Tessler v. Rothman

• Decision Date: 16 July 1925
• Docket Number: June Term.,No. 49,49
• Citation: 232 Mich. 62,204 N.W. 694
• Parties: TESSLER v. ROTHMAN.
• Court: Michigan Supreme Court

232 Mich. 62

204 N.W. 694

TESSLER

v.ROTHMAN.

No. 49, June Term.

Supreme Court of Michigan.

July 16, 1925.

Error to Circuit Court, Oakland County; Frank L. Covert, Judge.

Suit by Morris H. Tessler against Elias M. Rothman. Verdict for plaintiff. From a judgment granting defendant's motion for judgment non obstante veredicto, plaintiff brings error. Affirmed.

Argued before McDONALD, C. J., and CLARK, BIRD, SHARPE, MOORE, STEERE, FELLOWS, and WIEST, JJ.Bigelow & Rankin, of Detroit, for appellant.

A. W. Sempliner, of Detroit, for appellee.

MOORE, J.

The trial judge stated the questions in this case so clearly in an opinion filed when he granted a judgment non obstante veredicto that we quote from it as follows:

‘This is an action in assumpsit brought by the plaintiff to recover the balance claimed to be due on an oral contract for labor and material furnished in the erection of a building on property of the defendant. It is the claim of plaintiff that on or about the 27th day of May, 1919, he entered into a written contract with defendant to build a certain brick building on property belonging to the latter, the contract price being $8,500; that he began work under the contract, and that in October, 1919, finding that he was unable to complete the contract because of increase in the price of materials, etc., he advised the defendant of his intention to throw up the contract. That defendant thereupon asked him to go ahead and finish the building, agreeing to compensate him for materials and labor furnished, and also to pay him an additional sum equal to 10 per cent. of the entire cost of the work on the said building and the materials furnished therefor.

‘Defendant filed a plea of the general issue, and gave notice that he claimed as a matter of defense under such plea that no such second oral contract was made; that certain liens for materials had been filed against the property more than sufficient to overcome the balance due plaintiff upon the original written contract.

‘He further gave notice, under such plea of the general issue, that the matter in issue had been fully adjudicated in the case of the People's Lumber Company, as plaintiff, and plaintiff and defendant herein as defendants, being No. 75722 in the Wayne circuit court in chancery.

‘The instant case was heard before the court and a jury, and a motion was made by counsel for defendant asking the court for a directed verdict in his favor because of such former adjudication, and for other reasons.

‘The ruling was reserved on the motion, and the case submitted to the jury under the provisions of section 14568 of the Compiled Laws of 1915; the jury rendering a verdict in favor of the plaintiff for $4,402.80.

‘Subsequently the defendant filed a motion for judgment for defendant non obstante veredicto.

‘A certified copy of the files in the Wayne county case was offered and received in evidence. From such record, it appears that a bill was filed in the Wayne circuit court on or about the 20th day of February, 1920. The People's Lumber Company, as plaintiff, to foreclose a mechanic's lien upon defendant's property, claiming that they had furnished to plaintiff Tessler, a certain amount of lumber, under a contract between Tessler and Rothman for the erection of a building upon Rothman's property, and making both plaintiff and defendant herein defendants in such action. Summons was served upon defendant, Tessler, but his appearance was not entered, and subsequently his default was taken, although he appeared as a witness at the hearing. The case was heard before the circuit court for the county of Wayne, and a decree was entered thereon on the 11th day of January, 1921, reciting that the case came on to be heard on the bill of complaint and answer of defendant Elias Rothman, the default of Tessler having been taken. The decree further recites, among other things, the following:

‘Upon due consideration thereof the court doth find that upon the 27th day of May, 1919, the defendant Rothman entered into a written contract with the defendant Tessler whereby the defendant Tessler agreed to do the carpenter work for four stores and flats on the premises hereinafter described for the sum of $8,500; and the court doth further find that said contract was the only existing contract between the said parties until the time that said defendant Tessler abandoned the work under said contract, shortly after November 21, 1919; and that no other or different contract was ever entered into by the defendants Rothman and Tessler in regard to said work, and further found that Rothman had paid defendant Tessler $5,400 on his written contract of $8,500; that he had also paid for the completion of the work; after the abandonment of the contract by Tessler, $486.75; and that the amount then due to Tessler from Rothman was $2,623.25; that said $486.75 was paid by Rothman without securing sworn statements, as provided for by the Mechanics' Lien Law, and because of such failure the total amount subject to lien was $3,200, and a lien was decreed for that amount on the property of defendant Rothman.

‘It is the contention of the plaintiff that this decree was not an adjudication of the matters involved in this case. However, in the case of Kerns v. Flynn, 51 Mich. 573, 17 N. W. 62, the opinion reads as follows:

“The case of subcontractors involves inquiry into the relations and state of accounts existing between the defendant and the original contractors, and into the contract relations and state of accounts existing between said original contractors and subcontractors. Both kinds of inquiry are indispensable. It is a fundamental implication of the remedy that an indebtedness from the defendant and in favor of the original contractors must be found and adjudicated. Without it there can be no basis for relief to the subcontractors. The right of lien must be ascertained, and the rights and liabilities of the different parties, so far as they pertain to the subject, must be inquired into and liquidated. The fact of a lien and the fact of liability or indebtedness may actually exist, but they must be adjudged to exist as a preliminary to their enforcement. They can never be taken for granted. So long as a claim is unadjudged it cannot be enforced and there is no law for making such investigations and decisions in the absence of the parties. They must have an opportunity to be heard, and if they do not have it they will not be bound. The doctrine is elementary, and citations are unnecessary;' which clearly made it necessary, in the mechanics' lien case, to make the principal contractor, Tessler, a party to the action, and also made it necessary for the court to determine what the contract relations between Tessler and Rothman were, and how much was due Tessler under such contract.'

‘The files in the case disclose that the claim of the People's Lumber Company was $3,683.21, and, had there been an additional sum due from Rothman to Tessler, the court would have undoubtedly decreed a lien for that amount. But, inasmuch as the court found that the only contract existing between Tessler and Rothman was a written one for $8,500, and that the balance remaining unpaid on such contract plus the sum of $486.75 was $3,200, he gave the lumber company a decree for that amount only.

‘The files in that case further disclose that some of the materials were furnished by the People's Lumber Company in November, 1919, which was some weeks subsequent to the time Tessler claims the oral contract was made, which would make it still more necessary for the Wayne circuit court to determine what contracts were in existence at that time.

‘In view of these facts and the decision above referred to, I am satisfied that the motion of defendant for a judgment non obstante veredicto is well founded, and the same will be granted and judgment entered accordingly.’

The case is brought into this court by writ of error.

It may be well to state at the outset that the instant case was commenced July 26, 1920, while the chancery case to which reference is made by the trial judge was commenced February 20, 1920, and the decree was not entered therin until January 11, 1921.

We quote from the brief:

‘The plaintiff insists: (1) That in the said lien suit of the People's Lumber Company v. Elias M. Rothman and Morris H. Tessler the pleadings in no way involved the issue in the case at bar, as between the parties to this suit; that in the said lien suit the issue in the case at bar was not raised or determined; and that the said decree in the said lien suit is not res judicata as to the issue involved in this suit. (2) That the said circuit court erred in entering judgment of no cause of action in favor of the defendant in this suit notwithstanding the said verdict in favor of the plaintiff, and that said judgment ought to be set aside and a judgment entered on the said verdict for the plaintiff.’

The principle for which the plaintiff contends in this case is well stated in 15 R. C. L. p. 972 (section 449), as follows:

‘While a judgment is decisive of...