Case ID: ad_154/html/0523-01.html
Source: Caselaw Access Project
Author: {"author": "Miller, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Mayor, Aldermen and Commonalty of the City of New York, Appellant, v. The Mechanics and Traders’ Bank of the City of New York, Respondent.
    First Department,
    January 3, 1913.
    Contract — agreement to indemnify municipality against liability to other claimants — settlement by city with claimant — demand by city for repayment — injury to indemnitor.
    A municipal contractor, in consideration of moneys advanced, assigned all his interest in the contract, including moneys to become due thereunder. The assignee sued the city for the amount due on the completion, of the contract, making another claimant a party defendant, and on recovering judgment and accepting payment from the City, executed a bond wherein it covenanted to repay to the city any amounts recovered by other claimants. Thereafter the claimant made defendant in the action established his claim, and both the city and the assignee appealed from a judgment in his favor. While the appeal was pending, the city settled and paid the claim against the protest of the assignee, giving notice of the payment to all parties, and stating that the appeal no longer had any force. Thereafter the city demanded that the assignee repay the amount paid by it to the other claimant, and repayment being refused, brought action. The answer alleged in substance that the payment of the claim was made by the city in bad faith.
    
      Held, that even assuming that the evidence tended to show bad faith on the part of the city, it failed to show injury to the defendant;
    That since the claimant made defendant in the action by the assignee was clearly entitled to recover, the indemnitor was not injured by the payment of the judgment, and the plaintiff’s motion for a direction of a verdict should have been granted.
    Appeal by the plaintiff, The Mayor, Aldermen and Commonalty of the 'City of New York, from a judgment of the Supreme Court in favor of the defendant, ■ entered in the office of the clerk of the county of New York on the 6th day of April, 1911, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 21st day of March, 1911, denying the plaintiff’s motion for a new trial made upon the minutes.
    
      Terence Farley, for the appellant.
    
      Rufus O. Catlin, for the respondent.
   Miller, J.:

The facts leading up to this controversy were stated by Mr. Justice McLaughlin- on a prior appeal in this action (130 App. Div. 748). On that appeal this court reversed a judgment in favor of the plaintiff for the exclusion of evidence offered to show that the payment of the Winant judgment was made in bad faith. We said, upon the authority of City of New York v. Baird (176 N. Y. 269), that the defense interposed involved two questions: 1, whether the payment to Winant was made in good faith, and, 2, whether it operated to the injury of the bank. On this trial the said excluded evidence was received, and, even assuming that it tended to show bad faith on the part of the city, it failed to show injury to the defendant. On the contrary, the undisputed evidence shows that the defendant was not injured.

Of course, the important question on the second branch of the case was whether the Winant judgment could have been reversed on. appeal. If it could not, the indemnitor was not injured by its payment. The attorney who represented the indemnitor, this defendant, testified that the question which he desired to raise on the appeal from the Winant. judgment was whether the work was done by Winant on the Lexington avenue paving, for which the defendant’s assignor, Gavin, had the contract in question, or upon some other contract of Gavin. The stenographer’s minutes of the trial, resulting in the Winant judgment, are in evidence. The testimony discloses without contradiction that the work done by Winant consisted of carrying earth by boats from Fifty-fourth street, East river, to One Hundred and Sixth street, Harlem river, to be used for grading Lexington avenue. The fact that the earth was obtained from places where Gavin was doing other work requiring excavation to be made is of no consequence. Upon the undisputed evidence, Winant was entitled to recover under the decision of the Court of Appeals. (Mechanics & Traders Nat. Bank v. Winant, 123 N. Y. 265.) Manifestly, then, the indemnitor was not injured by the payment of the judgment, and the plaintiff’s motion for a direction of a verdict should have been granted. It is. to be noted that the city succeeded bn the new trial of City of New York v. Baird (117 App. Div. 659; 191 N. Y. 501).

The finding that defendant sustained damages is reversed, and judgment and order are reversed, with costs, and a j.udgment directed in' favor of the plaintiff, with costs, on its motion for a directed verdict, made at the close of the evidence.

Ingraham, P. J., Laughlin, Clarke and Scott, JJ., concurred.

Judgment and order reversed, with costs, and judgment ordered for plaintiff, with costs, as directed in opinion. Order to be settled on notice.