231 Pa. Super. 357 | Pa. Super. Ct. | 1974
Opinion by
This appeal arises from the lower court’s granting of a motion for a directed verdict in favor of third party defendant, Ponnock & Sons, on the claim raised in the third party complaint of Hanscom Bros., Inc. Hanscom Bros, asserts that the directed verdict was erroneously granted and that it, therefore, is entitled to a new trial. We agree and will reverse and remand for a new trial.
The facts giving rise to the claim set forth in Hans-com’s third party complaint are not in dispute. Hans-com Bros, is a Philadelphia retail variety store which did business with Ponnock & Sons, a wholesaler. Among the items which it purchased from Ponnock’s was a line of vinyl squeeze toys of the type frequently seen in the playpens of infants. In the ordinary course of Hanseom’s business, those toys would be resold to
All parties conceded that the whistle in the base of the toy, which caused the toy to squeak when it was squeezed, fell into the boy’s throat and lodged in his windpipe causing his death.
Mr. Kelly, acting as administrator for his son’s estate, perfected a claim against Hanscom Bros, for wrongful death based upon both Section 402A of the Restatement of Torts, Second, and U.C.C. § 2-314. Hanscom Bros, brought in Ponnock & Sons, charging breach of the implied warranty of merchantability under Section 2-314 of the Uniform Commercial Code. Since the firm which sold the toy to Ponnock’s was a Japanese concern, and presumably not amenable to process in Pennsylvania, no further parties were joined.
Shortly before trial the original plaintiff, Kelly, entered a settlement agreement whereby both Hanscom Bros, and Ponnock & Sons agreed to pay $10,000 each to the estate of his son. The agreement also provided that it did not affect the rights of Hanscom and Ponnoek, inter se. Trial was held on the third party complaint, and the contested motion for a directed verdict was entered in favor of Ponnock on the theory that, as between two equally culpable and passively negligent tortfeasors, neither is entitled to be indemnified by
U.C.C. § 2-314
The more difficult question concerns the proper measure of damages for that breach on the facts of this case. What confused the court below was the parties’ insistence on characterizing that measure of damages as an “indemnity.” Use of that misleading term resulted in the interjection of a host of principles and maxims which have no relevance to a cause of action in assumpsit. The fact that, from the standpoint of tort law, two intermediaries in the chain of distribu
The issue, therefore, is whether consequential damages in the amount of $10,000 may be awarded to Hanscom Bros, because of the breach of the implied warranty of merchantability by Ponnock & Sons.
U.C.C. § 2-715 provides: “(2) Consequential damages resulting from the seller’s breach include (a) any
In the instant case the goods were sold under warranty to Hanscom Bros, with the knowledge that they would be resold to Hanscom’s customers. As our Supreme Court has stated: “Where goods are sold with a warranty to a dealer it must be assumed that the dealer may resell them with a similar warranty to a subpurchaser. Accordingly if this is done and the subpurchaser recovers damages from the original buyer, the latter has a prima facie right to recover these damages against the seller who originally sold him the goods.” Elliolt-Lewis Corp. v. York-Shipley, Inc., 372 Pa. 346, 350 (1953), quoting Wolstenholme, Inc. v. Jos. Randall & Bro., 295 Pa. 131, 136 (1929). See also 5 Corbin on Contracts § 1015 (1951). Hence, a buyer for resale may recover damages arising from suits by his customers: Farrey’s, Inc. v. Supplee-Biddle Hardware Co., 103 F. Supp. 488 (E.D. Pa. 1952).
It is not unusual for liability to move transactionally up the chain of distribution until the manufacturer ultimately pays for its breach of its implied warranty of merchantability to the distributor to whom it initially sold the goods. Indeed, it is ironic that such a situa
12A P.S. § 2-314 (1970).
The parties agreed that the toy was in the same condition when it was sold to Mrs. Kelly as it was when it was purchased by Hanscom Bros.
“Damages for breach of the warranty would be those resulting from the breach in the ordinary course of events. Normally, the damages for such a breach are measured by the difference between the value of the goods accepted and their value as warranted, at the time and place of acceptance. But special circumstances showing proximate damages of a different amount will alter the rule, permitting incidental and consequential damages to be recovered in a proper case.” Wisniewski v. The Great Atlantic and Pacific Tea Company, 226 Pa. Superior Ct. 574, 579-580 (1974).
9 Ex. 341, 156 Eng. Rep. 145 (1854). See J. Summers & R. White, Uniform Commercial Code 324 (1972).
The vertical privity requirement was abolished in Pennsylvania in Kassab v. Central Soya, 432 Pa. 217 (1968).
The horizontal privity requirement was recently abolished in Pennsylvania in Salvador v. I. H. English, Inc., 457 Pa. 24 (1974) ; same case, 224 Pa. Superior Ct. 377 (1973).
R. Nordstrom, Law of Sales 283 (1970).
There is no need to discuss problems concerning the “tacit agreement test” for determining the propriety of allowing consequential damages. See Keystone Diesel Engine Co., Inc. v. Irwin, 411 Pa. 222 (1963); Globe Refining Co. v. Landa Cotton Oil Co., 190 U.S. 540 (1903). In the instant case, that problem was neither briefed nor argued by the parties. In any event, on the facts of this case the interposition of the tacit agreement test, which is explicitly rejected by the Uniform Commercial Code (U.C.C. § 2-715 (2), Comment 2), would not lead us to a different result.