6946. Adulteration and misbranding of strawberry, blackberry, peach, and cherry 
preserves. TJ. S. v. 600 Cases of Assorted Preserves. Consent decree 
of condemnation. Product ordered released under bond to be relabeled. 
Subsequent judgment for $1,000 and costs for breach of bond affirmed on 
appeal.    (F. D. C. No. 4332.   Sample No. 48801-E.)
LIBEL FILED:    April 16, 1944, Eastern District of South Carolina.
ALLEGED SHIPMENT: On or about February 21, 1941, by the Fresh Grown 
Preserve Corporation, from Lyndhurst, N. J.
PRODUCT: 600 cases, each containing 6 8-pound cans, of assorted preserves 
at Fort Jackson, S. C.
LABEL, IN PART: (Cans) "Nature's Own Pure Strawberry [or "Blackberry," 
"Peach," or "Cherry"] Preserve."
VIOLATIONS CHARGED: Adulteration, Section 402 (b) (2), imitation strawberry 
(or blackberry, peach, or cherry) preserves, deficient in fruit, had been sub- 
stituted in whole or in part for strawberry (or blackberry, peach, or cherry) 
preserves, foods for which definitions and standards have been established in 
the regulations.
Misbranding, Section 403 (a), the names "Pure Strawberry Preserve," 
"Pure Blackberry Preserve," "Pure Peach Preserve," and "Pure Cherry 
Preserve," were false and misleading; Section 403 (c), the articles were imita- 
tions of other foods and their labels failed to bear, in type of uniform size and 
prominence, the word "Imitation," and, immediately thereafter, the names of 
the foods imitated; and, Section 403 (g) (1), the articles failed to conform to the 
definitions and standards of identity prescribed by the regulations.
DISPOSITION: May 14, 1941. No claimant having appeared, judgment of 
condemnation was entered and the products were ordered destroyed. However, 
before all the goods were destroyed, the Fresh Grown Preserve Corporation 
intervened and secured release of the remainder under bond for relabeling. 
These proceedings and subsequent suit by the Government on the bond charging 
breach of the conditions of the decree are set forth in the following opinions: 
(Opinion of the Eastern District Court of South Carolina, handed down February 1,1944.)
TIMMEEMAN, District Judge: ,
"This is an action on a bond executed and filed by the defendants pursuant 
to an order of this Court in the libel proceeding, entitled, 'United States of 
America, Libelant, vs. 600 Cases, more or less, each containing 6 cans of an 
article labeled in part "Nature's Own Pure Strawberry Preserve * * * 
[also "Blackberry, Peach and Cherry"]."
"The complaint alleges the execution of said bond by the defendants, the 
filing thereof in the aforementioned proceeding and its breach.
"The gist of the Government's case is stated in the 5th paragraph of the 
complaint, as amended.    It reads as follows:
V. The defendant Fresh Grown Preserve Corporation did not abide by the decree 
hereinabove referred to, dated September 23,1941, in that (1) it did not pay costs within 
30 days; (2) It did not relabel the goods within 30 days; (3) while It did relabel the 
goods, after the 30-day period prescribed by the decree, it did not relabel them under 
the supervision of the Food and Drug Administration of the Federal Security Agency ¦ 
(4) it did not maintain the lot of goods intact for examination or inspection by a 
representative of the Federal Security Agency; (5) it sold these goods without having 
obtained a release from the Federal Security Agency; (6) it did not abide by the con-
elusion of the representative of the Federal Security Agency. By reason of these viola- 
HZ„f EP forms of the decree compliance with which has been made a condition of 
the bond the TJnttedStates'be^me and is now entitled to receive from the defendants 
the sum of one thousand ($1,000) Dollars, the amount specified in the aforesaid bond, 
no part of which has been paid.
"Upon the trial of the case the defendants conceded that they had executed 
and filed the bond in question. Briefly stated, the contentions of the defend- 
ants now are: (a) That there was substantial compliance with the conditions 
of the bond, although the compliance was belated; and (b) that the bond is 
one of indemnity and not one of a penal nature.
THE  PARTS
"The libel in the aforementioned proceeding was filed April 16, 1941. The 
600 cases of condemned cans labeled in part as 'Nature's Own Pure Strawberry 
Preserves' were originally shipped by the defendant Fresh Grown Preserve 
Corporation of Lyndhurst, New Jersey, to the Quartermaster at Fort Jackson, 
S C on or about February 21, 1941. It was alleged in the libel that the 
so-called preserves were adulterated and misbranded in violation of the Federal 
Food, Drug and Cosmetic Act of June 25, 1938.
"No answer having been filed, on May 14, 1941, Judge Lumpkin entered a 
decree condemning said goods and ordering their destruction by the Marshal. 
However, before all of said goods had been destroyed, the defendant Fresh 
Grown Preserve Corporation intervened in said proceeding and, as the owner 
and shipper of said goods, filed a claim and a stipulation admitting the allega- 
tions of the libel, consenting to a decree of condemnation, and asking to be 
allowed to reclaim such of the goods as had not been previously destroyed for 
the purpose of relabeling it before putting it into the channels of commerce 
again So upon the formal, written consent of said claimant (one of the de- 
fendants herein), the Court entered an order, September 23, 1941, holding and 
'decreeing said seized goods to be adulterated and misbranded as alleged and 
ordering the forfeiture thereof; but providing that, in case the claimant should, 
within thirty days from the date of said decree, pay all the costs of said pro- 
ceeding and execute and deliver to the libellant a good and sufficient bond in 
the sum of $1,000.00, conditioned as provided in said decree, the condemned 
goods should be released to the claimant. ,
"The conditions of said bond or undertaking as required by said decree were
"1 That claimant would, at its own cost and within thirty days, cause said 
libeled goods to be reshipped to the warehouse of the claimant in New Jersey 
and there relabeled under the supervision of the Food and Drug Administration 
so as to comply with the requirements of the Food, Drug and Cosmetic Act
of June 25, 1938. 
,„,..-       +•    , *   f       * A       A   • +    *
"2 That the Claimant would retain the entire lot of condemned goods intact 
for examination or inspection by a representative of the United States Federal 
Security Agency, and at all times maintain necessary records or other proof 
to identify said goods to the satisfaction of said representative.
"3 That the claimant would notify the Federal Security Agency of its 
purpose to do so and then submit to the Agency's representative all of said goods 
at claimant's said warehouse for the purpose of examination and inspection.
"4 That the claimant would not, under any circumstances, ship or sell, or 
offer for shipment or sale, for human consumption, any part of said goods until 
a representative of said Federal Security Agency had been given free access to 
said goods for the purposes of inspection and he had released the same for sale.
"57 That the claimant would pay $14.00 per day as salary or wages and 
$5 00 per day as subsistence and expenses for each day a representative of the 
Federal Security Agency should be engaged in supervising or inspecting the
relabeling of said goods. ,...,.    xv   J    •¦       *«. 
* *•       *
"6   That the claimant would abide by the decision of the representative of
said Agency as to the proper relabeling of said goods, which decision should
"7 That the claimant would furnish evidence, by affidavit or otherwise, 
satisfactory to the Federal Security Agency, as to the relabeling of said goods, 
and file the same with the Clerk of this Court
"The required bond was duly executed by the defendant Fresh Grown 
Preserve Corporation, as principal, and by the defendant The Century In- 
demnity Company, as surety, on September 30, 1941, although it was not filed 
in this court until November 4, 1941.   The order did not require the bond to be
filed with the court,—only that it be delivered to the libelant. The condemned 
goods were shipped from Columbia, S. C, to the defendant Preserve Corpora- 
tion on November 2, 1941, and they were in due course received by said defend- 
ant at its warehouse in Lyndhurst, New Jersey.
"The record discloses no further action in the libel proceeding until August 
14, 1942. On that date both defendants herein, Fresh Grown Preserve Corpora- 
tion and The Century Indemnity Company, filed with the Court a- signed 
written stipulation, in these words:
IT IS HEREBY STIPULATED AND CONSENTED that the decree heretofore en- 
tered on the above entitled cause on the 23rd day of September, 1941, be amended to 
further provide": That the time for the claimant herein to relabel the merchandise in 
conformity with the decree entered herein, be extended to the 1st day of October, 1942, 
and that this extension is conditioned upon the claimant furnishing to the Food and 
Drug Division of the Federal Security Agency satisfactory evidence as to the disposition 
of the relabeled goods by furnishing said Food and Drug Division a duplicate of the 
invoice of the sale of such merchandise which said invoice shall contain the amount 
and description of the merchandise and the name and address of the purchaser.
IT IS FURTHER STIPULATED that in" the event that the said merchandise is not 
relabeled within the period of time as provided for in this stipulation, the claimant 
will not request a further extension.
"On the date of the filing of this stipulation and in response thereto, Judge J. 
Waties Waring entered a supplemental order in the libel proceeding. Among 
other things, Judge Waring held that the merchandise in question had been 
condemned and forfeited on September 23, 1941 (Judge Paul's order of that 
date), but with leave to the claimant to repossess certain of said condemned 
merchandise on certain stated conditions; that the claimant had not carried out 
all of the conditions prescribed in Judge Paul's order which were made the 
condition of said bond. It was then ordered by Judge Waring that 'the time 
for relabeling (said goods) in a manner satisfactory to the said Food and Drug 
Division and carrying out the other provisions relative to said relabeling and 
satisfying the said Division, be extended to the 1st day of October 1942,' 
subject to the following proviso:
* * * that the above extension is contingent upon the claimant paying all costs, 
disbursements and expenses due to or incurred by the Clerk of this court and by the 
Marshal of this court in connection with this cause * * * in full within Ten days 
from the date hereof. Upon failure of such payment within such time then the extension 
hereinabove granted in this order shall become null and void and the District Attorney 
is directed to institute suit for the enforcement of the terms of the bond on file in 
this cause forthwith, etc.
"The costs required to be paid as a condition precedent to the extension of 
• time asked for by the defendants were not paid within the time specified in 
Judge Waring's order.    Thereafter, this action was brought.
"That the defendant Fresh Grown Preserve Corporation, the claimant in 
the libel proceeding, did not comply with the terms and conditions prescribed 
in Judge Paul's order of September 23, 1941, within the time limit fixed, which 
were made the condition of said bond, is not open to serious question. However, 
the defendants now claim substantial compliance therewith at a later date, and 
before Judge Waring's order of August 14, 1942.
"This contention is based upon the testimony of one Leo Greenberg, Vice 
President of the Preserve Corporation, but his testimony is contradicted by 
the Government's witnesses. I do not deem it necessary to review all of the 
testimony. Suffice it to say that I resolve the issue of fact in favor of the Govern- 
ment. I hardly think that any other conclusion could be reached in view of the 
stipulation signed by both defendants and filed in this Court on August 14,1942, 
a copy of which appears above. It would not comport with reason to conclude 
that the defendants would have- been asking for time within which to comply 
with the conditions of the bond in August, 1942, if those conditions had been 
complied with in November or December, 1941. The concluding words of 
said stipulation of August 14, 1942,   are:
* • * * that in the event that the said merchandise is not relabeled within the 
period of time as provided for in this stipulation, the claimant will not request a further 
extension.
Could this mean that the defendants wanted a further extension of time within 
which to do what they had already done?    Obviously not.
"I, therefore, find as a matter of fact that the defendants breached said bond 
prior to the time they applied for and obtained Judge Waring's order of August 
14, 1942, and that said order did not operate to relieve the defendants from the 
effects of such breach since they did not perform the condition which would 
have made it effective for that purpose.
"Having found as a fact that the defendant Fresh Grown Preserve Corpora- 
tion did not comply substantially with the condition of said bond at any time 
prior to the commencement of this action, it follows as a matter of law that 
such plea cannot avail the defendants, or either of them, in this action.
"The real issue raised on the trial of this cause is: What is the character of 
the bond; is it a penal bond or one of indemnity? My conclusion is that it is a 
penal bond.
"This bond was required by the Court to enforce compliance with the
Food; Drug and Cosmetic Act, which Act the defendant Fresh Grown Preserve
Corporation admittedly had violated in respect to the very food in question
in the libel proceeding.    Section 304-d of the Act (21 TJ. S. C. A., Sec. 304-d)
specifically provides:
That after entry of the decree (of condemnation) and upon the payment of the 
costs of such proceedings and the executi'on of a good and sufficient bond conditioned 
that such (condemned) article shall not be sold or disposed of contrary to the pro- 
visions of this chapter * * *, the Court may by order direct that such article be 
delivered to the owner thereof to be * * * brought into compliance with the pro- 
visions of this chapter under the supervision of an officer or employee duly designated 
by the administrator, etc.    [Emphasis added.]
"The decree providing for the execution of the bond in question was made 
in strict compliance with the cited Act, and the defendant Fresh Grown Preserve 
Corporation was accorded thereby every right to which it was entitled under 
the Act. It received, and presumably retained, every consideration which the 
execution of the bond entitled it to. The fact that said defendant has played 
fast and loose with the Government—continually promising and not per- 
forming—since the inception of this matter only emphasizes the necessity for 
a penalty bond in cases of this character, if the law enacted by Congress to 
protect the general public against unscrupulous vendors of food is to be 
effective.
"Where a bond is given to a public body as a condition of license or other 
privilege, or conditioned on compliance with la,w, the full penalty of such bond 
may be recovered for a breach thereof, in the absence of a provision to the 
contrary in the statute which prescribes the bond, or in the bond itself. Clark 
v. Barnard, 108 U. S. 436 (1883); United States v. Dieckerhoff, 202 U. S. 302 
(1906); United States v. Montell, 26 Fed. Kans. No. 15,798 (C. C. D. Md., 
1841); United States v. Wandmaker, 292 Fed. 24 (C. C. A. 8th, 1923); Illinois 
Surety Co. v. United States, 229 Fed. 527 (C. C. A. 2nd, 1916); Eagle Indemnity 
Co. v. United States, 22 F. (2d) 388 (C. C. A. 4th, 1927), cert. den. 276 U. S. 
624 (1928); United States v. United States Fidelity and Guaranty Co., 35 F. 
Supp. 959 (E. D. Pa., 1940).
"In cases where by statute the Government is authorized to take a bond to 
insure compliance with the law, it is not material that the conditions of the 
bond are not expressly prescribed by the statute. Eagle Indemnity Co. v. 
United States, 22 F. (2d) 388 (C. C. A. 4th, 1927) cert. den. 276 U. S. 624 (1928) ; 
Illinois Surety Co. v. United States, 229 Fed. 527 (C. C. A. 2nd, 1916); United 
States v. Engelberg, 2 F. (2d) 720 (W. D. Pa., 1924).
"Section 785, 28 U. S. Code, has been invoked to protect the defendants 
-against a declaration that the bond in question is a penalty bond. I do not 
think that this section operates to relieve the defendants from the full penalty 
of their bond. That section in effect provides that 'in suits to recover the 
forfeiture annexed to * * * (a) bond' courts shall render judgment 
'according to equity'. There is a difference between forfeitures and penalties. 
'A penalty as distinguished from a forfeiture involves the enforcement of an 
obligation to pay a sum fixed by law or agreement of the parties as a punish- 
ment for the failure to fulfill some primary obligation. A forfeiture deprives 
a man of what he previously possessed, or at least prevents him from acquiring 
what he has substantially paid for; a penalty subjects him to a liability beyond 
the actual damage caused by his breach of the primary obligation.' Williston 
on Contracts, Vol. II, p. 1470, Sec. 770. The obligation of the bond in the 
instant case was not to surrender something to the Government which the 
defendant previously possessed or was entitled to receive as a matter of right, 
but it was simply to guarantee that the said defendant would obey the law as 
interpreted by the court (to which interpretation the defendants agreed), or 
pay a fixed agreed sum as a penalty for not doing so. United States v. Diecker- 
hoff, 202 U. S. 302; 26 S. Ct. 604; 50 L. Ed. 1041, is in point. That case arose 
under a statute which provided that imported merchandise subject to duty 
might be taken from the Collector prior to inspection and appraisal on the
giving of a bond in double the estimated value of such merchandise conditioned 
for the delivery of the same to the Collector on his order. The defendant 
filed the bond required and breached it by failing to return the merchandise at 
the request of the Collector. The defendant contended that his liability on 
said bond was limited to such damages as the Government alleged and could 
prove.    The Court, among other things, said: 
' 
A
But we think the purpose of the statute and the purpose of the requirement in the 
bond provided for therein, and the one given in this case, was to secure the performance 
of the duty imposed of returning the package or packages, where an importer has availed 
himself of the privilege of withdrawing merchandise from the custody of the Govern- 
ment officials before it has been examined and appraised ... we think it was the inten- 
tion of the law to provide specific damages to be recovered upon the nonperformance 
of the duty imposed, and to secure a prompt and faithful discharge of which the statute 
provides for the giving of a bond. . .
We think such undertaking, for this manner of discharging this duty, or paying the 
value stipulated, was intended to and does relieve the Government from the necessity 
of showing any actual damage or loss.   (Emphasis added)
"See also: United States v. Bngelberg, 2 F. (2d) 720; Eagle Indemnity Co. v 
United States, 22, F. (2d) 388, (4th Cir.); United States r. Wandmaken, 292 F. 24 
(8th Cir.); Illinois Surety Co. v. United States, 229 F. 527 (2nd Cir.).
"From the foregoing authorities and others that might be cited it follows as 
a rule of law that, where the condition of a bond given to the Government is to 
guarantee compliance with the law, it is a penal bond, and that the Govern- 
ment will be entitled to judgment for the full penalty of such a bond on proof 
of a breach thereof. Even if it should be conceded that Judge Paul's decree of 
September 23, 1941, imposed conditions for the bond in question, some of 
which were not authorized by the Act (a concession I am unwilling to make in 
fact), that would not relieve the defendants from the full penalty of the bond, 
for said decree was entered at the instance and for the benefit of the defendant 
Fresh Grown Preserve Corporation in the first place and it was later ratified 
by both defendants in the stipulation filed in this court on August 14, 1942, for 
the purpose of gaining an extension of time within which to do the things that 
would save the penalty of the bond. The defendants got the extension they 
asked for on a very simple condition; and it is their own fault that they did not 
perform that simple condition and thereby make the extension effective for 
their protection. Since no appeal was taken from Judge Paul's order and 
since it appears that said order was entered at the instance and for the benefit 
of the claimant in the libel proceeding, it is the law of that proceeding and should 
be respected as such in this case. The defendants are now estopped to deny 
its full validity.
"I conclude as matters of law that the bond in question is a penal bond; 
that it has been breached in material respects; and that the plaintiff is entitled 
to judgment against both defendants for the full penalty of said bond.
"An order for judgment in accordance with the views herein expressed will 
be signed on presentation in proper form."
(Opinionlof the^Oircuit^Court^oCAppeals for the[Fourth Circuit; handed down July 31,1944)
NOETHCOTT, Circuit Judge:
"This is an action brought in the District Court of the United States for the 
Eastern District of South Carolina in September 1942, by the appellee, United 
States of America, here referred to as the plaintiff, seeking to recover the full 
penalty of a bond in the sum of $1,000.00 given by one of the appellants, Fresh 
Grown Preserve Corporation, here referred to as a defendant. The appellant 
The Century Indemnity Company, here referred to as a defendant, was the 
surety on the bond.
"In December 1943, a trial was had and in February 1944 the trial judge 
handed down an opinion finding the facts and stating his conclusions of law 
holding for the plaintiff. Judgment was entered in accordance with this 
finding, from which judgment this appeal was brought.
"In February 1941 the defendant Fresh Grown Preserve Corporation shipped 
to the Quartermaster at Fort Jackson, South Carolina, 600 cases, six cans in each 
case, of an article, labeled in part 'Nature's Own Pure Strawberry Preserve 
[*    *    *   also 'Blackberry, Peach and Cherry'].'
"On April 16, 1941, a libel was filed, in the District Court of the United 
States for the Eastern District of South Carolina
, entitled 'United States of 
America, Libellant, vs. 600 Cases, more or less,' and the goods were seized. On 
May 14, 1941, no answer having been filed, an order was entered condemning 
said goods and directing their destruction by the Marshal. Before all of said 
goods had ]been destroyed, the defendant Fresh Grown Preserve Corporation
intervened in the libel proceeding as the owner and shipper of said goods and 
filed a claim and a stipulation admitting the allegations of the libel, consenting 
to a decree of condemnation, and asking to be allowed to reclaim such of the 
goods as had not been previously destroyed for the purpose of relabeling them 
before putting them into the channels of commerce again.
"On September 23, 1941, the court entered an order holding and decreeing 
that said goods were adulterated and were misbranded as alleged and ordering 
the forfeiture thereof; but providing that, in case the claimant should, within 
thirty days from the date of said decree, pay all the costs of said proceeding 
and execute and deliver to the libellant a good and sufficient bond in the sum 
of $1,000.00, conditioned as provided in said decree, the condemned goods 
should be released to the claimant.
"The conditions of said bond or undertaking as required by said decree were 
as follows:
"1. That claimant would, at its own cost and within thirty days, cause said 
libeled goods to be reshipped to the warehouse of the claimant in New Jersey 
and there relabeled under the supervision of the Food and Drug Administration 
so as to comply with the requirements of the Food, Drug and Cosmetic Act of 
June 25, 1938.
"2. That the claimant would retain the entire lot of condemned goods intact 
for examination or inspection by a representative of the United States Federal 
Security Agency, and at all times maintain necessary records or other proof to 
identify said goods to the satisfaction of said representative.
"3. That the claimant would notify the Federal Security Agency of its 
purpose to do so and then submit to the Agency's representative all of said goods 
at claimaint's warehouse for the purpose of examination and inspection.
"4. That the claimant would not, under any circumstances, ship or sell, or 
offer for shipment or sale, for human consumption, any part of said goods until 
a representative of said Federal Security Agency had been given free access to 
said goods for the purpose of inspection and he had released the same for sale.
"5. That the claimant would pay $14.00 per day as salary or wages and $5.00 
per day as subsistence and expenses for each day a representative of the Federal 
Security Agency should be engaged in supervising or inspecting the relabeling 
of said goods.
"6. That the claimant would abide by the decision of the representative of 
said Agency as to the proper relabeling of said goods, which decision should be 
final.
"7. That the claimant would furnish evidence, by affidavit or otherwise, 
satisfactory to the Federal Security Agency, as to the relabeling of said goods, 
and file the same with the Clerk of this Court.
"The bond was duly executed by the defendant Fresh Grown Preserve 
Corporation and by the defendant indemnity company as surety on September 
30, 1941, and filed in the court November 4, 1941. 217 cases of the condemned 
goods were shipped from Columbia, South Carolina, to the defendant Preserve 
Corporation on November 2, 1941, and they were in due course received by 
said defendant at its warehouse in Lyndhurst, New Jersey.
"There was no further action in the libel proceeding until August 14, 1942, 
when appellants filed with the court a signed written stipulation, as follows:
IT IS HEREBY STIPULATED AND CONSENTED that the decree heretofore en- 
tered on the above entitled cause on the 23rd day of September, 1941, be amended to 
further provide: That the time for the claimant herein to relabel the merchandise in 
conformity with the decree entered herein, be extended to the 1st day of October, 1942, 
and that this extension is conditioned upon the claimant furnishing to the Food and 
Drug Division of the Federal Security Agency satisfactory evidence as to the disposi- 
tion of the relabeled goods by furnishing said Food and Drug Division a duplicate of 
the invoice of the sale of such merchandise which said invoice shall contain the amount 
and description of the merchandise and the name and address of the purchaser.
IT IS FURTHER STIPULATED that in the event that the said merchandise is 
not relabeled within the period of time as provided for in this stipulation, the claimant 
will not request a further extension.
"On the date of the filing of this stipulation the court below entered a sup- 
plemental order in the libel proceeding reciting that the merchandise in question 
had been condemned and forfeited but giving leave to the claimant to repossess 
certain of said merchandise; that the claimant had not carried out all of the 
conditions prescribed in the order of the court below that were made the con- 
dition of said bond and further ordering that 'the time for relabeling (said 
goods) in a manner satisfactory to the said Food and Drug Division and car- 
rying out the other provisions relative to said relabeling and satisfying the
said Division, be extended to the 1st day of October 1942,' subject to the 
following proviso:
* * * that the above extension is contingent upon the claimant paying all costs, 
disbursements and expenses due to or incurred by the Clerk of this court and by the 
Marshal of this court in connection with this cause * * * in full within ten days 
from the date hereof. Upon failure of such payment within such time then the exten- 
sion hereinabove granted in this order shall become null and void and the District 
Attorney is directed to institute suit for the enforcement of the terms of the bond on 
file in this cause forthwith    *    *    *
"The costs required to be paid as a condition precedent to the extension of 
time asked for were not paid within the time specified in the last order of the 
court below.   Thereafter, this action was brought.
"Two questions are involved in the appeal: (1) Were the conditions of the 
bond breached?   (2) Was the bond a penal bond or an indemnity bond 
"That the conditions of the bond as originally given were breached is not 
open to dispute. The Preserve Corporation did not retain the entire lot of 
condemned goods intact for examination or inspection and did not notify the 
Federal Security Agency when they were ready to relabel the goods reclaimed. 
The Preserve Corporation also offered for shipment and sale part of said goods 
before a representative of the Federal Security Agency had been given free 
access to them for the purposes of inspection and did not furnish satisfactory 
evidence as to the relabeling of said goods.
"It is claimed on behalf of the Preserve Corporation that the conditions of 
the bond were substantially complied with, but the judge below found this not 
to be a fact and we are of the opinion that his finding is not only based upon 
substantial evidence but is overwhelmingly supported by the evidence.
"The Preserve Corporation claims to have relabeled the goods within thirty 
days after they were received but not under the supervision of the Food and 
Drug Administration, but that the Food and Drug Administration adopted 
the view that the relabeling had been properly done. As pointed out by the 
judge below in his able opinion it is not probable that if the relabeling had 
already been done the Preserve Corporation would have, months later, in 
August 1942, filed a stipulation asking for a further extension of time in which 
to do the relabeling. Upon this point and considering other evidence the 
judge below found against the Preserve Corporation defendant.
"It is also admitted that the costs, the payment of which within ten days 
from the date of the order of August 14, 1942, was required by said order, were 
not paid within the time specified and as again pointed out by the judge below 
this failure to comply with the conditions of the order as expressly stated in the 
order made null and void the privileges granted under the order to the Preserve 
Corporation. The record discloses that a few cases of the goods were destroyed 
or damaged.
"The Preserve Corporation contends that the order of August 14, 1942, was 
a waiver by the Government of any breach of the conditions of the bond that 
had occurred prior thereto but do not contend that they paid the costs within 
the time specified in the order to make the decree of August 14, 1942, effective.
"The whole history of what happened, as shown by the record, makes a 
picture of repeated efforts on the part of the Government, its attorneys and 
agents to aid the Preserve Corporation in reclaiming the goods and just as 
many negligent acts on the part of the Preserve Corporation to avoid complying 
with the conditions prescribed by the court. In fact very few of the conditions 
of the bond or the requirements made in the court orders were strictly complied 
with by the Preserve Corporation and there seems to be no room for excusing 
their course of conduct.
"The conditions of the bond were breached and the conditions of the court 
order excusing these breaches were not complied with.
"On the second question the court below held that the bond was a penal 
bond and not an indemnity one. In this holding the judge below was clearly 
right. We had occasion to discuss this question in Eagle Indemnity Co. v. 
United States, 22 F. 2d 388, where we distinguished the case of United States 
v. Zerbey, 271 U. S. 322, chiefly relied upon by the defendants. The condition 
as to the payment of certain money was, of course, an indemnifying one but 
the breach of that condition is not charged.
"The authorities are clear that where a bond is given to a public body as a 
condition of a privilege or condition on compliance with law, the full penalty 
of such bond may be recovered for a breach thereof, in the absence of statutory 
provision to the contrary.
"Clarke v. Barnard, 108 U. S. 436.
"United States v. Dieckerhoff, 202 U. S. 302.
"Eagle Indemnity Co. v. United States, supra.
"In United States v. Dieckerhoff, supra, the court said:
" 'But we think the purpose of the statute and the purpose of the requirement 
in the bond provided for therein, and the one given in this case, was to secure 
the performance of the duty imposed of returning the package or packages, 
where an importer availed himself of the privilege of withdrawing merchandise 
from the custody of the governmental officials before it has been examined and 
appraised. * * *, we think it was the intention of the law to provide specific 
damages to be recovered upon the nonperformance of the duty imposed, and to 
secure a prompt and faithful discharge of which the statute provides for the 
giving of a bond.
" 'We think such undertaking, for this manner of discharging this duty, or 
paying the value stipulated, was intended to and does relieve the government 
from the necessity of showing any actual damage or loss.'
"The Preserve Corporation was violating the law in shipping adulterated 
goods and showed no appreciation of the various efforts made to assist it in 
reclaiming and reconditioning the goods.
"The findings of the judge below that the conditions of the bond were breached 
and that the bond was a penal one were correct and the judgment of the court 
below is accordingly affirmed."
MISCELLANEOUS FRUIT PRODUCTS