On May 2, 1941, James A. Carrig (plaintiff) hired Gilbert-Varker Corporation (Gilbert-Varker) (defendant) to construct thirty-five houses. A written contract included a schedule that set forth the price apportioned to each house. The contract provided that Carrig would take out separate mortgages on each lot and transfer the proceeds of each mortgage to Gilbert-Varker. Gilbert-Varker was to commence construction on each house once it received the proceeds of each mortgage. Gilbert-Varker would be paid for each house as certain stages of construction were reached. Final payments were to be paid to Gilbert-Varker upon completion of each house. Gilbert-Varker ultimately completed twenty houses but refused to construct the remaining fifteen houses. Carrig brought suit to recover for Gilbert-Varker’s breach, based upon Gilbert-Varker’s refusal to build the final fifteen houses and for allegedly failing to build the twenty houses in accordance with the contract’s plans and specifications. An auditor determined that Carrig was not entitled to recover for the construction of the twenty houses, but was entitled to $9,935.00 for Gilbert-Varker’s refusal to build fifteen houses. Accordingly, judgment was granted to Carrig for $9,935.00. Gilbert-Varker brought a cross-action to recover amounts due for its construction of the twenty houses. The auditor found that Carrig owed Gilbert-Varker $2,816.35 in unpaid fees for the twenty houses, but that Gilbert-Varker was not entitled to recover this amount due to its refusal to build the last fifteen houses.