Elite Distributing Co. v. Schrul

Schmuck, J. A delinquent judgment debtor, for whom an attachment had been issued, in order to avoid the humiliation of arrest, deposited with the sheriff the sum of fifty dollars. At the time the deposit was made no statement or written direction concerning the title to or the manner in which the money was to he refunded, if the judgment debtor subsequently became entitled to the return thereof, was made. The debtor, after his discharge from the custody of the sheriff, sought Jo have the deposit returned, claiming the money to he that of a third party who had merely loaned the money for hail purposes. The judgment creditor in the meantime demanded payment of the deposit in part satisfaction of the judgment, and has enlisted by this application the assistance of the court in said endeavor. A vehement protest is made against any such disposition by the judgment debtor, who naturally feels anxiety and solicitude for his friend who deposited the hail. The first thought given to this question would seem to lead to the conclusion that an injustice would he done if the innocent third party were to he deprived of the money he merely intended to temporarily assist the delinquent. An examination of the authorities shows that at common law money deposited as hail either in civil or criminal proceedings may he applied to the satisfaction of the obligation to secure which the delinquent is held to hail, regardless of the rights of others thereto. People ex rel. Gilbert v. Laidlaw, 102 N. Y. 588. In order to avoid the harshness of this rule and to protect the rights of those who in reality are entitled to the money, section 586 of the Code of Civil Procedure was adopted. By the terms of this law the debtor may-protect the rights of the third party by delivering to the sheriff, .at any time before the deposit is paid into court, a written direction to pay i-t to said third person. By such a declaration, indication is given that there is not a transfer of the money, hut rather that the property still remains in the third person, and when repaid is to he repaid to the specified person. Finelite v. Sonberg, [208] 75 App. Div. 455; Rallings v. McDonald, 76 id. 11-2. However, if such a declaration is not given to the sheriff, the common-law rule hereinbefore stated applies. Further, if an application is made by the judgment creditor to utilize the deposit in reduction of the judgment, the debtor cannot successfully oppose the application on the ground that the .deposit is the property of a third person, for hy such an admission he establishes his lack of interest in the property. People v. Gould, 75 App. Div. 524. Therefore, in the Us sub judice, the debtor 'admitting the deposit to he the property of another, and that other failing to oppose this application, and, the provisions of section 586 not having been complied with, this application must he granted. Submit order. Application granted.