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Daniel-Morris Co., Inc. v. Glens Falls Indem. Co.

Supreme Court of New York, Appellate Division

March 23, 1954

DANIEL-MORRIS CO., INC., Appellant,
v.
GLENS FALLS INDEMNITY COMPANY et al., Respondents, et al., Defendants.

Page 505

APPEAL from a judgment of the Supreme Court in favor of respondents, entered December 20, 1950, in New York County, upon a decision of the court at a Trial Term (BREITEL, J.), without a jury.

COUNSEL

Sibyl C. Welling for appellant.

Samuel Halpern and David S. Konheim of counsel (Konheim, Halpern & Wolf, attorneys), for Glens Falls Indemnity Company, respondent.

Leon J. Shapiro of counsel (L. J. and G. A. Shapiro, attorneys), for Big-W Construction Corp., respondent.

CALLAHAN, J.

This appeal presents a question as to the right of a materialman to recover as a third-party beneficiary under a bond given in connection with a building contract.

Big-W Construction Corp. was the general contractor for the construction of a garden apartment in the Borough of Queens, City of New York. It hired Horowitz & Rubin, copartners (unserved defendants), as subcontractors to install the plumbing and heating system for a contract price of $390,000. One of the conditions of the subcontract was that Horowitz & Rubin furnish a 20% payment bond and a 20% performance bond. Such bonds were given. The defendant Glens Falls Indemnity Company was the surety, Horowitz & Rubin the principals, and Big-W the obligee on each bond.

Page 506

Horowitz & Rubin did not complete the work under their subcontract. A dispute having arisen as to their performance, they filed a mechanics' lien for over $325,000. Materialmen have filed liens against this job and another in an amount exceeding $105,000.

Plaintiff, a materialman, thereupon commenced this action claiming that it delivered plumbing supplies valued at $17,077.36 to Horowitz & Rubin for installation in the project and claiming the right to recover a money judgment in that amount against the surety on the bond or, in the alternative, recovery in favor of the principal on the bond, the general contractor, for the use and benefit of plaintiff.

It was stipulated upon the trial that the plaintiff had received no inducements or representations from either the surety or the general contractor, which had led it to deliver the materials.

The payment bond in this action, after outlining the provisions of the plumbing subcontract, sets forth the condition of the bond as follows: 'if the Principal shall promptly make payment to all persons supplying labor and material in the prosecution of the work provided for in said contract, and any and all duly authorized modifications of said contract that may hereafter be made * * * then this obligation to be void, otherwise to remain in full force and virtue.'

The performance bond also recited the provisions of the subcontract and contained as its condition a provision that, 'if the Principal shall well and truly perform and fulfill all the undertakings, covenants, terms, conditions, and agreements of said contract', with the ...


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