182 N.E. 68 | NY | 1932
Sherman Square Studios Realty Corporation was the owner of premises in New York city known as 160 West Seventy-third street. Henry Cohen was the president of the corporation and its principal stockholder. He conceived a plan for the improvement of the premises by the erection of an apartment house building thereupon. As the first step toward this end Cohen caused a corporation to be organized under the name of 160 West Seventy-third Street Corporation. The certificate of incorporation provided that the capital stock should be $1,051,400; that the board of directors should consist of five members. Of the directors named in the certificate, one was a nephew of Henry Cohen and three others were employees of a firm of attorneys which acted throughout for Cohen and the Sherman Square Studios Realty Corporation. The new corporation was organized without capital paid in, and, for an extended period, issued no stock. *419
In April, 1928, within two weeks after its organization, 160 West Seventy-third Street Corporation entered into a written contract with Sherman Square Studios Corporation. By this contract the latter corporation agrees to convey to the former the premises 160 West Seventy-third street, with the buildings erected or to be erected thereupon, and the former agrees to purchase the same. Sherman Studios agrees to erect upon the premises an apartment house in accordance with certain plans and specifications. The corporation, 160 West Seventy-third Street, agrees, in consideration of the conveyance of the premises and the erection of the building, to deliver to Sherman Square Studios the entire issue of its capital stock, viz., 10,514 shares of the total par value of $1,051,400. It further agrees to pay over to Sherman Studios the proceeds of all loans, not exceeding $1,051,400, which it may procure through mortgages upon the premises, and to execute and deliver to it all leases of apartments in the building which it might negotiate. Thereafter, on April 9, 1928, Sherman Studios Corporation conveyed to the corporation 160 West Seventy-third Street the premises 160 West Seventy-third street. Thereupon Sherman Studios began the construction of the building.
In the course of construction the corporation, 160 West Seventy-third Street, borrowed more than $900,000, securing the loan with mortgages on the Seventy-third street property. The moneys were paid out in part to cancel underlying mortgages, and the balance was paid to Sherman Studios. In April, 1929, the building was completed, and upon its completion the corporation, 160 West Seventy-third Street, in fulfillment of its contract, issued and delivered to Sherman Studios, or its transferees, 10,514 shares of its stock, representing the entire capital of the corporation.
In the course of the construction, the plaintiff furnished the labor and materials for the plastering; the defendant *420 Lovisa Pistoresi the labor and materials for the marble installation; the defendant Jarcho Bros., Inc., the labor and materials for the plumbing. These were furnished to Sherman Studios under contracts made with it. After the corporation, 160 West Seventy-third Street, had paid over its shares of stock to Sherman Studios, and had otherwise complied with its contract, the materialmen named filed mechanics' liens against the premises to secure the payment to them of unpaid balances. Subsequently, upon the filing of undertakings, executed by the 160 West Seventy-third Street Corporation as principal and the defendant New Jersey Fidelity and Plate Glass Insurance Company as surety, conditioned for the payment of any judgment which might be recovered in actions to enforce the liens, the Supreme Court made an order discharging the liens. In this action to enforce the claims of the plaintiff and the two materialmen who are defendants, judgment for the full amount of such claims has been granted in their favor.
It is provided in section
"The term `contractor,' when used in this chapter, means a person who enters into a contract with the owner of real property for the improvement thereof, or with the state or a municipal corporation for a public improvement." (Lien Law, §
On its face, the agreement between Sherman Studios and 160 West Seventy-third Street Corporation was not a contract between general contractor and owner, for the corporation 160 West Seventy-third Street, when the contract was signed, did not then own the title to the premises; nor was it "a vendee in possession under a contract for the purchase of such real property." (Lien Law, §
The judgments should be affirmed, with costs.
POUND, Ch. J., CRANE, LEHMAN, O'BRIEN, HUBBS and CROUCH, JJ., concur.
Judgments affirmed. *424