Abel v. Conover

• Decision Date: 19 August 1960
• Docket Number: No. 34787,34787
• Citation: 170 Neb. 926,104 N.W.2d 684
• Parties: Robert ABEL, Appellant-Cross-Appellee, v. J. Cedric CONOVER, Appellee-Cross-Appellant.
• Court: Nebraska Supreme Court

Page 684

104 N.W.2d 684

170 Neb. 926

Robert ABEL, Appellant-Cross-Appellee, v. J. Cedric CONOVER, Appellee-Cross-Appellant.

No. 34787.

Supreme Court of Nebraska.

Aug. 19, 1960.

Syllabus by the Court.

1. In this state the measure of recovery in all civil actions is compensation for the injury sustained.

2. A statute which provides for more than compensatory or actual damages to be paid to an individual is in excess of legislative authority and is unconstitutional.

3. Where a statute imposes liability for actual damages and also imposes additional liability for the same act, such additional liability is a fine or a penalty.

4. A statute which provides for a penalty to be paid to the injured party is violative of Article VII, section 5, of the Constitution.

5. A statute providing for liquidated damages, though in the form of a penalty, will be upheld if the amount provided bears a reasonable relation to the actual damages which might be sustained and which damages are not susceptible of measurement by ordinary pecuniary standards.

6. Section 7-106, R.R.S.1943, insofar as it provides for the recovery of treble the actual damages sustained by the injured party, is violative of Article VII, section 5, of the Constitution, in that it authorizes the recovery of a penalty by a private individual.

7. Arthur v. Trindel, 168 Neb. 429, 96 N.W.2d 208, and School District of City of Omaha v. Adams, 147 Neb. 1060, 26 N.W.2d 24, distinguished.

8. McNish v. General Credit Corp., 164 Neb. 526, 83 N.W.2d 1, distinguished, and in part overruled.

9. Where an action under a statute is a cumulative or alternate remedy to one available at common law, an election of remedies is involved. In such a case a party may not plead a cause of action under the statute and, failing that, rely upon the common law remedy.

Andrew K. Parkansky, Scottsbluff, Peter E. Marchetti, Omaha, for appellant.

Neighbors & Danielson, Scottsbluff, for appellee.

Heard before CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE and BOSLAUGH, JJ.

CARTER, Justice.

This is an action to recover treble damages, under section 7-106, R.R.S.1943, for fraud and deceit on the part of the defendant while acting as city attorney of Bridgeport, Nebraska, as county attorney of Morrill County, Nebraska, and as an attorney at law. The trial court sustained the motion of the defendant for a judgment on the pleadings, and plaintiff has appealed.

The petition alleges in substance that on or about February 17, 1955, defendant was engaged by plaintiff's wife to represent her in a suit for a divorce against the plaintiff. On February 18, 1955, plaintiff was imprisoned in the city jail of the city of Bridgeport for a period of 5 days, and on February 23, 1955, he was imprisoned in the county jail of Morrill County for 2 days. The plaintiff was not charged with any criminal offense prior to his dismissal from the county jail. The plaintiff alleged that the defendant, under the pretext that he was acting in his official capacity, fraudulently procured a deed and a bill of sale of his property to plaintiff's wife, he not knowing that defendant was about to file a suit for divorce in her behalf. He also alleged that defendant induced him to sign voluntary commitment papers for commitment of plaintiff to the Hastings State Hospital. It was further alleged that defendant did on February 24, 1955, file a divorce petition for plaintiff's wife and obtained a decree of divorce in which the deed, bill of sale, and other papers so obtained were used as evidence. Plaintiff appealed from the divorce decree to this court. Abel v. Abel, 168 Neb. 488, 96 N.W.2d 276. Plaintiff alleged that the fraud and deceit of the defendant caused him great mental anguish and deprived him of his property and standing in the community. He alleged that the conduct of defendant caused him to forfeit to plaintiff treble damages as provided by section 7-106, R.R.S.1943. He prayed for damages in the amount of $150,000.

Defendant alleged in his answer, insofar as it is pertinent to this appeal, that section 7-106, R.R.S.1943, is violative of Article VII, section 5, of the Constitution of Nebraska, and that the action is barred by section 25-208, R.R.S.1943, a 1-year statute of limitations.

The trial court held that section 7-106, R.R.S.1943, insofar as it provides that an attorney shall forfeit to the injured party treble damages to be recovered in a civil action, is violative of Article VII, section 5, Constitution of Nebraska, and thereupon sustained defendant's motion for a judgment on the pleadings.

It is the contention of the defendant that section 7-106, R.R.S.1943, is unconstitutional in that it violates Article VII section 5, of the Nebraska Constitution. This statute provides: 'An attorney and counselor who is guilty of deceit or collusion, or consents thereto, with intent to deceive a court, or judge or a party to an action or proceeding, is liable to be disbarred, and shall forfeit to the injured party treble damages to be recovered in a civil action.' It is argued that the provision that the guilty party shall forfeit to the injured party treble damages constitutes it a penalty and not a provision for liquidated damages, and consequently is void.

There is confusion in the cases as to the the meaning of the words 'fines, penalties, and license money' contained in Article VII, section 5, of the Constitution, which provides: 'All fines, penalties, and license moneys, arising under the general laws of the state, * * * shall belong and be paid over to the counties respectively, where the same may be levied or imposed, and all fines, penalties, and license money arising under the rules, by-laws, or ordinances of cities, villages, precincts, or other municipal subdivision less than a county, shall belong and be paid over to the same respectively. All such fines, penalties, and license money shall be appropriated exclusively to the use and support of the common schools in the respective subdivisions where the same may accrue, * * *.'

It has been a fundamental rule of law in this state that punitive, vindictive, or exemplary damages will not be allowed, and that the measure of recovery in all civil cases is compensation for the injury sustained. This rule is so well settled that we dispose of it merely by the citation of cases so holding. Boyer v. Barr, 8 Neb. 68, 30 Am.Rep. 814; Atkins v. Gladwish, 25 Neb. 390, 41 N.W. 347; Bee Publishing Co. v. World Publishing Co., 59 Neb. 713, 82 N.W. 28; Wilfong v. Omaha & Council Bluffs St. Ry. Co., 129 Neb. 600, 262 N.W. 537.

In School District of City of Omaha v. Adams, 147 Neb. 1060, 26 N.W.2d 24, 25, this court held: 'The words 'fines, penalties, and license moneys,' as used in section 5, article VII, of the Constitution, refer to and include fines imposed in the punishment of crimes and misdemeanors, exactions imposed for violations of ordinances and regulations growing out of the exercise of the police power and having the characteristics of a criminal proceeding, and generally speaking, such license fees as may be imposed upon businesses which by their nature require police regulation by the state and its governmental subdivisions.' This interpretation of the constitutional provision was adhered to in School District of McCook v. City of McCook, 163 Neb. 817, 81 N.W.2d 224; and Arthur v. Trindel, 168 Neb. 429, 96 N.W.2d 208. We adhere to those decisions. The case before us is not controlled by those cases.

The defendant contends that section 7-106, R.R.S.1943, provides for the collection of a penalty by an individual and is unconstitutional for that reason. The plaintiff asserts that the statute is remedial and within the power to the Legislature to enact. This question has been before this court many times with varying results. The genesis of the problem is in Atchison & Nebraska R. R. Co. v. Baty, 6 Neb. 37, 29 Am.Rep. 356, and Graham v. Kibble, 9 Neb. 182, 2 N.W. 455. Numerous cases followed these decisions in point of time which were not consistent with either or both of them. The question came squarely before the court in Sunderland Bros. Co. v. Chicago, B. & Q. R. R. Co., 104 Neb. 319, 177 N.W. 156, on rehearing 104 Neb. 322, 179 N.W. 546. The holdings of that case are: A statute which imposes a liability for actual damages and in addition thereto a penalty to be paid to the injured party is repugnant to section 5, Article VIII, now Article VII, of the Constitution, which requires all fines and penalties arising under the general laws to go exclusively to the school fund. A statute which imposes liability for actual damages and additional liability for the same act provides a penalty.

The distinction between provisions providing for penalties and those providing for liquidated damages has been stated by this court to be as follows: 'In construing a contract to determine whether or not a provision therein for the payment of a stipulated sum in case of default by one of the parties is to be considered as a penalty or liquidated damages, the court will consider the subject-matter, the language employed, and the intention of the parties. If the construction is doubtful, the agreement will be considered a penalty merely. If damages result from the performance or omission of acts which damages are certain or can be ascertained by evidence, the stipulated sum is considered as a penalty; but where the acts or omissions occasioning damages are not susceptible of measurement by a pecuniary standard, the sum stipulated ordinarily will be regarded as liquidated damages.' Brennan v. Clark, 29 Neb. 385, 45 N.W. 472. See, also, Haffke v. Coffin, 89 Neb. 134, 130 N.W. 1045; Sunderland Bros. Co. v. Chicago, B. & Q. R. R. Co., supra.

'The purpose of liquidated damages is to furnish compensation for an injury sustained, and if the amount provided does not bear a reasonable relation to the damage which might be contemplated by the parties, or if it is apparent...