Tompkins County Bank v. Trapp

By the court, Brooks, County Judge. I have been unable to find any adjudged case involving directly the question here presented. There can be no doubt of the power of the court to punish as for a contempt disobedience of its orders in these proceedings; it is a power incident to the due administration of justice, and essential to the enforcement of the statute under Avhich these proceedings are had. This poxver Avas inherent, in a general sense, to judicial tribunals prior to the passage of the Code, and it is expressly conferred by the Code. (See §302.) The question, then, to be determined, is whether there has been a willful disobedience in this case, b)r the party refusing to make a more particular and specific answer. In other Avords, had the plaintiff’s counsel a right to examine this party as to the particular business transactions and relations between him and the judgment debtor? If the object of the legislature, in enacting § 294, xvas to enable a creditor to seek out the property of a dishonest debtor, strip it of the covering of an equally dishonest confederate or friend of the debtor, and expose it to the process of execution, then it xxmuld seem an idle ceremony to provide only for a general answer on the part of a party alleged to haxm property of, or to be indebted to the judgment debtor, and constitute such party the sole judge of both the law and the fact in the case. I-am inclined, liOAvever, to think that such Avas not the object of the legislature, but that it AA'as to provide for cases, by this section, xvliere a third party had property of the judgment debtor, or xvas indebted to him, and did not deny or dispute such fact upon being-required to “answer concerning the same.” It will be perceived that the provisions of ^§292 and 294 are essentially different. By the former it is prox-ided that “either party may examine xvituesses in his behalf,” and the judgment debtor “ may be examined in the same manner as axvitness.” By the latter it is simply provided that the third party “ shall answer concerning the same,” i. e., [20] his alleged indebtedness, &c. Had this section, like § 292, provided that the third party should be examined “ in the same manner as a witness,” or that “either party might examine witnesses in his behalf,” then it would seem more clear that it was intended that the allegation of the creditor was to be traversed, and the question of fact settled by the court. I think it will be seen by reading carefully §§ 294, 297 and 299 in connexion, that § 294 was intended to provide for such cases only, where the allegation of the creditor is undisputed by the third party; by § 297, it is provided that the judge may order any property of the judgment debtor, not exempt from execution in the hands of himself or any other person, or due to the judgment debtor, to be applied towards the satisfaction of judgment; but this power conferred by § 297, of summarily disposing of the property of third persons is modified and limited by § 299, which provides, “ if it appear that the person or corporation, alleged to have property of 'the judgment debtor, or indebted to him claims an interest in the property adverse to him or denies the debt, such interest or debt shall be recoverable only by the receiver, &c.” Hence, it will be seen that if the third party deny the allegation of the creditor, the power of the court so far as he is concerned is at an end, except to forbid by order a transfer or disposition of such property or interest, until the receiver may commence and prosecute an action to judgment and execution. In this case David Trapp denies the indebtedness, or that he has property, &c.; the referee or county judge had no right to try this disputed claim. (See People agt. Hulbert, 1st Code R., N. S., 75.) It could only be tried in an action by the receiver. (Catlin agt. Doughty, 12 How. Pr. R., 457; Sherwood agt. N. Y. City R. R. Co., id., 136.) And if the court could not try it, why further investigate it ? No purpose is to be answered so far as the proceedings before the county judge is concerned. He can make no [21] order under § 297, no matter how well he may be convinced that the claim of the third party is unfounded or how untruthful the denial of the debt, he is foreclosed by § 299, from further action. But it may be claimed that the creditor is entitled to a rigid examination of the third party and to establish by his oath if he can, the allegation of the creditor of indebtedness, &c., and to show fraud in the transactions between the parties ; that the claim of the third party is fictitious, and his denial of indebtedness false. I think this claim answered by the suggestions I have already made; if the examination of the party is desired with a view to its use in an action to be prosecuted by the receiver, such object could have been attained by calling him as a witness, in the proceedings against the judgment debtor, under § 295. On an examination under this latter section, as a witness, he would not have been excused from answering fully, because he set up a claim to the property. (See Sanford agt. Carr, 2 Abb., 462.) This latter section I think was intended to aid the creditor in discovering the property of a fraudulent debtor by allowing a full and rigid examination as a witness, of any person the creditor might have reason to suspect, was concealing the property of the debtor, or indebted to him; but I am inclined to think that such is not the object of § 294, but that a party examined under it, can only be required to answer concerning his alleged indebtedness to the judgment debtor, and as to the fact whether he has property belonging to him, and a general denial on oath of both propositions is all that can be required. I therefore deny the motion; but as the question is a new one, and not free from doubt, without costs.