State v. Distilling Co.

We will consider the last insistence first.

Judge GANTT, in passing upon the case of State v. Bengsch, 170 Mo. 1. c. 115, used some language which was purely obiter that lends countenance to this insistence of counsel for the State. But when we look deeper into the Wilson Act, and view it in the light of its history, and under the decisions of the Supreme Court of the United States, it will be seen that it does not serve the purpose here assigned to it, by counsel for the State.

After the adoption of the prohibition and local option law by many of the States of the Union, unscrupulous persons sought to take an impoper advantage of the interstate commerce clause of the Constitution of the United States, and under the authority thereof would ship into such States, for the use of the consumer, intoxicating liquors in what was known as the "Original Package," and thereby violate the spirit if not the letter of said prohibition and local option laws. Under that status of the law, neither the courts of justice nor other State officials had sufficient authority to effectively remedy the many abuses before suggested. The courts when confronted with that condition of things frequently suggested that relief from that situation might be granted by an act of Congress. Interested parties grasping the suggestion, urged upon Congress the importance and necessity of such an act. In consequence thereof, the Wilson Act was duly enacted. From this brief history of that act, it must be apparent that Congress never designed thereby to authorize the legislature of a State to enact laws materially interfering with interstate commerce, but only intended to remove the shield under which the State laws were being violated by those designing persons with impunity; or in other words, the clear intention of Congress was to subject intoxicating liquor shipped from one State into another to the laws of the State to which

State v. Distilling Co.

it was shipped, and thereby subject both foreign and domestic liquors to the same law, but nothing more.

The Supreme Court of the United States, in the case of Scott v. Donald, 165 U. S. 98, has expressed the same views. That case involved the constitutionality of the law known as the "South Carolina Dispensary Law." In discussing the application of the Wilson Act to that law, the court, on page 100, said: "The question whether a given state law is a lawful exercise of the police power is still open, and must remain open, to this court. Such a law may forbid entirely the manufacture and sale of intoxicating liquors and be valid. Or it may provide equal regulations for the inspection and sale of all domestic and imported liquors and be valid. But the State cannot, under the Congressional legislation referred to, establish a system which, in effect, discriminates between interstate and domestic commerce in commodities to make and use which are admitted to be lawful."

We therefore hold that the Wilson Act is not controlling in this case.

This brings us to the consideration of the question: Does the Act of 1909 attempt to regulate or interfere with interstate commerce?

The act requires all persons who manufacture, rectify or sell intoxicating liquors in this State, except wines or spirits made from grapes or fruits grown herein, to take out a license and pay the fees mentioned in section 5 thereof. The information filed against respondent charges it with engaging in the business of manufacturing, rectifying and selling in this State, intoxicating liquors, not being wine or spirits made from grapes or fruits grown in this State. This information, in effect, charges respondent with the violation of this act, in that it is engaged in selling or exposing for sale, intoxicating liquors manufactured in other States or countries, and shipped into this, not made of grapes or fruits grown in this State; and in that it is

State v. Distilling Co.

manufacturing and selling, in this State, intoxicating liquors not made of grapes or fruits grown in this State, without having taken out a license therefor, and without having paid the fees required to be paid by section 5 of the act. That must of necessity be the effect of the charge, for the reason that the information, by the exception therein, in effect, states that respondent was not charged with manufacturing, rectifying, selling or exposing for sale, wine or spirits made of grapes or fruits grown in this State. That being true, that there was no other intoxicating liquors respondent could manufacture or sell, except those before mentioned.

In other words, this act attempts to license persons to sell intoxicating liquors in this State manufactured in other States; and to manufacture and sell intoxicating liquors in this State not made of grapes and fruits grown herein; and to impose upon the licensee the payment of the license fees prescribed by the fifth section, for the privilege so attempted to be granted, but no such license is required to authorize the manufacture or sale of wines or spirits made of grapes or fruits grown in this State, nor are the fees mentioned in the fifth section required to be paid by the licensee for the privilege of manufacturing or selling wines and spirits made from grapes or fruits grown in this State.

By this analysis of the act, and the information drawn thereunder, it is perfectly apparent that the act, whether designedly or not, discriminates in favor of wines and spirits made from grapes or fruits grown in this State, and against the same kind of wines and spirits made from grapes or fruit grown elsewhere, and thereby imposes burdens in the form of license fees upon interstate commerce.

That cannot and should not be tolerated, even under the guise of a police regulation. That authority has been wisely delegated by the several States, to Con

State v. Distilling Co.

gress, by the Constitution of the United States; and no State should be permitted to enforce any law, whatever its character may be, which stifles or materially interferes with interstate commerce.

I know of no power the several States could exercise which would be fraught with greater evil. It would generate intense friction between the States; create bad feeling between their citizens; prevent the free exchange of their surplus products; and stifle interstate commerce in general. This would lead to retaliation, sectional strife, bloodshed and war.

In my opinion the commercial clause of the Constitution is one of the wisest provisions contained in that wonderful document, and shows the wisdom and clear foresight of our forefathers. Under its beneficent provisions, the States must remain at peace with each other; the surplus products of each may be freely exchanged; drought or famine, in any one, could not bring want or starvation to her people; the necessities and comforts of life are distributed to all; business is transacted upon broad and national lines; and intercourse between their citizens is untrammeled; each is a brother and not an alien.

Returning to the question in hand.

In the case of Darnell v. Memphis, 208 U. S. 115, the statute of Tennessee, after authorizing the taxation of all real and personal property of the State, exempted from its operation "all growing crops of whatever nature and kind, the direct product of the soil of this State in the hands of the producer and his immediate vendee, and manufactured articles from produce of the State, in the hands of the manufacturer." Darnell & Son Company was a corporation existing under the laws of Tennessee, and domiciled in Memphis, and there owned and operated a lumber mill. Shortly prior to January 30, 1905, pursuant to the statute mentioned, the personalty of the Darnell Company was assessed for taxation at $44,000. Of that amount

State v. Distilling Co.

$19,325 was the value of logs cut from the soil of States other than Tennessee, which the company had shipped into Tennessee, and were held by the company as the immediate purchaser, awaiting manufacture into lumber, or consisted of lumber already manufactured by the company from logs which had been acquired and brought into Tennessee from other States, all of which was lying in the mill yard awaiting sale. The Darnell Company protested against the assessment, claiming that it was not liable to be taxed for the $19,325, the value of the property owned by it as the immediate purchaser of logs bought from other States, or the lumber, the product thereof. The basis of this contention was that the property represented by the valuation in question could not be taxed without discriminating against it or like property, and being the product of the soil of Tennessee, was exempt from taxation under the constitution and laws of the State, and therefore to tax said property would violate the commerce clause of section 8 of article 1 of the Constitution, and the equal protection clause of the Fourteenth Amendment thereof.

From this statement of the proposition, it will be seen that it is of a twofold character, one relating to the commerce clause and the other to the equal protection clause of the Fourteenth Amendment; and for that reason, both of those sections must be considered in the determination of this question, and all similar questions. [Cox v. Texas, 202 U. S. 1. c. 451; Darnell v. Memphis, supra, 118; Dewey v. Des Moines, 173 U. S. 193, 198.]

Upon the facts before stated, the Supreme Court of Tennessee decided against the company and held the statute imposing the tax valid. Thereupon the company sued out a writ of error from the Supreme Court of the United States. The latter court in reversing the judgment of the Supreme Court of Tennessee, on page 119, said: