In re Francisco

| N.D.N.Y. | Sep 17, 1917

RAY, District Judge

(after stating the facts as above). It appears from the papers in the case that Charles R. Francisco was adjudged a bankrupt on the 11th day of May, 1917. He was owing the International Milk Products Company, on a judgment obtained prior to the filing of the petition in bankruptcy, the sum of $224.73. This claim or judgment is one from which a discharge in bankruptcy would be a release. Prior to the filing of the petition in bankruptcy an execution had been returned unsatisfied, and proceedings supplementary to execution on such judgment had been commenced and were pending in the County Court of the county of Schenectady, N. Y., before the county judge of that county. The order of the county judge prohibited Francisco from disposing of any of his property, but notwithstanding such order, on filing his petition, in order to pay his attorney, he used some money which he had in his possession. A part of this money he claims, and files affidavits tending to show, did not belong to him at all, and the remainder the bankrupt claims, and files affidavits tending to show, was money earned and paid to him within the preceding 60 days for his personal services, and was his personal earnings, and exempt from the supplementary proceedings.

The judgment creditor in the execution claims that all of this money belonged to the bankrupt, and that he paid it to his attorney to institute the bankruptcy proceedings in defiance of the order of the county judge and in violation thereof.

[1, 2] It is plain that the bankrupt, with the consent of the owner thereof, had the right to use money in his possession which did not belong to him, for the purpose of instituting the bankruptcy proceedings. It is also plain that the county judge of Schenectady county could not interfere with the use by the now bankrupt of money which was not subject to the order or jurisdiction of the county judge or County Court, but was absolutely exempt. It is presumed that the county judge will properly perform his duties, and see to it that no wrong is done the bankrupt in proceedings to punish him for contempt. It is a question for the county judge or County Court of Schenectady county to determine whether or not Francisco was guilty of a contempt of court. It is claimed in behalf of the now bankrupt that the proceeding supplementary to execution had run down and was not in force at the time the petition in bankruptcy was filed, but that is a question for the county judge to determine.

[3] This court in bankruptcy can enjoin further proceedings looking to the collection of the judgment from the property of the bankrupt, and can enjoin further examination of the now bankrupt in such proceeding; but I do not think this court in bankruptcy has any power to enjoin a proceeding in the County Court of Schenectady county, or before the county judge of that county, to punish Francisco for an alleged contempt of that court committed by him prior to the institution of the proceedings in bankruptcy. Up to the time the bankruptcy proceedings were instituted it was the duty of the bankrupt to obey all lawful orders of the County Court, or of the county judge. Unless a stay was granted by some court of competent jurisdiction, it was the duty of the now bankrupt to obey such lawful orders,- even after the bankruptcy proceedings were instituted. Here there is no claim that the alleged contempt was committed after the institution of the bankruptcy proceedings. The claim is that the alleged contempt was committed before that time. A fine imposed for alleged contempt, if contempt is found, would not be a debt dischargeable in bankruptcy.

I think the order of the referee enjoining further proceedings in the proceedings supplementary to execution, so far as it enjoins punishment for contempt of court, if any,' committed before the institution of the bankruptcy proceedings, should be vacated, and the application for an injunction or order restraining such a proceeding should be denied. The plaintiff in that execution and judgment should be enjoined from taking further or other proceedings under such order or in such proceeding for the collection of the debt, as the claimant may prove his claim and share with the other creditors. Punishment for the contempt of court,. if any, is another matter, and a question to be passed upon by the county judge, with all the facts before him. The County Court will be able to determine whether or not there was a contempt, and whether or not it was willful, and what punishment, if any, should be imposed, if Francisco is found guilty. There will be an order enjoining and' staying the International Milk Products Company, its agents and. servants, and all other persons, from taking further proceedings in the-proceeding supplementary to execution, except in so far as it relates-to an application to the county judge or County Court to punish Francisco for a contempt committed prior to the institution of the bankruptcy proceedings.

[4] It is contended that, if the bankrupt is found guilty of and punished for the alleged contempt, it will interfere with the proper conduct of the bankruptcy proceedings. I cannot see that it will have this effect. If the bankrupt is found guilty of a contempt and punished by fine or imprisonment, this court has ample power by writ of habeas corpus to bring the alleged bankrupt before the court in case he is imprisoned.

There will be an order accordingly.

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