Opinion
283 A.D. 307 128 N.Y.S.2d 21 In the Matter of WOODROCK CONTRACTING CO., INC., et al., Appellants, v. SPENCER C. YOUNG, as Treasurer of the City of New York, Respondent. Supreme Court of New York, First Department. February 23, 1954
APPEAL from an order of the Supreme Court at Special Term (MCNALLY, J.), entered September 16, 1953, in New York County, which denied a motion by petitioners for an order pursuant to article 78 of the Civil Practice Act directing respondent, as city treasurer, to countersign and deliver to petitioners a city warrant for $15,000 in settlement of an action against the city. A contract, executed on December 26, 1950, by petitioner Woodrock Contracting Co., Inc., and the President of the Borough of Queens for the construction of a sewer, contained the following provisions: 'XXVI. During the performance of the work herein set forth the Contractor will place proper guards upon and around the same for the prevention of accidents, and at night will put and keep suitable and sufficient lights, and he will indemnify and save harmless The City against and from all claims, suits and actions, of every name and description, brought against it, and all costs and damages to which it may be put on account or by reason of any injury or alleged injury to the person or property of another, resulting from the prosecution of the work, or from negligence or carelessness in the performance of the work, or in guarding the same, or from any improper materials used in its prosecution, or by or on account of any act or omission of the Contractor, or his agents; and the Contractor agrees that the whole or so much of the moneys due to the Contractor under and by virtue of this contract, as shall or may be considered necessary by the Comptroller of the City may, at its option, be retained by The City until all such suits and claims for damages as aforesaid shall have been settled, and evidence to that effect furnished to the satisfaction of the Comptroller. * * * XXX. The Contractor will not, at any time, suffer or permit any lien, attachment, or other incumbrances, under the law of this State or otherwise, by any person or persons whomsoever, to remain on file in the Finance Department or at the office of the City Department having supervision of the work against any money due or to become due for any work done or materials furnished under this contract, or by reason of any other claim or demands against the Contractor; and any such lien, attachment, or other incumbrance, until it is removed, shall preclude any and all claim or demand for any payment whatsoever under or by virtue of this contract. The Contractor further agrees that he will present to the party of the first part satisfactory evidence that all just liens, claims and demands of his employees, or of parties from whom materials used in the construction of the work may have been purchased or procured are fully satisfied and that the materials furnished and work done under this contract are fully released from all such liens, claims and demands before said party of the second part will demand or shall receive the sums due on final payment under this contract.'
COUNSEL
Nelson Rosenbaum for appellants.
Anthony Curreri of counsel (Seymour B. Quel with him on the brief; Adrian P. Burke, Corporation Counsel, attorney), for respondent.
Per Curiam.
Petitioner contracted with the city to construct certain sewers in Queens County. He sued for damages for breach of his contract alleging that a change of grade had added to the cost of his work. This suit was settled in open court for $15,000, and the comptroller of the city approved the settlement. A warrant was drawn by the comptroller to pay the agreed sum and delivered to the city treasurer, but the latter refused to sign the warrant contending that there had been several claims filed against the city for accidents supposedly connected with the sewer construction work. This supposition appears to be largely based on the fact that the accidents occurred in the streets where the sewer was built. However, none of the claims showed accidents occurring during the progress of the work, all referred to accidents on dates several months after completion. The theory of the treasurer is that under an indemnity clause in the sewer construction contract the city was permitted to withhold payments for work until claims were discharged.
In the present case the comptroller approved the payment after the dates of the claims and we may reasonably infer that he made the settlement agreement with notice of the claims. The agreement to pay the $15,000 was a new and separate enforcible agreement ( Yonkers Fur Dressing Co. v. Royal Ins. Co., 247 N.Y. 435). It was not conditioned with all the covenants of the construction contract. The settlement concluded defenses and counterclaims as well as the primary claim (Compania De Remorque y Salvamento, S. A., v. Esperance, Inc., 187 F.2d 114). We see no legal right on the part of the treasurer in these circumstances to apply the indemnity clause of the construction contract to defeat the agreement to pay the $15,000.
The order appealed from should be reversed, with $20 costs, and the motion granted.
DORE, J. P., COHN, CALLAHAN and BOTEIN, JJ., concur.
Order unanimously reversed, with $20 costs and disbursements to the appellants, and the application granted.