Healey v. Murnaghan, 27785.

• Decision Date: 12 December 1939
• Docket Number: No. 27785.,27785.
• Citation: 34 F. Supp. 203
• Parties: HEALEY v. MURNAGHAN et al.
• Court: U.S. District Court — Northern District of New York

34 F. Supp. 203

HEALEY v. MURNAGHAN et al.

No. 27785.

District Court, N. D. New York.

December 12, 1939.

John C. Rafter, Jr., of Troy, N. Y., for bankrupt.

Jack Goodman, of Albany, N. Y., for defendant Mealey, Commissioner.

Before L. HAND, Circuit Judge, and COOPER and COXE, District Judges.

PER CURIAM.

This is a motion in a bankruptcy proceeding to enjoin one Murnaghan and the Commissioner of Motor Vehicles of the State of New York from suspending the bankrupt's license to drive, and his certificate registering his motor car, on the ground that the statute authorizing them to do so is unconstitutional. Section 94-b of the Vehicle & Traffic Law of New York, Consol.Laws c. 71, as amended by Chap. 618 of the Laws of 1939, effective as of May 31st, 1939. Since in part the motion is to enjoin a state official from executing a state statute because of its unconstitutionality, it was thought proper to convene a "statutory court" under § 380 of Title 28, U.S. Code, 28 U.S.C.A. § 380. The bankrupt has been adjudicated, but has not yet obtained his discharge. He alleged that Murnaghan had on April 11, 1939, obtained a judgment against him for $825 for personal injuries done her by a motor car, negligently operated by another, but owned by him. Further, that she was threatening to invoke against him the provisions of § 94-b which require the Commissioner to suspend his license to operate the car, and its certificate of registration. On this petition he obtained an order to show cause why both respondents should not be enjoined from putting the section in force; the Commissioner appeared and admitted that, unless enjoined, he would suspend the bankrupt's privileges. The section, as it stood on April 11, 1939, provided that when a judgment for personal injuries was obtained against the owner of a car and it was not satisfied within fifteen days, the clerk of the court where it was entered should send a certified copy of the judgment to the Commissioner of Public Vehicles, who must thereupon suspend the owner's license and certificate for three years, unless the judgment creditor should meanwhile consent to their restoration. Moreover, even then the privileges were not to be restored unless the debtor gave certain specified security in favor of any whom he might injure in the future. The same condition was imposed upon him at the end of the three years' suspension. Discharge in bankruptcy was not to toll the sanctions thus created. By the amendment of 1939 the clerk is to transmit a copy of the judgment to the Commissioner only in case the judgment creditor asks him to do so.

The first question is whether a court of bankruptcy has jurisdiction to issue such an injunction at all; the second, whether, if so, a "statutory court" must convene. The only possible jurisdiction of the court is by virtue of § 11 of the Bankruptcy Act, 11 U.S.C.A. § 29, which gives it discretionary power to stay suits against the bankrupt between his adjudication and his discharge. Section 94-b in effect adds a new sanction for the collection of the judgment, because payment will remove one of the obstacles to the restoration of the bankrupt's privileges. For this reason it seems to us that the court certainly has power to enjoin the creditor under § 11, and we also think that the same is true after the Commissioner receives a copy of the judgment from...