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DELAWARE VALLEY EQUIP. CO. v. GRANAHAN

March 31, 1976

DELAWARE VALLEY EQUIPMENT COMPANY, INC.
v.
JOHN J. GRANAHAN, t/a ADVANCE MASONRY COMPANY



The opinion of the court was delivered by: BRODERICK

BRODERICK, J.

 This is a contract action for the recovery of $28,832.00 with interest from April 1, 1974, for the sale by the plaintiff of a Lull Diesel High Lift 400-34 to the defendant on the above date. This action was tried without a jury and after carefully considering the evidence and arguments presented by both sides, the Court has determined that it will grant the relief requested by the plaintiff.

 Plaintiff, Delaware Valley Equipment Co., Inc., a franchisee of Lull construction equipment, is a corporation incorporated under the law of New Jersey and maintains its principal place of business in that state. The defendant, John J. Granahan, trading as Advance Masonry Company, is a citizen of Pennsylvania maintaining his principal place of business therein. The amount in controversy exceeds $10,000.00. Therefore, diversity jurisdiction exists under 28 U.S.C. § 1332. *fn1"

 The essential and operative facts as this Court finds them from the record are as follows: Defendant, John J. Granahan ("Mr. Granahan"), contacted plaintiff by telephone on Friday, March 22, 1974, seeking to purchase a fork lift truck, a Lull Diesel High-Lift 400-34 (hereinafter "Lull fork lift"). Mr. Granahan's call was returned by Mr. William Agster, the President of plaintiff. In the phone conversation which followed, Mr. Granahan identified himself, stated that he was the owner of a piece of Lull construction equipment, told Mr. Agster that he needed a Lull fork lift immediately on the job site where he was a masonry sub-contractor, and that he desired to purchase a new Lull fork lift immediately. A price of $28,832.00, including Pennsylvania sales tax, was quoted by Mr. Agster for the Lull fork lift and accessory equipment. Mr. Agster told Mr. Granahan that the necessary paper work on the sale would be prepared the first thing the following week and the truck would be made ready for delivery. On that same day, March 22, 1974, Mr. Agster prepared a paper labelled "Quotation", addressed to Mr. Granahan, which specifies the truck with its equipment and the price of $28,832.00. This document is signed by both Mr. Agster and Mr. Granahan and is in the record as plaintiff's Exhibit #1. A document labelled "Invoice" to "Advance Masonry," dated April 1, 1974, specifies the truck with its equipment, the sale price of $28,832.00 and also states that the truck was picked up on March 29, 1974. This "Invoice", which is also signed by Mr. Granahan, is in the record as plaintiff's Exhibit #2. No payment was made to the plaintiff at the time the truck was delivered. It was understood by the parties that Mr. Granahan would go to his bank and obtain financing in order to pay the plaintiff. Mr. Agster, thereafter, made a number of telephone calls to Mr. Granahan, which calls were not returned. Mr. Agster then visited Mr. Granahan at the job site on several occasions demanding payment. On one of these visits Mr. Granahan advised him that his (Mr. Granahan's) bank turned down his request for financing. Mr. Granahan then asked Mr. Agster to sell his old Lull truck and stated that the net proceeds from the sale would be applied to the purchase price of the new Lull fork lift. Mr. Agster succeeded in selling the old truck on or about May 1, 1974, to a Mr. DiGregorio for $13,400.00, which was paid by a check made out to Mr. Granahan. Mr. Granahan testified that he cashed the $13,400.00 check and turned the money over to an attorney who was handling the dissolution of a partnership in which Mr. Granahan was once a partner. The plaintiff never received any of these funds. On June 10, 1974, the plaintiff, having received no money, caused the Lull fork lift to be repossessed.

 On and after March 29, 1974, until June 10, 1974, the Lull fork lift was used continuously on the job by Mr. Granahan. Mr. Granahan never questioned the purchase price, never complained about the truck's performance and never stated that he would not pay. At the time of trial, Mr. Agster testified that he was offering the repossessed Lull fork lift for sale but had been unable to sell it.

 Mr. Granahan does not contest that there was an agreement to purchase the Lull fork lift for $28,832.00. In the stipulation of facts entered into between the parties in the Final Pre-Trial Order, it is stated:

 
Plaintiff agreed to sell to defendant a Lull Diesel High Lift 400-34 Serial No. 1451 NW (along with necessary equipment). For said Lull Lift, defendant agreed to pay TWENTY-EIGHT THOUSAND EIGHT HUNDRED THIRTY-TWO ($28,832.00) DOLLARS, per plaintiff's original quotation, NO. 009294 [Exhibit #1]. Plaintiff then delivered said equipment to defendant. Defendant not only failed to pay for the equipment, which was delivered, but also continued to use the equipment until plaintiff repossessed it.

 It is therefore undisputed that there was a sale of the Lull fork lift for $28,832.00. The defendant, Mr. Granahan, however, offers several reasons for his position that he is not liable for the purchase price. First, he contends that the plaintiff failed to perform an essential condition of the contract, i.e., secure financing for him. Second, he contends that the contract was a "sale on approval" under which he had no obligation to accept the Lull fork lift and pay the purchase price. Third, he contends that the contract of sale was between the plaintiff and "Advance Masonry, Inc.", a Pennsylvania corporation, which is not a party to this suit, and he is therefore not personally liable.

 First, as to Mr. Granahan's claim that the plaintiff was obliged to secure financing for him, Mr. Agster, who made the sale denies that financing was discussed. He testified that the plaintiff does not finance or procure financing for its customers. The "Quotation" and the "Invoice" make no mention of financing. In this case, the terms of the agreement of sale, as set forth in the "Quotation" and the "Invoice", both of which are signed by Mr. Granahan, evidence a complete agreement between the parties. We find that there is no credible evidence in this record that the plaintiff was obligated to obtain financing or that the sale of the Lull fork lift was conditioned upon Mr. Granahan obtaining financing.

 Second, Mr. Granahan contends that the transaction in question was a "sale on approval" under which he had no obligation to pay for the Lull fork lift. The "Invoice" which Mr. Granahan signed states: "Machine delivered on approval until 4/1/74." The defendant testified that he was told by Mr. Agster's secretary when he took delivery of the truck on March 29, 1974, that he had the truck as a demonstrator until April 1, 1974, and that if he did not want the truck it would be picked up. The evidence in this record is uncontradicted that Mr. Granahan used the truck continuously from the date he took delivery, March 29, 1974, until the day it was repossessed by the plaintiff on June 10, 1974, without ever having uttered a word of dissatisfaction or offering to return the truck. We find, therefore, that there is no credible evidence in this record which would permit this Court to find that Mr. Granahan was not obligated to pay for the Lull fork lift after April 1, 1974. Section 2-327 of the Uniform Commercial Code, 12A P.S. § 2-327, specifically provides in pertinent part:

 
(1) Under a sale on approval unless otherwise agreed

 The term "sale on approval" does not relieve Mr. Granahan of any liability in connection with the sale herein.

 Lastly, Mr. Granahan contends that he is not personally liable. He testified that the contract was between the plaintiff and "Advance Masonry, Inc.," which is not a party to this lawsuit. Mr. Granahan claimed that he was acting as an agent for the corporation in this transaction. He introduced into evidence a "Certificate of Incorporation" for "Advance Masonry, Inc." He testified that the address of the corporation was the same as his ...


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