Supreme Court limits garnishment claims when third-party debtor fails to deposit full debt

The Supreme Court ruled that a third-party debtor who fails to deposit a seized monetary claim in full cannot claim the debt is extinguished by paying one creditor, limiting other creditors' recovery to their proportional share.

In a decision dated Feb. 12, the court clarified obligations under Article 248 Paragraph 3 of the Civil Execution Act regarding cases where multiple creditors attach the same debt owed by a third party. The court held that if a third-party debtor voluntarily pays one creditor instead of depositing the full amount, they remain liable to other creditors who requested the deposit.

However, a creditor who demanded a deposit may only garnish the amount they would have received had the full sum been deposited and a proportional distribution taken place. The third-party debtor bears the burden of proving which creditors exist, their claim amounts and their priority rankings to calculate this limit.

If another creditor has already obtained a final judgment to garnish the same debt, the creditor who requested the deposit can enforce that judgment to collect their hypothetical distributive share. The third-party debtor cannot argue the debt is extinguished for this portion but may file a separate objection lawsuit for any amount exceeding that calculated share.

The court found that a failure to deposit does not automatically constitute a tort requiring compensation. Since creditors can still seek proportional distribution from those who were paid or garnish their theoretical share, definite financial loss is generally not recognized absent special circumstances.