Court Opinion

ID: 3607553
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:52:37.804918+00
Date Added: 2024-06-11T13:58:53.771647
License: Public Domain

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 whether 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 section 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 section 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 section 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 section 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 having an *Page 560 
opportunity to be heard, it is provided, by section 294, that the judge issuing the order may require notice of the proceeding to be given, in his discretion, to any party to the action. This will, in practice, usually, and we think always should, be done, unless, for reasons that commend themselves to the judge, it is deemed best to omit it, and affords a sufficient safeguard to the rights of judgment debtors. Cases may easily be conceived where such notice would not be expedient; and the fact that provision is made for it, is a strong implication that the true construction of the two sections is, that they operate, and may be availed of, entirely independently of each other, and that, consequently, in this case, so far as this question is concerned, the order under the 294th section of the Code was valid and legal.
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 exparte, 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 section 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, his rights have been judicially determined, and his property has been passed from his hands into another's, without any day in court given him to assert his claims. This cannot be done without disregarding and practically subverting a fundamental maxim of the law, as *Page 561 
well as a constitutional immunity provided for the owner of property. It would, indeed, be a novel proposition, that, in a proceeding between A and B, which does not rise to the dignity of a lawsuit even, but is entirely amicable, and perhaps pre-arranged, the property of C can, without his knowledge or consent, be taken from him and bestowed upon one of the parties to such a procedure.
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  Co. 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 one hundred and five dollars, with interest from January 13, 1860, together with costs.
Order granting a new trial reversed, and judgment of Special Term affirmed. *Page 562