Windalume Corp. v. Rogers & Haggerty, Inc.

• Decision Date: 11 October 1962
• Citation: 234 N.Y.S.2d 112,36 Misc.2d 1066
• Court: New York Supreme Court
• Parties: WINDALUME CORPORATION, Plaintiff, v. ROGERS & HAGGERTY, INC. and National Surety Corporation, Defendants. NATIONAL SURETY CORPORATION, Third-Party Plaintiff, v. Nicholas FALINO and Phyllis Falino, Third-Party Defendants.

Page 112

234 N.Y.S.2d 112

36 Misc.2d 1066

WINDALUME CORPORATION, Plaintiff, v. ROGERS & HAGGERTY, INC. and National Surety Corporation, Defendants.

NATIONAL SURETY CORPORATION, Third-Party Plaintiff, v. Nicholas FALINO and Phyllis Falino, Third-Party Defendants.

Supreme Court, Special Term, New York County, Part I.

Oct. 11, 1962.

French, Fink & Markle, New York City (Fred P. Ellison, New York City, of counsel), for plaintiff.

Maurice, McNamee & White, New York City (Charles R. McNamee, New York City, of counsel), for defendant National Surety Corp.

De Graff, Foy, Conway & Holt-Harris, Albany (Wm. F. Conway, Albany, of counsel), for Dormitory Authority of State of New York.

PETER A. QUINN, Justice.

Plaintiff moves to strike the affirmative defense set forth in defendant-surety's answer on the ground that it is insufficient in law.

The complaint seeks to recover an alleged balance due for labor performed and materials furnished by plaintiff in the construction of a dormitory building for the Dormitory Authority of the State of New York. Defendant-surety has been made a party to this action because of a combined performance and payment bond it issued to defendant Rogers & Haggerty, Inc.

The affirmative defense alleges, in substance, that the bond involved was subject to the provisions of section 137, State Finance Law, and that plaintiff has failed to comply therewith 'to the extent that such section requires the successful foreclosure of a mechanic's lien by the claimant thereunder.'

The Dormitory Authority of the State of New York, authorized by Section 5 of Article X of the State Constitution, was created by Chapter 524 of the Laws of 1944 (formerly Secs. 1430-1433, now Sec. 1677, Public Authorities Law). Hence it is an independent corporate agency with governmental functions delegated to it by the State, as distinguished from a mere arm of the State through which the State acts directly in carrying out the governmental function (Braun v. State of New York, 203 Misc. 563, 564-565, 117 N.Y.S.2d 601, 602).

An analysis of section 137, State Finance Law, establishes that the provisions of this law, relied upon by the surety, are applicable only to a bond furnished in connection with a contract for the prosecution of a public improvement 'for the State of New York.' The contract here involved is clearly one for the prosecution of a public improvement for the Dormitory Authority, a distinct and separate political entity (supra); not for the State of New York. The Dormitory Authority has its own employees (see 1951, Atty. Gen. 152) transacts its own business, and is not subject to the requirements imposed upon other boards or departments of the State in so far as Article IX of the State Finance Law is concerned (Matter of Plumbing, Heating, Piping and Air Conditioning Contractors Association, Inc. v. New York State Thruway Authority, 5 N.Y.2d 420, 423-425, 185 N.Y.S.2d 534, 537, 158 N.E.2d 238, 240). Although this cited case deals with a different section of the State Finance Law, contrary to the surety's contentions, the observations made by the court therein are applicable to the instant matter. The very purpose of the Dormitory Authority is to free such public projects...