Surace v. Danna , 248 N.Y. 18 ( 1928 )

Appellant's claim to exemption from execution against moneys heretofore paid to him as compensation for injury rests upon this provision of section 33, Workmen's Compensation Law: "Compensation or benefits due under this chapter, shall not be assigned, released or commuted except as provided by this chapter, and shall be exempt from all claims of creditors and from levy, execution, and attachment or other remedy for recovery or collection of a debt, which exemption may not be waived. Compensation and benefits shall be paid only to employees or their dependents."

No property is exempt from execution unless some statute makes it so, and the burden is upon the person claiming exemption to bring his property within some statutory exception. (Baker v.Brintnall, 52 Barb. 188.) The question whether any one shall receive the privilege of escaping payment of a debt is one of policy and, therefore, one essentially for legislative action. The lawmaking body has seen fit to continue to impose upon one recovering a judgment in an action for personal injuries the duty to discharge his pecuniary obligations to those who have trusted him. It may relieve him of that duty just as it may lighten the financial burdens of one obtaining compensation under the Workmen's Compensation Law. We ought not to hold that the Legislature has done so in either case unless its language clearly indicates such an intention.

I can read in the act no such legislative purpose. The compensation and benefits which are exempt are only those which are "due." The statute does not deal with those which have been paid. Compensation and benefits which are due are not merely made free from claims of all kinds; the workman himself is forbidden to assign them or to waive his exemption from execution. We would have to go to extraordinary lengths before we could hold that the statute purposes to prevent any one from assigning compensation after it has been paid to him. How could an injured workman support himself, if he were prohibited from assigning his own money and if his creditors could not compel him to pay what he owes them? Clearly, to my mind, this section forbids assignments and waivers of exemption from execution only so long as the money remains in the custody of the State or the employer. This idea is reinforced by the last sentence in that part of the section above quoted: "Compensation and benefits shall be paid only to employees or their dependents," and the further provision in section 33 directing, in case of the death of an injured employee to whom any compensation was "due" at the time of his death, that such compensation shall be "payable" to certain designated relatives. All through section 33 the word "due" seems to mean "payable." Compensation can no longer be due or payable after it has been paid. The purpose of section 33 impresses me as directing a mode of procedure by which the State or the employer may be enabled to get rid of compensation, which is due and payable, simply by paying it over to the person to whom it has been awarded or to whom it is payable under the statute. The agent, public or private, who makes the disbursement shall not be harassed or obstructed by the imposition of a duty to determine at his peril the validity of assignments, third party orders, executions or any kind of document purporting to constitute legal process. He is not to be turned into a stakeholder but is to be a disbursing agent and nothing else. After his function as such has been discharged, the beneficiary may do with his compensation as he wills. The money belongs to him and, in the absence of a clear statute of exemption, it is, like other property, subject to execution. This policy may not embody such humanity and benevolence as we may think the State ought to dispense to the victims of industrial casualties. The Legislature is free to change its present policy. Our duty is to interpret the law as we find it.

In this statute, the word "due" is, I think, used by the Legislature in the sense in which that and cognate words have been defined by the courts. In Bull v. Case (165 N.Y. 578) we decided that the section of the Insurance Law (Cons. Laws, ch. 28) which provides that "all money or other benefit, charity, relief or aid to be paid * * * shall not be liable to be seized, taken or appropriated" (§ 238) does not include the case of money after it has been paid. The act of Congress (R.S. § 4747) which directs that "no sum of money due, or to becomedue, to any pensioner, shall be liable to attachment, levy or seizure" has been held to protect pension moneys only until they have been paid. (McIntosh v. Aubrey, 185 U.S. 122; Smith v.Blood, 106 App. Div. 317, 324, per CHASE, J.) Our decision inYates County Nat. Bank v. Carpenter (119 N.Y. 550) does not, it seems to me, announce any essentially different doctrine. In that case we construed a statute which provided that "a pension heretofore or hereafter granted by the United States * * * for military * * * services * * * is also exempt from levy and sale by virtue of an execution, and from seizure for non-payment of taxes, or in any other legal proceeding." (Civ. Prac. Act, § 667.) That statute plainly exempted the pension not only before but also after the money had reached the beneficiary. Property purchased with pension money and necessary for the pensioner's maintenance is the equivalent of and represents the pension. That is the theory upon which that case was decided. No one pretended that, under that statute, the pension money itself, even after it had been paid to the beneficiary, could be seized or levied upon. Therein lies the vital distinction between this and theCarpenter case. The authority of that decision has, moreover, been shaken by the opinion of the Supreme Court of the United States in McIntosh v. Aubrey (supra).

POUND, CRANE, LEHMAN and KELLOGG, JJ., concur with CARDOZO, Ch. J.; O'BRIEN, J., dissents in opinion; ANDREWS, J., not sitting.

Orders reversed, etc.