United States Gypsum Co. v. Zacks , 236 Mich. 698 ( 1926 )

On July 31, 1922, plaintiff entered into a written contract with defendants Zacks and Lerner (hereafter called the defendants) wherein it agreed to furnish the material for and erect the interior tile partitions in a building then being constructed in Hamtramck, according to the plans and specifications which had been prepared therefor. The defendants, who were subcontractors under the defendant Ross, the general contractor, agreed to pay plaintiff for such material and work the sum of $910, payable as follows:

"On or before the tenth (10) day of each calendar month eighty-five (85%) per cent. of the value of all materials delivered upon the premises of the purchaser by the contractor, and of work performed by the contractor, during the next preceding calendar month. Final payment to be made within thirty (30) days after the completion of said tile partitions by the contractor. If the contractor is unable to complete all work embodied in this contract due to delays by the purchaser or by other trades or for any cause beyond the control of the contractor, full payment shall be made to the contractor on the last day of the month for all materials delivered and for all work performed during previous months."

On the same day another written contract was entered into by the same parties wherein the plaintiff agreed to furnish the materials and erect the "tile roof deck" over the building according to such plans and specifications, for which it was to, receive from the defendants the sum of $3,035, payable in the manner above provided for the tile partitions.

In August and September, 1922, the material necessary for the construction of the partitions and roof was shipped by plaintiff to Detroit and conveyed by its agents to the building. Soon after, plaintiff's salesman, accompanied by its construction superintendent, visited the building and had a conversation with the defendant Zacks about the work. In answer to a later inquiry over the telephone, Zacks said that he was not being paid by Ross and that plaintiff should not begin until notified to do so. On December 4th, Zacks notified plaintiff's agent that defendants intended to file a lien for the material furnished and work done by them and that plaintiff should not proceed with its work. The defendants soon after filed such lien, and included in it the cost of the partition and roofing tile which plaintiff had placed in the building. It was stipulated by counsel that the profit which plaintiff would have made, had it been permitted to perform its contracts, would have been $882.50.

Plaintiff brought this action to recover the cost of the material furnished by it and its loss of profit, and recovered judgment for $2,763.44, which defendants here review by writ of error.

Defendants' counsel insisted upon the trial and urge here that the court was in error in not holding that it was the duty of the plaintiff, when advised that it could not proceed with its work under the contracts, to minimize its loss by retaking possession of the tile and selling them at the best price obtainable therefor, and in refusing to admit proof relating thereto.

Plaintiff furnished this material under its contracts. The time of payment therefor was agreed upon, and had elapsed before the date when plaintiff's agent was told not to proceed with the work. The cost of the material was thus segregated from the labor cost. Defendants included the amount in the lien filed by them, and had a suit pending to foreclose such lien at the time of the trial. The trial court was clearly right. The defendants might have disposed of the tile, but chose to obtain the cost thereof in the proceedings to enforce their lien.

Plaintiff was entitled to recover its loss of profits.Federal Bond Mortgage Co. v. Burstein, 222 Mich. 88, 92, and cases cited.

The judgment is affirmed.

BIRD, C.J., and SNOW, STEERE, FELLOWS, WIEST, CLARK, and McDONALD, JJ., concurred.