#### Matter of Examination of Myron R. Thompson, Relating to Alexander Smith Cochran, Judgment Creditor, Appellant, *v.*Virginia S. Sage, Judgment Debtor, Respondent.

(Supreme Court, Appellate Term,

May, 1905.)

Supplementary proceedings—Receiver appointed — Notwithstanding claim that judgment is paid though not satisfied — Notwithstanding adverse claim to moneys in hands of third person.

A receiver in supplementary proceedings should be appointed when property of the judgment debtor appears, by the examination of a third party, to be in his hands though a claim is made that it belongs to another. A receiver is entitled to test such a claim by action.

When the judgment debtor claims that the judgment creditor received an assignment of another judgment in payment' and the evidence is conflicting, though preponderating in support of such claim, the application for a receiver should not be denied, but the judgment debtor should be left to his motion to have the judgment satisfied of record.

Appeal from an order of the Oity Court of the city of New York.

Arlington 0. Kendall (Clarence M. Lewis, of counsel), for appellant.

William L. Flagg, for respondent.

*358Dowling, J.

This is an appeal from an order denying a. motion made by the judgment creditor herein for the appointment of a receiver of a judgment debtor’s property in the hands of a third party; vacating an order for the examination of a third party, and vacating the injunction contained in said order, with costs. An order having been heretofore made for the examination of one Thompson, a third party, having property of the judgment debtor in his possession, it appeared upon the examination of the latter that he had ninety-five dollars belonging to the judgment debtor in his possession and would collect more money for her in the future. Thereupon the judgment creditor moved for the appointment of a receiver. This motion was argued on the same day as the return of an order to show cause why the third-party order should not be set aside. The order to show cause was returnable in four days and the moving papers did not disclose any re'ason why a shorter notice than five days was given. Objection was duly made upon the latter ground, but the motion to appoint a receiver was denied, and the motion to vacate the order of examination was granted, upon the ground that by a preponderance of proof it appeared that an assignment of an interest in a certain judgment had been accepted by the judgment creditor from a third party in settlement of his claim against the debtor, and that the money in the possession of Thompson was not the property of the debtor. As to the first point,, it appears from the affidavits that Virginia S. .Sage, the judgment debtor, was indebted to Alexander S. Cochran, the judgment creditor, in the amount of a certain judgment recovered April 27, 1904, in the City Court of Yew York, for $172.05, upon which execution had been issued to the sheriff of the county of Yew York, May 4, 1904, and the same returned wholly unsatisfied. It further appears that one Sarah B. Parsons, in July, 1904, assigned to -said Cochran a sufficient part of a certain judgment in her favor' against George R. Teller, then on appeal to the Appellate Division of the Supreme Court, First Department, to cover said Cochran’s judgment herein and a debt owing him by said Parsons. It is claimed on behalf of the judgment creditor that said Cochran ac*359cepted. said assignment in full payment for all indebtedness owing Mm by said Sage and Parsons and on condition that he would do nothing to enforce his judgment while the Parsons judgment was being litigated, and this contention is sustained by the affidavits of Virginia S. Sage, Sarah B. Parsons and Georgia F. Sage. On the other hand it is contended that when Myron R. Thompson, the judgment creditor’s agent who attended to all his business herein, was offered said assignment he was especially cautious to make no agreement respecting any delay in enforcing the Cochran judgment because of the meager knowledge obtainable as to the Parsons judgment, and nothing whatever was said as to refraimng from action on the former judgment pending a collection of the latter. This contention is supported by the affidavits 6f Myron R. Thompson and Arlington C. Kendall the latter of whom, the attorney herein, swears, in direct opposition to Miss Parsons’ affidavit, that he personally told her that the assignment would be received without any prejudice whatever to any action or proceeding Cochran might see fit to institute to collect the indebtedness. Upon these conflicting statements, an issue of fact was raised. The only thing which is not controverted is, that the judgment in Cochran v. Sage is regular, remains unsatisfied of record and with no written agreement to satisfy it in any event, and is sufficient to sustain the order for the third party examination. If there was anything due or unpaid upon the judgment, the motion to vacate the order should have been denied. In view of the contention made by the judgment debtor and denied by the judgment creditor, the proper remedy was by motion in the action to have the judgment satisfied of record. On such a motion a reference can be ordered to take proof of the facts, and if they are found in favor of the debtor the judgment can be properly discharged. Otherwise the anomaly would be presented of a judgment which, while remaining valid of record, would be judicially declared incapable of enforcement. Austin v. Byrnes, 54 N. Y. Super. Ct. 552. As to the second point, it appears that Virginia S. Sage, the judgment debtor, being a tenant of the judgment creditor made an alleged sublease of the apartments so demised *360to her daughter, Georgia S. Sage, who claimed that she put her own furniture in the same and rented the apartment furnished to one Gahler, through Thompson, the agent of the building, and authorized him to collect the rent for her. This is supported by the affidavits of mother and daughter. On the other hand, Thompson expressly swears that the sum of ninety-five dollars in his hands is the property of the judgment debtor and no one else and explicitly denies the statements of the two Sages. It is well settled that where the question of the title to property in the hands of a third person is raised in supplementary proceedings, the proper procedure is to appoint a receiver, who can test the question by action, and not to determine the matter upon motion. Rodman v. Henry, 17 N. Y. 484; West Side Bank v. Pugsley, 47 id. 368.

The order appealed from should be reversed, the order for the examination of Myron E. Thompson reinstated and the motion, for the appointment of a receiver granted, with ten dollars costs and disbursements of the motion and of this appeal to the appellant.

Scott and Tbuax, JJ., concur.

Order reversed, order for examination of Thompson reinstated and motion of appointment of receiver granted, with ten dollars costs and disbursements of motion and this appeal to appellant.