§ 5225.Payment or delivery of property of judgment debtor.

This section is based upon CPA § 796 which provided for payment and delivery orders in supplementary proceedings. Section 796 limited the evidence which might have been presented on the motion to that appearing “from the examination or testimony taken in a special proceeding authorized by this article.” There is no apparent reason for confining the admissible evidence in this manner, and this section does not so limit the source of the court’s information. The judgment creditor may have acquired evidence independently and he should be permitted to introduce it.

Although § 796 contained no limitations with regard to personal property of the judgment debtor in his own possession or control, the section was applicable only to such property in the possession or control of a garnishee that was “capable of delivery” and the judgment debtor’s “right to the possession whereof is not substantially disputed.” The “capable of delivery” condition has been omitted; although the court cannot order “delivery” of property incapable of delivery—i. e., intangible property—it can order assignment or transfer under subd (c). Moreover, under § 5201(c)(4) and former §§ 687 and 916, intangible property represented by an instrument or certificate, such as corporate stock, is treated as property capable of delivery.

The second condition in § 796 has also been omitted. If the judgment debtor’s right to possession is disputed, the issue can be determined upon the motion or proceeding or in accordance with CPLR § 5239. See notes to § 5239.

Section 796 expressly provided that the granting of the order was discretionary with the court. It is interesting to note that § 794, which dealt with orders against a debtor of the judgment debtor provided for both mandatory order directing payment of the indebtedness to the judgment creditor, in which case the court “must grant” the order if the required showing was made, and a discretionary order permitting such payment, in which case the court “may” grant the order. If the judgment debtor is entitled to the property or payment, it would appear that the order should be granted, and §§ 5225 and 5228 so provide.

Section 796 apparently required payment of money as well as delivery of other property to the sheriff. Since a sheriff’s sale is not required where only money is involved, there is no reason for requiring payment of money to the sheriff. Indeed, CPA §§ 793 and 794 provided for payments of money directly to the judgment creditor.

This section provides that if the person against whom the order is sought has both money and other property of the judgment debtor, the other property should not be delivered unless the money is insufficient to satisfy the judgment. This provision is designed to avoid loss to the judgment debtor by reason of the expenses of, and the distress price which may be received at, a sheriff’s sale and to expedite collection by the creditor. It is anticipated that the court in determining which of several types of property should be turned over, after any money available is exhausted, will prefer the more liquid and more easily valued and marketable properties.

Subd (c) of this section is partly new; it is designed to make it clear that the court can implement a payment or delivery ordered by directing execution of documents. To the extent that it requires “delivery” of documents, it replaces the second sentence of former § 687-a(6) and part of the second sentence of former § 795.

Under this section, the judgment creditor proceeds by motion against the judgment debtor or by special proceeding against third parties. The motion provisions of article 22 and special proceeding provisions of article 4 are applicable, except insofar as they are inconsistent with provisions of this article. Failure of the judgment debtor to obey the resulting order is punishable as contempt; a judgment obtained against a garnishee is enforceable in the same way as any other judgment. See § 5251. The proceeding is brought in a court specified in § 5221(a). The motion is made, in a court in which a proceeding could be brought under § 5221(b).

Although a proceeding need not be instituted against a judgment debtor in order to secure an order that he turn over property, subd (a) of this section requires service of the notice of motion in a way calculated to insure his actually being notified. Similar requirements are made for service of a restraining notice under § 5222(a), and service of a notice of motion for an installment order under § 5226.

Section 796 also permitted payment or delivery to a receiver, if one had been appointed. This aspect of the former section is treated in § 5228(a).

The provision in subd (b) of this rule limiting costs where the respondent does not contest the proceeding is adapted from the last sentence of former § 687-a(6), and part of the last sentence of former § 795; both of these sections related to an action against a debtor of the judgment debtor. The remainder of the last sentence of § 795, providing that the “action . . . shall make the judgment debtor a party defendant,” has also been included in the last two sentences of subd (b). See also § 5227. The last sentence of subd (b) has been added to indicate that it is intended that the rights of all claimants can be determined on this proceeding and to clarify that the provision changes former law which required a plenary action to determine rights.

Formerly § 5224, add, L 1962, ch 308; renumbered § 5225, L 1962, ch 315, § 5, eff Sept 1, 1963; L 1964, ch 388, § 25, eff Sept 1, 1964.