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

Sam Danna had an award of $3,500 from the State Industrial Commission under the Workmen's Compensation Law (Cons. Laws, ch. 67) for injuries suffered in the course of his employment. He deposited the money in the Central Trust Company of Rochester. Thereafter a judgment was recovered against him for $558.15, and execution returned unsatisfied. Supplementary proceedings followed. On deposit with the trust company when the proceedings were begun was a balance of $2,600, a sum more than sufficient to satisfy the judgment. The judgment creditors obtained an order upon notice to the trust company and the depositor directing payment by the trust company to the sheriff of $591.22. The question is whether the moneys are exempt.

Workmen's Compensation Law (§ 33) provides: "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."

By concession the moneys due under the award would have been exempt from the pursuit of creditors before they reached the judgment debtor. The argument is, however, that they became subject to seizure the instant they were paid. If this is so, the exemption is next to futile. All that a creditor has to do is to obtain an order in supplementary proceedings, containing, like the order in this proceeding, the usual provision restraining the judgment debtor from making any transfer or disposition of his property until further directions in the premises. Then, as the installments of an award are paid, the injunction will tie them up. They may be appropriated to the last dollar in satisfaction of an ancient debt. They will no longer be a fund for the support of the indigent and helpless.

So narrow a construction thwarts the purpose of the statute. The Workmen's Compensation Law was framed to supply an injured workman with a substitute for wages during the whole or at least a part of the term of disability. He was to be saved from becoming one of the derelicts of society, a fragment of human wreckage (Matter ofPost v. Burger Gohlke, 215 N.Y. 544; N.Y.C.R.R. Co. v.White, 243 U.S. 188, 197). He was to have enough to sustain him in a fashion measurably consistent with his former habits of life during the trying days of readjustment. The cost of such support becomes a charge upon the industry without regard to fault. Rehabilitation of the man, not payment of his ancient debts, is the theme of the statute, and its animating motive.

The exemption must have a meaning consistent with the policy behind it. Few words are so plain that the context or the occasion is without capacity to enlarge or narrow their extension. The thought behind the phrase proclaims itself misread when the outcome of the reading is injustice or absurdity (Smith v. People, 47 N.Y. 330, 341, 342; Matter of Meyer,209 N.Y. 386, 389). Adherence to the letter will not be suffered to "defeat the general purpose and manifest policy intended to be promoted" (Spencer v. Myers, 150 N.Y. 269, 275; People exrel. Wood v. Lacombe, 99 N.Y. 43; Matter of Folsom, 56 N.Y. 60,66; Kent's Comm. 462). We are told that the word "due" must be held to limit the exemption to compensation owing and unpaid. But "due," like words generally (Towne v. Eisner,245 U.S. 418, 425; Int. Stevedoring Co. v. Haverty, 272 U.S. 50), has a color and a content that can vary with the setting. Compensation due under an act may be a payment presently owing, or one to become due in the future, or one already made, but made because due, i.e., required or commanded (cf. Allen v.Patterson, 7 N.Y. 476; U.S. v. State Bank of NorthCarolina, 6 Pet. [U.S.] 29, 36). If the narrower meaning is the commoner, the broader does not strain the word beyond the limits of construction. A workman, holding in his hands a payment made by his employer or an insurance carrier in satisfaction of an award might say not inappropriately that the money so received was due under the statute. The argument is not compelling that some of the prohibited acts — assignment, release, commutation — apply to compensation before the stage of payment, because impossible thereafter. This does not mean that other acts — execution, attachment, supplementary proceedings — appropriate or possible in later stages must be fitted to the same mould. The maxim"reddendo singula singulis" supplies the applicable rule.

The fundamental policy of workmen's compensation is a token of intention to be ranked as first and foremost. It is reinforced by others. Section 33 as first enacted was to the effect that "claims for" compensation or benefits were not to be assigned or released and were to be exempt from legal process. By the amendment of 1922 the words quoted are omitted. Under the statute as it now reads, the exemption is affixed to the compensation, and not merely to the claim. The strength of the desire to give protection to the workman is accentuated also by the final words of the section, "which exemption may not be waived." The claimant is to be protected against his own improvidence or folly (cf. the cognate sections 24 and 32). We are blind to the policy of workmen's compensation if we say that the purpose of the exemption, thus emphatically guarded, is to promote the convenience of the State by withdrawing the occasion for conflicting claims of ownership. There shines through the statute, both here and in related sections, a worthier conception of the duty of the State to the helpless and hapless in an industrial society. From the viewpoint of mere convenience, an assignment or release or commutation of an award is a matter of indifference to the State or its officials. Payments are made for the most part by the employer or an insurer. When not made by these, they are made from the State fund. Release, instead of imperilling the fund, would have a tendency to strengthen it. A public officer may assign his salary after an installment is already due (Mechem on Public Officers, §§ 874, 875; Bliss v. Lawrence,58 N.Y. 442; B.N. Bank v. Wilson, 122 N.Y. 478; Matter ofWorthington, 141 N.Y. 9; cf. McCoun v. Dorsheimer, 1 Clark Ch. 144; Hadley v. Peabody, 13 Gray, 200). Not so, a disabled workman who would part with his award. "Compensation and benefits shall be paid only to employees or their dependents" (Workmen's Compensation Law, § 33). At the root of the exemption is something more benignant than bureaucratic formalism, a dislike of complicating documents. The exemption like the compensation is for the protection of the man.

One other signpost of intention is at hand to give direction to the way. It is found in a different statute, but one in parimateria. A statute long in force provides that "the earnings of the judgment debtor for his personal services rendered within sixty days" before supplementary proceedings are exempt from seizure "when it is made to appear by his oath or otherwise that those earnings are necessary for the use of a family wholly or partly supported by his labor" (Civ. Prac. Act, § 777; Code Civ. Pro. § 2463). Execution is permissible for ten per cent of his accruing wages, but even that percentage is exempt if the wages are less than twelve dollars per week (Civ. Prac. Act, § 684). Compensation or benefits under the Workmen's Compensation Law are not earnings for personal services. The result will therefore be, unless the exemption follows the payment into the hands of the injured workman, that he will be in a position less favorable than his brother-workmen who are blessed with health and strength. Their earnings for sixty days, if necessary for the care of the family, are withdrawn from the reach of creditors.His meagre allowance may be diverted from his family, and used to pay his debts. The vast majority of awards under the act are payable periodically in bi-weekly installments (Workmen's Comp. Law, § 25). Commutation is exceptional, and may be ordered by the Industrial Board only when found to be "in the interests of justice" (§ 25;Adams v. N.Y., O. W. Ry. Co., 175 App. Div. 714; 220 N.Y. 579). We infer from the size of the payment to this workman that in this instance lump payments were substituted for the periodical installments. Even so, they represent a fund for his maintenance while disability continues. His untrammeled use of them for that purpose is as necessary as if the payments were spread over the years.

In these circumstances, our decision in Yates County NationalBank v. Carpenter (119 N.Y. 550) supplies the applicable rule. Code of Civil Procedure, section 1393 (now Civ. Prac. Act, § 667), exempts from execution a "pension * * * heretofore or hereafter granted by the United States * * * for military * * * services." We were asked to limit this exemption to the pension or the pension moneys before payment by the government. We held that it protected moneys collected by the pensioner. We even extended the immunity to a dwelling house and lot in which the moneys were invested. "It is quite obvious," we said, "that such an exemption can produce no beneficial effect, unless it is extended beyond the letter of the act, and given life and force, according to its evident spirit and meaning" (cf. Stockwell v.National Bank of Malone, 36 Hun, 583; Burgette v. Fancher, 35 Hun, 647; Benedict v. Higgins, 165 App. Div. 611; Price v. Soc. of Savings, 64 Conn. 362). No doubt there are decisions giving color of support for a narrower construction. They deal with statutes framed on other lines, and animated by a policy less paternal in its aim. Thus McIntosh v. Aubrey (185 U.S. 122) and Kellogg v. Waite (12 Allen, 529) construe a Federal statute which exempts a "sum of money due, or to become due, to any pensioner." The statute itself supplies a gloss upon the meaning. The money is to be exempt "whether the same remains with the Pension Office, or any officer or agent thereof, or is in course of transmission to the pensioner entitled thereto." (R.S. § 4747.) The implication is not difficult that the exemption is to cease when the transit has been ended. Bull v. Case (165 N.Y. 578) has to do with a section of the Insurance Law exempting money "to be paid" by membership insurance societies to their members or to others who may be named as beneficiaries (cf. Matter of Lynch, 83 Hun, 462; 150 N.Y. 560). There was support for a strict construction, not merely in the letter of the act, but in cogent considerations of public policy and justice. The insurance to be protected was without limit of amount (see opinion of CULLEN, J., in Bull v.Case, 41 App. Div. 391, 392). The exemption, if it could survive collection, would guard a great fortune as fully as a widow's mite. The statute now before us protects the dole of the disabled. The end to be served, the mischief to be averted, supply the clews and the keys by which construction must be governed.

The order of the Appellate Division and that of the County Court should be reversed, without costs, and the questions certified answered in the negative.