Next, the ship-owners claim that a genuine factual dispute exists on the question whether they are indebted to the defendant. If a question of fact does indeed exist, the court may not make an order under section 794; instead the judgment creditor must institute a plenary action under N.Y.Civ.Prac.Act. ยง 795. Kenney v. South Shore Natural Gas Fuel Co., 201 N.Y. 89, 94 N.E. 606 (1911); Powley v. Dorland Bldg. Co., 281 N.Y. 423, 427, 24 N.E.2d 109 (1939); (dictum) Kerckafric (Pty.) Ltd. v. Maxwell Meyers Affiliations, Ltd., D.C., 108 F. Supp. 594, 595 (1952). But we concluded in Koufopantelis that there was no genuine dispute as to the indebtedness of the ship-owning third parties.
The proceeding against the third parties was brought under ยง 794 of the New York Civil Practice Act, applicable in the district court by virtue of Rule 69(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A. The statute, as construed, requires that there be a trial whenever there is a "genuine issue of fact." Kerckafric Ltd. v. Maxwell Meyers Affiliations, Ltd., D.C.S.D.N.Y. 1952, 108 F. Supp. 594, 595. Section 794 states that the court "must grant" an order requiring payment by the third party to the judgment creditor "if it shall appear to the satisfaction of the court [that the third party is indebted to the judgment debtor] unless the said third party * * * shall show such facts as may be deemed by the court sufficient to entitle [him] to a trial."
Bierman also argues that the Trustee's remedy was a plenary action and not supplementary proceedings pursuant to Section 794 of the Civil Practice Act, since the latter is available only when no issue of fact exists as to the judgment creditor's right to collect from the third party. See, e.g., Kenney v. South Shore Natural Gas Fuel Co., 1911, 201 N.Y. 89, 94 N.E. 606; Kerckafric Ltd. v. Maxwell Meyers Affiliations, Ltd., D.C.S.D.N.Y. 1952, 108 F. Supp. 594. The only issue below, however, concerned Bierman's right to share in the funds held in escrow, and this right was conditioned upon a recovery by Klipper. Since Klipper was entitled to nothing, there would be no issue remaining for determination in a plenary suit. The order is affirmed.
Where a third party's affidavit presents a factual issue as to whether the third party owes money to the judgment debtor, an order compelling payment should be denied. Kerckafric (Pty) Ltd. v. Maxwell Meyers Affiliations Ltd., D.C.S.D.N.Y.1952, 108 F.Supp. 594. Therefore, since the affidavits of Ruth Goldstein and Abraham Goldstein put these facts at issue, so much of the relief which requests that Cangold.