Seglin Construction Co. v. State

249 A.D. 476, 293 N.Y.S. 205, 1937 N.Y. App. Div. LEXIS 9621
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJanuary 21, 1937
DocketClaim No. 19892; Claim No. 22029
StatusPublished
Cited by7 cases

This text of 249 A.D. 476 (Seglin Construction Co. v. State) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Seglin Construction Co. v. State, 249 A.D. 476, 293 N.Y.S. 205, 1937 N.Y. App. Div. LEXIS 9621 (N.Y. Ct. App. 1937).

Opinion

Rhodes, J.

The claims herein are founded basicly upon matters growing out of a contract made between the State of New York and the Seglin Construction Company, Inc. (hereafter referred to as Seglin Company), for the construction of the State Office Building in the city of Albany, N. Y. The other claimants were subcontractors of said company.

Chapter 5 of the Laws of 1926 created a Commission, to be known as “ The State Office Site and Building Commission,” for the purpose of procuring a site in the city of Albany for an office building. By chapter 4 of the Laws of 1927, said Commission was authorized to construct. an office building for the State upon such site. Pursuant thereto and about February 1, 1927, the Commission, in behalf of the State, entered into said contract with the Seglin Company for the construction of the foundation, steel frame work and exterior of said office building and thereafter, with the approval of the State, the Seglin Company entered into contracts with the above-named claimants, subcontractors and others, for the performance of various portions of the work to be done under the main contract. By the terms of its contract Seglin Company was to complete its contract by September 1, 1928.

[478]*478It is undisputed that after work of excavating had proceeded for a short time the State concluded that the plans prepared by it for the foundation would not provide for an adequate and proper foundation and, therefore, the State ordered the suspension of further work pending the preparation of further plans and designs for the foundation. The court below has found that the effect was to stop all work on the job until further instructions.

New plans were prepared by the State, involving a radical change in the design of the foundation with vast additional work connected therewith. It is principally because of the damages caused by these changes and the delay incident thereto and for extra work and materials necessitated by the change in design that the claims herein have been made.

An enabling act, chapter 692 of the Laws of 1931, was passed, entitled: An Act to confer jurisdiction on the Court of Claims to hear, audit and determine certain claims against the State, by contractors, subcontractors and others, arising out of alleged delays, interferences and acts of the State in the construction of the State Office Building at Albany, and to render judgment or judgments therefor.”

The first question to be considered arises out of the contention of the State that the enabling act is unconstitutional, in so far as the various subcontractors are concerned. Owing to its length the act is not quoted in full here, but its salient features are that it confers jurisdiction upon the Court of Claims to hear, audit and determine the claims of the Seglin Company and of the subcontractors against the State for work performed and materials furnished, and for damages alleged to have been sustained by reason of breach of contract upon the part of the State, failure of the State to furnish claimants with the site of the work to enable them to proceed with the construction and progress the same, and by reason of delays, interferences with and interruptions to said construction work caused by the State, its officers and agents, in carrying out [the said contract of the Seglin Company] * * * and the State consents to have the liability, if any, of said contractor to said subcontractors, and the liability of the State to all said claimants determined in one proceeding by said court. * * * and the court may award to and render judgment for the claimant, Seglin Construction Company, Incorporated, in such sum or sums as it shall find to be just and equitable, including therein such damages as shall have been found by the court to be a legal liability of Seglin Construction Company, Incorporated, to any or all of said subcontractors, claimants.”

[479]*479Counsel for the State bases the claim as to unconstitutionality in part upon the fact that the enabling act permits subcontractors to present their claims to the Court of Claims, although the Seglin Company was the only one with whom the State had any contractual relation; also that the act empowers the Court of Claims to hear and determine any controversies existing between the principal contractor and the subcontractors arising out of the construction in question and in case the court finds liability on the part of the Seglin Company to the subcontractors then judgment is permitted to be entered against the State for these amounts. The State argues that ordinarily there is no liability to a subcontractor on the part of the owner or builder for delays, the only liability of the owner of the building being to the main contractor.

It appears also that the above subcontractors, except A. B. Norton, Inc., have executed so-called releases to the Seglin Company discharging it from all claims for the damages herein sought by the subcontractors, such damages being claimed by the subcontractors against the State directly. In consideration of such releases and by the terms thereof, the Seglin Company agreed to present the claim of each said subcontractor for damages alleged to have been sustained by it at the hands of the State of New York, because of delay in the execution of its contract with Seglin Construction Company, Inc.,” and the Seglin Company promised in said releases to demand payment of said claims and to prosecute them to a determination in the Court of Claims if necessary. . -

The claims of the subcontractors are alleged to be directly against the State for damages for delay caused solely by the act of the State, whereby the subcontractors were prevented from performing their contracts within the time specified thereby. The State claims that the subcontractors, having no contractual rights with the State and having released the Seglin Company from liability, have no claim based upon any legal right as against the State, and that such claims are, therefore, barred by section 9 of article 8 of the State Constitution, which provides that “ Neither the credit nor the money of the State shall be given or loaned to or in aid of any association, corporation or private undertaking;” the contention of the State being that the claims of the subcontractors are not founded on justice and equity and are not supported by a moral obligation sufficient to remove them from the ban of said provision of the Constitution.

L In support of this point the case of Ausable Chasm Co. v. State of New York (266 N. Y. 326) is cited as directly applicable and determinative of the question involved. The claim in that case, however, was for the amounts expended by the claimants for the [480]*480construction of a bridge over the Ausable river, said bridge forming a connecting link in a State highway. The bridge had been built by private individuals to suit their own purposes without any request or inducement whatever on the part of the State or any of its officials, and it was held that no liability existed therefor against the State in favor of said individuals.

The situation is vastly different in the matter now before us. (See Williamsburgh Savings Bank v. State of New York, 243 N. Y. 231; Wheeler v. State of New York, 190 id. 406; O’Hara v. State of New York, 112 id. 146.) Here the contractors were compelled to stop work under their contracts by the compulsion of the State and its officials, and the damages to the claimants were the direct result.

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Bluebook (online)
249 A.D. 476, 293 N.Y.S. 205, 1937 N.Y. App. Div. LEXIS 9621, Counsel Stack Legal Research, https://law.counselstack.com/opinion/seglin-construction-co-v-state-nyappdiv-1937.