While in no way a flawless solution, those type of errors (Unexpected Errors) happens in a whole lot of Sierra games, and typically, when those happens to me, my solution is to reload several savegames ago and replay the game, maybe do things in a different order whenever possible hoping the Unexpected Error will not happen this time around. Because sometimes you do something the game did not expect, or something in a specific order that the game cannot handle, and you save your game, the game crashes some moments afterward, and when you reload the savegame, you already saved the game in this situation where the game has all the flags set up to get that Unexpected Error again, again and again.
Which is why sometimes you can get yourself out of this mess by reloading an older savegame where you didn't get all the flags set up for another Unexpected Error and cross your fingers maybe the game will not crash this time around. Always keep tons of backup savegames when you play Sierra adventure games, or old adventure games in general, just in case.
Alternatively, maybe another player can send you a savegame right after the drunkard was jailed. The Sierra Help website has a bunch of backup savegames for Police Quest 1 VGA Version 2.000, if my solution didn't work for you, you could try downloading these savegames, overwriting yours with their and check if they can fix your problem. http://www.sierrahelp.com
Their forums is also a good place to go whenever you get technical issues with Sierra games.