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KEYSTONE DIESEL ENGINE COMPANY v. IRWIN (06/04/63)

June 4, 1963

KEYSTONE DIESEL ENGINE COMPANY, INC.
v.
IRWIN, APPELLANT.



Appeal, No. 36, March T., 1963, from order of Court of Common Pleas of Butler County, March T., 1962, No. 93, in case of Keystone Diesel Engine Company, Inc. v. Floyd T., Irwin. Order affirmed.

COUNSEL

William J. Krzton, with him Lee L. Leonard, for appellant.

William C. Robinson, with him Henninger & Robinson, for appellee.

Before Bell, C.j., Musmanno, Jones, Cohen, Eagen, O'brien and Roberts, JJ.

Author: Eagen

[ 411 Pa. Page 223]

OPINION BY MR. JUSTICE EAGEN

This is an appeal from the order of the court below striking off a counterclaim filed in an action of assumpsit.

The plaintiff, Keystone Diesel Engine Company, Inc. (Keystone), is a dealer in diesel engines, and the defendant, Floyd T., Irwin (Irwin), operates tractortrailers 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 agree to pay the plaintiff for the additional work. The defendant refused to pay for the last mentioned repairs and the plaintiff brought this action of assumpsit to recover the amount due of $623.08. Defendant filed a counterclaim for loss of profits totaling $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,

[ 411 Pa. Page 224]

    all in contravention of an implied warranty of 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 (1951); Adams v. Speckman, 385 Pa. 308, 122 A.2d 685 (1956); Restatement, Contracts, ยงยง 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 place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, ...


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