In Ray v. Jama Productions, Ind., 74 A.D.2d 845, 425 N.Y.S.2d 630 (2d Dep't 1980), a judgment creditor served a restraining notice upon a garnishee that prohibited the garnishee from transferring any money to the judgment debtor or to any other entity having a relationship with the judgment debtor.
Despite the restraining notice, the garnishee paid a third party $10,000 to satisfy the judgment debtor's debts and expenses.
In that case, the court found that, even though the funds did not pass through the judgment debtor's hands, the judgment debtor derived a benefit from the funds and, thus, had an interest in the funds.
The court in Ray stated:
One may not circumvent the mandates of a restraining notice by claiming that the judgment debtor has no interest in the money merely because he will not acquire physical possession of such money. The fact that a judgment debtor will directly benefit from the payment of this sum is sufficient to require the party served with the restraining notice to comply with the provisions or be subject to the appropriate legal sanction. (Ray, 74 A.D.2d at 845-46.)