The opinion of the court was delivered by: DITTER
Plaintiff instituted this action to recover the balance due on a contract of sale for machinery. Defendant filed a counterclaim for losses allegedly sustained as a result of plaintiff's breach of warranties, both express and implied. After trial without a jury, I make the following:
1. Plaintiff, Puritan Manufacturing, Inc., a corporation with its principal place of business in Omaha, Nebraska, is engaged in the business of manufacturing refrigeration equipment for the meat packing industry.
2. Defendant, I. Klayman & Company (hereafter Klayman), a Pennsylvania corporation with its principal place of business in Philadelphia, Pennsylvania, is in the pork packing business.
3. In 1964, Klayman was in the process of making plans for the construction of a new, $3,000,000. facility.
4. Herman Klayman, defendant's manager, learned of a new process for chilling the internal organs and edible portions of the animal's head (hereafter collectively referred to as "offal") by running it through a conveyor and exposing the product to liquid carbon dioxide (Co).
5. In late 1964 Klayman entered into negotiations with Puritan for the purchase of a variety of machinery including a continuous liver chiller and a continuous head-meat chiller incorporating the process described in finding number 4.
6. Karl Oberdorfer, with whom Klayman negotiated for the purchase of said machinery, was an agent of Puritan, in addition to being employed as a consultant by AIRCO Industrial Gases, a liquid Co supplier.
7. On March 15, 1966, W. F. Walter, president of Puritan, submitted a list of equipment and prices for Klayman's consideration.
8. On April 4, 1966, Klayman submitted a purchase order to Puritan, which the latter accepted on May 3, 1966. The equipment actually purchased included a continuous liver chiller, a continuous head-meat chiller, a heart washer, a heart slicer, a lung chiller, a lung slicer, and a stomach deslimer.
9. The agreed upon purchase price was $33,216.00, of which Klayman paid $21,702.90, leaving a balance of $11,513.10.
10. The equipment ordered by Klayman from Puritan was delivered in November, 1966, and installed in February, 1967.
11. In June, 1970, Klayman dismantled the Puritan liver and head-meat chillers and placed them in storage.
12. The agreed upon purchase price for the liver chiller was $10,275.00 and for the head-meat chiller was $6,900.00, totaling $17,175.00.
14. Puritan further represented and warranted that its chillers would eliminate "double handling" of the offal product, which is necessary when traditional chilling methods are used.
15. Puritan knew the chillers were purchased so Klayman could continue to sell the livers and other offal products as fresh, rather than frozen.
16. As Klayman's production rose toward a kill rate of 650 hogs per hour, Puritan's equipment was unable to chill the offal to the guaranteed temperatures and at the same time produce, without double handling, livers that could be sold as fresh.
17. Klayman was not only forced to double handle livers but in view of customer complaints lost its market for fresh livers.
18. During the first eight months of operation, the Puritan equipment required constant maintenance readjustment and replacement.
19. During the first eight months Klayman gave frequent and adequate notice to Puritan that its equipment was not working properly. Besides numerous phone calls, Klayman sent Puritan letters on June 19 stating that the machinery was not performing in accordance with its warranties.
20. Puritan and its local representative, AIRCO, made numerous adjustments to remedy various problems and malfunctions in an attempt to enable the chillers to operate properly.
21. In July, 1967, under the supervision of Karl Oberdorfer, modifications were made on the continuous liver chiller, including the installation of an additional Co fixture to make "snow" which would be placed on the livers after they dropped into stainless steel tanks. This did ...