John R. Philip, Inc. v. Langella

The trust fund remedy prescribed by section 36-a of the Lien Law is not exclusive (Lien Law, § 76) and does not prevent a creditor from pursuing his ordinary remedies. Moreover, in this instance, the money was not effectively transferred beyond the control of the debtor. The judgment creditors’ rights in the fund in the receiver’s hands should, as a matter of discretion, be determined in such further proceedings herein as they may be advised to take. This will allow the other creditors who may have been misled into relying on the escrow agreement to make such claims as they can. They may well…