24 N.W.2d 161 (Mich. 1946), 47, Salzman v. Maldaver

Docket Nº:47.
Citation:24 N.W.2d 161, 315 Mich. 403
Opinion Judge:STARR, Justice.
Party Name:SALZMAN et al. v. MALDAVER et al.
Attorney:[315 Mich. 406] Max Kahn, of Detroit, for plaintiffs, appellants, and cross-appellees. William A. Rhodes, of Detroit, for defendants, appellees, and cross-appellants.
Judge Panel:Before the Entire Bench.
Case Date:September 11, 1946
Court:Supreme Court of Michigan

Page 161

24 N.W.2d 161 (Mich. 1946)

315 Mich. 403

SALZMAN et al.

v.

MALDAVER et al.

No. 47.

Supreme Court of Michigan

September 11, 1946

[315 Mich. 405]

Page 162

Appeal from Circuit Court, Wayne County; Lila M. Neuenfelt, judge.

Before the Entire Bench.

[315 Mich. 406] Max Kahn, of Detroit, for plaintiffs, appellants, and cross-appellees.

William A. Rhodes, of Detroit, for defendants, appellees, and cross-appellants.

STARR, Justice.

Plaintiffs are engaged in business in New York City under the name of American Surplus Trading Company. Defendants are engaged in business in Detroit under the name of Michigan Salvage Company. On July 25, 1945, these parties entered into a contract which provided in part:

'Party of the first part (defendants) agrees to sell, and party of the second part (plaintiffs) agrees to buy a surplus lot of approximately 790,000 pounds of offal aluminum sheets, various types, gauges, shapes, and sizes, list attached, less approximately 40,000 pounds of 24 S. T. in .025, .032, and .040 gauge which are to be deleted from list, leaving approximately 750,000 pounds in lot, at 11 5/8 cents per pound. The party of the first part does not guarantee the accuracy of the list, and the items and sizes on the list are approximate. * * *

'Payment to be made as follows: $10,000 deposit, receipt of which is hereby acknowledged, total balance of purchase price to be paid within sixty days from this date.

'Material to be shipped in carload lots sight draft bill lading attached. Each carload is to be paid for at the rate of 11 5/8 cents plus 10 per cent. of 11 5/8 cents per pound as additional deposit. The above deposits are to be credited to last shipment or shipments.

Page 163

'It is understood that if the material is not shipped or paid for by party of second part within sixty days from date of this agreement, the party of the first part is to retain the deposits paid as liquidated damages. * * *

"Material located as follows:

Steel Terminal Company ........... App. 360,000 lbs.

Ford Motor Co. Willow Run plant ... " 225,000 lbs.

Ford Motor Co. Rouge plant ........ " 125,000 lbs.

Ford Motor Co. Lincoln plant ...... " 40,000 lbs.

'It is understood that the party of the first part will pay for the loading of this material in carload lots, F. O. B., their present locations. It is further understood that the party of the first part will pay the storage charges on the material now located at Steel Terminals Company for a period not to exceed sixty days from date of this agreement.

'Material located at Willow Run, Rouge and Lincoln plants are sold F. O. B. their present location. If shipping instructions are not received immediately, from party of second part, this material is to be shipped and stored at Steel Materials Company, at the expense of party of the second part.

'Party of the second part further agrees to pay all expenses of sorting sizes, gauges, or types if they so desire.

'The party of the second part has examined this material and understands that there are some odd-shaped pieces in this lot, such as half-moons and triangle shapes.'

Attached to the contract were nine pages showing the types, gauges, shapes, sizes, and amounts of aluminum covered by the contract. Trouble arose between the parties over the quality and condition of the aluminum, and in December, 1945, plaintiffs began the present suit for damages, They also caused writ of garnishment to be issued against several banks, including the Commonwealth Bank of Detroit. As the principal questions before the trial court and on this appeal relate to the allegations in plaintiffs' declaration, it is necessary to discuss the declaration in some detail. In the first count plaintiffs alleged the execution of the contract in question;[315 Mich. 408] that they had deposited with defendants the sum of $10,000; and that prior to the execution of the contract defendants had informed them that they had purchased the aluminum from the Ford Motor Company, which was disposing of it as surplus material. They further alleged:

'Plaintiffs informed defendants that plaintiffs would be interested in purchasing said aluminum sheets as a dealer, provided the same were suitable for resale for manufacture into aluminum articles for consumption by the public, such as kitchenware and utensils, ash trays, lamps, clocks, juwelry, and other articles manufactured in all or in part of aluminum, and in which the aluminum showed in its natural state. Defendants represented to plaintiffs that said aluminum sheets were suitable and fit for the manufacture of such articles and kindred articles; that said sheets were new but comprised a lot of miscellaneous, large aluminum sheets, varying as to thickness, whdth and length; that the sizes were not standard sizes and to some extent parts of sheets had been stamped out for other uses, leaving only a portion, but a substantial portion, of a sheet remaining; that all of said sheets were bundled, wrapped in waterproof paper and banded and fully protected against the weather and that each bundle contained sheets generally uniform as to thickness, length and width, that said aluminum sheets had been under roof in dry storage, had not been exposed to moisture or sweating, had not been exposed to the air or any other substance that would cause corrosion; that said sheets were not corroded; that the sheets were protected from each other against air, moisture and scratching by paper sheets and that all of said aluminum was suitable for the manufacture of kitchenware and utensils, ash trays and other articles for public consumption, such as lamps, clocks, ornaments, juwelry, picture frames and, generally, all articles manufactured in whole or in part of [315 Mich. 409] aluminum in which aluminum appeared in its natural state.'

Plaintiffs alleged that in the course of their negotiations prior to the execution of the contract, defendants took them to the warehouse in Deroit, where a part of the aluminum was stored, for the purpose of

Page 164

showing them that the bundles of aluminum sheets had been securely and properly wrapped against exposure to the weather. They alleged that the bundles were piled in the warehouse to a height of 10 to 15 feet and were wrapped with waterproof paper and banded with metal straps; that they were unable to make any proper inspection of the bundled sheets and relied entirely on defendants' representations that the bundles contained aluminum sheets which were fit and suitable for manufacturing purposes. They alleged that after the contract was executed, they resold a part of the aluminum sheets to the Aircraft Metal Company of New York and instructed defendants to ship the same; that when the shipment was received, plaintiffs were notified by the Aircraft Company that the sheets were corroded and wholly unfit for commercial use; that they immediately inspected the shipment and found that the sheets were scratched and corroded and could not be used for the manufacture of aluminum products. They alleged that after their examination of the shipment to the Aircraft Company, thty notified defendants to make no further shipments; that thereafter they inspected the bundles of aluminum sheets stored in the warehouse in Detroit and found that all of the sheets, except the top one in each bundle, were corroded and unfit for use. They further alleged that they notified defendants that they would not accept further shipments; that they demanded repayment of their deposit of $10,000 and [315 Mich. 410] notified defendants that they would hold them liable for damages for breach of contract.

In the second count of their declaration plaintiffs realleged their claims relative to the aluminum sheets' being corroded and unfit...

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