New York Trap Rock Corp. v. National Bank

260 A.D. 1035, 24 N.Y.S.2d 426, 1940 N.Y. App. Div. LEXIS 5959

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: December 16, 1940
• Status: Published

Opinion

In an action for money had and received the plaintiffs sue to recover unpaid balances due them for materials furnished under a contract for a public improvement. The complaint alleges that the defendant bank, in which the contractors deposited the final payment received by them from the New York City Parkway Authority, paid the entire fund to itself on account of an indebtedness owing to it by the contractors. Defendant moved to dismiss the complaint for failure to state facts sufficient to constitute a cause of action and the motion was denied. Order, in so far as appealed from, reversed on the law, with ten dollars costs and disbursements, and motion granted, with ten dollars costs. It does not appear that any of the plaintiffs had filed hens. Hence they acquired no rights under sections 25 and 25-a of the Lien Law. (Amiesite Constr. Corp. v. Luciano Contr. Co., 284 N. Y. 223.) Under the construction placed upon the statute in that decision, the funds received by a contractor do not acquire the character of trust funds unless and until a hen is filed while the funds are in the contractor’s hands. The plaintiffs are, therefore, in the position of ordinary creditors of the contractors, and the complaint alleges no facts from which the conclusion could be drawn that their claim is superior to that of the defendant. Lazansky, P. J., Hagarty, Carswell, Taylor and Close, JJ., concur.