Wurlitzer harmless for, from or on account of any liability, loss, damage or expense resulting from or arising out of any fraud, negligence or wrongful acts or omissions by Dealer, including, without limiting the generality of the foregoing:
"1. Payment of any and all indebtedness now or hereafter owing by Dealer to Wurlitzer for merchandise purchased by Dealer, and the payment of any note or other evidence of such indebtedness;
2. Payment and discharge by Dealer of Dealer's obligations, direct or contingent on any retail account, installment account or otherwise, purchased by Wurlitzer from Dealer, or assigned by Dealer to Wurlitzer in payment of, or to secure, indebtedness owing by Dealer to Wurlitzer;
3. Indemnification of Wurlitzer against loss, damages or expense because of fraud or wrongful acts or omissions of Dealer."
While the factual matters are not in dispute, the defendant challenges the legal effect of the "Guaranty" agreement, and the amount which the plaintiff alleges as a deficiency judgment under its terms. Therefore, the questions for determination are: (1) did the plaintiff act reasonably in reselling the musical instruments; (2) what damages did the plaintiff actually sustain; and (3) is the defendant liable to the plaintiff for these damages.
It is provided in 12A P.S. § 2-703
that "Where the buyer wrongfully rejects or revokes acceptance of goods or fails to make a payment due on or before delivery or repudiates with respect to a part or the whole, then with respect to any goods directly affected and, if the breach is of the whole contract * * * then also with respect to the whole undelivered balance, the aggrieved seller may * * * (d) resell and recover damages as hereafter provided * * *." It is further provided in 12A P.S. § 2-706 that "* * * Where the resale is made in good faith and in a commercially reasonable manner the seller may recover the difference between the resale price and the contract price together with any incidental damages allowed under the provisions of this Article * * * but less expenses saved in consequence of the buyer's breach. * * *" The article also contains provisions for resale at either public or private sales.
Where a breach of contractual duty has occurred, it is the obligation of the non-breaching party to act in such a manner as to mitigate his damages. Rees v. R.A. Bowers Co., 280 Pa. 474, 124 A. 653 (1924). In fulfilling this duty, the plaintiff held a public sale on November 1, 1969.
The defendant alleges that this sale was improperly conducted since the plaintiff offered the lot of instruments for sale on one entity, and not on an individual basis. The defendant contends that had the instruments been sold individually, it is probable that a larger sum would have been realized. "The best available market must be sought, and effort made to secure the highest price obtainable * * * at public or private sale * * * but, in the absence of evidence to the contrary, the sum received will be presumed to be the best that could be secured * * *." Atl. C.T. & R. Corp. v. Southwark Foundry & Machine Co., 289 Pa. 569, 577, 137 A. 807, 810 (1927). See also Old Colony Trust Company v. Penrose Industries Corp., 280 F. Supp. 698 (E.D. Pa. 1968), affirmed 398 F.2d 310, C.A. 3, 1968. While the defendant's allegations do raise some doubt as to the propriety with which the sale was conducted, sufficient matters have not been presented for my consideration which would adequately support the defendant's claim. Accordingly, it will be assumed that the sale was conducted in "good faith" for the purpose of realizing the greatest sum to be applied in mitigation of damages.
The second burden which the plaintiff must fulfill is to demonstrate by a preponderance of the evidence, the extent of its damages. "Where the resale is made in good faith and in a commercially reasonable manner the seller may recover the difference between the resale price and the contract price together with any incidental damages allowed * * *." 12A P.S. § 2-706.
At the trial, the plaintiff introduced Exhibit "B" which is a Stock Report to the Wurlitzer Company showing that as of December 31, 1969, Frank Oliver, Inc. was indebted to the plaintiff in the amount of $61,286.71. This sum represents the total amount due for those instruments which defendant received and apparently disposed of but for which it never paid the plaintiff, and the difference between the original selling price for those instruments repossessed and sold at auction, and the amount received at auction. Since the defendant did not produce any evidence which would rebut these figures, they will be accepted as true.
The final matter remaining for my consideration is a determination of whether or not the defendant is individually liable to the plaintiff for the debts incurred by Frank Oliver, Inc.
As previously discussed, the defendant entered into what has been characterized as a "Guaranty" agreement with the plaintiff by which he agreed to make full and prompt payment at maturity or thereafter of all indebtedness between the plaintiff and Frank Oliver, Inc. As a further condition, the defendant waived all requirements of presentment, protest and demand, and notice of default, non-performance, presentment, protest and demand. A contract is one of suretyship, although the word "guarantee" is used, if the agreement is one to pay in case of default by the principal, and not simply to pay in case of the principal's inability to pay, and such an individual is bound to the full extent that his principal is bound. Phil. & R.R. Co. v. Knight, 124 Pa. 58, 16 A. 492 (1889); Riddle v. Thompson, 104 Pa. 330 (1883). These determinations were codified in 1913 as follows:
"Every written agreement hereafter made by one person to answer for the default of another shall subject such person to the liabilities of suretyship, and shall confer upon him the rights incident thereto, unless such agreement shall contain in substance the words: 'This is not intended to be a contract of suretyship,' or unless each portion of such agreement intended to modify the rights and liabilities of suretyship shall contain in substance the words: 'This portion of the agreement is not intended to impose the liability of suretyship.'" 1913, July 24, P.L. 971, § 1, 8 P.S. § 1.
In construing this Act, the Supreme Court of Pennsylvania held:
"* * * the words 'guaranty' and 'suretyship' are in ordinary business transactions frequently used interchangeably and with little understanding of the technical differences between the two. Even before the passage of the act, we held that the use of the word 'guarantee' did not of itself negative an intention that the liability should be that of a surety. * * * Since the act, it is well settled that the words 'guarantee' or 'guarantor' are not sufficient to satisfy the act, and therefore do not prevent the creation of 'the liability of suretyship as distinguished from technical guaranty' * * * the act expressly requires a statement, in the negative form, of an intention not to be liable as surety, if such liability is to be avoided * * * and, in the absence of an expressed intention not to be so liable, his liability was therefore that of suretyship." Waber's Estate, 317 Pa. 497, 500, 177 A. 51, 52 (1935).