Case Name: West Side Bank v. James E. Pugsley
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1872-01-30
Citations: 47 N.Y. 368
Docket Number: 
Parties: West Side Bank v. James E. Pugsley.
Judges: 
Reporter: New York Reports
Volume: 47
Pages: 368–374

Head Matter:
West Side Bank v. James E. Pugsley.
A party aggrieved by an order made by a judge out of court is not confined to the remedy by appeal; he has the right to move to set it aside.
Where proceedings are instituted, under section 294 of the Oode, to reach a debt claimed to be due the judgment debtor, if the debt is denied, a judge has no authority to decide summarily the question of the indebtedness, and to compel its payment. The debt is only recoverable, as provided in section 299, in an action against the person or corporation claimed to be owing it, brought by a receiver.
By the provisions of section 297, which authorizes a judge to order any property of the judgment debtor due to him to be applied to the satisfaction of the judgment, and by section 802, which provides that a person disobeying an order of a judge may be punished as for contempt, it was not intended to revive the remedy of imprisonment for debt, and under them a judge has no authority to direct the imprisonment of one owing a debt to a judgment debtor, and who is unable or declines to pay.
The word “ property,” as used in section 297, does not include debts, but is limited to goods or specific money; and, when these belong indisputably to the judgment debtor, a refusal to deliver them over as ordered would be a willful contempt, and punishable as such.
(Argued January 28, 1872;
decided January 30, 1872.)
Appeal by the Sixth National Bank from an order of the General Term of the Supreme Court in the first department, dismissing an appeal from an order of Special Term in the first district, denying appellant’s motion for an order vacating and setting aside certain judge’s orders theretofore made by Justice Cabdozo in this action, ordering that appellants surrender and pay over certain moneys to the sheriff upon an execution herein against the property of defendant James E. Pugsley.
The first order was made ex parte, May 19, 1870, and requires the Sixth National Bank to surrender to the sheriff all property in their hands belonging to defendant, “ and particularly the money heretofore levied upon under the warrant of attachment issued in this action,” or to show cause why their officers should not “ be punished as for a contempt in disobeying the writs, process and order of this court.” It was based upon an affidavit of a deputy sheriff, alleging that, on the 22d January, 1870, a warrant of attachment came to his hands, and that on the same day he levied it upon pro-, perty of defendant in the hands of appellants, and received from the cashier a “certificate” that defendant Pugsley had to his credit in the bank, January 20, 1870, $1,062.87; that, on the 29th April, 1870, execution issued, and he attempted to levy it “ upon the money heretofore levied upon,” under the warrant of attachment; but that appellants “ refused to surrender to deponent possession of said attached moneys under the writ of execution.”
On the return day of that order, the appellants, by affidavit of their cashier, showed cause before the judge, by denying that they had been guilty of any disobedience of any order of the court, denying any indebtedness to the judgment debtor, and claiming that, at the time of the alleged attachment, they had an interest in the property adverse to him; and that, at the time when judgment was recovered and the order was served requiring them to pay over the moneys as Pugsley’s property, they had no “ funds of his, or any moneys, securities, or other property of the said Pugsley in their hands.”
The judge ordered appellant’s cashier, president, and note teller to appear before him, “ and submit to an examination as to the said credit,” and that the further hearing before him be adjourned. The cashier did so attend, was examined, and reiterated his denials of the alleged credit.
On the adjourned hearing the judge ordered that appellant’s officers (without naming any particular person) comply with the order of May 9, by paying over, within twenty-four hours, the money then ordered to be paid,-and interest on it from January 22, 1870, or that “ they be committed as for a contempt until the said order is complied with.”
That order was made September 29, 1870, and, immediately upon service of it on them, the appellants applied to the court, at Special Term, for an order of the court setting aside' and vacating the judge’s order last mentioned, and also the' ex parte order which was referred to in it and made its basis. The motion was denied.
From that order, which was entered October 11, 1870, the appellant appealed to the General Term.
The appeal was dismissed.
B. N. Harrison for the Sixth national Bank, appellant.
An order dismissing an appeal to the General Term is appealable to this court. (Bates v. Voorhees, 20 N. Y., 525; Maltby v. Greene, 1 Keyes, 548; In the matter of Duff, Ct. App., 10 Abb. Pr., N. S., 410.) The facts are reviewable, as well as the law. (Gillegg v. Maass, 28 N. Y., 197; Griscom v. Mayor, 12 id., 590; Bates v. Voorhees, 21 id., 525-528.) The judge had no authority to order the alleged indebtedness to be paid over, after denial of the debt. (Edmonston v. McLoud, 19 Barb., 362; Tompkins Co. Bank v. Trapp, 21 How., 20; Rodman v. Henry, 17 N. Y., 484; 7 Robt., 64; 1 Hilt., 505; 10 Abb., 103; 9 How., 97; 13 id., 137; 12 id., 139; 22 id., 3; 12 id., 307; 5 id., 16; 23 id., 423; 26 id., 155; 34 id., 333; 40 Barb., 242; 2 R. S., 174, §§ 38, 39; 2 Barb. Ch. Pr., 153; Robeson v. Ford, 3 Edw. Ch., 442; Const. of N. Y., art. 1, § 2.) The orders, although entitled at Special Term, were merely judge’s orders. (Wickes v. Dresser, 13 How., 336; 18 How. Pr. 245; 22 id., 309; In the matter of the Knickerbocker Bank, 19 Barb., 602, at N. Y. General Term; Dresser v. Van Pelt, 15 How. Pr., 19, and 5 Abb., 53; 10 How. Pr., 425; Bitting v. Vandenburg, 17 id., 80; Carter v. Clark, 7 Robt., 497; Matter of Smethurst, 2 Sandf. S. C., 724; Miller v. Rossman, 15 How. Pr., 11; and see Davis v. Turner, 4 id., 190; Hawes v. Barr, 7 Robt., 454; and see Kelly v. McCormick, 2 E. D. Smith, 503; Fenner v. Sanborn, 3 Sandf., 613 ; Joyce v. Holbrook, 2 Hilt., 95; 13 How. Pr., 465, 470.) To get rid of a judge’s order, the proper practice is to move to set it aside. (Archb. Pr., 1st Am. ed., 278; Tidd’s Pr., 3d Am. ed., 511; Wood v. Kirk, 1 Chit., 246; Pike v. Davis, 6 M. & W., 546; Clement v. Weaver, 6 Jurist, 6; 1 Burrill’s Pr., 348-350; 1 Dunlap’s Pr., 307, 309; 2 Wend., 627; 3 id., 455; 6 id., 555; 9 id., 470 ; 2 Cow., 587; id., 463; 3 id., 73; 1 Johns. Cas., 245; 4 Cow., 539; Follet v. Weed, 3 How., 361; Blake v. Lacy, 6 id., 109; Lindsey v. Sherman, 5 id., 308; Bank of Genesee v. Spencer, 15 id., 15; Boyd v. Bigelow, 14 id., 511; Union Bank of Troy v. Sergeant, 53 Barb., 424; Kelly v. Thayer, 34 How., 168.) Appellant had a lien on Pugsley’s funds, which had priority over that of an attaching creditor. The order was made in a special proceeding. (Davis v. Turner, 4 How., 192; Holstein v. Rice, 15 Abb., 308.) And is appealable. (Laws of 1854, chap. 270; Amidon v. Wolcott, 15 Abb., 314.) The only proceedings to determine claim is an action. Lyman v. Cartright, 3 E. D. Smith, 117.)
Jfy. Hammond for West Side Bank, respondent.
This order is not appealable. (T. and L. H. R. R. Co. v. Schenck, 18 How., 275.) The cashier’s certificate was a certificate of indebtedness. (Com. Bank of Albany v. Hughes, 17 Wend., 94; Chapman v. White, 2 Seld., 412; Marsh v. The Oneida Central Bank, 34 Barb., 298.) After levy of attachment, the bank lost all right to set off claims subsequently arising. (Beckwith v. Union Bank, 5 Seld., 211.)

Opinion:
Peckham, J.
It is insisted that this order is not appealable, but that the appeal should have been taken from the other orders, if erroneous, and not attempt to set them aside upon motion to the court.
The orders sought to be set aside were made in a sort of supplementary proceedings against defendant Pugsley as a judgment debtor. They were made before a judge out of court, and resulted in the order of September 29, peremptorily requiring the officers of the Sixth National Bank to pay this $1,062.37 to the sheriff having the execution against Pugsley " within twenty-four hours after the service of a copy of this order, or that they be committed as for a contempt until the said order be complied with." Both of these orders seem to be proceedings with a view to punish said defaulting bank as for a contempt in not paying said money; and the last one orders that all of the officers be sent to jail as for contempt, there to remain until they pay.
As these orders were made by a judge out of court, it seems to be regular practice to move to set them aside, if erroneous, before a court. The counsel for the Sixth National Bank has cited numerous cases to that effect. True, the Oode has provided that, " for the purpose of an appeal, any party affected by such order may require it to be entered with the clerk, and it shall be entered accordingly." (Code, as amended in 1870, § 850.)
But this does not deny the other remedy. It does not assume to deprive the party aggrieved of his right to make a motion to a court to set aside the order of a judge made out of court.
This order, then, is appealable. Is it right upon the merits ? I think not, upon two grounds.
The Sixth National Bank had denied, and under oath, that it owed anything to Pugsley, the judgment debtor. In the language of the Code, had denied " the debt." In such case, the Oode declares that " such interest or debt shall be recoverable only in an action against such person or corporation by the receiver." (Code, as amended in 1849, § 299.)
When the bank denied owing this alleged debt to the judgment debtor, the judge had no legal right to proceed to examine, in that summary way, whether it did owe such debt or not. He had no authority, no right whatever, thus to make any such determination. The law had provided another remedy, by action by a receiver, where the rights of the parties could be determined in the usual course of a suit at law. (Rodman v. Henry, 17 N. Y., 484, and cases cited.)
Another reason: These orders required the officers of this bank to pay, or be sent to jail as for contempt, and there remain until they paid. It is difficult to believe that the legislature has intended to revive, in its most offensive form, this condemned remedy of imprisonment for debt. We cannot believe, and cannot adjudge, that the legislature intended to revive this odious mode of collecting debts, unless it is plainly so declared.
True, the Code provides that " the judge may order any property of the judgment debtor in the hands either of himself or any other person, or due to the judgment debtor, to be applied toward the satisfaction of the judgment." (§ 297.)
There is another provision, that, " if any person, party or witness disobey an order of a judge, duly served, such person may be punished by the judge as for contempt; but, in case of inability to perform the act required, or to endure the imprisonment, he may be discharged by the court or judge committing him, or the court in which the judgment was recovered, on such terms as may be just." (§ 302.)
To hold that this authority extends to the collection, by these summary proceedings, of an ordinary debt due to the judgment debtor, invests a judge with a justly dreaded power over the liberty of an embarrassed or insolvent debtor. A party in extensive business, with many debts due to him, has only to allow a judgment to be recovered against him, and he may collect his desperate debts by this severe machinery.
He may send the debtor to jail, and then he may discharge him, according to the sense of justice the judge may entertain. Inability to pay is thus made punishable with imprisonment, longer or shorter, depending upon the length of notice for discharge that the imprisoned debtor must give, the ability to reach the case in its regular order of business, the time the judge may hold the cause under consideration before deciding it, and the-sense of justice the judge may entertain as to the propriety of discharging the debtor; a harsh remedy for this age.
It is not necessary, by any provision of the Oode, that the debtor should be able to pay, to justify an order by the judge requiring him to do so. It is sufficient that he owes a debt to the judgment debtor. The judge may then not only order him to pay it, but commit him to jail for not doing so. Simple inability to pay is not, then, ground for a discharge, otherwise the act would have so declared; but, if utterly unable to pay, he can then be discharged only upon such terms as to the judge may seem just. First send him to jail, and then let him get out by due process of law, always provided that he can comply with such terms as the judge may deem just.
If these provisions as to "property of the judgment debtor in the hands of himself or any other person or due to the judgment debtor," in section 297, be confined to property other than debts, choses in action, as we then think, these proceedings are without authority.
This would give authority to the judge to order a person who has possession of goods, or of specific money belonging to the judgment debtor, or, as the statute says, " due to him," to deliver it over to the sheriff, to be applied to the satisfaction of the judgment. It not being denied that the property did, in fact, belong to the judgment debtor, the refusal to deliver it over as ordered would be a willful contempt of the judge's order. It is a very different principle to apply this doctrine of contempt to the collection of debts. The principle of imprisonment for debt was abolished some forty years ago in this State, deliberately, and we are not disposed to revive it by uncertain implications. Therefore, the order appealed from must be reversed, and the motion to set aside the orders of the 12th of May and the 29th of September is granted, with costs.
All concur, except Allen, J., who thinks the remedy was by appeal from the original orders.
Ordered as above directed.