Sogn v. Koetzle , 38 S.D. 99 ( 1916 )

SMITH, J.

Appeal from an -order overruling demurrer to complaint. Action against Roetzle & S-ohopf, copartners and retail dealers in intoxicating liquors in the city of Sioux Falls, and Western Surety Company, -bondsman, for damages resulting from unlawful sales of intoxicating liquors to- plaintiff’s 'husband. The -complaint is attacked on two grounds only: First, that it fails to show the defendant Western Surety Company to- be a legal entity. Second, that -the complaint fails to- show “conditions precedent to such bio-nd becoming- a valid obligation.”

[1] Appellant cites State v. C., M. & St. P. Ry. Co., 4 S. D. 261, 56 N. W. 894, 46 Am. St. Rep. 783, Rust-Owen Lumber Co. v. Wellman, 10 S. D. 122, 72 N. W. 89, and Texas Mut. Life Ins. Co. v. Davidge, 51 Tex. 244, as sustaining the proposition urged, viz. that the name Western Surety -Campan)'- raises no presumption of incorporation, or that such party is a legal entity capable of s-uin-g or being sued. Although appellant has omitted it from the statement of -the -contents- -of the -corn-plaint set forth in its brief, the amended - statement in -respondent’s brief discloses that a copy of the bond sued on, executed by the defendant company, is attached1 to- and made a part of the complaint.

The bond itself re-cited that “Western Surety Company, a corporation, as surety, are held and- firmly bound,” etc. -The acknowledgment attached to- the bond recites that:

“John A. Bowler, etc., known t-o- -me to- be the president o-f the Western .'Surety Company, the corporation that is described in and that executed the within undertaking,” etc.

A-lso attached to and made a part of the undertaking is an affidavit of John A. Bowler, stating that:

“Fie is ¡president o-f the Western Surety 'Company, and that said company is by its charter, etc., and has -complied! with all the provisions of the law o-f the state of South Dakota.”

This action is upon an express contract. Garrigan v. Thompson, 17 S. D. 132, 95 N. W. 294: Palmer v. Schurz, 22 S. D. 289, 117 N. W. 150. This express eonbract is pleaded: in hsec verba as a pant of the complaint, and the complaint therefore sufficiently alleges the Western Surety- to be a corporation', under the rule announced’ by this count in Dunlap v. C., M. & St. P. Ry. Co., 32 S. D. 581, 144 N. W. 226; Johnson v. Kindred, 12 N. D. 336, 96 N. W. 588.

In First Nat. Bank v. Dakota F. & M. Co., 6 S. D. 624, 61 N. W. 439, it was held in effect that when an express contract, pleaded in hsec verba and made a part of the -complaint, discloses that under the express terms of such contract no present liability exists, a demurrer to the complaint should he sustained. In Aultman v. Siglinger, 2 S. D. 442, 50 N. W. 911, this court held that “a complaint which does not state a cause of action by its averments, without reference to exhibits-, is. bad1 upon demurrer,” and saidl exhibits “will not be considered in determining the sufficiency of the complaint.” The broad- rule thus stated- has certainly been abandoned by -this court in its later decisions, and the Siglinger -case -i.s- said- to- have been overruled in First Nat. Bank v. Dakota F. & M. Co., 6 S. D. 425, 61 N. W. 439. See opinion by Haney, J., in Cranmer v. Kohn, 11 S. D. 246, 76 N. W. 937. See, also, opinion by Fuller, J., in Múrtha v. Howard, 20 S. D. 152, 105 N. W. 100, in which he states-, in substance, that recitals in. exhibits attached to and made a pairt of a pleading- should be considered! 'in determining the sufficiency -of facts pleaded “according to all modern- authority and- the uniform1 decisions' of this court disaffirming the case of Aultman & Co. v. Siglinger.”

“As against a 'demurrer, the office of which is to raise a substantial issue on tire law! off tli-e case, sand not. on the law of practice and pleading,' evidentiary facts, and even -inferences from averments amounting to: mere conclusions of law, will be considered in its favor.” Dunlap v. C., M, & St. P. Ry. Co., supra.

Under this rule, the recitals in the express- contract pleaded in and made a .part of the complaint must be considered upon' demurrer a.-sufficient averment that the- defendant Western Surety Company is- a corporation,

[2] Defendant’s further -contention that “the conditions -precedent to such bond becoming a valid -obligation are not alleged” cannot be sustained. Tire 'allegation of the complaint is that “defendant Western Surety Company, as surety, executed and delivered to the -state of South Dakota -their certain 'bond,” etc., that “the board of county commissioners of Minnehaha county, South Dakota, duly approved said -bond, and 'the city authorities of the -city of Sioux Falls issued' a license,” etc.'; and’ that “under said license said defendants John Koetzle and Jacob S-chO-pf engaged in the business of * * * selling such malt, spirituous, brewed and vinous liquors,” ¡etc.

Section 2839, Pol. Code, -requires -every person about to engage in the business of selling intoxicating liquors at.-retail -to execute a bond with sureties to be approved by the board of county commissioners, which bond when -duly executed and approved -shall he delivered to the county treasurer of the county.

[3] The complaint sufficiently alleges -the execution and approval of such bond, and alleges its- delivery as required by this statute. No other inference can be drawn firom such allegations except that delivery was ■ to -the county treasurer with such approval duly -indorsed- thereon, as required by the statute. Certainly, as against the defendant surety -company, which- has executed and delivered its bond as surety to- one who- proposes to engage in the business of selling intoxicating liquors, whi-ch bond has been- -approved ¡by -the board of county commissioners and duly delivered as required by the statute, and- where the municipality pursuant to such acts has -accepted- the license fee and issued its receipt or ¡permit for the sale o,f intoxicating liquors, no other inference -can be drawn than that -the question of the sale of intoxicating liquors had been duly submitted1 and voted upon by the qualified electors of the municipality. But while -this is true we are not to be understood- -as holding that allegations covering the facts referred to as inferences must he affirmatively .pleaded in a complaint upon a retail liquor seller’s bond. It is unnecessary to determine that question- at this time.

[4, 5] We are not to be understood, however, as approving the form -o-f complaint presented in this- case. The code practice contemplates a -clear and concise statement in a -pleading o-f every fact which must he proved to moke out a cause of action or a defense. The rule is so plain and simple that -any lawyer who knows what facts are essential to be proved in h-i-s case need not err in bis allegations. As was ¡pointed out in the case of Dunlap v. C., M. & St. P. Ry. Co., supra, the office of a ¡demurrer is to raise a substantial issue upon the law governing the substantive rights of the parties, and it is not its- function merely to test the incompleteness or uncertainty of averments or even failure to state some facts which should have been stated' to make a technically good ¡complaint. Under this rule, whenever facts are alleged in a ¡pleading from which, by making' all reasonable inference or intendments in favor of ¡the party pleading ¡them, enough can ¡be seized hold of to show that he has rights which ought to be enforced, such pleading will foe held sufficient upon demurrer. But this rule is not intended to justify or excuse bad pleading' even of a good cause of action. In such case the remedy for bad pleading is by motion to compel the pleader to conform his statement of facts- to the rules of good pleading. Such a motion properly raises an issue on the law of pleading and practice to be applied in ¡the particular case. A demurrer tests the substantive legal rights of parties upon admitted facts including proper and reasonable inferences of law and1 fact which may be drawn from facts which are ¡pleaded. Tested by this rule -we hold the complaint sufficient upon demurrer.

[6] We had supposed- ¡the -questions discussed herein were •settled by the farmer decisions of -this court above referred to. But in view of the fact ¡that -counsel for- appellant again- invoke the former rule u-pon this appeal, we have deemed it -proper to again -consider and finally settle it. But aside from the fact that the complaint .is sufficient on demurrer, the record discloses that appellant answered and went to trial on the merits. Under the rule announced in former decisions of this court, the demurrer roust be deemed abandoned, -and for that reason alone the judgment of the trial court would have to- be -affirmed. Pierson v. Minnehaha County, 26 S. D. 462, 128 N. W. 616, Ann. Cas. 1913B, 386; Sschwitz v. Thomas et al., 160 N. W. 734.

The judgment appealed from is affirmed.