People v. Sheriff of Kings County

• Decision Date: 25 June 1913
• Parties: PEOPLE ex rel. OTTERSTEDT v. SHERIFF OF KINGS COUNTY.
• Court: U.S. District Court — Eastern District of New York

206 F. 566

PEOPLE ex rel. OTTERSTEDT v. SHERIFF OF KINGS COUNTY.

United States District Court, E.D. New York.

June 25, 1913

Alfred J. Patterson, of Brooklyn, N.Y., for relator.

Moore Williams & Upson, of Brooklyn, N.Y., for judgment creditor.

Jacob Brenner, of Brooklyn, N.Y., for sheriff.

CHATFIELD District Judge.

The bankrupt has mistaken his remedy. He must apply to the County Court to be discharged if unable to comply with its order and especially since he has turned over all his property to be administered in bankruptcy. His right to file such a petition in bankruptcy is well established.

The fine imposed under sections 753 and 773 of the Judiciary Law of New York (chapter 35 of the Laws of 1909 (Consol. Laws 1909, c. 30)) is expressly stated to be for the purpose of giving recompense for 'damages' which were incurred prior to the bankruptcy proceedings and which have been liquidated by the finding of the County Court. This fine has been imposed for what is named in the state law as a civil contempt, although a charge of criminal contempt would also lie for the same act. Section 753. This contempt consisted in the disobedience of an order of the County Court forbidding transfer of assets by the judgment debtor, who filed the petition in bankruptcy a short time before he was adjudged in contempt.

The entire question of punishment is within the jurisdiction of the County Court, except as it is affected by the bankruptcy statute (Act July 1, 1898, c. 541, 30 Stat. 544 (U.S. Comp St. 1901, p. 3418)). Section 9, subd. 'a,' of the bankruptcy law (2) exempts a bankrupt from arrest when in attendance upon a court of bankruptcy or engaged in the performance of duties imposed by the act. Section 11 of the bankruptcy statute provides for staying a suit founded upon a claim from which a discharge in bankruptcy will be a release. A claim of 'damages' accruing prior to the petition in bankruptcy and equal in amount to the judgment which is discharged would be a provable debt, if it arises from a legal right growing out of a tort or breach of contract. But the state courts have held that, although payment of the fine will extinguish the debt and satisfy the judgment, as well as constitute a bar to an action for further damages (where the right to such an action is recognized), yet the obligation to pay the amount of this fine is not a debt. They have held that the order of the state court compelling the payment to the judgment creditor shall stand and be enforced, even though the creditor has also a provable claim in bankruptcy for the amount of his judgment, and although the order of the state court directing the payment of the fine would seemingly give to this creditor a preference prohibited by the bankruptcy statute. The ruling of the state court that such a right to receive 'damages' is not dischargeable in bankruptcy (Matter of Lyman A. Spalding, 10 Paige (N.Y.) 284) was affirmed by the Court for the Correction of Errors for the state of New York, and upon appeal to the Supreme Court of the United States was affirmed by that court; the Chief Justice stating:

'There is some difference among the justices who concur in affirming the judgment as to the principles upon which the affirmance ought to be placed. No further opinion will therefore be delivered than merely to pronounce the judgment of this court, affirming the judgment rendered by the state court. ' Spalding v. State of New York, 45 U.S. (4 How.) 21, at page 36 (11 L.Ed. 858).

The Circuit Court of Appeals for this circuit, in the...