110 N.E. 610 | NY | 1915
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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *277 The Empire State Surety Company was a corporation organized under section 70 of the Insurance Law and authorized to carry on the business of liability insurance in this state. On December 16th, 1912, in a proceeding instituted under and in pursuance of section 63 of the Insurance Law it was declared insolvent and the superintendent of insurance was directed to take possession of its affairs and liquidate its business. On September 20th, 1913, an order dissolving the company was entered. On May 11th, 1914, the superintendent of insurance filed a report rejecting as contingent certain claims against the estate of the surety company. These claims arose under bonds given pursuant to a statute of the United States. (33 U.S. Stat. at Large, ch. 778.) This statute requires a contractor engaged in the construction of government work to file a bond, with sufficient sureties, providing among other things for the prompt payment by him to all persons furnishing labor and materials to be used in such work. Under this statute the United States has the exclusive right to bring action thereon within six months after the "completion and final settlement of such contracts." It is therein provided that in that action the laborers and materialmen may intervene, prove their claims, and have them paid subject to the priority of the claim and judgment of the United States. If the Federal government fails to bring the action within the time stated any claimant may institute a suit in the interest of all creditors who *280 choose to intervene to have their respective claims liquidated. In the event of the penalty of the bond being insufficient, the judgments of the various claimants are to be for a pro rata amount. The claimants and appellants represented on this appeal were subcontractors on various United States government contracts. The Empire State Surety Company had issued bonds covering all such contracts. No action, however, had been brought by the United States government upon any of the contracts here involved within the six months after completion thereof as provided by the statute.
There are two general classes of claims involved. (1) Claims upon which causes of action had accrued and upon which actions against the surety had been commenced before December 16th, 1912, the date of the entry of the order of liquidation in which actions judgments on that date had not been entered. (2) Claims upon which no causes of action against the surety had accrued before the date of the entry of the order of liquidation and upon which claims no actions were commenced until after the date of the entry of the order of liquidation. We are all of the opinion that the claims within the latter class are contingent and were properly rejected. In so holding we follow and apply the actual decision made in People v. Metropolitan Surety Company
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The application of these principles to the questions certified to us by the Appellate Division requires that questions 1, 2, 5, 6 and 7 in the order of the Appellate Division, dated June 25th, 1915, should be answered in the affirmative, and questions 3 and 4 contained in that order be answered in the negative. Question 1 in the order of the *284 Appellate Division, dated July 9th, 1915, should be answered in the affirmative, and question 2 contained in that order should be answered in the negative.
I advise that the order appealed from be reversed, with costs, and that the questions certified to this court by the Appellate Division be answered in the manner indicated above.
WILLARD BARTLETT, Ch. J., CHASE and POUND, JJ., concur: COLLIN, CUDDEBACK and HOGAN, JJ., dissent.
Order reversed, etc.