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ESKA KLEIDERFABRIK v. PETERS SPORTSWEAR CO.

January 30, 1980

ESKA KLEIDERFABRIK, SIGMUND KLEIN
v.
THE PETERS SPORTSWEAR CO., INC.



The opinion of the court was delivered by: LUONGO

SUR PLEADINGS AND PROOF

In 1970 plaintiffs delivered merchandise (jackets) to defendant. Claiming that a number of the jackets shipped exceeded the quantity ordered and that others were defective, defendant deducted approximately $ 115,000 from the purchase price. After a period of time, the parties agreed that the goods in question had been properly rejected, but could not come to agreement as to the disposition of the overshipped and the defective jackets. Ultimately defendant sold the jackets. In this suit plaintiffs seek either to recover the purchase price or to obtain an accounting for the proceeds of the sale of the jackets.

 The matter was tried on October 22-23, 1979. Thereafter the parties submitted requests for findings of fact and conclusions of law, together with briefs on the legal issues. On pleadings and proof, I make the following

 I. FINDINGS OF FACT

 1. Plaintiffs are Eska Kleiderfabrik (Eska), a business partnership of the Republic of Austria, which produces and sells men's and ladies' garments, and Sigmund Klein, a partner.

 2. Defendant, The Peters Sportswear Co., Inc. (Peters), is a Pennsylvania corporation which was a wholesale distributor of men's sportswear.

 3. This action arose out of a sale by Eska to Peters of approximately 35,000 cotton corduroy men's jackets in 1970.

 4. The jackets were sewn by a Yugoslavian manufacturer in accordance with specifications provided by Peters, and shipped by Eska to Peters' Pennsylvania warehouse.

 5. After Peters received some of the shipments of jackets, Michael Driban, Export/Import Director of Peters, notified Robert Klein, managing partner of Eska, in a letter dated August 25, 1970, that quantities of jackets in excess of the numbers ordered had been shipped.

 6. Driban further notified Klein in a letter dated September 24, 1970, that a certain number of garments in later shipments had a strong, offensive, cheese-like odor.

 7. Inspections by Peters employees revealed that a total of 4,639 jackets were overshipped, and 4,447 jackets had the offensive odor, for a total of 9,086 non-conforming garments.

 8. Peters received complaints and returns of jackets from its customers because of the odor.

 9. Peters paid Eska for the shipments of garments, less deductions totalling $ 115,115.63 for the 9,086 non-conforming jackets, and other minor problems with some of the conforming garments.

 11. In March, 1971, Sigmund Klein of Eska met at Peters' Philadelphia office with Maurice Petrosky, President of Peters, and Harry Paltin, Vice-President, and discussed disposition of the 9,086 alleged non-conforming jackets.

 12. The parties agreed that Peters had not accepted the 9,086 alleged non-conforming jackets, and that ownership of them remained with Eska. Peters never paid to Eska any portion of the purchase price for the 9,086 jackets.

 13. Peters offered to sell the overshipped goods if the invoice prices were reduced by $ 4.00 per jacket, but made no offer with respect to the odorous jackets.

 14. Although the Yugoslavian proceedings were mentioned, the parties did not agree that Peters would hold the jackets pending the outcome of those proceedings.

 15. Klein tentatively agreed to the sale of the overshipped jackets at prices $ 4.00 under the invoice prices, contingent upon approval by the Yugoslavian manufacturer. Based on this tentative agreement, Peters' salesmen began to offer the overshipped goods for sale.

 16. In early April, 1971, Klein cabled Peters advising that the Yugoslavian manufacturer had rejected Peters' offer to sell the jackets at a $ 4.00 reduction on the invoice prices.

 17. On April 16, 1971, Klein wrote to Peters to inform it that the Yugoslavian manufacturer was offering Peters a 15% discount against the invoice price of the jackets, provided that Peters would accept delivery of a group of jackets not yet shipped from Yugoslavia. This offer was rejected by a cable from Harry Paltin on May 4, 1971.

 18. On May 4, 1971, Paltin wrote to Klein and informed him that, based upon the tentative agreement reached at the March meeting, Peters had begun offering the jackets for sale. In a letter dated June 1, 1971, Klein reiterated that the Yugoslavian manufacturer would not accept a $ 4.00 price reduction on the overshipped goods. Following receipt of that letter, Peters cancelled orders on the jackets.

 19. Paltin complained to Klein in a letter dated December 8, 1971, that the jackets were occupying valuable space in Peters' warehouse, and that Eska would be liable for storage charges.

 20. In December, 1971, Eska authorized Impex International, an export-import firm, to take inventory of Eska's jackets in Peters' warehouse. Although there were communications between representatives of Impex International and Peters, no one visited Peters' warehouse to take inventory. In January, 1972, Peters sent Impex samples of the non-conforming goods.

 21. From December, 1971, to June, 1972, there was no communication between the parties about the jackets.

 22. By letter dated June 2, 1972, Paltin, on behalf of Peters, offered to purchase the jackets at a price of $ 4.00 each for the overshipped jackets, and $ 2.00 each for the odorous jackets. Paltin further informed Klein that storage charges to date amounted to $ 11,281.20.

 23. Klein replied to Paltin in a letter dated June 29, 1972, stating that he was leaving on vacation, and would not be able to get approval for Peters' offer from the Yugoslavian manufacturer until his return at the end of July.

 24. Sometime after receipt of Klein's June 29 letter, in the late summer or fall of 1972, Paltin and Petrosky decided to sell Eska's jackets. Peters did not give notice to Eska of its intention to sell the jackets.

 25. Sale of Eska's goods commenced sometime in late summer or fall of 1972 and continued until September 13, 1975 when the last jackets were sold. Peters gave no notice to Eska of any of those sales at or about the time they were made.


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