W W Leasing Unlimited v. Torok Exploration, Mining and Construction Co., Inc., and John Torok

The sole issue in this appeal is the appropriate measure of damages for breach of contract. ' We affirm in part and reverse and remand in part.

Torok Exploration, Mining and Construction Co. (Torok) ordered a front-end loader from Conexco, Inc., d.b.a. Sierra Machinery &' Industrial (Sierra). When financing proved unavailable, Sierra agreed to rent the loader to Torok for six months with an option to purchase. On April 17, 1973, To-rok took possession of the loader, which cost $57,165.00. Eight months later Torok was still unable to finance the purchase, and Sierra moved to terminate the arrangement. Torok entered into an agreement with W W Leasing Unlimited (W W) whereby W W purchased the loader from Sierra and leased it to Torok. A simultaneously executed agreement provided for Sierra to repurchase from W W in the event of default by Torok. To finance the purchase W W borrowed $42,079.89 — arrived at by subtracting $15,350.15 that To-rok had paid under the rental agreement from the original purchase price — from Wells Fargo Bank, assigning the lease to the bank as security.

Torok defaulted after five months and W W repurchased the lease from the bank for $39,975.90, the amount…