ADAMS et al. v. STATE, for Use of LIMESTONE COUNTY, 150 S.W. 591

BROWN, C. J. On the 21st day of September, 1908, a license was granted by the state of Texas to H. D. Adams to sell intoxicating liquors in quantities less than a quart, etc., for one year, at Datura, in Limestone county, and on the same day Adams executed a bond in the form prescribed by law. The American (Surety Company of New York signed the bond as surety. One of the conditions of the bond is that Adams should keep “a quiet house.” Adams pursued the business authorized until the 12th day of September, 1909, when

an act of the second called session of the Thirty-First Legislature (Acts 31st Leg. c. 17), known as the Robertson-Fitzhugh Law, took effect, which contains this provision: “See. 35. All laws and parts of laws in conflict with this act are expressly repealed. Providing, all of the provisions relating to the sale of intoxicating liquors contained in any special charter granted by the Legislature to any city or town shall not be repealed by this act, but the same shall be cumulative thereof.

Provided that as soon as this law goes into effect all licenses heretofore issued shall immediately cease and determine, but the holders of such licenses shall have until sixty days after this act takes effect in which to obtain licenses under this act, said licenses to be dated as of the date this act takes effect, and the tax collector shall give such licensee credit for the unearned portion of such cancelled license as of the date this act takes effect; and provided, during said sixty days said licensee shall have the right to pursue his business under and in accordance with the cancelled license and the laws applicable to the same, which for that purpose are hereby kept in force for said sixty days.” Adams continued his business after the last law took effect for more than 60 days after the 12th day of July, 1909, without taking out another license.

This suit was instituted in the district court of Limestone county in the name of the state of Texas for the use of Limestone county to recover the penalty for each of six breaches of the condition of said bond requiring Adams to keep a quiet house, which breaches were alleged to have occurred on respectively January 25, 1909, in the month of February, 1909, in the month of March, 1909, on the 15th day of August, 1909, on the 20th day of August, 1909, and on September 3, 1909.

Judgment was entered against Adams and the American Surety Company of New York for the penalty, $500 for each alleged breach, with interest. Upon appeal to the Court of Civil Appeals of the Fifth District the judgment of the district court was affirmed. 146 S. W. 1086. The liability of the surety company is based upon the bond and the bond was conditioned to secure the performance of the duties imposed upon the licensee. It follows that when the license ceased to exist as authority to the licensee to sell, the obligation of the surety company was also terminated.

The language, “Provided that as soon as this law goes into effect all licenses heretofore issued shall immediately cease and determine,” is unambiguous, and as the law took effect on the 12th day of July the license became void on that day.

It is claimed that the next succeeding proviso had the effect to keep the license in force for 60 days: “And provided, during said sixty days said licensee shall have the right to pursue his business under and in accordance with the cancelled license and the laws applicable to the same, which for that purpose are hereby kept in force for said sixty days.” The general rule of construction that all statutes providing penalties shall be strictly construed is applicable here.

The language of the second proviso had the effect to give to the canceled license the special effect to permit Adams to carry on his business during the sixty days' of privilege granted by the act of 1909. This was not the license which was supported by the bond, but was in fact a license granted by the Legislature; that is, from the 12th day of July to the 10th day of September. Under that proviso the license would have terminated in this case on the 10th day of September, 11 days before its limit under tile license as granted.

If Adams’ license had been granted earlier so that its time would have expired on the 15th day of July, the proviso would have continued it in force until the expiration of 60 days from July 12th, giving him the right to sell for 57 days longer than the license originally provided for. It will be observed that the extension given by the proviso was to allow Adams to pursue the business for 60 days without regard to limitation of time in the original license.

The time fixed in the license was extended, if necessary, to reach the 60-day limit, or the time was shortened if it would overreach the 60 days granted by the statute. We are of opinion that the surety company was not abound for the breaches of the condition to keep a quiet house, which occurred after July 12, 1909. But we see no reason to reverse the judgment for the penalties for breaches which occurred prior to that date. The thirty-fifth

section of the Law of 1909, quoted above, gave to Adams the privilege to continue his business under the canceled license for 60 days, or until he should apply for and obtain a license under the new law, and, as he did continue his business, it will be conclusively presumed that he accepted the terms of that law, and the acts done by him after the 12th day of July, 1909, in violation of the conditions of his bond, made him liable for the penalties prescribed in the law and the bond. The judgment will be affirmed as to Adams.

The American Surety Company is liable upon its bond for the penalties accruing prior to July 12, 1909. Therefore the judgment is reversed as to the surety company, and will be here rendered in favor of the state, for the use of Limestone county, against the surety company upon its bond as surety for Adams for $1,500, being the penalties which accrued prior to July 12, 1909, and for all costs incurred by the state in prosecuting the claim as against him.

It is therefore ordered that the state of Texas for the use of Limestone county recover of the American Surety Company the sum of $1,500, and that the said surety company recover of the state of Texas all costs incurred by it in prosecuting this appeal to the Court of Civil Appeals and to this court.