State v. Wipke

• Citation: 133 S.W.2d 354,345 Mo. 283
• Decision Date: 07 November 1939
• Docket Number: 36793
• Parties: The State, Appellant, v. Harry Wipke and Reserve Mutual Casualty Company, a Corporation
• Court: United States State Supreme Court of Missouri

133 S.W.2d 354

345 Mo. 283

The State, Appellant, v. Harry Wipke and Reserve Mutual Casualty Company, a Corporation

No. 36793

Supreme Court of Missouri

November 7, 1939

Appeal from Circuit Court of St. Louis County; Hon. Julius R Nolte, Judge.

Reversed and remanded (with directions).

Roy McKittrick, Attorney General, J. E. Taylor and J. F. Allebach, Assistant Attorneys General, for appellant.

(1) Where bond is given to a sovereign as a condition of license or other privilege and conditioned upon compliance with law the full penalty may be recovered for a breech thereof without showing actual damages because of the impossibility of showing or proving actual damages. Secs. 13-a, 19, Laws 1933-1934, Ex. Sess., 82, 83; 11 C. J. S. 510; Clark v Barnard, 108 U.S. 436; State v. Vending Machine Corp. of America, 51 P.2d 724, 174 Okla. 603; Illinois Surety Co. v. United States, 229 F. 527; United States v. Engelberg, 2 F.2d 720; Quintard, Treas., v. Corcoran, 50 Conn. 34; Commonwealth v. Moeschlin, 170 A. 119; Paducah v. Jones, 104 S.W. 971; Albany v. Cassel, 76 S.E. 105; O'Kane v. Lederer, 4 F.2d 418, 103 A. L. R. 405. (2) When bond runs to the sovereign as a condition of license or other privilege, a breach of any one of many conditions covered by said bond will forfeit the entire penal sum thereof to the State. Illinois Surety Co. v. United States, 229 F. 527; United States v. Engelberg, 2 F.2d 720. (3) The defendant Wipke was engaged in and licensed to sell liquor at retail only and therefore the statutory liquor bond must be governed by the provisions of Section 13-a of the Liquor Control Act which is a special section dealing with the bonds required of retailers and such bonds are not governed by Section 19, which is a statute dealing generally with all liquor licenses including manufacturers and wholesalers. Secs. 13-a, 19, Laws 1933-1934, Ex. Sess., pp. 82, 83; Cohn v. Railroad Co., 151 Mo.App. 661; State ex inf. Barrett v. Imhoff, 291 Mo. 603, 238 S.W. 122. (4) Where bond is given in pursuance of a statute the courts will, in enforcing the bond, read into it the terms of the statute which have been omitted and will likewise read out of it terms included in it that are not authoried by the statue. 11 C. J. S. 420; Rubelman Hardware Co. v. Greve, 18 Mo.App. 6; Woods v. State of Missouri, 10 Mo. 698. (5) The legislative intent is clear that entire penal sum of the statutory liquor bonds of retail liquor dealers is to be forfeited to the State in the event any of the conditions, duties or requirements of the Liquor Control Act are violated. Secs. 13-a, 19, Laws 1933-1934, Ex. Sess., pp. 82, 83; Secs. 6508, 6510, 6527, 6537, R. S. 1919; State v. Larson, 86 N.W. 3; State v. Hackbarth, 279 N.W. 687; Sec. 26, Laws 1933-1934, Ex. Sess., 1937, p. 53; Sec. 27, Laws 1933-1934, Ex. Sess., p. 88, amended Laws 1935, p. 277, Laws 1937, p. 533. (6) Full penalty of bond is forfeited to State upon a violation of terms of Liquor Control Act, regardless of fact that the licensee and principal in the bond is also subject to criminal prosecution which might result in a penitentiary or jail sentence and a possible fine. Sec. 30-e, Laws 1935, p. 278; Albany v. Cassel, 76 S.W. 107; Sec. 13-a, Laws 1933-1934, Ex. Sess., p. 82; State ex rel. Canyon County v. Forch, 146 P. 110; Granger v. Hayden, 20 A. 833; State v. Pierce, 26 Kan. 777. (7) If the bond involved in this case is not the correct type of bond as required by the statute, then it is good as a common-law bond. Burton Machinery Co. v. Ruth, 194 S.W. 526, 196 Mo.App. 459; Nations v. Beard, 267 S.W. 19, 216 Mo.App. 33; State ex rel. Hubbard & Moffit Commission Co. v. Cochrane, 175 S.W. 599, 264 Mo. 593; 11 C. J. S. 412; Southern Surety Co. v. Nalle & Co., 242 S.W. 197; Love v. McCoy, 94 S.E. 954; State ex rel. Cantwell v. Stark, 75 Mo. 566. (8) The statute requiring bonds of retail liquor dealers does not violate Section 28, of Article IV of the Missouri Constitution. Graves v. Purcell, 85 S.W.2d 543, 337 Mo. 574. (9) The State has full power to regulate the liquor traffic. State v. Parker Distilling Co., 236 Mo. 219, 139 S.W. 453; State Board of Equalization v. Young's Market Co., 299 U.S. 59; Mahoney v. Triner, 304 U.S. 401, 58 S.Ct. 952.

McCune, Caldwell & Downing, Harding, Murphy & Tucker, Fordyce, White, Mayne, Williams & Hartmann and Lord, Bissell & Kadyk for respondents.

(1) Unless the penalty of the bond is either (a) liquidated damages for its breach, or (b) the punishment exacted by the sovereign for violation of its laws, the State may recover only the actual damage sustained as a result of a breach of any of the conditions of the bond. Art. II, ch. 15, R. S. 1929, secs. 2876-2889; Burnside v. Wand, 170 Mo. 531; Basye v. Ambrose, 28 Mo. 39. (2) The full amount named in the bond is not liquidated damages for breach thereof, because -- (a) Where the bond is conditioned upon the performance of several duties of varying importance, the damages for breach of some being capable of ascertainment, and for breach of others being incapable of ascertainment, the amount specified in the bond to be forfeited is not to be construed as liquidated damages. Gower v. Saltmarsh, 11 Mo. 271; Hammer v. Breidenbach, 31 Mo. 49; Basye v. Ambrose, 28 Mo. 39; Morse v. Rathburn, 42 Mo. 594; Jennings v. First Natl. Bank of Kansas City, 30 S.W.2d 1049; Sylvester-Watts-Smyth Realty Co. v. Amer. Surety Co., 292 Mo. 423, 238 S.W. 494; United States v. Zerbey, 271 U.S. 332; State v. Hackbarth, 279 N.W. 687; City of Summit v. Morris County Traction Co., 85 N. J. L. 193, 88 A. 1048; City of Brunswick v. Aetna Indemnity Co., 4 Ga.App. 722, 62 S.E. 475; State v. Estabrook, 29 Kan. 739; Illinois Surety Co. v. United States, 229 F. 527; United States v. Engelberg, 2 F.2d 720. (b) It is the policy of the courts of Missouri to construe a bond as providing for indemnity rather than liquidated damages, and in pursuance of such policy the courts of Missouri have often ignored express language to the contrary contained in the bond. Burnside v. Wand, 170 Mo. 560; State ex rel. Ford v. Ellison, 287 Mo. 683; Thompson v. St. Charles County, 227 Mo. 238. (3) The bond is not one exacted by the State as punishment for the violation of its laws for the reason that it is conditioned not only for the faithful compliance with the Liquor Control Act and the regulations of the supervisor, but, also, for the payment of taxes, inspection and license fees, together with all fines, penalties and forfeitures. 11 C. J. S. 510; O'Kane v. Lederer, 4 F.2d 418; United States v. Wandmaker, 292 F. 24; United States v. United States Fid. & Guar. Co., 1 F.2d 355; United States v. Zerbey, 271 U.S. 332; United States Fid. & Guar. Co. v. United States, 12 F.2d 1021; United States v. Randall, 58 F.2d 193; United States v. Warnell, 67 F.2d 831; United States v. Kern, 8 F.Supp. 296; United States v. Hartford Acc. & Indemnity Co., 15 F.Supp. 791; State v. Larson, 83 Minn. 124, 86 N.W. 3; St. Cloud v. Willenbring, 261 N.W. 585; State ex rel. v. Haller, 199 Mo.App. 470; Clark v. Barnard, 108 U.S. 436; State v. Vending Machine Corp. of America, 174 Okla. 603, 51 P.2d 724; Illinois Surety Co. v. United States, 229 F. 527; United States v. Engelberg, 2 F.2d 720; Quintard v. Corcoran, 50 Conn. 34; Commonwealth v. Moeschlin, 170 A. 119; Paducah v. Jones, 104 S.W. 971; Albany v. Cassel, 76 S.E. 105. (4) Section 13-a and Section 19 of the Liquor Control Act were each applicable in the granting of a license to Wipke, and it was proper for the bond to contain not only the conditions required by Section 13-a, but also the conditions required by Section 19. Laws 1933-1934, Ex. Sess., secs. 13-a, 19, pp. 82, 83; In re Bernay's Estate, 126 S.W.2d 209; Johnson v. Kruckemeyer, 224 Mo.App. 351, 29 S.W.2d 730. (5) To construe the bond as a forfeiture bond would be inconsistent with the obvious intent of the Legislature evidenced by the provisions of the Liquor Control Act. Laws 1937, secs. 13, 26; 11 C. J. S. 510; State ex rel. v. Haller, 199 Mo.App. 470. (6) The fact that the bond is conditioned not only for observance of the Liquor Control Act as prescribed by Section 13-a, but also for the payment of taxes, license and inspection fees, together with all fines, penalties and forfeitures as prescribed by Section 19, does not give it a dual character, so as to permit recovery of the full amount thereof for a failure to observe the Liquor Control Act. United States v. Sullivan, 26 F.2d 606; United States v. New Amsterdam Cas. Co., 45 F.2d 93; Eagle Indem. Co., v. United States, 22 F.2d 388; Runnels v. Lasswell, 272 S.W. 1032. (7) If it be conceded that criminal prosecution under the Liquor Control Act is not a condition precedent to recovery on the bond, it does not follow that the State may recover more than the damages actually sustained as a result of the principal's breach of the bond. State v. Estabrook, 29 Kan. 739; State v. Pierce, 26 Kan. 777; Granger v. Hayden, 20 A. 833; State ex rel. Conyon County v. Forch, 146 P. 110; Albany v. Cassel, 76 S.E. 105. (8) The language contained in the bond to the effect "that a breach of any of the conditions of said bond, whether general or special, shall work a forfeiture of said bond" is of no significance, because it was not authorized by the provisions of the Liquor Control Act, nor was the supervisor authorized to insert that provision in the bond. Laws 1933-34, Ex. Sess., secs. 13-a, 19; 11 C. J. S. 420; Rubelman Hardware Co. v. Greve, 18 Mo.App. 6; Kinealy v. Stead, 51 Mo.App. 176; Greene County v. Wilhite, 29 Mo.App. 459; Woods v. State ex rel. Rainey, 10 Mo. 698; State ex rel. v. Fraser, 165 Mo. 242; United States Fid. & Guar. Co. v. Iowa Tel. Co., 174 Iowa 476, 156 N.W. 727.

OPINION

Tipton, C.J.

This is an action upon a surety bond,...