Gibson v. Haggerty
Gibson v. Haggerty
Opinion of the Court
(after stating the case.)—I think, the plaintiff cannot maintain this action. He claims to be entitled to certain moneys once due from the defendants to his assignor, McCrossan. Sturgis and others, judgment-creditors of McCrossan, have collected those moneys, in right of McCrossan, and by virtue of proceedings which gave to them all the authority, as against these defendants, which McCrossan himself would
If, then, the proposition above stated be correct, viz., that the supplementary proceedings and order of the judge, in question in this action, gave to the judgment-creditors of McCrossan an authority to collect the money from the defendants, as available to the latter for their protection, as the authority, or rather the power, of McCrossan himself, then the defendants are protected by the payment..
To the suggestion, that the plaintiff cannot be deprived of his property, without due process of law, it must be answered, that the law protects the defendants in paying their debt to *their creditor, or to any one who comes clothed with such authoity as the creditor can confer, notwithstanding such payment would operate to deprive the assignee of the responsibility of the original debtor. The title of the assignee was but an equitable title, and if he would protect it, he must use the means the laws require for its protection. The grantee of land may lose his title, if he do not record his deed, and the assignee of a chose in action (not negotiable) may lose his- equitable right to proceed against the debtor, if he gives no notice of the assignment. The plaintiff has no reasonable or equitable complaint to make, that notice of the proceedings was not given to him, when he had given
It is suggested, that notice might have been and ought to have been given to the judgment-debtor, McCrossan. I think, it ought always to be given (when notice can be served on him), before an order is made requiring the .parties examined to pay over. But the statute makes it discretionary with the judge; his omission to do so, does not change or affect the legal proceedings. And, as respects this plaintiff, it would not affect his position; McCrossan might not have regarded the notice.
The case stands (in reference to the argument that the section does not authorize the payment of the money to the judgment-creditor because, having been assigned, it was not “ due to the judgment-debtor ”) just as it would, on the appointment, of a receiver, and an action by him against the defendants, recovery and payment by them to the receiver. There is no room to doubt that such payment would be a full defence. If, before the Code, or now, a creditor’s bill were filed and a receiver appointed, and such receiver had brought an action against the defendants and recovered the money, it cannot be questioned, that payment on such a judgment would protect the defendants against the plaintiff, the assignee, of whom they never heard. And it is no less *clear, that a payment by them to such receiver, without suit, would have the same effect, and yet, in either case, it might be said, with the same propriety as in the present, that the plaintiff was deprived of his property without due process of law.
I am not able to perceive the foice of the suggestion, that an order under § 292 must be first obtained, before the judge can obtain jurisdiction to make the order for the examination of a debtor of the judgment-debtor and direct the payment ,of what he owes toward the
I concur fully in the observations made in Sherwood v. Buffalo & New York City Railroad Co. (12 How. Pr. 138, and cases cited), that to permit a proceeding under § 294, without any notice to the defendant, and so without giving him an opportunity to appear and assert his rights, opens the door to injustice and fraud. The judgment, as there suggested, may have been paid, or there may be other equitable, and even legal reasons why it should not be enforced by the plaintiff These are considerations, however, which are addressed to the judge who has the discretion to exercise, or to the legislature which has conferred that discretion. It is, however, pertinent to say, that notice to the judgment-debtor would not have been of any service to the present plaintiff, as he had voluntarily neglected to give the notice *of assignment which would have enabled and made it the duty of the defendants to resist the order made upon them.
The order granting a new trial must be reversed, and the judgment of the special term affirmed.
Dissenting Opinion
(Dissenting.)—By the stipulation in the case, the only question presented for adjudication is the validity and legality of the order made under the 294th section of the Code. If a literal and narrow construction should be given to the stipulation, it would only raise the question w'hether it is competent to make such an order, as an independent proceeding, and disconnected with any order under the 292d section, requiring the judgment-debtor first to appear and be examined. If this were all the point presented, the result would, I think, be very clear, that the defendants would be entitled to judgment.
It has, indeed, been a mooted point, whether proceedings under § 294 can be taken in any other way than as connected with and auxiliary to a proceeding against the judgment-debtor under the 292d section. Decisions can be found at general and special terms in the supreme court on both sides of this question. If it is necessary, to set the question at rest, for this court to decide it, I am clearly of opinion, that these two sections are susceptible of, if indeed they were not intended to have, an operation independently of each other. They have no necessary connection in terms, nor is the issuing of an order under § 294 made dependent upon an order being first issued against the judgment-debtor; and, indeed, if this were not so, cases would every day arise where no proceeding whatever could be taken under § 294. If the judgment-debtor should abscond, after judgment and before execution, or the judgment should be rendered against a corporation, there would be no possibility of reaching a claim due the judgment-debtor, in the hands of a third party, under this section, since no order under § 292 could be issued in such a case.
To obviate the objection that in this way an order may be made transferring the debt, without the creditor
But this does not end this case; for, I think, the stipulation has a broader meaning, and involves the inquiry, whether the order, and the payment made under it, were valid as against the plaintiff in this suit, who became the owner of the claim, before the order was made, or the money was parted with by the defendants. It was so treated by the counsel on both sides, and the judgment of the supreme court proceeds on that assumption. So treating it, I think, the judgment of the supreme court was right, in holding that, to take the property of a party, by an order granted ex fmte, and without any opportunity of being heard, is to deprive one of his property without due process of law. It is property belonging to the judgment-debtor which the order under § 294 professes to reach, and which only it can reach; and this money, at the time the order was issued and the payment was made, was not the property of the judgment-debtor, but of the plaintiff. This fact is conceded in the case; and it can, with no show of reason, be claimed, that, by virtue of an order, without a hearing of the party most interested in the question,
It is said, in the dissenting opinion at the general term, that the assignee (the plaintiff) was guilty of negligence in not giving notice of the assignment. It would, doubtless, have been a prudent proceeding on his part; but I know of no rule of law which requires this to be done, under the penalty of a forfeiture of all his right and interest in the property, on a failure to give such notice. To whom should the notice be given, in order to protect either party from- loss? A notice to the original debtor would, of course, have been unavailable. There is no proof that the plaintiff knew that the debt of Martin & Go. had been transferred to the defendants, nor on what terms they held the balance of the fund, and he surely could not be chargeable with knowledge or notice that Sturgis & Co." were about to take a proceeding that would seize the fund, and dispose of it, without an opportunity to the plaintiff to interpose any objection or assert his claim.
The order appealed from should be affirmed, and judgment rendered for the plaintiff, pursuant to the stipulation, for the sum of $105, with interest from January 13th, 1860, together with costs.
Order reversed, and judgment of the special term affirmed.
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