Commonwealth v. Beals

139 Misc. 785, 249 N.Y.S. 232, 1931 N.Y. Misc. LEXIS 1215
CourtNew York Supreme Court
DecidedMarch 27, 1931
StatusPublished
Cited by5 cases

This text of 139 Misc. 785 (Commonwealth v. Beals) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Commonwealth v. Beals, 139 Misc. 785, 249 N.Y.S. 232, 1931 N.Y. Misc. LEXIS 1215 (N.Y. Super. Ct. 1931).

Opinion

Lytle, J.

This action is brought to recover for labor performed in the construction of a public highway in the State of Pennsylvania. On or about January 9, 1929, the plaintiff’s father, Paul R. Beals, entered into a contract with the State of Pennsylvania for the improvement of a section of a highway located in Potter county. Pursuant to a statutory requirement the contractor was obliged to furnish a bond which, among other things, provided that the [786]*786contractor would well and truly pay for all labor performed and material furnished in the performance of said contract. The defendant Hartford Accident and Indemnity Company is the surety on that bond.

The provisions of the Pennsylvania statute applicable to the construction contract are found in section 142 of the Highways and Bridges Law of the State of Pennsylvania, and is also contained in Purdon’s Pennsylvania Statues, volume 36, section 142.

The defendant Hartford Accident and Indemnity Company moves to dismiss the action on the ground that this court has no jurisdiction over the subject-matter of the action and that the plaintiff has not the legal capacity to sue the action in the courts of the State of New York.

The primary question is whether the action is local in its nature, so as to render it cognizable only in the courts of the State of Pennsylvania. The contention of the defendant Hartford Accident and Indemnity Company is that the action is founded upon a liability created or provided for by statute and. that the statute also provided a remedy for that liability. If that be true, the remedy provided is exclusive of all others.

The statute in question provides, among other things, that the building of highways shall be by a contract and according to plans .and specifications prepared by the Highway Department, and provides further that the contract be let to the lowest responsible bidder with the privilege to the State of rejecting any and all bids. The statute also provides that the successful bidder shall furnish a bond in the sum equal to fifty per cent of the contract price, the condition of said bond to be that the contractor shall well and truly, and in a manner satisfactory to the State Highway Commissioner, complete the work contracted for and shall save harmless the Commonwealth of Pennsylvania from any expense incurred through the failure of said contractor to complete the work as specified, or from any damages growing out of the carelessness of said contractor or his or its servants. Another condition of such bond is that he shall well and truly pay for all material furnished and labor performed in the prosecution of the work contracted for.” Then follows the provision that any laborer or materialman who has not been paid shall have the right to intervene and be made a party to any action instituted by the Commonwealth of Pennsylvania on such bond and shall have the right to have his claim adjudicated and judgment rendered in that action subject to any prior claim or judgment of the Commonwealth. If the liability of the surety on that bond is insufficient to pay the amount of the claim, then, after the Commonwealth has been paid in full, [787]*787the remainder is to be distributed pro rata among the intervenors. Then comes the part with which we are particularly concerned on this motion. The next sentence provides that if no suit is brought by the Commonwealth within six months from the completion of the contract and final settlement, then any laborer or materialman upon furnishing affidavit to the Highway Department that his claim for labor or material has not been paid is entitled to be furnished with a certified copy of said contract and bond “ upon which he or they shall have a right of action and shall be and are hereby authorized to bring suit, in the name of the Commonwealth of Pennsylvania, for his or their use and benefit, against the said contractor and his sureties, and to prosecute the same to final judgment and execution.” It is clear from the foregoing that the laborer or materialman has no other or different cause of action, nor has he any cause of action in his individual right. It must be in the name of the Commonwealth of Pennsylvania. The next sentence provides that such action shall not be commenced until after the performance of the contract and the final settlement with the Commonwealth, but must be commenced within one year after the performance and settlement, and not later. Then follows a provision which makes that action not only the exclusive one for the particular creditor who commences it but also for all other creditors. The following is the provision: “ Where suit is so instituted by a creditor or creditors no other action shall be brought by any other creditor but any other creditor may file his claim in the action first brought and be made party thereto within one year from the completion of the work under said contract, and not later.”

It is further provided that if two or more actions are brought on the same day the action in which the largest amount is demanded shall be regarded as the first. Any creditor who has brought an action within the one year period of limitation after suit has been brought by another creditor may intervene in the first suit notwithstanding the fact that the intervention is after the expiration of the one year limitation provided it- be made within thirty days thereafter. If the recovery on the bond is inadequate to pay the amounts found due to the original and intervening creditors, the statute provides for a pro rata judgment. There is a further provision to the effect that the surety may pay into court for distribution among the creditors the full amount of its liability, less any amount which it has had to pay the Commonwealth of Pennsylvania, and upon doing so the surety will be relieved.

The statute further provides: “In all suits instituted under the provisions of this act, such personal notice of the pendency of such suits, informing them of their right to intervene, as the Court may [788]*788order, shall be given to all known creditors, and, in addition thereto, notice shall be given by publication in some newspaper of general circulation, published in the county or town where the contract was performed, once a week for at least three successive weeks.”

It has been repeatedly held in this State that a surety bond given pursuant to charter or statutory requirements by contractors is primarily for the protection of the State or the municipal corporation, and the protection of others is incidental or subordinate. (Johnson Service Co., Inc., v. Monin, Inc., 253 N. Y. 417; Fosmire v. National Surety Co., 229 id. 44; Newark Concrete Pipe Co. v. National Surety Co., 131 Misc. 718; Eastern Steel Co. v. Globe Indemnity Co., 185 App. Div. 695; affd., 227 N. Y. 586; Buffalo Cement Co. v. McNaughton, 90 Hun, 74; affd., 156 N. Y. 702.)

A requirement that the contractor furnish a bond for the payment of labor performed and materials furnished in the construction of the improvement under the contract has been held to be a proper exercise of legislative power of municipal corporations. The legislative bodies may also prescribe a means by which the individual members of the municipality and all other persons may be protected in their rights. (Wilson v. Whitmore, 92 Hun, 466; affd., 157 N. Y. 693.)

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Cite This Page — Counsel Stack

Bluebook (online)
139 Misc. 785, 249 N.Y.S. 232, 1931 N.Y. Misc. LEXIS 1215, Counsel Stack Legal Research, https://law.counselstack.com/opinion/commonwealth-v-beals-nysupct-1931.