
    Fourth Appellate Department,
    January, 1899.
    Reported. 37 App. Div. 234»
    Henry H. Lyman, as State Commissioner of Excise of the State of New York, Respondent, v. Rochester Title Insurance Company, Appellant, Impleaded with Andrew G. Schenck and Andrew P. Schenck.
    Liquor Tax Law—A bond given in 1896 may be enforced for its face by the State Commissioner of Excise under the authority given by chap. 312 of the Laws of 1897—The statute is a part of the bond.
    In the event of a violation of the Liquor Tax Law by the holder of a liquor tax certificate, who has given the bond required by section 18 of the Liquor Tax Law (Laws of 1896, chap. 112), an action may be maintained against the obligors on the bond to recover the penalty thereof, before any criminal proceedings have been instituted against the principal, and entirely independent of the provisions of sections 34 and 36 of the Liquor Tax Law.
    Although the breach of the condition of the bond took place in 1896, at a time when the law as it then stood did not specify who might bring an action for the enforcement of the bond, an action may he brought thereon by the State Commissioner of Excise, after the passage of chapter 312 of the Laws of 1897, amending the Liquor Tax Law, under the authority thereby conferred upon him.
    Such amendment in no way impairs the obligations of the contract, or-changes the rights of the parties, but relates only to the form and mode of procedure.
    Where a bond is given in pursuance of a statute, the provisions of the statute are in effect a part of the bond, and of the contract of the surety.
    Appeal by the defendant, the Rochester Title Insurance Company, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Ontario on the 39th day of April, 1898, upon the decision of the court rendered after a trial at the Monroe Special Term, overruling the said defendant's demurrer to the plaintiff's complaint, and also, as stated in the notice of appeal, from the order overruling the demurrer and upon which an interlocutory judgment was entered.
    The action was begun November 5, 1897, to recover the penalty of a bond executed by the defendants Schenek as principals and the defendant insurance company as surety.
    In the complaint, it is alleged in substance that the plaintiff is the State Commissioner of Excise of the State of New York; that the defendants Schenek made application for a liquor tax certificate pursuant to chapter 112 of the Laws of 1896; that pursuant to the provisions of said law the defendants Schenek, as principals, and the defendant insurance company, as surety, made and executed their bond in the form prescribed by said act, by which they jointly and severally undertook that, if a liquor tax certificate should be given to the defendants Schenek, the obligors upon said bond would pay to the People of the State of New York the sum of $600 in case said defendants Schenek violated any of the provisions of the Liquor Tax Law.
    It is further alleged that at different times during the year 1896 the defendants Schenek violated the provisions of said Liquor Tax Law, in that they sold liquor on Sunday. Judgment is demanded for the amount of the penalty of said bond, to wit, $600.
    The defendants Rclienck did not appear or answer. The defendant insurance company duly appeared and demurred to the complaint, upon the ground:
    
      First. That it does not state facts sufficient to constitute, a cause of action; and,
    
      Second. Upon the ground that the plaintiff has no legal capacity to sue, in that the law gives him no authority to sue on the bond set forth in the complaint.
    The bond is annexed to and made a part of the complaint, the conditions of which are as follows:
    “ Now, the conditions of the above obligation are such that if the said liquor tax certificate applied for is given unto the said Andrew G. Schenek and Andrew P. Schenek, the said Andrew G. Schenek and Andrew P. Schenek will not, while the business for such tax certificate is given shall be carried on, suffer or permit any gambling to be done in the place designated by the tax certificate in which the traffic in liquors is to be carried on, or in any yard, booth or garden appertaining thereto or connected therewith, or suffer or permit said premises to become disorderly, and will not violate any of the provisions of the Liquor Tax Law, any act amendatory thereof or supplementary thereto, then this obligation shall be void; otherwise it is to be and remain in full force and effect.” . ■
    
      George F. Yeoman, for the appellant.
    
      Edwin Hides, for the respondent.
   McLennan, J.

The bond in question was given, and all the alleged breaches of its conditions occurred, during the year 1896, and, therefore, the liability of the defendant must be determined by the bond itself and by the statute as it existed at that time.

It is elementary that where a bond is given, in pursuance of a statute, the provisions of the statute are, in effect, a part of the bond. (McCluskey v. Cromwell, 11 N. Y. 593; People v. Chalmers, 60 id. 154.)

The statute constitutes a part of the contract of the surety, (People v. Pennock, 60 N. Y. 421, 425.)

Section 11 of chapter 112 of the Laws of 1896 specifies the amount of tax which must be paid for a liquor tax certificate. The defendants Scheuck were lawfully required to pay, and did pay, the sum of $300, and a liquor tax certificate in due form was issued to them.

Section 18 of the act provides, in substance, that the applicant for a liquor tax certificate must execute a bond to the People of the State of New York, with sureties, in double the amount of the sum paid for the liquor tax certificate, containing, among others, the provision that if such certificate is given, he, the applicant, will not violate any of the provisions of the Liquor Tax Law while engaged in the business of trafficking in liquors under such certificate. And the section further provides that the bond so executed must contain, in substance, the agreement that if a liquor tax certificate is issued to such applicant, and he violates any of the provisions of said Liquor Tax Law, the penalty of such bond shall become due and payable to the People of the State, and that the principals and sureties upon said bond shall be jointly and severally liable for the payment of the same.

The bond in this case follows substantially the language of the section.

Section 31 of the act provides, among other things, that it shall be unlawful for any person holding a liquor tax certificate of the kind issued to the defendants Schenck to sell liquor on Sunday. It is clear that if the language of the bond and of section 18 of the act, under which it is given, is only considered, the liability of the defendant insurance company would be established upon proving that the defendants Schenck sold liquor on Sunday as alleged in the complaint.

The contention of the defendant insurance company, stated broadly, is that no liability can exist against it upon the bond which it executed as surety until the liability of its principals has been established as provided by section 36 of the Liquor Tax Law. That section provides, in substance, as follows: “ Upon the conviction and sentence of any person * * * for a violation of the provisions of this act """ * * the court * * * imposing the sentence, or the clerk of the court, if there be a clerk, shall forthwith make and file in the office of the clerk of the county in which such conviction shall have been had a certified statement of such conviction and sentence, and the clerk of said county shall immediately thereupon enter in the docket book kept by said clerk for the docketing of judgments in said office, the amount of the penalty or fine and costs imposed, as a judgment against the person or persons * * * so convicted and sentenced, and in favor of the State Commissioner of Excise. * * * If said judgment shall not be paid within five days after such conviction and sentence the clerk of said county shall issue an execution against the property of said judgment debtor or debtors, against whom said judgment is docketed, directed to the sheriff of the county, who shall forthwith proceed to collect the amount due on said judgment, together with his legal fees and costs, by levy and sale in the manner now provided by law. * * * In case such judgment debtor or debtors shall have given the bond provided for in section eighteen of this act, such county treasurer or special deputy commissioner may proceed to collect the amount of such judgment, together with the costs of collection, from the sureties on such bond by due process of law.”

Section 34 of the statute specifies the penalty which may be imposed for a violation of the provisions of Liquor Tax Law. In substance it provides that any violation of the law by the holder of a liquor tax certificate shall be a misdemeanor, and that upon conviction therefor he may be punished by fine or imprisonment, or both, in the discretion of the court before Avhom such conviction is had, and in addition, in most cases, upon such conviction the liquor tax certificate is required to be canceled by the judgment of the court, and the holder thereof disqualified from again engaging in the business of trafficking in liquors for a period of five years.

If the defendants Hehenck are guilty of A'iolating one of the provisions of section 31, as alleged in the complaint, to wit, guilty of selling liquor upon Sunday, upon conviction for such offense they may be punished by fine or imprisonment, or both, in the discretion of the court before whom such conviction may be had, and the sureties upon the bond, if given, are liable to the amount of the fine imposed.

But if this is the entire liability- of the obligors upon a bond like the one in question, no force or effect is given to the express agreement contained in said bond. That agreement, which is in accordance with the proA'isions of section 18 under Avhich it is given, is that if a person holding a liquor tax certificate violates any of the provisions of the Liquor Tax Luav, the obligors upon the bond will forfeit to the People of the State double the amount of the tax paid by the holder of such certificate.-

The meaning of the agreement cannot be uncertain if the Avords are given their ordinary significance. It is that the obligors upon the bond will pay to the People of the State of New York' the sum of $600 in case the principals in the bond violate any of the provisions of the Liquor Tax Luav.

It is urged that such is not the true meaning of the bond, by reason of the provisions of the other sections of the statute which have been referred to. If such was not the agreement intended, but, instead, it Avas intended that the liability of the sureties should be limited to such fine as might be imposed upon the holder of the liquor tax certificate, in case of eonA'iction for shell violation by- him, hardly less appropriate language could have been used by the Legislature to express such intention.

We think that the scope and purpose of the statute in question is plain; that when the language of' the bond, of section 18 under which it is given, and of the other provisions of the act are all considered, and the words used are given their ordinary meaning, the different provisions of the statute will be found to be in entire harmony, and to express clearly a reasonable purpose and intent on the part of the Legislature.

By the statute as a whole two methods are provided for compelling the observance oí the Liquor Tax Law by those engaged in the business of trafficking in liquors:

First. In case of any violation of the law by a holder of a liquor tax certificate, who has given a bond as provided for in •section 18 of the act, a civil action may be maintained against the obligors upon said bond to recover the penalty of such bond. This may be done before the institution of any criminal proceedings, before such delinquent is convicted, and entirely independent of the provisions of sections 34 or 36 of said act; or,
Heconü. The holder of a liquor tax certificate, who has violated any of the provisions of the Liquor Tax Law, may be proceeded against criminally, and if found guilty, such person may be punished by fine or imprisonment, or both, in the discretion of the court before whom such conviction is had, and if a fine is imposed, the surety upon a bond, such as the one in question, is liable for the amount of such fine.

Such construction gives force and effect to all of the provisions of the statute involved in the case.

if we have correctly construed the provisions of the statute and properly interpreted the meaning of the bond in question, it follows that the complaint states a cause of action against the defendants.

We believe that the plaintiff has legal capacity to maintain this action.

Section 18 of chapter 112 of the Laws of 1896 did not specify by whom an action might be brought for the enforcement of a bond given pursuant to such section, and there was no provision of the statute which in express terms authorized the bringing of such action by the State Commissioner of Excise.

The act was amended by chapter 312 of the Laws of 1897, and there ivas added to section 18 the following:

“The State Commissioner of Excise may at any time, without previous prosecution or conviction for violation of any provision of the Liquor Tax Law, or for the breach of any condition of said bond, commence and maintain an action in his name as such commissioner, in any court of record in any county of the State, for the recovery of the penalty for the breach of any condition of any bond, or for any penalty or penalties incurred or imposed for a violation of the liquor Tax Law, and all moneys recovered in such actions shall be paid over and accounted for in the same manner as are moneys collected under subdivision four of section eleven of this act.”

We think that, by virtue of such amendment, the plaintiff had ample power and authority to maintain this action, notwithstanding the breaches of the bond complained of occurred during the year 1896, and before such amendment to the statute was made. The amendment in no way impairs the obligation of the contract. The rights of the parties have not thereby been changed. The change relates only to the form and mode of procedure, and the Legislature had the right to make such change.

In the case of Matter of Davis (149 N. Y. 545) the court says (Martin, J.) : “The method of procedure for the enforcement of a Transfer or Inheritance Tax Law was somewhat changed by chapter 713 of the Laws of 1887, and chapter 399 of the Laws of 1.892. The procedure is controlled by the statute as it existed at the time this proceeding was instituted. It is a general rule that in the absence of words of exclusion a statute which relates to the form of procedure, or the mode of attaining or defending rights, is applicable to proceedings pending or subsequently commenced. * * Hence, the rights of the parties depend upon the statute of 1885, while the method of procedure is governed by that of 1892.”

In the case of Lazarus v. M. E. R. Co. (145 N. Y. 585) the court say (Andrews, Ch. J.) : “It is well settled that the Legislature may change the practice of the court, and that the change will affect pending actions in the absence of words of exclusion. (Southwick v. Southwick, 49 N. Y. 510.) The court can not, under guise of an amendment or repeal of a statute, cut off any substantial right of a party to have his case decided on the merits according to the law of the land. But it would be a very inconvenient rule, tending to great confusion, if the rule of practice existing when an action is commenced attaches itself to the substance of the right in litigation, so that it could not be changed, or that a law changing procedure should be held inapplicable to subsequent proceedings in pending actions, unless in terms made applicable thereto. It is the right of a party to have his case heard and decided in the orderly course of legal procedure, but he has no right to demand that the procedure prescribed when the action was commenced should remain unchanged. He prosecutes his action subject to the power of the Legislature in matters of practice to abrogate rules existing when his action was brought, or make additional rules, and all subsequent proceedings will be governed thereby.”

In the case at bar, under a provision of the statute enacted by the Legislature, the defendant insurance company obligated itself upon the happening of certain events, to pay to the People of the State of New York the sum of |600. It is believed that even if the Legislature failed to indicate by the act creating such liability the person or persons or method by which such obligation should be enforced, it was entirely competent for a subsequent Legislature to supply such defect, and to designate any person or persons to represent the People as plaintiff in an action brought for the purpose of enforcing such obligation. This we believe the Legislature of 1897 did by the amendment referred to.

By the amendment of 1897 the obligation of the defendant insurance company was not changed or modified in any respect. It simply was made enforcible in an action brought by the State Commissioner of Excise as plaintiff.

The conclusion is reached that the judgment entered upon the decision of the court at Special Term, overruling the demurrer of the defendant insurance company, should be affirmed, with costs, but with leave to the defendant insurance company to withdraw, its demurrer and serve an answer to the complaint within twenty days from the service of notice of the judgment of this court, upon payment of the costs of the demurrer and of this appeal.

Judgment is ordered accordingly.

All concurred, except Ward, J., not voting.

Interlocutory judgment affirmed, with costs, with leave to , defendant to withdraw its demurrer and answer upon payment of the costs of the demurrer and of this appeal.  