Harrington-Wiard Co. v. Blomstrom Manufacturing Co.

131 N.W. 559, 166 Mich. 276, 1911 Mich. LEXIS 513
CourtMichigan Supreme Court
DecidedJune 2, 1911
DocketDocket No. 102
StatusPublished
Cited by42 cases

This text of 131 N.W. 559 (Harrington-Wiard Co. v. Blomstrom Manufacturing Co.) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harrington-Wiard Co. v. Blomstrom Manufacturing Co., 131 N.W. 559, 166 Mich. 276, 1911 Mich. LEXIS 513 (Mich. 1911).

Opinion

Stone, J.

This is an action of assumpsit brought to recover damages for the breach of two contracts made by the parties, as hereinafter stated.

On the 9th of April, 1908, the defendant was engaged in the manufacture of automobiles. It entered into contract with the plaintiff company, which was a contracting machinist. By and under the terms of this contract the plaintiff was to build and construct 25 two-cylinder Gyroscope motors for the defendant for the sum of $2,412.50. It was to furnish all the materials and workmanship for the engines, with the exception of crank shafts, connecting rods, valves, main ball bearings, forgings, steel castings [278]*278for steering device, intake and exhaust water pipes. The latter materials were to be furnished by the defendant, which was also to furnish all materials necessary for building jigs and tools, and to pay, in addition to the contract price, 60 cents per hour for the work done upon the jigs and tools. From time to time, as the work progressed, the defendant was to advance to the plaintiff sufficient moneys to meet its pay rolls upon this work. Ten motors were built and delivered under this contract, and considerable other work is claimed to have been done, and materials furnished towards completing the 15 additional motors. On or about the 24th day of July, 1908, the plaintiff was instructed to cease manufacturing any more motors under the contract of April 9, 1908. Under this first contract the plaintiff claimed the value of each item that was manufactured, embracing the cost of material and labor, to be $1,256.75, and damage by reason of defendant’s failure to fulfill the contract in accordance with the terms thereof of $500 as reasonable profits on 15 motors not constructed.

On February 23, 1909, the second contract was made by the parties. Under the terms of this contract, the plaintiff was to manufacture for the defendant 300 small two-cylinder Gyroscope motors for the sum of $87 each, and deliver the engines as fast as completed and tested, and the defendant was to advance, from time to time, to the plaintiff, all pay rolls, and pay for all materials going into said engines when payment therefor should become due and payable. Fifty-two engines were delivered under this contract by the plaintiff to defendant. Some time in June, 1909, at the request of the defendant, the plaintiff suspended work under this contract. It was the claim that up to that time it had acquired a large quantity of material and expended a great amount of labor in manufacturing parts for the completion of the contract. Plaintiff’s statement of this material and labor appears as an exhibit in the case. That exhibit contains a statement of labor and material required to construct 248 Gyroscope motors under [279]*279the last contract. It aggregates $8,214.82, with the additional item of $1,500 for loss sustained as damages by reason of the cancellation of the contract. The bill of particulars in the case contains these two items, respectively, of $500 and $1,500 as damages for loss of gains and profits under the two contracts. There was a credit to the defendant allowed upon the trial of $4,954.08 in excess of the engines actually delivered.

On or about the 31st of August, 1909, the defendant entered into an agreement with Fred Postal and Henry Bowen by and under the terms of which it agreed to sell to said last-named parties, and to a corporation which was to be organized by them and their associates, all of its assets for a consideration therein named, and the said Bowen and Postal agreed as follows:

“We will not assume any debts or obligations of your company, founded on contract or tort, except for materials not delivered and agency contracts for machines to be delivered, such contracts we are to assume and carry out.”

On or about the 11th day of September, 1909, in accordance with the terms of this contract, said Postal and Bowen and their associates organized a corporation known as the “Lion Motor Car Company.” Mr. Bowen was elected president and general manager of this corporation at that time. Pending the negotiations for the transfer of the property of the defendant, as above contemplated, the plaintiff threatened to institute proceedings to prevent the transfer. Between the 19th and 31st days of August the attorney for the defendant had an interview with the general manager and treasurer of the plaintiff and its attorney, when he informed them of the proposition that had been made by Bowen and Postal, and stated that, if the proposition was accepted, Bowen, Postal, and their associates, when organized into a corporation, were to assume all contracts for materials which the defendant had. At this interview it was stated that the plaintiff would not allow any transfer until its matters with the defendant had been settled and adjusted, and attachment pro[280]*280ceedings were threatened. It was agreed that nothing should be done which would change the position of the plaintiff without notice to it. While these negotiations were pending, Mr. Wiard, the general manager and treasurer of the plaintiff, acting for it, was kept informed as to what was going on; and some time between the 1st and 10th of September, 1909, he was given a copy of the contract by the attorney of the defendant, who called Mr. Wiard’s attention to the fact that under the terms of the agreement the two contracts between the parties to this suit would be assumed by the purchasers of the plant, and that, as soon as the corporation was organized, it was going to begin business at Adrian, and continue the manufacture of the products of the defendant. In these conversations Mr. Wiard stated to the attorney for the defendant that all the plaintiff wanted was to have these contracts carried out. He did not care whether this was done by the defendant, Mr. Postal, Mr. Bowen, or the Lion Motor Car Company.

On the 16th day of August, 1909, Mr. Blomstrom resigned the position which he held as superintendent and manager of the defendant. On the same day he entered into the employment of Messrs. Postal and Bowen, and, after the organization of the Lion Motor Car Company, became the superintendent of its plant at Adrian, Mich., and continued in that position down to the time of this suit.

On the 11th day of September, 1909, immediately following the adjournment of the meeting at which the Lion Motor Car Company was organized, Mr. Bowen, Mr. Blomstrom, and others interested in the new company went to the office of the attorney of the plaintiff. The attorney was there informed that the corporation known as the Lion Motor Car Company had been organized, and that it had taken over the contracts for materials of the defendant, and Mr. Bowen said that in a few days he would be down and have some money. On the 16th day of September Mr. Bowen gave his personal check to the [281]*281plaintiff for $2,000, and the following paper was executed:

“ Memorandum of agreement made this 16th day of September, 1909, by and between Harrington-Wiard Company, a corporation in Detroit, Michigan, and Henry Bowen of Adrian, Michigan.
“Whereas, the said Harrington-Wiard Company hold a contract with the Blomstrom Manufacturing Company for the manufacture of motors, upon which has accrued accounts for material aggregating upwards of two thous- and dollars ($2,000.00).
“And whereas, said Blomstrom Company has failed to advance funds required sufficient to meet said obligations and the funds are required to go on with said work under the contract:

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Bluebook (online)
131 N.W. 559, 166 Mich. 276, 1911 Mich. LEXIS 513, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harrington-wiard-co-v-blomstrom-manufacturing-co-mich-1911.