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This entry was published on 2014-09-22
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SECTION 37
Bond to discharge all liens
Lien (LIE) CHAPTER 33, ARTICLE 2
§ 37. Bond to discharge all liens. (1) The owner or contractor between
whom a contract exists for the improvement of real property may, either
before or after the commencement of the improvement, execute as a
principal, a bond to the county clerk of the county where the premises
are situated in such amount as the supreme court of this state, or any
justice thereof, or the county court or the county judge of such county
may direct, which shall not be less than the amount then unpaid under
such contract, conditioned for the payment of any judgment or judgments
which may be recovered in any action brought for the enforcement of any
and all claims, notices of which may be filed as in this section
provided, arising by virtue of labor performed or materials furnished in
or about the performance of any such contract. As many such bonds may be
executed as there are contractors employed upon the improvement.

(2) Such a bond must be executed as a surety by a fidelity or surety
company authorized to do business in this state, and to which a
certificate of solvency has been issued and is unrevoked pursuant to
section one thousand one hundred eleven of the insurance law.

(3) Such bond shall recite the name of the owner, the name of the
contractor, the name of the surety company, the date and amount of the
contract, and shall contain a description of the real property upon
which the improvement is to be made, is being made, or has been made;
such description shall be sufficient if it complies with the
requirements in respect thereto prescribed for a notice of lien.

(4) Upon the approval of any such bond by such court, judge or justice
thereof and upon the filing of such bond with the county clerk of the
county where the real property is situated, an order shall be made by
such court, judge or justice discharging such property from the lien of
each and every contractor, subcontractor, material man or laborer
performing labor or furnishing materials in or about the performance of
the contract described in such bond. After the filing of such bond, the
owner and the contractor named therein shall no longer be obligated to
comply with the provisions of section eight of this chapter insofar as
said provisions may relate to or in any way affect the contract,
described in said bond, or the rights of any person performing labor or
furnishing materials in or about the performance thereof.

(5) A contractor, subcontractor, laborer or material man who performs
labor or furnishes materials in or about the performance of the contract
described in such bond shall have a claim, which shall attach against
and be secured by such bond, for the principal and interest of the
value, or the agreed price, of such labor and materials. Within the
meaning of the provisions of this section, materials actually
manufactured for but not delivered to the real property, shall also be
deemed to be materials furnished.

The claimant in order to perfect his claim shall within the time
prescribed in this chapter for the filing of a notice of lien, file a
notice of claim in the office of the clerk of the county where such bond
is filed. Any such claimant who has so perfected his claim may bring an
action on the bond for the enforcement thereof in any court where an
action might have been brought if such claim were a lien filed against
such real property.

(6) The notice of claim shall state: (1) the name and residence of the
claimant; and if the claimant is a partnership or a corporation, the
business address of such firm, or corporation, the names of partners and
principal place of business, and if a foreign corporation, its principal
place of business within the state; (2) the names of the owner,
contractor and surety named in the bond; (3) the name of the person by
whom the claimant was employed or to whom he furnished or is to furnish
materials; (4) the labor performed or materials furnished, including
also materials actually manufactured for but not delivered to the real
property, and the agreed price or value thereof; (5) the amount unpaid
to the claimant for such labor or materials; (6) a description of the
real property such as is required for a notice of lien.

The notice of claim shall be verified by the claimant or his agent in
the form required for the verification of notices in section nine of
this chapter.

(7) The plaintiff in such an action must, prior to the commencement
thereof, file in the office of the clerk of the county where the bond is
filed, the summons and complaint in such action and shall join as
parties defendant, the principal and surety on the bond, the contractor,
and all claimants who have filed notices of claim prior to the date of
the filing of such summons and complaint. In case a claimant files his
notice of claim on or after the date of such filing of such summons and
complaint he may be brought in by amendment at any time up to and
including the time and in the manner and under the conditions that a
lienor may be brought into an action to foreclose a lien pursuant to
section sixty-two of this chapter.

(8) The court may adjust and determine the equities of all the parties
to the action and render an appropriate judgment. In case a counterclaim
is set forth by any defendant, such defendant shall be deemed to have
waived a trial by jury of the issues raised thereby.

(9) An action upon such a bond shall be begun within one year after
the completion of the improvement, or if the work thereon is abandoned,
then within two years after the last item of work was performed or the
last item of materials was furnished by the claimant. The beginning of
the action by the plaintiff-claimant shall be deemed a bringing of the
action by each defendant-claimant made a party thereto.

(10) The county clerk of each county shall provide and keep a book
called the "lien bond docket," which shall be suitably ruled in columns
headed "owner," "contractor," "claimant," "property," "surety," "amount
of bond," "time of filing," "amount of claim," "proceedings had," in
each of which he shall write the particulars of the notice of claim
property belonging therein. The date, hour and minute of the filing of
notice of each claim and of the filing of the summons and complaint in
any action commenced on said bond shall be entered in the proper column.
The names of the owners shall be arranged in such book in alphabetical
order. The validity of the claim and the right to file a notice thereof
shall not be affected by the death of the principal before notice of the
claim is filed.

(11) In the event that notwithstanding the provisions of this section
a contractor, subcontractor, material man or laborer, whose lien has
been discharged in the manner provided in this section, shall thereafter
file a notice of lien against the real property, then upon application
of the owner or contractor to the supreme court of this state or any
justice thereof or the county court or the county judge of the county
where such notice of lien is filed and upon proof that the bond approved
and filed as in this section provided secures the payment of the claim
set forth in any such notice of lien, the court, justice or judge
thereof shall make an order discharging such lien. In any such case a
copy of the bond and notice of the time and place of making such
application for such order to discharge any such lien shall be served
upon the lienor or his attorney not less than two days before such time.

(12) A claim which has been perfected by the filing of a notice of
claim may be discharged as follows: (1) By the certificate of the
claimant duly acknowledged or proved and filed in the office where the
notice of claim is filed, stating that the claim is satisfied and may be
discharged; (2) By failure to begin an action as and within the time
provided in this section.