No. 78 March Term 1979, Appeal from the Order entered on January 24, 1979 of The Superior Court of Pennsylvania, sitting at Pittsburgh, at No. 792 April Term, 1978, from the Decision of the Court of Common Pleas of Allegheny County, Pennsylvania, Civil Division, at No. G.D. 75-8319 -- In Assumpsit. Appeal allowed May 4, 1979 at No. 1889 Allocatur Docket
Alvin J. Ludwig, M. Victoria Geddis, Ludwig, Schauffler, Klein & Geddis, Pittsburgh, for appellant.
Thomas W. Trimm, James A. Prostko, Pittsburgh, for appellee.
Eagen, C. J., and O'Brien, Roberts, Nix, Larsen, Flaherty and Kauffman, JJ. Roberts, J., filed a concurring opinion in which Eagen, C. J., joins. Larsen, J., concurs in the result. Kauffman, J., filed a dissenting opinion.
This is an appeal from an Order of the Superior Court*fn1 which reversed an Order of the Court of Common Pleas of Allegheny County holding in favor of appellant, Ohio Valley
Provision Company (Buyer), in an action for breach of contract brought by appellee, Atalanta Corporation (Seller). Seller, engaged in the business of distributing meat products to processors, brought suit to recover damages for the alleged failure of Buyer, a large meat processing business, to provide a bank guaranty to secure payment for a quantity of meat ordered from Seller.
In January, 1974, Seller's salesman solicited from Buyer a $19,000 order for Irish beef trimmings. Subsequently, the salesman requested that Buyer furnish a bank guaranty securing payment of the purchase price and, consequently, on February 20, 1974, Buyer's bank sent a letter to Seller containing language identical (except for date and dollar amount) to the subsequent letter dated May 8, 1974 which appears hereafter. On February 22, 1974, Seller's credit manager received the letter but was dissatisfied with the language therein because of an ambiguity as to whether the letter constituted a guarantee or a mere credit reference. The credit manager telephoned the president of Buyer's bank who said the letter was a guarantee. The Irish beef trimmings were then released to Buyer in March of 1974 and payment was made by Buyer.
On or about February 22, 1974, the same salesman solicited a much larger order for a $33,000 sale to Buyer of Australian Shank Meat. A written confirmation of sale containing the words "bank guarantee due prior to delivery" was mailed to Buyer but due to an incorrect address was never received. On May 8, 1974, when no bank guarantee had been forthcoming, the salesman visited Buyer and demanded such a guaranty. Buyer's president agreed to have one furnished, dispatched the salesman to go the bank, and telephoned ahead to the bank's vice president instructing him to prepare a guaranty. While at the bank, the salesman telephoned Seller's credit manager who stated he wanted a letter of credit from the bank rather than a bank guarantee. Buyer's president, however, declined to agree to have a letter of credit supplied so the following letter was sent by the bank instead: