New Amsterdam Casualty Co. v. Sokolowski

In 1953, Joseph Sokolowski, one of the defendants in this case, contracted with the Detroit school board to do certain work on a school, on which contract plaintiff New Amsterdam- Casualty Company gave the performance bond. Sokolowski became financially embarrassed. He notified the school board and plaintiff that he was unable to continue, being then indebted to subcontractors in excess of $18,000.

Sokolowski and others formed a Michigan corporation known as American Plumbing & Heating, Inc. On September 15,1954, this corporation agreed to complete Sokolowki’s contract. A new contract between…