Tri-City Elec. Co., Inc. v. People

• Court: New York Court of Appeals Court of Appeals
• Writing for the Court: COOKE
• Citation: Tri-City Elec. Co., Inc. v. People, 483 N.Y.S.2d 990, 63 N.Y.2d 969, 473 N.E.2d 240 (N.Y. 1984)
• Decision Date: 13 November 1984
• Docket Number: TRI-CITY
• Parties: , 473 N.E.2d 240 ELECTRIC CO., INC., et al., Plaintiffs, v. The PEOPLE of the State of New York et al., Respondents, and Lake Steel Erection, Inc., Appellant, et al., Defendants.

Page 990

483 N.Y.S.2d 990

63 N.Y.2d 969, 473 N.E.2d 240

TRI-CITY ELECTRIC CO., INC., et al., Plaintiffs, v. The PEOPLE of the State of New York et al., Respondents and Lake Steel Erection, Inc., Appellant, et al., Defendants.

Court of Appeals of New York.

Nov. 13, 1984.

Roy R. Cesar, Buffalo, for appellant.

Robert Abrams, Atty. Gen. (Richard J. Dorsey and Peter H. Schiff, Asst. Attys. Gen., of counsel), for the People of the State of N.Y., respondent.

Lawrence E. Becker, Brooklyn, for Aetna Cas. and Surety Co., respondent.

OPINION OF THE COURT MEMORANDUM.

The order of the Appellate Division, 96 A.D.2d 146, 468 N.Y.S.2d 283, which modified the judgment in favor of Lake Steel Erection, Inc., by reducing it to $51,000, the amount of the discharge bond, should be affirmed, with costs. ^*

Lake Steel Erection filed a mechanic's lien in the amount of $47,342.41, which was discharged with the consent of Lake Steel by the filing of an undertaking in the amount of $51,000 under court order made pursuant to subdivision 5 of section 21 of the Lien Law. Upon the filing of such a discharge bond the public improvement lien previously filed attaches to the bond, which is substituted for the liened property (Milliken Bros. v. City of New York, 201 N.Y. 65, 74, 94 N.E. 196; Morton v. Tucker, 145 N.Y. 244, 248, 40 N.E. 3). Recovery against the surety on the bond may not exceed the face amount of the bond as originally fixed, unless an amendatory order is thereafter obtained increasing the amount of the bond (CPLR 2508; Lien Law, § 21, subd. 5), or the surety defaults on the bond, in which later event the amount recoverable from the surety may include interest from the time of default in addition to the face amount (General Obligations Law, § 7-301; CPLR 2502; Carrols Equities Corp. v. Villnave, 57 A.D.2d 1044, 1045, 395 N.Y.S.2d 800; see Mendel-Mesick-Cohen-Architects v. Peerless Ins. Co., 74 A.D.2d 712, 713, 426 N.Y.S.2d 124). Interest in excess of the face amount of the discharge bond is not otherwise recoverable (see McClendon Blacktop Co. v. Johnson Bldg. Co., 46 A.D.2d 724, 360 N.Y.S.2d 342). Here no default has been shown.

Moreover, Lake Steel was not entitled to enforce its claim for interest in excess of that payable under the discharge bond under the trust fund provisions of article 3-A of the Lien Law. Neither the State as owner nor Aetna as surety on the payment and performance bond can be charged under article 3-A for other than "the cost of...