Case ID: misc_12/html/0626-01.html
Source: Caselaw Access Project
Author: {"author": "McAdam, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Grand Lodge Knights of Pythias of the State of New York, Plaintiff, v. The Manhattan Savings Institution, Defendant.
    (New York Superior Court
    Special Term,
    June, 1895.)
    An order in supplementary proceedings directing a third party to pay over to the sheriff moneys in his hands belonging to the judgment debtor furnishes no protection tó such person for a payment made in pursuance thereof, but such payment will be regarded as voluntary.
    Section 3447, authorizing a direction to pay, applies only to moneys in the hands of the judgment debtor. The provision directing delivery by a third person applies to articles of personal property other than money, capable of delivery, and to which the title of the debtor is undisputed.
    Upon suspension of a subordinate lodge the plaintiff notified the defendant, in which the funds of such lodge were deposited, of the fact of such suspension and that the plaintiff was the owner of the funds on deposit and had possession of the bank book. Thereafter, in supplementary proceedings against such lodge, brought by a creditor thereof, an order was made directing the defendant to pay over a portion of such funds to the sheriff, which it accordingly did. Held, that such order amounted to no more than a permission to defendant to pay, and furnished no protection as against the plaintiff.
    Demubbeb to complaint.
    The plaintiff was incorporated under and by virtue of chapter 316 of the Laws of 1880, with power to institute subordinate lodges. The objects were the promotion of friendship, charity and benevolence, and to aid members in case of sickness or death. The act declares that all funds raised to further these purposes shall be exempt from process against the grand or any subordinate lodge, and that upon the dissolution or suspension of any subordinate lodge all the ' funds, etc., to its credit shall belong to and become the property of the grand lodge.
    In 1894 the plaintiff granted a charter to certain members, whereby they were constituted a lodge of the order under the name of Independence Lodge. This lodge deposited certain moneys with the defendant and received from it a bank book numbered 136,838, in which the amounts of the deposits were entered. Attached to the book is an extract from the charter and by-laws of the defendant, providing that no person shall have the right to demand any part of his principal or interest without producing such book that the payments may be entered therein, and that sixty days’ notice must be given before the money can be withdrawn.
    On April 10, 1895, there was on deposit in defendant’s bank $253.93. On the twenty-third of the preceding month Independence Lodge was duly suspended, whereupon the bank book, etc., were surrendered to the plaintiff, which has since had possession thereof.
    On April 1, 1895, the plaintiff served notice on the defendant, informing it of the suspension of Independence Lodge; that the bank book had been delivered over to the plaintiff, and that plaintiff owned the funds on deposit as aforesaid.
    One Hirsch recovered a judgment for $69.72 against Independence Lodge, docketed it and issued an execution to the sheriff. Supplementary proceedings were instituted, and, on April sixth, the assistant receiving teller of the defendant appeared and testified that Independence Lodge had on deposit to its credit $253.93. On April tenth a judge of the Court of Common Pleas made an order directing the defendant to pay out of said moneys $103.21 to the sheriff on account of the execution and $30 costs in said action. The defendant complied with this order on the following day, and now claims that the payment made thereunder is binding on the plaintiff.
    The plaintiff was not notified of said proceedings, and now sues to recover the entire deposit. The defendant demurs upon the ground that the complaint does not state facts sufficient to constitute a cause of action.
    
      J. G. de la Mare, for plaintiff.
    
      Hoyt <Si Sckell, for defendant.
   McAdam, J.

Upon the conceded facts the moneys on deposit became the property of the plaintiff prior to April 1, 1895. The defendant was on that day sufficiently notified of the change of title, and, as a consequence, the payment on April eleventh, pursuant to the order made by the Common Pleas judge, was in the defendant’s own wrong, and not chargeable to the plaintiff. Richardson v. Ainsworth, 20 How. Pr. 521; Muir v. Schenck, 3 Hill, 232; Schrauth v. Bank, 86 N. Y. 390; Wright v. Cabot, 89 id. 570; West Side Bank v. Pugsley, 47 id. 368; Beebe v. Goodenough, 3 Hun, 73; Roy v. Baucus, 43 Barb. 310.

The order taken by the judgment creditor should have been in the language of section 2446 of the Code, “ permitting ” the defendant to pay to the sheriff; it can have no greater effect. The defendant might then have availed itself of the option, and, by declining, put the creditor to his remedy by action.

Section 2447, which authorizes a direction ” to pay, applies only to moneys in the hands of the judgment debtor. The provision therein directing delivery over by a third perstin applies to articles of personal property other than money, capable of delivery, and to which the title of the debtor is undisputed.

If the defendant had called the attention of the judge who made the order to the fact that the plaintiff had possession of the bank book and claimed the deposit, he would no doubt have modified it by making the order permissive instead of mandatory.

At all events, the order furnishes no protection to the defendant, and the payment by it to the sheriff must be considered as voluntarily made.

The fact that the notice did not specify in detail how the money on deposit became the property of the plaintiff is immaterial, for the rule is that where a party has notice sufficient to put him upon inquiry, he is chargeable with such knowledge as the inquiry would have disclosed if it had been properly made. Bienenstok v. Ammidown, 31 Abb. N. C. 409.

It follows that the plaintiff is entitled to judgment on the demurrer, with costs.

Judgment for plaintiff, with costs.