Stanton v. Babor-Comeau & Co.

260 A.D. 831, 22 N.Y.S.2d 427, 1940 N.Y. App. Div. LEXIS 4871

Opinion

Appeal from a judgment dismissing upon the merits the complaint and counterclaims of the lienors herein. On January 31, 1933, the State entered into a contract with the defendant Babor-Comeau and Company, Inc., for the construction of a prison at Woodboume, N. Y. The ultimate contract price was $803,350.45. On January 4, 1935, the contractor defaulted and abandoned the work. It had then done work amounting to $673,918.31, against which it had received the sum of $620,300, the State retaining percentages amounting to something over $53,000. The State called upon the surety for the contractor to complete the work, and it did so at a cost of $193,114.54. The State paid the surety the sum of $183,050.45, the balance due on the contract including retained percentages. In the meantime liens had been filed for labor and materials furnished to the defunct contractor. These lienors claim a paramount right to the balance of $183,050.45, the amount paid to the surety for the completion of the work. The facts are not disputed and the controlling question before the official referee was whether the State cancelled the contract. If it did so then there was no fund available to which the hens might attach. The surety, upon completing the work, became subrogated to the rights of the State. (Slattery v. National Commercial Bank & Trust Co., 247 App. Div. 221; Arrow Iron Works, Inc., v. Greene, 260 N. Y. 330; Scarsdale National Bank & Trust Co. v. United States F. & G. Co., 264 id. 159.) The referee has decided that there was a cancellation by the State, and the undisputed facts support this decision. The ease of Wilson v. Moon (240 App. Div. 440) is distinguishable upon the facts, and not in point upon the situation presented here. Judgment unanimously affirmed, with costs. Present — Hill, P. J., Crapser, Bliss, Heffernan and Foster, JJ.