State v. Prybil

Decision Date17 October 1973
Docket NumberNo. 55535,55535
PartiesSTATE of Iowa, Appellant, v. Ralph PRYBIL, Appellee.
CourtIowa Supreme Court

Richard C. Turner, Atty. Gen., Bennett Cullison, Jr., Asst. Atty. Gen., and Robert Bartels, Special Asst. Atty. Gen., for appellant.

Jay H. Honohan, Iowa City, for appellee.

Considered en banc.

McCORMICK, Justice.

The State appeals trial court's judgment acquitting defendant Ralph Prybil, a member of the Johnson County board of supervisors, of receiving gratuities from contractors in connection with county business transactions in violation of Code § 741.1. We reverse but do not remand since defendant has been in jeopardy. § 793.9, The Code.

Code § 741.1 provides:

'It shall be unlawful for any agent, representative, or employee, officer or any agent of a private corporation, or a public officer, acting in behalf of a principal in any business transaction, to receive, for his own use, directly or indirectly, any gift, commission, discount, bonus, or gratuity connected with, relating to, or growing out of such business transaction; and it shall be likewise unlawful for any person, whether acting in his own behalf or in behalf of any copartnership, association, or corporation, to offer, promise, or give directly or indirectly any such gift, commission, discount, bonus, or gratuity.

The provisions of this section shall not be construed to apply to officials or employees of the state of Iowa nor to legislators or legislative employees.'

The offense is an indictable misdemeanor, punishable by a fine of not less than $25 nor more than $500, or by county jail imprisonment for not more than one year, or by both such fine and imprisonment. § 741.2, The Code.

Defendant was alleged to have violated the statute by receiving meals, books, and convention hotel expense from contractors in connection with county purchases of equipment, material, and services. He entered a not guilty plea, waived jury trial pursuant to Code § 780.23, and was tried by the court.

The State introduced evidence relating to five separate transactions, three with the Herman M. Brown Company, one with Wheeler Lumber, Bridge and Supply Company, and one with the L. L. Pelling Company. Expense vouchers submitted by salesmen for the Brown and Wheeler companies indicated the companies paid for lunches at which purchases were discussed with the board of supervisors. On one occasion, two days after the Wheeler company sold the county a pole shed, its salesman entertained the board at a Des Moines supper club. A month later he sold them an enclosure fence for the county yard. The State contended defendant's proportionate share of these meals constituted unlawful gifts to him under § 741.1.

Records of the Pelling Company showed expenses of $21.53 in payment of December 11, 1969, convention hotel expense for defendant and his wife and $20.95 on December 22, 1969, for a gift of books to defendant. In a series of transactions between September 11, 1969, and January 19, 1970, the company did more than $10,000 worth of road and equipment repair for the county.

Trial court held the State failed to carry its burden of proof and acquitted defendant. The court also interpreted § 741.1 differently than the State believed it should. The State alleges trial court erred in (1) limiting the terms 'gift(s), commission, discount, bonus or gratuity' to kickbacks, (2) requiring proof such kickbacks were made as specific inducement for a particular sale or as a reward for a particular purchase, and (3) finding the State's evidence insufficient to establish defendant's guilt.

I. We have not previously interpreted § 741.1. Familiar principles of statutory construction are applicable. The goal is to ascertain legislative intent in order, if possible, to give it effect. Words are given their ordinary meaning unless defined differently by the legislature or possessed of a peculiar and appropriate meaning in law. Other pertinent statutes must be considered. Effect is to be given to the entire statute. Its terms are not to be changed under the guise of construction. Maguire v. Fulton, 179 N.W.2d 508, 510 (Iowa 1970), and citations. In searching for legislative intent, we consider the objects sought to be accomplished as well as the language used and place a reasonable construction on the statute which will best effect its purpose. Crow v. Shaeffer, 199 N.W.2d 45, 47 (Iowa 1972).

Code § 741.1 was enacted in 1907 as Acts 32 G.A. ch. 183, § 1. It was entitled 'AN ACT to prohibit the corrupt influencing of agents, representatives, employees, officers of a private corporation, or public officers acting in behalf of a principal in any business transaction and provide a penalty therefor.'

The statute thus reaches private as well as public employees. In its relationship to private employees it is a commercial bribery statute. As to public employees it fits in the scheme of statutes prohibiting public officer corruption. See §§ 739.1, 739.10, 739.11, The Code. The purpose of statutes like § 741.1 has frequently been discussed. New York prohibited commercial bribery in § 439 of its Penal Law of 1909, (now repealed and replaced by §§ 180.00 and 180.05 of its present Penal Law, McKinney's Consol.Laws, c. 40). In People v. Davis, 33 N.Y.Crim. 460, 160 N.Y.S. 769 (1915), the court held the purpose of § 439 was to prohibit agents from considering their own personal welfare by making contracts favorable to themselves rather than their employers. The court said 'secret commissions are to be condemned because they prompt a servant to betray his master, and thus prejudice the master's interests in consideration of pay received from others,' 160 N.Y.S. at 776, and also, '(a) bonus or commission, secretly given is nothing short of a bribe to betray one's employer,' 160 N.Y.S. at 777.

Under a statute similar to ours the Connecticut court in State v. Aldridge, 25 Conn.Sup. 257, 268, 202 A.2d 508, 514 (Super.Ct.1964), said, 'It is the intention of this statute to prohibit a person who has the authority to make contracts or transact business on behalf of a public or private corporation from accepting any payment, commission or compensation or gratuity of any kind from the person with whom he makes the contract or transacts business.' For similar statements, see State v. Brewer, 258 N.C. 533, 129 S.E.2d 262 (1963); State v. Landecker, 100 N.J.L. 195, 126 A. 408 (1924), affirmed 103 N.J.L. 716, 137 A. 919; Note, 108 U.PaL.Rev. 848; Note, 46 Minn.L.Rev. 599; annot., 1 A.L.R.3d 1350 et seq.

In its application to public officers § 741.1 resembles 18 U.S.C. §§ 201(f) and (g), lesser offenses in the hierarchy of federal officer corruption defined in 18 U.S.C. § 201. Section 201(f) prescribes punishment for one who, 'otherwise than as provided by law for the proper discharge of official duty, directly or indirectly gives, offers, or promises anything of value to any public official * * * for or because of any official act performed or to be performed by such public official * * *.' Section 201(g) makes punishable the receiving of such benefit by the public official. The scope and purpose of these prohibitions has been defined:

'The awarding of gifts thus related to an employee's official acts is an evil in itself, even though the donor does not corruptly intend to influence the employee's official acts, because it tends, subtly or otherwise, to bring about preferential treatment by Government officials or employees, consciously or unconsciously, for those who give gifts as distinguished from those who do not. * * * The iniquity of the procuring of public officials, be it intentional or unintentional, is so fatally destructive to good government that a statute designed to remove the temptation for a public official to give preferment to one member of the public over another, by prohibiting all gifts 'for or because of any official act,' is a reasonable and proper means of insuring the integrity, fairness and impartiality of the administration of the law.' United States v. Irwin, 354 F.2d 192, 196 (2 Cir.1965), cert. denied, 383 U.S. 967, 86 S.Ct. 1272, 16 L.Ed.2d 308.

We believe the plain language of § 741.1 and its relationship to Code §§ 739.1, 739.10, and 739.11, prohibiting other kinds of official corruption, demonstrate the legislature intended it to have the same scope, purpose, and effect as 18 U.S.C. §§ 201(f) and (g).

Trial court relied upon Dukehart-Hughes Tractor & Equipment Co. v. United States, 341 F.2d 613, 169 Ct.Cl. 522 (1965), in giving it a much more limited effect. That case was an action by a contractor for a tax refund after disallowance by the Internal Revenue Service of deductions for expense of entertainment of Iowa public officials. In granting the refund the court held the entertainment did not violate Iowa public policy manifested in § 741.1. The court decided the statute is aimed at kickbacks, does not necessarily bar entertainment of or gifts to agents of potential customers, refers to bounties paid in connection with a particular transaction, and uses the enumeration 'gift, commission, discount, bonus, or gratuity' as an elaboration of types of kickbacks. A dissent argues the statute is not limited to kickbacks and bars gratuities related to multiple as well as single business transactions. We find the dissent accords with our view of the statute.

The statute does not use the word 'kickback,' and there is nothing in its language, context, or purpose to justify substituting that word for the words that are used. In its normal meaning, a kickback is the 'payment of money or property to an individual for causing his employer * * * or principal to buy from, to use the services of, or to deal otherwise with, the person making the payment.' Ballentine's Law Dictionary (Third Ed. 1969). Limiting the bounties enumerated in § 741.1 to kickbacks would have the effect of reading the terms 'gift,' 'gratuity' and 'bonus' out of the...

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