I dissent and vote to reverse the order adjudging the third-party appellant (herein called Psaty) guilty of contempt based upon a finding that subsequent to the service of a third-party subpoena upon it Psaty made payments to or on behalf of the judgment debtor (herein called Monarch).
Psaty was the general contractor for the City of New York on the construction of an incinerator plant and entered into a subcontract with Monarch for the performance of the concrete work. The subcontract called for monthly payments of 90% of the value of the work completed in the preceding month. In *168January of 1956 Monarch advised Psaty that it was short of funds necessary to continue its work. Thereupon, and on the 10th day of January, 1956, Monarch wrote to Psaty offering an arrangement whereby the work might be continued. This arrangement contemplated advances by Psaty to Monarch in order to make that possible. The letter arrangement provided that Psaty would “ make such advance payments to us (Monarch) as you may see fit in your sole discretion, or you may pay for our account such of our obligations or unpaid bills as you, in your sole discretion may determine, and charge the same against the payments, if any, which might otherwise next become due to us in the normal course. * * * We would also like it understood that if the total payments made and to be made by you to us for our account exceeds the amount of our subcontract price, * * * the excess, if any, will be repaid by us to you on your demand.”
In pursuance of this arrangement, which was acceptable to it, Psaty thereafter made advances to meet Monarch’s payroll and material bills.
On June 11, 1956 the judgment creditor (Cosmopolitan), the respondent herein, having obtained a judgment ($4,746.90) against Monarch, served a third-party subpoena on Psaty. The subpoena contained notice of the restraint provision of section 781 of the Civil Practice Act- against the transfer of property belonging to the debtor. By that time, according to the facts before us, Psaty had overpaid Monarch in the sum of $97,099.58 on its subcontract and Monarch was indebted to Psaty in that sum. In lieu of an appearance in court Psaty submitted the affidavit of its secretary, Hyman Greenberg, so stating. This statement was not challenged by the creditor nor at any time was there evidence offered to contradict the facts set forth in the affidavit. True, there is a claim made by respondent that the letter indicated a liability from Psaty to Monarch as the result of alleged delays which it is claimed occurred through no fault of the subcontractor. But there is nothing in this record to establish liability and there is no proof whatever to show that there was anything due Monarch as the result of such claim.
Pursuant to the letter of January 10, 1956, and after the service of the third-party subpoena Psaty advanced additional moneys for the express purpose of paying for labor and materials to further the work on the job. It is stated and not denied that the moneys advanced were less in amount than was required for the payment of such labor and materials, Monarch apparently paying the difference. In addition to payments for *169labor and materials, a sum in the neighborhood of $5,000 went to pay for insurance and a telephone bill amounting to less than $50.
It is because of the various advances made after the service of the subpoena that Psaty was found guilty of a willful contempt and fined the sum of $4,410.39.
In my opinion that holding can be sustained only if it should be found that Psaty, after the service of the subpoena, disposed of property belonging to Monarch, since section 781 of the Civil Practice Act forbids a transfer by a third party “ ivho has in his or its possession property or moneys belonging to the judgment debtor or who is indebted to the judgment debtor (Italics supplied.) However, there is nothing in the record to establish that when it advanced the money to pay Monarch’s obligations, Psaty had in its possession property belonging to Monarch or that Psaty was indebted to Monarch. The undisputed facts show the very contrary, for at no time when advances were made by Psaty subsequent to the service of the subpoena was there anything due to Monarch.
Monarch had no right to collect or even demand anything from the third party except as Psaty was willing to make payments. There was nothing due to Monarch at any time between the service of the subpoena and the contempt finding. Monarch could not have compelled Psaty to make any payment to it and consequently the judgment creditor was in no better position to do so for it stands on the same footing as its debtor (Matter of Gombert, 285 App. Div. 1053).
It is urged however that as a result of the letter agreement permitting Psaty to make advances as it saw fit, there came into existence a contractual relationship between Monarch and-Psaty and that under such arrangement a judgment creditor has the right to attach. That would be true if as a result of such contractual arrangement something could become due to the judgment debtor. As heretofore indicated it appears from the facts established that at no time did money become due to the judgment debtor and consequently the continuing arrangement could not be a basis for a claim by Monarch.
It is also claimed that the third party should be held liable because some of the money which was advanced for material and labor was not paid directly by Psaty but was advanced to Monarch and deposited in the latter’s bank. While conceivably the creditor might have been able to attach this money while in the debtor’s bank, the fact remains that when Psaty advanced the money it was not property belonging to Monarch. At best the advance constituted a loan and there is nothing prohibiting *170the making of such a loan. As indicated, the proceeds of that loan might have been subject to attachment when placed in the debtor’s bank account. But at the time the loan was made there was nothing due from Psaty to Monarch and consequently there was no violation of section 781 of the Civil Practice Act,
Furthermore, before Psaty could be fined the amount of the judgment it would have to be shown that the judgment creditor was prejudiced by the acts of the third party and that those acts prevented it from collecting its judgment (Matter of Short v, B. R. T, Corp., 279 App. Div. 681). Inasmuch as Psaty was not obliged to make payments and was not indebted to Monarch it is difficult to see how, because of its acts, the judgment creditor was prevented from collecting its judgment. Had the creditor stepped in and objected when the first advance was made, of certainty, the work would have stopped and there would have been no further advances beyond that point. It follows that the creditor was not prejudiced in the collection of its judgment. Nevertheless, and despite the fact that the judgment creditor would not have been able to collect anything from the third party (since the judgment debtor could not have collected anything) the order appealed from, if affirmed, will enable the creditor to collect its judgment in full.
Moreover, it seems that the judgment creditor rather than accepting, without challenge, the affidavit submitted by Psaty following the service of the subpoena, should have examined Psaty as it had the right to do, It could thus have explored the arrangement between Psaty and Monarch and proceeded to enforce whatever rights it considered it had in the circumstances. Psaty should not be penalized for failure of the judgment creditor to follow through on its subpoena, assuming it had rights which could be enforced. It is apparent that for all intents and purposes the third-party examination was considered closed upon the acceptance of the Greenberg affidavit without objection, and that the third party apparently was led to so consider it. In this situation the creditor should not be heard to complain of advances (which I believe were not improper) made by Psaty thereafter.
In short, my view is that the facts in this case do not show that there was any money due or to become due to the judgment creditor or that any property of the judgment debtor was disposed of by the third party; also that there was no showing on the part of the judgment creditor that it was prejudiced by the acts of the third party and that it was prevented by such acts from collecting its judgment. Consequently, the third-party appellant should not have been held in contempt.
*171The order should be reversed and the motion to punish the appellant herein for contempt should be denied on the law, with costs to the appellant.
Botein, P. J., Breitel, M. M. Frank and McNally, JJ., concur in Per Curiam opinion; Rabin, J., dissents in opinion.
Order modified on the law and on the facts, to strike the final decretal paragraph therein, and as so modified is otherwise affirmed, with costs to the respondent.
Settle order.