Fosmire v. Nat'l Sur. Co.

Decision Date04 May 1920
PartiesFOSMIRE v. NATIONAL SURETY CO.
CourtNew York Court of Appeals Court of Appeals
OPINION TEXT STARTS HERE

Action by Charles Fosmire against National Surety Company. An order of the special term, denying plaintiff's motion for judgment on the pleadings (104 Misc. Rep. 166,171 N. Y. Supp. 474), was reversed by the Appellate Division (189 App. Div. 44,177 N. Y. Supp. 810), and defendant appeals by permission. On question certified by Appellate Division (178 N. Y. S.upp. 890).

Order of Appellate Division reversed, and that of Special Term affirmed, and certified question answered.

The Appellate Division (178 N. Y. Supp. 890) certified the following question: ‘Does the complaint state facts sufficient to constitute a cause of action?’

Appeal from Supreme Court, Appellate Division, Third Department.

M. O. Garner, of New York City, for appellant.

Frederick E. W. Darrow, of Kingston, for respondent.

CARDOZO, J.

In June, 1916, Wagner & Braun entered into a contract with the state of New York for the construction of part of the state highway in the village of Saugerties. The Highway Law (Consol. Laws, c. 25, § 130, subd. 7) requires every such contractor to execute a bond in the form prescribed by the commission with sufficient sureties, conditioned for the performance of the work in accordance with the contract, for the commencement and completion thereof within the prescribed time, and for the payment of any direct or indirect damages that shall be suffered or claimed on account of such construction during the time thereof and until the highway is accepted. In obedience to that statute, Wagner & Braun, as principals, and the defendant, National Surety Company, as surety, made their bond in favor of the people of the state of New York, in the sum of $25,245, with a condition which reads as follows:

‘Now, therefore, the condition of this obligation is such that if the said principal shall well, truly and faithfully perform the work in accordance with the terms of the contract and with the plans and specifications, and will commence and complete the work within the time prescribed in the contract on his part to be kept and performed according to the terms and tenor of said contract and shall protect the said state of New York against and pay any excess of cost as provided in said contract and all amounts, damages, costs, and judgments which may be recovered against said state or its officers or agents or which the said state of New York may be called upon to pay to any person or corporation by reason of any damages, direct or indirect, arising or growing out of the doing of said work, or suffered or claimed on account of said construction or improvement during the time thereof and until the final completion and acceptance of the work, or the manner of doing the same, or the neglect of the said principal, or his agents or servants, or the improper performance of the said work by the said principal, or his agents, or servants, or from any other cause, and if the above bounden principal, his heirs, executors, administrators, or assigns, shall and do well and truly pay or cause to be paid in full the wages stipulated and agreed to be paid to each and every laborer employed by the said principal or by his agents, then this obligation shall be null and void, otherwise to remain in full force and virtue.’

The plaintiff, a laborer employed upon the work, brings this action against the surety to recover unpaid wages due from the contractors to himself and a fellow laborer whose assignment he holds. The question is whether the bond gives a cause of action in his favor.

We think the cause of action is in favor of the people solely. Eastern Steel Co. v. Globe Indemnity Co., 227 N. Y. 586, 125 N. E. 917;Buffalo Cement Co. v. McNaughton, 90 Hun, 74, 35 N. Y. Supp. 453, affirmed on opinion below 156 N. Y. 702, 51 N. E. 1089. In so holding, we put our decision upon the single ground that the bond, read in its entirety, is inconsistent with an intention that the plaintiff and others in like position should have the right to sue upon it. If that intention is absent, the right to sue will be denied. Simson v. Brown, 68 N. Y. 355. A different question would be here if the bond had been conditioned for the payment of wages and nothing else. The interest of the state in the welfare of those who labor on its public works might then point to an intention to create a cause of action in their favor. Matter of Int. Ry. Co. v. Rann, 224 N. Y. 83, 120 N. E. 153; Williston on Contracts, §§ 372, 402. Cf. 28 U. S. Stat. 278; 33 U. S. Stat. 811 (U. S. Comp. St. § 6923); Texas P. Cement Co. v. McCord, 233 U. S. 157, 34 Sup. Ct. 550, 58 L. Ed. 893. For the purpose of this opinion, we assume, without attempting to decide, that when such an intention is revealed, there is no logal obstacle in the way of its enforcement. Seaver v. Ransom, 224 N. Y. 233, 120 N. E. 639, 2 A. L. R. 1187;Lawrence v. Fox, 20 N. Y. 268; Williston, supra. But the difficulty which the plaintiff meets at the threshold of his case is in making out the intention that such a right should be conferred. Simson v. Brown, supra; Garnsey v. Rogers, 47 N. Y. 233, 7 Am. Rep. 440;Knickerbocker L. Ins. Co. v. Nelson, 78 N. Y. 137, 153;Pardee v. Treat, 82 N. Y. 385;Wheat v. Rice, 97 N. Y. 296;Standard Gas Power Corp. v. New England Casualty Co., 90 N. J. Law,...

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    ...an intended beneficiary" (Goodman-Marks Assoc. v. Westbury Post Assoc., 70 A.D.2d 145, 148, 420 N.Y.S.2d 26, citing Fosmire v. National Sur. Co., 229 N.Y. 44, 127 N.E. 472; Graybar Elect. v. Seabord Sur. Co., 157 Misc. 275, 283 N.Y.S. 522; McCulloch v. Canadian Pac. R. Co., 53 F.Supp. 534; ......
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    ...not formally a party. The benefit, as it is sometimes said, must be one that is not merely incidental and secondary (cf. Fosmire v. Nat. Surety Co., 229 N.Y. 44 ). It must be primary and immediate in such a sense and to such a degree as to bespeak the assumption of a duty to make reparation......
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    ... ... Co. v. American ... University, 58 App. D. C. 184, 26 F. (2d) 556; First ... Methodist Church v. Isenberg, 246 Pa. 221, 92 A. 141; ... Fosmire v. Nat. Surety Co., 229 N.Y. 44, 127 N.E ... 472; and in Searles v. City of Flora, 225 Ill. 167, ... 80 N.E. 98--but the obligation of the bonds ... ...
  • Doyle v. South Pittsburgh Water Co.
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    ...a party. The benefit, as it is sometimes said, must be one that is not merely incidental and secondary. Cf. Fosmire v. National Surety Co., 229 N.Y. 44, 127 N.E. 472. It must be primary and immediate in such a sense and to such a degree as to bespeak the assumption of a duty to make reparat......
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1 books & journal articles
  • Incorporating the Third Party Beneficiary Principle in Natural Resource Contracts
    • United States
    • University of Georgia School of Law Georgia Journal of International & Comparative Law No. 43-1, 2014
    • Invalid date
    ...in payment due to insolvency because "the bond was for the benefit of unpaid creditors . . ."). But see Fosmire v. Nat'l Surety Co., 127 N.E. 472, 473 (N.Y. 1920) (finding that a laborer could not recover unpaid wages from the surety under a payment-performance bond required by the Highway ......

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