
    Herman V. Swalm, Plaintiff, v. Robert T. Lyons, Defendant.
    (City Court of New York, Special Term,
    May, 1908.)
    Supplementary proceedings — Proceedings to examine third persons — Vacating order — Order violating agreement.
    An agreement between a judgment debtor and Ms creditor by wMch the former gives notes and checks which, when paid, are to be in payment of the latter’s judgments, whereupon pending supplementary proceedings are to be discontinued and in the meantime action by the creditor to be withheld, so long as the agreement remains unabrogated and the debtor fulfills its obligations, controls the relation and action of the parties and a third party order in supplementary proceedings in violation of the agreement should be vacated.
    Application to vacate a third party order.
    Francis Gilbert, for plaintiff.
    Phillips & Avery, for defendant.
   Schmuck, J.

The judgment debtor applies to the court to vacate a third party order, obtained in the customary manner, ascribing his reason therefor that he had agreed with the creditor for the liquidation of the judgment upon which the said order was obtained and has not been guilty of any dereliction with respect thermo. The motion is strenuously opposed, the creditor, through his attorney, with whom all dealings with the debtor were had, vehemently denouncing the application, asserting that the debtor willfully and viciously misrepresented his financial condition and misled him into making the agreement upon which the debtor relies.

An epitome of the relations subsisting between the creditor and the debtor will conduce to a proper and just consideration of the motion. On January 23, 1908, the creditor obtained a judgment for $773.18. On March 6, 1908, another judgment was obtained for $775.77. Neither action was defended; but, before either action was commenced, the debtor had transferred his property to a corporation created for the purpose of liquidating his debts. On March 7, 1908, the debtor was examined by virtue of the judgment obtained in January. It appears that he testified that he had no property and, especially interesting for the purpose of this application, no bank account. After one adjournment and considerable' discussion, the attorney for the creditor (relying upon the testimony and the debtor’s expostulations of pecuniary embarrassment) and the debtor entered into an agreement whereby the debtor was to give a check and notes falling due at various periods in full payment of both judgments and the creditor to withhold all action under the proceedings supplementary; and, if the notes and checks were paid, the motion for the appointment of a receiver was to be withdrawn and the proceedings discontinued without costs to either party. The agreement was dated March 9, 1908. After repeated adjournments, made according to the terms of the agreement, the debtor, on April 7, 1908, by direction of the court was compelled to sign his testimony adduced in the supplementary proceedings. In the interim between March 9, 1908, and April 17, 1908, the creditor*, through his attorney, discovering that the debtor had a large sum of money deposited in the bank with which he testified he had ceased dealing, obtained an order restraining the said bank from paying to the debtor any part of the money. Upon the solicitation of the debtor this order was vacated, after the debtor promised, in return for this consideration, to procure an assignment of a large parcel of realty of which his wife held the title. The. transfer was never effected, because of the refusal of the debtor’s wife. When this refusal was communicated to the creditor’s attorney, he, having lost all patience with the debtor, obtained an order to examine the said bank under the judgment obtained on March 6, 1908, for the vacating of which order this motion is made.

Accepting as true the version of the creditor and conceding the claim of the debtor that money deposited in the Metropolitan Bank belonged to the corporation to be a snare and subterfuge, the court is reluctantly compelled to admit the soundness of the contention that the creditor is bound by the agreement of March 9, 1908, made in payment of both judgments.

¡No doubt exists in the mind of the court that the debtor presumed upon the sympathy and indulgence of the creditor, and that he intentionally and willfully misstated the facts concerning his bank account; for, on pages 7, 8 and 9. of his sworn testimony, he denies having a bank account, the contrary being clearly established by the report of the bank. There can be no question that the conduct of the creditor was kind, indulgent and sympathetic, no dispute that that of the debtor was vicious, deceitful and replete with chicanery. ¡Nevertheless, an impartial consideration of this application requires that due importance be given the agreement of March ninth, and that it be considered, so long as it remains unabrogated, as controlling the relation and action of the creditor and the debtor. By its terms it states that it is in payment of both judgments; and so long as the debtor fulfills the obligations thereof it would be unjust to permit the creditor to take any action based upon .those judgments.

The court is not called upon to decide the reprehensibility of the debtor’s conduct, nor will the court permit his sympathy for the creditor to outweigh his judgment.

Therefore, although recognizing that the creditor was misled by the obsequious lamentations of the debtor, untruthful yet withal sympathy exciting by reason of their seeming sincerity, the court, regretting his inability to assist the creditor, reluctantly grants the motion.

Motion granted.  