Court Opinion

ID: 5349936
Source: CourtListenerOpinion
Date Created: 2022-01-08 06:35:10.217054+00
Date Added: 2024-06-11T08:29:43.005552
License: Public Domain

Martin, P. J.
In 1926 the petitioner herein, who was then but thirteen years of age, through his guardian instituted an action *282to recover the proceeds of an insurance policy upon the life of ' his father. The action was settled by an order of the Supreme Court. Pursuant thereto there was deposited with the city chamberlain for the benefit of the petitioner the sum of $1,875. Certain withdrawals were subsequently made by order of the court, the aggregate amount of which deducted from "the original deposit shows a balance of $936.06. After attaining his majority the petitioner moved that the balance be paid to him. The present chamberlain opposed the motion upon the ground that his predecessor had invested $1,000 of the moneys deposited in an undivided share of a bond in the face amount of $70,000. • Subsequently the mortgage securing said bond was foreclosed and title to the mortgaged premises acquired by the chamberlain. Both the chamberlain and his predecessor contend that the investment was authorized by section 44-c of the State Finance Law, as amended in 1928, which provides that moneys paid into court may be invested by the city chamberlain without specific direction of the court having jurisdiction, when the chamberlain deems it advisable to make such investments. This contention is met by the fact that the order under which the money was deposited in effect contained specific directions that the money should be held on deposit. The order in this connection provided as follows: “ Ordered that the balance be deposited with the Chamberlain of the City of New York for the benefit of the infant and said sum be withdrawn only upon order of the Court.”
In Matter of Schmidt v. Chamberlain of City of New York (266 N. Y. 225) a similar question was presented in connection with an order which provided: “ And that the said Special Guardian pay the balance remaining in his hands to the Chamberlain of the City of New York * * * to be held by said Chamberlain of the City of New York until the further order of this court.” The Court of Appeals, in sustaining a subsequent order directing payment by the city chamberlain of said balance deposited as aforesaid, held that section 44-c of the State Finance Law, as amended by chapter 837 of the Laws of 1928, applied only to moneys paid without a specific direction of the court. The court said: “ Our decision must rest on the ground that the amendment to section 44-c applies to moneys paid into court ‘ without a specific direction of the court having jurisdiction/ The order in question specifically provides that the money is to be held by the Chamberlain ‘ until the further order of this court herein/ The language used in the order clearly shows that the court intended that the money be held readily available for disposition in the manner to be determined by the court, To hold that this phraseology is not a specific direction *283would be to disregard the clear language of the order. So to do would make it necessary for a court expressly to negative the provisions of the statute in order to escape its application. This would cast an unusual and an unreasonable burden on the court. The amendment to section 44-c not applying, the Chamberlain had authority to invest the money only under direction of the court, embodied in an order or decree. (Civ. Prac. Act, § 136.) Until such order was made the money should have been deposited in a ‘ savings bank, trust company, bank, banking association or with * * * banker designated by the State Comptroller.’ ”
The appellant urges that the case above cited is distinguishable from the case at bar since in that case the order specifically directed that the money be held by the chamberlain. There is, however, no substantial difference between the two orders. In the case at bar the provision that the moneys were to be withdrawn only upon the order of the court carries the necessary implication that they were to be held until the further order of the court.
The city chamberlain further contends that the petitioner has mistaken his remedy and, instead of moving by petition, should have brought suit against the former chamberlain or the city for any loss sustained by the investment. The latter contention is predicated upon the fact that by chapter 186 of the Laws of 1908, as amended by chapter 185 of the Laws of 1927, which imposes upon the city a liability for moneys deposited with the chamberlain by order of the court, it is provided that “ an action to recover any loss to or of such fund may be brought against the city * * * by any party aggrieved.” Said provision, however, clearly does not prevent the court from issuing its further order in the premises. The petitioner should not be limited to the bringing of an action where, under the order, the funds were to be held subject to the further order of the court. The petitioner followed the procedure indicated by sections 136, and 137 of the Civil Practice Act and rule 32 of the Rules of Civil Practice. By section 137 it is expressly provided that no money which shall have been placed in the custody of the court shall be surrendered except upon an order of the court in whose custody said money shall have been placed. The petitioner accordingly moved for such an order. It was only through the chamberlain’s opposition to the motion that he learned the facts as to the investment of the money deposited.
It has been the uniform procedure to obtain an order of mandamus directing the city chamberlain to pay out moneys deposited in his office to be held pursuant to the order of the court, notwithstanding there may have been an investment of such funds by *284his predecessor. It should be sustained upon the basis that the city, by chapter 186 of the Laws of 1908, as amended by chapter 185 of the Laws of 1927, is under an absolute liability to refund, in cash, money deposited with the chamberlain to be held pursuant to the order of the court. The city chamberlain, therefore, as an officer of the city may properly be directed to pay out such money. It does not appear, moreover, that there has been or will be any loss by reason of said investment, since the city chamberlain has title to the mortgaged premises, the $70,000 mortgage upon which was reduced, by payments, to the sum of $50,000. It does not appear what consideration was paid for said premises. They were acquired at foreclosure sale in 1934, presumably upon a basis that affords ample protection for the investment. Obviously, the chamberlain must hold the title to said property as an officer of the city and not individually. As such officer, he should be required to find ways and means of paying out the money which his office was ordered to hold for the benefit of the petitioner. The matter should be dealt with practically and not as an abstract proposition of law. The present incumbent of the office is protected individually by the provision of section 137 of the Civil Practice Act, that no liability shall, in any event, attach to a city chamberlain because of a payment made by him in good faith in accordance with an order of the court. It is also worthy of note that this property, as stated above, has been foreclosed and the title to same is now in the city chamberlain. It would be very unjust to allow him to keep the title to the property in his name and refuse to take any action to pay those whose money was invested therein.
The order should be affirmed, with twenty dollars costs and disbursements.
Townley and Glennon, JJ., concur; O’Malley and Untermyer, JJ., dissent and vote to reverse and deny the motion.