Buying a broken tool means the original owner for whatever reason chose not to make a warranty claim on that tool when it was broken. As the present owner of the tool, perhaps I choose to make that warranty claim. It shouldn't matter to Sears how much I paid for the tool, be it $1 or $100.
Sears was paid the full amount asked for that tool when it was sold new, and they entered into the warranty contract. How are they getting screwed having to fulfill that warranty when a claim is made by the present owner of the tool?
If the warranty specifically stated that it only applied to the original purchaser, or was otherwise non transferable, that's a different story.