Barnard v. Kobbe

By the Court.* Loew, J. The general rule unquestionably is that a bailee or consignee cannot controvert or dispute the title of his bailor or consignor. But this, like almost every other general rule, has its exceptions, and one of these permits the bailee to show in defense to' an action by the bailor, that the goods were seized under judicial process, duly and regularly issued. If, therefore, the sheriff by virtue of the attachment which was issued out of the Supreme Court against the property of a third party had taken the plaintiff’s goods from the defendants* against the will or determination of the latter, I have no doubt that they upon giving due notice of the seizure to the plaintiff,, would have been relieved from all liability. But it is conceded, that before the issuing of the attachment, or, at all events, before the certified copy thereof was served on the defendants, the goods had all been sold, and that the sheriff did not take the proceeds arising from said sales out of the possession of the defendants. The money in the hands of the latter was, it appears, subsequently paid over by them to the judgment creditors, at whose instance the attachment had been issued, in compliance with an order made by a Justice of the Supreme Court, in supplementary proceedings. The question then arises, whether the payment made by the. defendants, in obedience to said order, constitutes a defense to the plaintiff’s right of recovery in this action. . In my opinion it does not. It is true that under sections 294 and 297 of the code, the judge* may, after the issuing or return of an execution, require third persons, having property of the judgment debtor to an amount. [377] exceeding ten dollars, to appear before him and answer concerning the same, and may order any such property, not otherwise exempt, to be applied towards the satisfaction of the judgment. But it is also true that, to warrant such an order, it must be admitted or conceded, that the money or other property in reality belongs to the judgment debtor. (Stewart v. Foster, 1 Hilt. 505; Crounse v. Whipple, 34 How. Pr. 333.) Section 299 expressly provides that if it appear, that a person, alleged to have property of the judgment debtor, claims an interest therein adverse to him, such interest shall be recoverable only in an action against such person by the receiver. This section was evidently intended to- restrict the power conferred on the judge by section 297, so that, as we have already seen, it should only be exercised in cases where the judgment debtor’s title to the property is clear and undisputed. Whenever it appears that the debtor’s right to the money or other property alleged to belong to him, is disputed—as was the case here—the judge has no power or authority to order the same to be applied directly towards the satisfaction of the judgment, in as much as the conflicting claims can only be tried, settled, and determined in an action brought for the recovery thereof by a receiver appointed for that purpose. (Rodman v. Henry, 17 N. Y. 482; Teller v. Randall, 26 How. Pr. 155; Sherwood v. Buffalo & N. Y. R. R. Co. 12 id. 139; The People, &c., v. King, 9 id. 97.) This rule, it seems to me, should—within the reason and spirit, if not the strict letter of § 299—be more particularly applied to a case like the present, where the third party, in whose possession the money or goods are, is merely a bailee' or consignee. It would be strange, indeed, if a party owning or claiming to own property, could be divested of it without any opportunity of being heard, by a summary order bestowing it on another, made in proceedings to which he is not a party, and of which he has no knowledge. [378] Yet, that is precisely what was done or attempted to be done in this case. For, although the testimony given by the defendant Kobbe on his examination shows that when the plaintiff demanded of the defendants the proceeds of the property "lie had consigned to them, they informed him that the same had been attached as the property of Arnstein; still it nowhere appears that he had any notice of the supplementary proceedings in which the order was made. In my opinion it was beyond the power and jurisdiction of the justice of the Supreme Court to make that order, and the payment of the money by the defendants, as thereby required, cannot for that reason afford them any protection against the plaintiff’s right to recover in this action. It follows that the court below was right in directing the jury to find a verdict for the plaintiff, and that judgment should be ordered on the verdict for the plaintiff. Ordered accordingly. Footnotes [*] Present—Robinson, Loew and Larremore, JJ.