Court Opinion

ID: 3613344
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:57:04.331858+00
Date Added: 2024-06-11T13:40:07.316175
License: Public Domain

The proceeding under section 294 of the Code was completely commenced by the service of the order on Johnson, the debtor of the judgment debtor, and all notice of the proceeding to Acker could have been omitted. (Gibson v. Haggerty, 37 N.Y., 555.) The direction that a copy of the affidavit and order should be served upon Acker was simply designed to give him notice of the proceeding, and its object or purpose was not to lay the foundation of any proceeding against him personally. What, then, was the effect of the service of the order upon Johnson? *Page 33 
Proceedings under sections 292 and 294 of the Code are parts of the same scheme for the collection of debts inaugurated by the Code. These sections furnish a simple substitute for the creditor's bill, as formerly used in Chancery. The commencement of the creditor's suit in Chancery gave the creditor at once a lien upon the equitable assets of the judgment debtor. (Storm
v. Waddell, 2 Sandf. Ch., 494; Brown v. Nichols,42 N.Y., 26.) He was rewarded as a vigilant creditor, the commencement of his suit being regarded as an actual levy upon the equitable assets of the debtor. Under sections 292 and 294, the service of the order takes the place of the commencement of the suit under the old system, and should give the judgment creditor the priority of a vigilant creditor, and a lien upon the equitable assets of his debtor. (Edmonston v. McLoud, 16 N.Y., 544.) This lien was rendered effectual by the final order of the judge, directing the defendant to pay his debt to the plaintiff in the judgment against Acker; and payment, or a liability to pay; in pursuance of that order, is a defence to this action, the plaintiff not having shown himself a bona fide purchaser of the claim against the defendant for value.
The order of the General Term should be affirmed, and judgment absolute should be rendered against the plaintiff, with costs.
LEONARD, HUNT, and GRAY, CC., concur with EARL, C.
GRAY, C., concurs with LOTT, Ch. C.
LOTT, Ch. C., expresses no opinion as to question discussed by EARL, C.
Order of General Term affirmed, and judgment absolute against plaintiff, with costs. *Page 34