KESLER v. DEPT. OF PUBLIC SAFETY

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Argument of E. J. Skeen

Chief Justice Earl Warren: Number 14, Harold Beck Kesler, versus Department of Public Safety, Financial Responsibility Division, State of Utah.

Mr. Skeen.

Mr. E. J. Skeen: Mr. Chief Justice, may it please the Court.

This is an appeal from a judgment of the three-judge court, denying injunctive relief against the enforcement of the Utah Safety Responsibility statute.

We contend that the Utah statute conflicts with Section 17 of the Bankruptcy Act and is therefore void.

With the permission of the Court, I would like to read a brief reference from the section -- sections of the statute that we have in question here.

They are found on pages 3 and 4 of my brief.

“Whenever any person fails, within 60 days, to satisfy any judgment upon the written request of the judgment creditor or his attorney, it shall be the duty of the clerk of the court or the judge of a court which has no clerk in which such a judgment is rendered within the State to forward to the Commission immediately after expiration of said 60 days, a certified copy of the judgment.”

The following section provides that upon the receipt of the certified copy of the judgment, the Commission shall suspend the license and the registration of the judgment debtor’s vehicle and then follows a subsection, “if the judgment creditor consents in writing in such form as the Commission may prescribe that the judgment debtor be allowed license and registration or non-operating residence operating privilege, the same maybe allowed by the Commission in its discretion for six months, from the date of such consent and thereafter until the consent is revoked.”

The following section provides that such license and registration shall remain so suspended and shall not be renewed or shall any such license registration be thereafter issued in the name of the person unless and until such judgment is stayed, satisfied in full or to the extent hereinafter provided and until the said person gives proof of financial responsibility, then follows this statement.

“The discharge in bankruptcy following the rendering of any such judgment shall not relieve the judgment debtor from any of the requirements of the Act.”

The following section provides for application for -- to the Court for relief, but it’s not involved in this case.

Now, we take the position, Your Honors, that the provisions of the statute I have read give the creditor a measure of control of the suspension and renewal of the driver's license which in effect puts into operation a collection device and what in effect, write into the Section 17 of the Bankruptcy Act another exception, which we contend would be clearly contrary to the constitutional provision granting to the Congress the right to establish the power and authority to establish a uniform bankruptcy law.

Section 17, Your Honors will recall, provides a discharge in bankruptcy shall release a bankrupt from all his provable debts.

The facts in this case are such as to squarely raise this question.

The bankrupt, appellant here, was sued in a state court.

A judgment was recovered against him.

The judgment creditor immediately requested that the copy of the judgment be sent to the Commission.

The Commission suspended his driver's license and registration certificate and the -- following that, the bankrupt or the judgment debtor, filed a petition in bankruptcy and he was discharged.

Following his discharge, the bankrupt made a written application to the Commission to restore his driver's license.

That application was denied and the letter denying it, which is in the record, the Commission stated that -- quoted this provision that a discharge in bankruptcy shall not relieve the judgment debtor.

The bankrupt then filed this proceeding in the bankruptcy court to assure to him the fruits of the litigation and to get injunctive relief through the bankruptcy court against the enforcement of the statute contending as I stated that the statute is void because it conflicts with the bankruptcy law.

Chief Justice Earl Warren: Mr. Skeen, did the court below determine whether the petitioner had complied with the -- with the provisions of state law concerning the restoration?

Mr. E. J. Skeen: We submitted the case on a stipulated set of facts which outlined what the judgment debtor had done and it's clear in this case that there was a request by the judgment creditor under the statute and we think it's very clear that the -- before starting the proceeding, the bankrupt made a timely application to have his license restored.

Chief Justice Earl Warren: But did he comply with the Act?

Did they find that he complied with the Act in making his petition for restoration?

I think he could have under that Act could have shown financial responsibility and have had it restored --

Mr. E. J. Skeen: Yes.

Chief Justice Earl Warren: -- at least notwithstanding.

Now, did he -- did the Court find whether he'd complied with that section of the law or not?

Mr. E. J. Skeen: The Court made no formal findings in the case we submitted it on the stipulated set of facts to the three-judge court and the -- it's certainly clear that there is no question about that based on the case before the three-judge court.

Now, this case Your Honor -- Honors --

Justice Felix Frankfurter: Does that bar this Court from considering whether there isn't relief for him under the state law which he has not exhausted?

The fact that the three-judge court, that the litigation didn't take that element into account to which the Chief Justice has referred, does that bar this Court from considering whether in fact we have what might be called an abstract question here?

In other words, the implication as I get it of the Chief Justice's question is that if he could get his license restored under state law by an appropriate application from the state agency and he didn't resort to that, then haven't we got a situation in which the constitutional question is what might be called premature?

Mr. E. J. Skeen: Well, I might answer it in this way, Your Honor.

The bankrupt judgment debtor made a written request for restoration, setting up his discharge in bankruptcy and the relief was denied by the State not because he didn't tender performance under the -- by showing that he had insurance, but simply because the discharge in bankruptcy didn't entitle him to get the first base on the question.

That -- that factually stopped any further proceedings to get the license renewed.

Justice Felix Frankfurter: Well, you're -- neither your state agency, your Supreme Court held that the debt was not discharged.

In other words, if he was sued for this judgment, debt, for discharging bankruptcy I'd take it would be controlling, wouldn't it?

Mr. E. J. Skeen: If he -- if he were sued on the debt, of course, the discharge would be controlling --

Justice Felix Frankfurter: So that -- so that --

Mr. E. J. Skeen: There's no question about that.

Justice Felix Frankfurter: So that the -- what your state agency did as approved by your Supreme Court is not to say that the debt isn't discharged, didn't say that.

They said that in effect, what was said in Reitz namely that the State has another interest which isn't included in what -- in -- which isn't a consequence of a discharged debt.

The debt may be discharged and get some -- something -- some -- the State may draw some conclusion from the fact that the fellow didn't pay his debt although he doesn't have to pay it because of the Bankruptcy Act.

Mr. E. J. Skeen: Well, of course admittedly, the cases hold that the Bankruptcy Act simply destroys the procedure to collect the debt.

Justice Felix Frankfurter: Right.

Mr. E. J. Skeen: The debt is still there.

However, the position we take and urge is that the State has no right by this sort of legislation to inject another exception into Section 17.

And we contend that that's exactly what is happening here because of the element of creditor control in the case.

Now, in the Reitz case, the Court concluded that had the clerk by a force of law been required to certify the judgment in and had the creditor had nothing to do with the case that it would be -- would not contravene the Bankruptcy Act and would be a valid exercise of the police power and constitutional, but in that case, we had the same problem involved here except that in this case, we think that there can be no severability of the creditor controlled features of the law.

Your Honors will recall that in the Reitz case which involved the New York statute, the statute as originally enacted simply provided for the certification of the judgment to the Commission and the Commission was thereupon authorized to suspend the operation of the law for a period of three years -- or the license for a period of three years.

Then in 1936, New York amended the statute to permit the creditor, judgment creditor, to allow six months use of the suspended license and then in 1939, the New York statute was amended to provide for suspension only upon action of the judgment creditor.

Now, those two amendments, 1939 and 1936 are substantially the same as our statute laws when it was enacted as a whole.

We did not go at it piecemeal.

The entire statute was enacted as a whole and we think that clearly, there was no possibility of these creditor control provisions being severable from the rest of the statute.

If they were taken out of the statute, it wouldn't be what the legislature intended and there wouldn't be any sense to the rest of the statute.

So we take the position in this case that we have now submitted to this Court for decision the question that was not decided in the Reitz case because the Court took the position that the 1936 and 1939 Amendments were severable from the rest of the statute and that if there is a -- if they're unconstitutional, the original statute was constitutional and sustained it.

Justice Charles E. Whittaker: But may I ask you not to mention --

Mr. E. J. Skeen: Sir.

Justice Charles E. Whittaker: Your Act is not like the New York statute even apart from those amendments, is it?

You say -- your statute says that even though discharged in bankruptcy, the debt must still be paid in full and one cannot have the license until it is paid in full, whereas the New York statute put a limitation of three years on it, didn't it?

Mr. E. J. Skeen: That's right.

And there is another limitation, the judgment debtor may pay up to $10,000 as I remember arising out of one accident and be relieved if he -- for example, there happened to be a $30,000 or $40,000 judgment against him, he could pay up to a minimum and be relieved.

Justice Felix Frankfurter: What do you say to, apart from the difference that Justice Whittaker just called attention, what do you say to the consideration given by Judge Hand in writing in Reitz against Mealey for the three District Court -- for the District Court, what do you say to the considerations of Judge Hand that this business of spelling out in the statute that the creditor should ask a clerk to forward the judgment.

It's all eyewash because that happens anyhow, that the clerk wouldn't know whether debt was paid, that he would be nudged even though the statute said nothing about it, he would be nudged by the creditor who has chief interest so far as that goes in telling the unsatisfied judgment debt forwarded to the agency and that the clerk couldn't possibly know whether the judgment debt has been discharged without -- without calling upon the judgment creditor for all this information so that spelling out in the statute, the creditor must ask the clerk, he's merely spelling out what in fact takes place in life.

What do you say to that?

Mr. E. J. Skeen: Well, that's of course is a good question.

However, and I would have to say that from a practical standpoint, there are some reasons for Judge Hand's statement, however, the statute doesn't stop there.

It goes right on and puts in the hands of a judgment creditor the right to restore the license for a period of six months --

Justice Felix Frankfurter: But your statute --

Mr. E. J. Skeen: -- or permanently.

Justice Felix Frankfurter: Your statute doesn't give -- doesn't give him that control and if he fulfills the condition to which the Chief Justice has referred.

Mr. E. J. Skeen: The --

Chief Justice Earl Warren: Mr. Skeen, that's the reason I asked you if that particular portion of your Act had been passed on by the court below?

Mr. E. J. Skeen: Well, the Court did not pass on the question as it's been presented to be here.

It's just been assumed throughout that his efforts to get his license restored had been nipped in the bud, so to speak.

He made a request for restoration and they rejected it so there's nothing else for him to do.

It'd been an idle act to go off and say, “Well, I can buy some insurance.”

That as a matter of fact, that's a simple matter to get insurance and that didn't come in to the picture at all.

They simply nipped his efforts to get his license right at the beginning.

Justice Felix Frankfurter: Well, drivers who bring about sometimes gas or certainly loss of injury to one sort or another, dangerous ones at times, such drivers of greater hazard, if they don't have to pay any consequence for their negligence to disregard the rules of the road, isn't that true?

Mr. E. J. Skeen: That's true.

Justice Felix Frankfurter: So that the State has an interest in deciding who shall have a license.

And therefore, this isn't just the state capriciously, without any interest, saying, “Oh no, while the fellow is discharged, we're going to use the club against him.”

It's like the case -- the instance that Judge Hand gives.

Suppose -- suppose the State refuses to hire a man in a -- or discharges a man -- as a fireman refuses to hire him is solely because he didn't pay up a discharge, a discharge?

So the debt is discharged.

Nobody can make the fellow pay, but the city says, a fellow who lives beyond his means which is what not paying your debt means, is not a good risk for us as a firefighter --

Mr. E. J. Skeen: But --

Justice Felix Frankfurter: -- to a certain act.

Mr. E. J. Skeen: That's alright as far as it goes, Your Honor, but --

Justice Felix Frankfurter: It doesn't have to go very far, (Voice Overlap) --

Mr. E. J. Skeen: It doesn't make him a better driver -- doesn't make him a better driver because he happens to be able to pay.

He --

Justice Felix Frankfurter: Certainly, (Voice Overlap) --

Mr. E. J. Skeen: He -- he's still may be a bad risk on the highway, but a driver who can pay, turn over the money is free to use the highway.

Justice Felix Frankfurter: He may --

Mr. E. J. Skeen: Whereas one who's a poor man and can't pay, he is permanently deprived of using an automobile.

Justice Charles E. Whittaker: But wouldn't it be permissible in either case for the State in the exercise of its -- (Voice Overlap) -- you shall be -- it can have a certain accident, be prohibited from driving for a classified reasonable appearance.

Mr. E. J. Skeen: Well, I think personally that there's a great merit to that suggestion.

Justice Charles E. Whittaker: But isn't that the difference between the Reitz case, the New York statute than your statute.

Mr. E. J. Skeen: That's one important difference.

This New York statute was a three-year statute, ours is permanent.

Chief Justice Earl Warren: Well, there is a escape hatch though, this provision about subsequently showing financial responsibility.

Mr. E. J. Skeen: Plus paying.

Chief Justice Earl Warren: I beg your pardon?

Mr. E. J. Skeen: Plus paying.

You see, he can't get it -- his suspension lifted simply because he can show financial responsibility --

Chief Justice Earl Warren: He must pay in addition to that?

Mr. E. J. Skeen: He must pay in addition.

Chief Justice Earl Warren: In addition to that.

Mr. E. J. Skeen: Yes.

Chief Justice Earl Warren: Yes.

Mr. E. J. Skeen: He must pay in addition and that's the part that we believe makes it contrary to the purpose and intent of Section 17 of the Bankruptcy Act.

Justice William J. Brennan: May I ask a question to you, [Inaudible]?

Mr. E. J. Skeen: He must also pay.

And his -- as I indicated before, there is a -- he can pay up to a certain amount but it is a large sum for a man who is --

Justice Charles E. Whittaker: Well, the theory of that --

Mr. E. J. Skeen: -- in the position of this bankrupt.

Justice Charles E. Whittaker: The theory of that is that the State is interested in people carrying certain minimum amounts of protection, isn't that it, $10,000 in any one accident?

Mr. E. J. Skeen: Yes.

Justice Charles E. Whittaker: That's what your -- the theory of that statute, isn't it?

Mr. E. J. Skeen: That's right.

In the -- we think that if for example, a legislature through -- under its police power of the State passed a law to the effect that no judgment based on negligence on a public highway shall be discharged in bankruptcy.

Say, we -- a State had the nerve to enact such a law, that would clearly I think all agree would be contrary to the Bankruptcy Act.

Now this, as far as the practical effect of this statute is concerned, it's just the same.

The legislature has said that a discharge in bankruptcy shall not relieve the judgment debtor of the requirements of this Act and that puts a leverage on the judgment debtor that makes it impossible for him to either drive which is just about a necessity of life or pay.

And we have some states enacting such laws others don't and the purpose of having a uniform Bankruptcy Law in the United States is destroyed by this type of legislation.

We submit that this Court should reverse the three-judge court and strike the statute down as unconstitutional.

Chief Justice Earl Warren: Mr. Madsen.

Argument of Gordon A. Madsen

Mr. Gordon A. Madsen: Mr. Chief Justice, may it please the Court.

I believe that Mr. Justice Frankfurter's question fell out in the basic reason for the statute.

I would like to submit that there are two other bases however in addition.

First that the State, and we indicate in our brief at the outset, perhaps I should say by way of introduction first, we conceded that this Court -- or the three-judge court had jurisdiction in the matter and of course this Court as well and I should like also to mention two additional facts that were not touched upon by counsel for the appellant.

In this instance, this particular bankrupt, discharged, in addition to this particular judgment, a $502 small loan and a $290 attorney's fee, the attorney's fee resulting from the trial of his negligent action.

So that as a matter of fact, this bankrupt was principally discharging this particular debt in the course of taking out that bankruptcy.

And I also wish to point out that in response to this question of separability and what the legislature's intent is, there is no discussion in either brief about the legislative intent in passing this Act largely because there isn't any such record of it.

There are no reports of committee action that are printed by the legislature of the State of Utah except where there are some public hearing and there was none in this instance when this Act was passed in 1951.

The Act, as a matter of fact, is a copy of the Uniform Vehicle Code which has been widely adopted in many of the States in our country.

I point out on page 5 in our brief, in the Footnote, at the bottom, the 21 States, including Utah, which have so passed this Act.

It's also of interest to note that the Congress has passed this Act with these creditor control provisions in them for the District of Columbia.

And assuming the intent of Congress and knowledge on the part of Congress, that it is aware to the paramountness of the Bankruptcy Act when Congress passed this Act for the District of Columbia it left this creditor control in the Act, I presume, assuming that you can ascribe some intent to Congress knowing or believing that these provisions did not conflict with the Bankruptcy Act.

Justice Felix Frankfurter: Is this -- did this originate with the uniform commissioners?

Mr. Gordon A. Madsen: I don't know where these controls originated Your Honor.

They must have come into being somewhere around 1936 or 1939 when they were put in the way of amendments in the New York Act as it was considered in the Reitz case.

Justice Charles E. Whittaker: Mr. Madsen, just a minor question.

Does the Uniform Act and the Act here in the District of Columbia, makes suspension permanent until judgment is paid or --

Mr. Gordon A. Madsen: That is correct Your Honor.

Justice Charles E. Whittaker: -- is it for period?

Mr. Gordon A. Madsen: And I think the reasoning behind that and this is only my opinion but I believe the reasoning behind the business of making it permanent rather than for a limited period would be that if you make it for a limited period, the possibility of collection is thereby frustrated.

If in fact the judgment debtor can prolong for enough time the collection of his debt, he can get his license back by the simple expiration of time whether or not he had satisfied his debt or proved financial responsibility.

Justice Charles E. Whittaker: That's just the point.

One criterion makes payment of a discharged debt, the criterion and the other makes the police power, namely some sanction for a negligent conduct, the criterion.

Mr. Gordon A. Madsen: Yes.

I believe, however, that they can't be separated, Mr. Justice, in this particular that I think -- and this is getting to the basic point here which I think is controlling, what was the purpose of this Act?

Was it in fact a police statute as we contend it was and a proper exercise of state police power?

Is it primarily concerned with keeping a particular kind of driver from using the highway and I think that's what it based at?

I think therefore, when all of these creditor control provisions are written, they say not only must he pay the debt, but he must in addition demonstrate financial responsibility.

We're not simply, therefore, considering payment of an otherwise discharged debt.

We're considering that this class of drivers, we don't consider permissible uses of our highway.

The right to use our highway is a privilege we bestow and we therefore control and regulate reasonably.

While in some States, this is no longer called a privilege, but rather a property right even in the State of New York -- even the State of New York as we indicate in our brief on page 7 and 8 citing the most recent case even where New York recognizes the right to drive as a property right.

They still contend and hold that the State has the right to reasonably regulate this use.

Now, if the State, therefore, in the exercise of its police power says, we don't feel that people who can't meet these minimum standards of responsibility, should properly use our highway, we therefore say, we don't compel you at the outset to furnish your certificate of insurance before you drive at all, but that rather, if you have an accident, you must pay the damages logically resulting -- provably resulting from that accident.

Justice William O. Douglas: But the only person that can trigger this – can initiate this is the creditors, can the -- could a state official invoke this?

Mr. Gordon A. Madsen: The State on its own motion?

Justice William O. Douglas: Yes.

Mr. Gordon A. Madsen: In given instances it can, Your Honor, not from a matter of judgment.

There is (Voice Overlap) --

Justice William O. Douglas: I mean not for --

Mr. Gordon A. Madsen: -- another provision that has to deal with accident reports --

Justice William O. Douglas: Well, I mean for a failure to pay a judgment.

Mr. Gordon A. Madsen: No.

I believe in this instance, it has to be initiated by the creditor.

There's no question about that but my point being, and perhaps indirectly answering your question, Mr. Justice, is that the creditor provision, the creditor control as it's been called here, as a matter of fact, gets into the question of implementing the Act.

This does not change its nature as a police statute, but said this is one of the criterions.

It's true.

You've got not only to pay the judgment but demonstrate financial responsibility.

We are still presently concerned with financial responsibility and it's not enough to say that we'll take it away only for a while and you may or may not pay your judgment and then you can have it back.

No; either you will drive safely or you will be insured or as you get in an accident, you will pay the damages resulting from that accident before you can drive again and you must after such an accident demonstrate financial responsibility.

You might have insurance from that on.

Justice Charles E. Whittaker: No sanctions then, effective sanctions are levied against one who has means to discharge any judgment.

Mr. Gordon A. Madsen: That's correct.

If you demonstrate your financial responsibility and again, remember, you had a fifth -- these minimums limits of $10,000.

Justice Charles E. Whittaker: Well, I'm not a -- I'm one of these unique creatures that doesn't drive a car but aren't there other sanctions for denying a license and revoking it?

Mr. Gordon A. Madsen: Of course, Your Honor, there are certain --

Justice Felix Frankfurter: Why do we say there were no other sanctions against the fellow (Voice Overlap)?

Mr. Gordon A. Madsen: Your Honor, in this context, I'll stand for the correction of Mr. Chief -- of Mr. Justice (Voice Overlap) --

Chief Justice Earl Warren: Mr. Madsen --

Mr. Gordon A. Madsen: Of course, there must be certain abilities to drive and test.

Justice William O. Douglas: No.

My question is whether or not there was any person other than a creditor who could get the revocation on these grounds for nonpayment of it.

Mr. Gordon A. Madsen: Nonpayment of a judgment.

The Commission cannot act on its own.

That's correct, Mr. Justice.

Chief Justice Earl Warren: The provision, restoration provisions are properly before us in this case?

Mr. Gordon A. Madsen: I believe they are in this particular, Your Honor, because even though the lower court did rule on this matter, this question of getting the -- having -- requiring the bankrupt to request the return of his license and getting consent of the judgment creditor wasn't done in this instant.

The lower court, I think, ruled that this wasn't done by this bankrupt.

It was obviated by the fact that he'd been denied by the Commission and that no justiciable controversy arose contesting that provision and that wasn't before the Court.

The Court just didn't consider that provision about the judgment creditor's consent in restoring a license so that they -- in saying the statute haven't been complied with, they just said, we're not going to concern ourselves with that part of the statute.

I'm not (Voice Overlap) --

Chief Justice Earl Warren: But it is true -- it is true, is it, that the -- that they could not restore the license if they did not pay the judgment --

Mr. Gordon A. Madsen: That's correct.

Chief Justice Earl Warren: -- even though they were able to provide adequate insurance for the future?

Mr. Gordon A. Madsen: That's correct.

Both the requirements --

Chief Justice Earl Warren: Yes.

Mr. Gordon A. Madsen: -- must be made.

Justice Felix Frankfurter: Mr. Madsen.

May I ask you this?

Mr. Gordon A. Madsen: Yes, sir.

Justice Felix Frankfurter: Under the Reitz, meaning right of the statute, 1936 Act of New York could, to use the phrase of my Brother, could the State Commissioner have triggered the proceedings unless the clerk sent up a judgment?

Mr. Gordon A. Madsen: No, that's the difference.

This is a distinction between our statute and the one considered in the Reitz case.

Justice Felix Frankfurter: No, no, I don't think I put my question.

Could, under the New York law of 1936, the -- whatever the appropriate agency was, the Commission have sua sponte of its own accord revoke the license?

Mr. Gordon A. Madsen: It would have had to with an automatic statute, yes.

The clerk --

Justice Felix Frankfurter: But how did the -- the nonpayment of the judgment debt get deployed.

Mr. Gordon A. Madsen: It was mandatorily required for the clerk to forward them all of the Commission.

Justice Felix Frankfurter: But you haven't taken my question as I may state here.

I asked, could the Commission, without any notice from anybody.

Mr. Gordon A. Madsen: Oh no.

Justice Felix Frankfurter: Alright.

Mr. Gordon A. Madsen: That's correct.

Chief Justice Earl Warren: Mr. Madsen, may I interrupt you just once more. You mentioned this is a uniform law and that there were 21 States that --

Mr. Gordon A. Madsen: That's correct.

Chief Justice Earl Warren: Does a uniform law include this restoration provision as you have it here?

Mr. Gordon A. Madsen: As I remember, it does, Mr. Chief Justice.

I -- unless I am mistaken the Utah Act is entirely the Uniform Act and because it appears in the Utah Act, I'm inclined to believe it also occurs in uniform.

Chief Justice Earl Warren: I wonder if you and the counsel could agree on the little memorandum on that issue and submit it to the Court.

Mr. Gordon A. Madsen: I'd be happy to.

Chief Justice Earl Warren: Would you do that please?

Mr. Gordon A. Madsen: Yes, Your Honor.

Justice Felix Frankfurter: Could I ask you Mr. Madsen over this law as a product of the uniform --

Mr. Gordon A. Madsen: You asked me and I answered I don't know.

Justice Felix Frankfurter: You didn't know, alright.

Mr. Gordon A. Madsen: Through the drafts memora, but considering all of this creditor control, in summarizing, they are that the judgment creditor must initiate the action and Mr. Justice Douglas added and certif -- request that the judgment be certified up.

Then there's a provision for a consent on the part of a creditor to restore the license on from prescribed by the Commission and the showing of financial responsibility thereafter.

The provision it said the discharge in bankruptcy shall not affect it.

Then there's a provision that the limits are the minimum amounts up to $10,000.

And finally, a provision that if in fact the judgment creditor wants immediate or a complete payment that the judgment debtor in that instance can apply to the Court again in -- which the judgment was reduced, can apply to the Court to be permitted to make payments monthly on this indebtedness on whatever term of the Court in its discretion as opposed to the judgment creditor determined.

And there is no time limit set on it, no reasonable time period within which judgment has to be paid.

This is a matter of discretion for the trial judge who originally determined the indebtedness (Voice Overlap) --

Justice William J. Brennan: Was any (Voice Overlap) --

Mr. Gordon A. Madsen: -- all of these provisions, if it please the Court, have the net effect not of becoming the principal concern of the Act but rather a concern for the judgment debtor to reduce the otherwise harshness of the Act had it been nothing more than the automatic revocation statute that was upheld by this Court in the Reitz case.

That is to say requiring all judgments to be docketed whether they had been paid or a private arrangement had been made to settle the matter or not that in fact these are safeguards and protection for the judgment debtor.

And if he finds a recalcitrant creditor, he first can go see him privately and say, “Can't we resolve this matter?”

And if he can do this, the judgment creditor fails to certify up a request the judgment setup, his license remains intact.

If he can't do this and the judgment is set up, he still has the right assuming that the creditor is doing what is contended here, go into Court and ask the Court to set whatever monthly payment he can afford to pay and thereby get a restitution of his license so that he can continue to drive.

These provisions are as a matter of fact designed to soften an otherwise harsh effect of the Act and that Justice Hand -- Judge Hand pointed out in the lower court's three-judge decision in the Reitz case, it is best calculated to do the clerk's work for him if you put the responsibility on the judgment creditor to see to it that the judgment is set up as Justice Frankfurter pointed out.

And the other basis if -- another analogy as pointed out by the court below in this case in which it argued in holding unanimously that this Act was constitutional that for example in a criminal statute, the complaining witness is the party, sometimes the aggrieved party, the injured party who has to initiate the beginning of the criminal action and supposing carrying it to the logical conclusion that it were to say a burglary and the complaining witness signed a complaint.

The burglar is tried.

He is convicted and perhaps placed on probation and one of the conditions of the probation is to make full restitution.

I reckon it could be there said that the complaining witness survived yet benefited directly, personally as a result of that order of restitution and having initiated this action.

But the fact that the complaining witness is directly benefited does not change the nature of the statute and make it no longer a police statute or a proper exercise of the state police power, the fact that he has benefited or recompressed is incidental to the proper exercise by the State of its police power.

And surely, if this Court is willing to say that where such a statute required mandatory forwarding of these judgments to the Commission as being constitutional at a proper exercise of the state police power, surely then, where there are other safeguards designed to facilitate and ease the burden on the judgment debtor.

This type of statute is unconstitutional.

It seemed to the matter of fact to put the Court -- put the State in the natural consequence of things if these Acts were to be held to be -- by this Court to be unconstitutional would mean that the State would thereby have to impose the requirement of insurance on all drivers.

Justice Felix Frankfurter: But does it -- would you agree the case gets down to this that this Court has to decide whether the exercise by Congress of the bankruptcy power whereby honest debtors are discharged for inability to pay their debt preempts or does not preempt an interest that the State may have in its own like which by indirection may also involve putting some pressure on the discharged debtor.

Isn't that the --

Mr. Gordon A. Madsen: Right.

Yes, Your Honor.

I think that really (Inaudible).

Chief Justice Earl Warren: Mr. Madsen, may I ask you this, just this one more question.

Assume that the judgment debtor has a judgment for 20 -- judgment creditor has a judgment for $20,000 and the license is revoked.

And later, the driver makes an application for restoration.

No part of that -- no part of that judgment has been paid.

Does the judgment creditor have the right to say, “Well, notwithstanding the fact that this isn't paid, I permit him to apply for and get a restoration of his license,” is -- can he do that?

Mr. Gordon A. Madsen: This is possible, yes, Your Honor.

Chief Justice Earl Warren: Well now, if he can do that, isn't the -- isn't the State putting him in the driver's seat under this Act in giving him the right to say from that time on, the rest of the debtor's life whether or not he can drive because if that -- if he will never say, if he will never consent to the man getting the -- his license restored then the State is powerless ever to restore it?

Now, that's --

Mr. Gordon A. Madsen: No.

Chief Justice Earl Warren: -- the part of the case that bothers me more than the initial, initial part of it.

I think the State does have a right under the police power to do this, but I wonder if that doesn't put the creditor in the driver's seat from that time on?

Mr. Gordon A. Madsen: That's what the following provision is designed to prevent, Your Honor, and perhaps I didn't properly emphasize it.

But in the event that you have such a recalcitrant judgment creditor, who will not say you've got to pay me every penny and every other most part of it or I won't consent.

There are two provisions; once he's paid the minimal amounts, the judgment creditor have nothing further but assuming nothing had fail as you said --

Chief Justice Earl Warren: But $10,000 is a lot -- $10,000 is a lot of money to some people.

Mr. Gordon A. Madsen: Assuming -- assuming if nothing has said, agreed.

Assuming that what you have said about no payment being made --

Chief Justice Earl Warren: Yes.

Mr. Gordon A. Madsen: There is still the alternative for the judgment creditor to go then into the Court where the judgment was obtained and asked the Court, having made a full disclosure to him what his financial situation is.

Now, Mr. Judge, you tell me what I can and can't pay and in what amounts and when and take as much time even perhaps I presume, determine whether interest shall be collected or added or compounded on this matter --

Justice Hugo L. Black: What section --

Mr. Gordon A. Madsen: -- so that if I have such a judgment creditor that gets -- will not consent to my return.

I can go and get the Court to work out whatever terms are most satisfactory to me in the Court's description, not in the creditors but the Court's --

Justice Hugo L. Black: What section is discretion?

Mr. Gordon A. Madsen: Pardon?

Justice Hugo L. Black: What section is that to which you referred?

Mr. Gordon A. Madsen: That is Section 41-12-17, Your Honor and it appears at page 7 in the record.

I think I quoted it in my brief also --

Justice Hugo L. Black: Page 22 of the -- page 22 of the jurisdictional statement I believe --

Mr. Gordon A. Madsen: In jurisdictional statement, Your Honor, I think it's --

Justice Hugo L. Black: 41-12-17?

Mr. Gordon A. Madsen: 40 -- yes, 41-12-17 subdivision (b).

The Commission shall not suspend a license registration of a non-resident operative privilege and shall restore a license registration (Inaudible) whether or not operative privilege suspended following nonpayment of judgment when the judgment debtor gives proof of financial responsibility and obtain such an order, permitting the payment of such judgment in installments and while the payment of any such installment is not in default.

Justice Hugo L. Black: That's (Voice Overlap) --

Mr. Gordon A. Madsen: (Voice Overlap) -- previous section (Voice Overlap) --

Justice Hugo L. Black: -- for installment payment.

Mr. Gordon A. Madsen: Yes, pardon?

Justice Hugo L. Black: He has to -- you agree with the Court to pay it by installment (Voice Overlap).

Mr. Gordon A. Madsen: He may give it by installment, that's correct, Your Honor.

I believe, however, this doesn't limit the Court's prerogative to work out whatever terms.

It says he can apply.

Justice Hugo L. Black: You mean less than $10,000 payment.

Mr. Gordon A. Madsen: At the Court's -- should order, that's what -- that's all the Court will consider then in effect what the -- then you've just transferred the creditor into the judge and the judges are recalcitrant and in that instance, then the State is powerless but only in that instance.

Justice Felix Frankfurter: If there is no -- there's no minimum finding in the Court, I mean the Court (Voice Overlap)?

Mr. Gordon A. Madsen: There are no -- there are no --

Justice Felix Frankfurter: -- the man has four children or three children or about to go to college, etcetera, etcetera, etcetera.

He just pays $10 a month for the next three years.

Mr. Gordon A. Madsen: That's what it appears to me to be, Mr. Justice Frankfurter.

Chief Justice Earl Warren: You mean it can -- under your state law he can wipe out a judgment that way?

Mr. Gordon A. Madsen: That's correct Your Honor.

Chief Justice Earl Warren: If the judgment is wiped out, I mean, the judgment doesn't exist --

Mr. Gordon A. Madsen: That the license has written forthwith as soon as the order is entered and so long as the judgment debtor is not in default on any monthly payment.

Justice Charles E. Whittaker: Well, that still makes payment --

Mr. Gordon A. Madsen: One of the criterions --

Justice Charles E. Whittaker: -- (Voice Overlap) criterion.

Mr. Gordon A. Madsen: I agree Mr. Justice.

I don't know how we can avoid that fact.

There are incidental benefits to the creditor, but our position is this does not change the nature of the Act of the statute itself that it principally, primarily an exercise of the state police power, a proper such exercise, one which has been widely done and I should add further that not only the 21 states have adopted the creditor control provisions or the model act, but virtually all the other states have some kind of safety responsibility act and most of the remaining ones have the automatic provision, that is the one that just said the judgment shall be forwarded up the license, shall be suspended some for a limited period and many permanently.

Justice Charles E. Whittaker: It would seem to me New York statute took care of the matter.

It says that you may not have your license back for three years unless -- meanwhile you pay.

Mr. Gordon A. Madsen: No, well -- yes.

But assuming you don't have it all paid in three years.

Justice Charles E. Whittaker: Then you get your license back in New York.

Now, it seems to me it's one thing and surely a state can say that one found guilty of negligently injuring another with an automobile shall suffer a certain sanction such as the temporary, at least, surrender of his license to drive.

But to say that one can never drive until he has paid the debt that has been discharged in bankruptcy is to revive the debt and thus to negate the Bankruptcy Act.

Mr. Gordon A. Madsen: I believe you're quoting the language of Mr. Justice Douglas into defending the right (Voice Overlap) --

Justice Charles E. Whittaker: No, this is just something I wrote down myself to ask you about.

Now, what about that?

Mr. Gordon A. Madsen: I believe, Your Honor that unless you have some kind of permanent revocation, it is no sanction at all, that is to say it is not affecting that cannot be easily avoided.

And I think this is our final point as a matter of fact on the other side of the coin that to permit a person to circumvent the purposes of this Act by the simple expedient of bankruptcy is to work an undue hardship on the person who happened to be -- that happens to be victim of the first accident.

Assuming for a moment we wipe out the statute, we declare it unconstitutional, so then there is no such creditor control, there is no taking away of a license for being in an accident even though you're uninsured.

So a party gets into an accident.

He is responsible.

He is adjudged the judgment debtor and subsequently discharges that debt in bankruptcy.

This then wipes out the judgment creditor in that instance while if in fact the same man gets into another accident within six years, he can't discharge that one in bankruptcy so that one can be collected.

So, what we're saying to everybody, you get one free accident in our state.

You can have one free accident.

You don't need to be insured.

You don't need to be financially responsible.

You can discharge it by the simple expedient of bankruptcy, but thereafter when bankruptcy can't be used as your shield, you're in trouble.

I don't think that this statute is designed to be frustrated in that fashion and I don't believe the Bankruptcy Act was designed to provide that of protection.

Justice Charles E. Whittaker: But New York in that situation under its statute would say, you can't have one free accident, you must either suffer a penalty of three years or sooner pay.

Isn't that what New York says?

Mr. Gordon A. Madsen: It did.

It is not now.

As a matter of fact, it is now permanent as well, Your Honor and incidentally the creditors control and contrary to what counsel argues in his brief, they were amended out as he indicated in 1941 but only as part of reenacting of this model code and the creditor control provision still remain in the New York Act as much as they appear in the (Voice Overlap) --

Chief Justice Earl Warren: Mr. Madsen, does your Act have a severability clause?

Mr. Gordon A. Madsen: It does have a separability clause Your Honor.

Chief Justice Earl Warren: And now, may I ask this.

If this particular section was struck down just as to the creditor control on the return of the license, would that seriously affect the State if -- that had the other provisions in there giving the Court the right to agree and so forth?

Mr. Gordon A. Madsen: There are no other provisions unfortunately, Mr. Chief Justice, as to what --

Chief Justice Earl Warren: Well, I suppose --

Mr. Gordon A. Madsen: In this area --

Chief Justice Earl Warren: I suppose you'd say every section, subsection clause or -- so forth is not --

Mr. Gordon A. Madsen: It's a general separability clause.

As I understand the statutory construction, the whole section would have to be taken out which would mean that the area of --

Chief Justice Earl Warren: The whole section?

Mr. Gordon A. Madsen: -- judgment debtor would no longer affect financial responsibility, no longer affect the Commission.

Justice Felix Frankfurter: Mr. Madsen, as I understood Mr. Justice Whittaker's question, namely that he have to pay it all which was discharged on the account of your analysis of your state statute a court may relieve him from paying all and thinking that a partial payment over an extended period of time would satisfy --

Mr. Gordon A. Madsen: I --

Justice Felix Frankfurter: -- not the payment of the judgment which isn't what the Court is concerned with but to determine whether he is a reliable fellow who should have a vehicle.

Mr. Gordon A. Madsen: That's agreed except I may have misled Your Honor in one particular,r partial payment up to the minimum requirement.

I don't believe the Court could for example say, I -- in your fact situation say, you only need to pay $5000 where the statute requires $10,000.

Justice Felix Frankfurter: Yes, but up to the statutory requirement, yes.

Mr. Gordon A. Madsen: Up to that amount on whatever term the Court determines, that's correct.

Justice Felix Frankfurter: Then I -- for your attention to the fact that the automobile liability security that this Act apparently is one of the Act that the Commissioner's model act, I think, undoubtedly from the latest report of the Uniform Commission, I gather that this was one of their proposals, this Act emanated from them.

Mr. Gordon A. Madsen: It may very well have, Your Honor.

I venture to mention it to -- in -- with regard to legislative intent that not only with a committee report but both in the Senate and the House in Utah legislature, the Act was read three times in the passed without any debate.

So we have no guide to tell us what the legislature intended if one part restricting or another were lifted.

Justice Hugo L. Black: There seems to have been some confusion about what you said on -- about releasing the judgment.

As I understand it, the Court has no power to release from him payment of any part of the $10,000 -- of the judgment up to $10,000.

Mr. Gordon A. Madsen: That's correct.

Justice Hugo L. Black: He has to order that paid.

He does have power under certain circumstances to the minute to be paid in installment rather than on (Voice Overlap) --

Mr. Gordon A. Madsen: Whatever installments he chooses or whatever time period the Court determines.

Justice Felix Frankfurter: And if the judgment is $20,000 or $15,000 or $30,000, it may be cut down to $10,000.

Mr. Gordon A. Madsen: Let's say that the Court would ordinarily pay $10,000 on whatever terms --

Justice Felix Frankfurter: Yes.

Mr. Gordon A. Madsen: -- it determines and give back the license.

Whatever --

Justice Felix Frankfurter: Yes.

Mr. Gordon A. Madsen: -- other remedy --

Justice Felix Frankfurter: Yes, but I mean --

Mr. Gordon A. Madsen: -- is then available to the creditor would be a material as a part of the --

Justice Felix Frankfurter: Minimum requirement but not -- but not a requirement to liquidate the judgment debt.

Mr. Gordon A. Madsen: That's correct.

Justice Felix Frankfurter: Is that right?

Mr. Gordon A. Madsen: That's correct.

Justice Charles E. Whittaker: Now, that would be true, is it not, where -- I mean -- let's put that this way, it would be true that for all of the dues, the $15,000 over the $10,000, there would be no execution to it because the debtor didn't discharge the bankruptcy or --

Mr. Gordon A. Madsen: That's correct.

Justice Charles E. Whittaker: So you're forcing payment of the first $10,000 --

Mr. Gordon A. Madsen: That's right.

Justice Charles E. Whittaker: -- of the $25,000 bankruptcy discharged judgment.

Mr. Gordon A. Madsen: That's right.

That's correct.

Justice Hugo L. Black: And I do not quite understand one other statements you've made --

Justice Felix Frankfurter: The standard statements.

Justice Hugo L. Black: Maybe you're correct, you probably are.

Justice Felix Frankfurter: [Inaudible]

Justice Hugo L. Black: Why would striking out this part --

Justice Felix Frankfurter: Yes, that's right.

Justice Hugo L. Black: -- which places the so-called triggering within the power of the creditor deprive the Utah of any kind of enforcement.

Since that part is in the clause which requires the clerk to notify the proper authorities of that cancellation and if the part was stricken out which is held not void which places that power in the hands of the creditor, why wouldn't the other still remain in the force.

Mr. Gordon A. Madsen: I'd be happy to agree with you Mr. Justice Burton, but is -- Black, excuse me, but I understand that you can't piecemeal take clauses out of sections when you separate it.

If that could be done --

Justice Hugo L. Black: You mean in your State that's (Voice Overlap) --

Mr. Gordon A. Madsen: As I understand the settled on statutory construction, he came from our State and we take him as kind of a Bible perhaps his opinion is and I haven't fairly briefed the subject that you can't rewrite sentences that you --

Justice Felix Frankfurter: I don't --

Mr. Gordon A. Madsen: -- we should take out a section or sentence at a time.

Justice Felix Frankfurter: I don't (Voice Overlap) --

Mr. Gordon A. Madsen: But unfortunately this is just a clause in a sentence.

Justice Felix Frankfurter: And on -- your -- the specific provision of your separability clause is --

Mr. Gordon A. Madsen: And it uses them --

Justice Felix Frankfurter: For years now -- for years and years, well, that since 1940 the separability clause affecting federal statute does precisely that that if any part of this or any provision, any clause so that you can cut out the words.

Mr. Gordon A. Madsen: Unfortunately, the wording in the Utah Act, this Uniform Act says section and I'm afraid that would be construed to mean the entire --

Justice Hugo L. Black: Which Section (Voice Overlap) --

Mr. Gordon A. Madsen: -- (Voice Overlap).

It is not quoted in the record, Your Honor.

The separability clause does not appear in the record but it's -- it is in the Act and I believe in the language and I'm going by memory, if any section of this Act is put out unconstitutional, the remainder of the Act --

Justice Hugo L. Black: Does it describe a section as one that has to be numbered and if so, would it be the whole thing or would be half (Voice Overlap) --

Mr. Gordon A. Madsen: I'd be happy to research that for the Court, Your Honor if that's a possibility but I have just got on the assumption that they can't take merely a phrase or clause out of a sentence.

Justice John M. Harlan: What year was this District of Columbia called --

Mr. Gordon A. Madsen: I beg your pardon?

Justice John M. Harlan: What year was the District of Columbia statute passed?

Mr. Gordon A. Madsen: I don't know but I will be glad to furnish the (Voice Overlap) --

Justice John M. Harlan: Is there any legislative material in connection with that to indicate whether Congress was aware of the state law?

Mr. Gordon A. Madsen: Well, I'm sure that it came after the Bankruptcy Act.

If we're imputing -- null it to Congress, it would have come after it knew of the existence of the Bankruptcy Act.

Chief Justice Earl Warren: Mr. Skeen.

Rebuttal of E. J. Skeen

Mr. E. J. Skeen: Counsel in his brief makes a statement that I wanted to make one comment about.

On page 13, he says, appellee respectfully submits that this Court should find that the state policy of preventing financially irresponsible drivers from using its highways outweighs whatever intrusion the Act may incidentally make into the field of bankruptcy.

Now, that sounds alright, but I don't believe this is a kind of a case where the Court can weigh equities.

I think that the Court has to determine whether this statute we're attacking makes any intrusion or whatever in the field of bankruptcy.

If it makes any intrusion, the statute is void.

It's not a matter of weighing equities.

Justice Potter Stewart: I don't think there's any room for balancing here.

Mr. E. J. Skeen: That's right.

Justice Potter Stewart: Because it's absolute.

Mr. E. J. Skeen: It's absolute.

If there's any intrusion, the statute is void as contrary to that provision of the Constitution.

Thank you.