2d at page 655: 'An honest dealer should be encouraged by the court (1) in his efforts to transfer his allotted quota of automobiles to bona fide individual purchasers, (2) in his attempt to comply with his agency contract, which bars a dealer from selling new cars to used car dealers, and

[ 165 Pa. Super. Page 614]

(3) in rescinding a transaction conceived in fraud.'

But in restricting the plaintiff to a recovery of nominal damages only, the learned court was out of line with the most recent decisions not only in this but in other states.

The facts are not in controversy. Defendant bought a new Ford automobile from plaintiff corporation, a regularly franchised dealer, on November 5, 1947. He executed a repurchase agreement which provided, inter alia, that he would '* * * not sell or transfer the title to the said Automobile within the period of six (6) months * * * without first offering the said Automobile to the Dealer for purchase at the price at which it was sold by said Dealer to the Purchaser, less depreciation at the rate of three percent (3%) per month * * *.' And provided further that if the purchaser should violate any of the terms of the repurchase option he would owe the dealer the sum of $300 'as liquidated damages.'

About two months after executing the repurchase agreement, the defendant, without first offering the said automobile to appellant, sold it to another dealer as a trade-in on a DeSoto sedan, for which he was credited with the sum of $1500 against the purchase price of $2044.45, which appears to have been the manufacturer's list price. Appellant's used car manager testified that, in his opinion, a car similar to the one sold to defendant would have sold for $2100 on the day defendant breached his contract. He could not testify as to the actual condition of the car sold to ...


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