Sparr Construction Co. v. Dearborn Heights Building Authority

144 N.W.2d 659, 4 Mich. App. 153, 1966 Mich. App. LEXIS 509

• Court: Michigan Court of Appeals
• Decided: September 13, 1966
• Docket: Docket 1,106
• Status: Published

Opinion

T. Gr. Kavanagh, J.

Although the late Judge Watts heard oral arguments on this case, his death occurred prior to preparation of the final opinion.

The City of Dearborn Heights Building Authority, entered into a contract with the plaintiff, Sparr Construction Company, for the completion of the architectural trades contract for two library buildings for $162,255.

Under the contract Sparr was required to furnish a performance bond and a payment bond. Sparr obtained these bonds from Maryland Casualty Company. After Sparr completed the building, it demanded payment. On Dearborn’s refusal to pay, Sparr brought this action to recover the balance of $8,252.69 due on the contract.

Sparr claimed Dearborn owed it the money. Dearborn answered admitting it owed somebody the money but that Maryland also claimed it and Dearborn accordingly filed a counter complaint for interpleader asking to pay the money into court. Maryland’s answer set' up that it was or might be liable to claims by Sparr’s subcontractors and mate rialmen, and it filed a cross-complaint asking for the money dne.

The basis for Maryland’s demand is the agreement on the part of Sparr contained in the application for the bonds that would effect an assignment of all of Sparr’s rights under the construction contract in the event Sparr defaulted giving rise to claims against Maryland.

Sparr’s motion for summary judgment was granted ordering Dearborn to issue seven individual checks, totaling $8,252.69, to plaintiff Sparr, each check to have added as payee thereon the contractors listed in the summary judgment, in the amount listed.

Maryland appeals asserting that if anyone should have a summary judgment it should be Maryland. While we are unwilling to go that far we do hold that the trial court erred in granting Sparr’s motion for summary judgment. By so doing, the trial court precluded Maryland from establishing Sparr’s default which would entitle Maryland to the proceeds of the Dearborn contract under Sparr’s agreement with Maryland. This could he established only by a trial of the factual issues.

If upon a hearing on the merits Maryland proves that Sparr did in fact default, the assignment provision should control. On receipt of the amount due under the Dearborn contract, Maryland could then exercise its right to determine the validity of the various claims made against it by the subcontractors.

However, the determination of this question is for the trial court. The sum due on the contract cannot be rightfully awarded to Sparr or to Maryland until this question is resolved.

The City of Dearborn Heights Building Authority, in their counter complaint for interpleader, prayed that they he given leave to pay the balance due under the contract into court and that they he discharged from all liability to Sparr and Maryland. This they should have been permitted to do. The amount due on the Dearborn contract is not in dispute. Dearborn, Sparr, and Maryland all agree that the amount due on the Dearborn contract is $8,252.69. * The actual dispute is between Sparr and Maryland as to who has prior right to the sum.

The summary judgment is set aside, the cause remanded for trial, and we also direct that an order discharging the City of Dearborn Heights Building Authority be entered and that they be granted leave to pay the $8,252.69 into court to await litigation of the aforementioned questions.

Maryland may tax costs.

Lesinsiii, P. J., concurred.

* There appears to be a discrejiancy of $50.81 between the agreed amount due on the contract and the total of the claims allowed.