Duluth Brewing & Malting Co. v. City of Superior

JENKINS, Circuit Judge, after stating the facts as above, delivered the opinion of the court. This cause proceeded to hearing without objection by either party to the jurisdiction of this court to entertain the appeal. The case involves the construction and application of the Constitution of the United States, and is also one in which a law of a state is claimed to be in contravention of the Constitution of the United States, and, within section 5 of the act establishing this court (Act March 3, 1891, c. 517, 26 Stat. 826 [U. S. Comp. St. 1901, p. 549]), could have been taken by appeal directly from the Circuit Court to the Supreme Court. Assuming, notwithstanding our decision in Holt v. Indiana [356] Manufacturing Company, 46 U. S. App. 717, 25 C. C. A. 301, 80 Fed. 1, that within the ruling in Carter v. Roberts, 177 U. S. 496, 20 Sup. Ct. 713, 44 L. Ed. 861, we are at liberty to decide as well the constitutional questions as the other questions involved, and since no objection has been raised to that course, we are not disposed to decline jurisdiction, as perhaps we would be justified in doing under the ruling in Carter v. Roberts, supra, and we proceed to determine the whole case. 1. Assuming, without deciding, that a bill in equity will lie to restrain the enforcement of an invalid ordinance of a municipality— touching which question the courts are not altogether at agreement (Ex parte Sawyer, 124 U. S. 200, 8 Sup. Ct. 482, 31 L. Ed. 402; Scott v. Donald, 165 U. S. 107, 17 Sup. Ct. 262, 41 L. Ed. 648; Vicksburg Waterworks Company v. Vicksburg, 185 U. S. 65, 22 Sup. Ct. 585, 46 L. Ed. 808; Davis & Farnham Manufacturing Company v. City of Ros Angeles [decided March 2, 1903] 23 Sup. Ct. 498, 47 L. Ed.-; Suess v. Noble [C. C.] 31 Fed. 855; Schandler Bottling Company v. Welch [C. C.] 42 Fed. 561; Hemsley v. Myers [C. C. 45 Fed. 283; Minneapolis Brewing Company v. McGillivray [C. C.] 104 Fed. 258; Davis Manufacturing Company v. Ros Angeles [C. C.] 115 Fed. 537; City of Hutchinson v. Beckham, 118 Fed. 399, 55 C. C. A. 333)—we are brought to the consideration of the objections urged to the ordinance. If the question were res integra, the argument that the ordinance was only designed to apply to the sale of liquors to be drunk upon the premises would come with weight. The nature of the business, the evil sought to be restrained, regulated, or prohibited, the conditions of the bond required, are forceful to strengthen argument that the ordinance was so designed, and was not intended to regulate the business of vending the commodity while contained in original packages (State of Minnesota v. Orth, 38 Minn. 150, 36 N. W. 103); but we are bound to regard the construction which the Supreme Court of the state has placed upon this or like enactments. If we thought that the court had misconstrued the statute, we would not be at liberty to therefore set aside its judgment. Crowley v. Christensen, 137 U. S. 86, 11 Sup. Ct. 13, 34 L. Ed. 620; Stutsman County v. Wallace, 142 U. S. 293, 12 Sup. Ct. 227, 35 L. Ed. 1018; Forsyth v. City of Hammond, 166 U. S. 506, 17 Sup. Ct. 665, 41 L. Ed. 1095; Wade v. Travis County, 174 U. S. 499, 508, 19 Sup. Ct. 715, 43 L. Ed. 1060. We are not referred to any case in which this particular ordinance has been under review by the Supreme Court of Wisconsin;* but the ordinance is not different in any essential particular from the general excise law of that state (Sanb. & B. Ann. St. Wis. c. 66), and that law has been frequently spoken to by the Supreme Court, and has a settled construction stamped upon it (Scanlan v. Childs, 33 Wis. 663, 667; Peitz v. State, 68 Wis. 538, 32 N. W. 763; Mayer v. State, 83 Wis. 339, 53 N. W. 444; Michels v. State, [357] 115 Wis.-, 90 N. W. 1096). In the last case Mr. Justice Winslow sums up the result of the decisions upon this subject as follows: “The condition of the law as deduced from the three eases cited would seem to be that a brewer may lawfully sell without license to a licensed dealer in his own town, but that he cannot establish a depot in another town and sell by his agent, either to a consumer or dealer in that town, without license.” In Scanlan v. Childs the court, speaking through Mr. Justice Dixon, ruled that the excise law did not apply to sales by manufacturers of articles made by themselves and put up and disposed of in quantities to dealers, according to the usual course of such manufacture and of the trade connected with it. This ruling is criticised in the later decisions, and would seem to be shaken as authority, although the case has not been directly overruled. We are, however, not now concerned w'ith that question; for the appellant does not come within that ruling, not being a manufacturer within the city whose ordinance is here in question. We are constrained, therefore, to hold, in deference to the ruling of the ultimate tribunal of Wisconsin, that the ordinance in question, with the possible exception stated, forbids the sale of liquors at wholesale or at retail by any one who has not obtained a license therefor. 2. It is alleged that the ordinance is obnoxious to the Constitution, in that it is discriminative; that with the construction placed upon the law by the decisions it exempts brewers manufacturing within the city from payment of license, while imposing the tax upon nonresidents. It is doubtless true, as said by Mr. Justice Field in Barbier v. Connolly, 113 U. S. 27, 31, 5 Sup. Ct. 357, 28 L. Ed. 923, that under the fourteenth amendment to the Constitution no impediment may be interposed to the pursuits of any one, except as applied to the same pursuits by others under like circumstances, and that no greater burdens should be laid upon one than are laid upon others in the same calling and condition; but, in the exercise of the police power of the state, “legislation which, in carrying out a public purpose, is limited in its application, if within'the sphere of its operation it affects alike all persons similarly situated, is not within the amendment.” In Reymann Brewing Company v. Brister, 179 U. S. 445, 21 Sup. Ct. 201, 45 L. Ed. 269, a like law of the state of Ohio was under review at the suit of a foreign corporation. The statute there expressly exempted the manufacture and sale at the manufactory, and it was ruled that the law was not discriminative, the court remarking (page 453, 179 U. S., page 204, 21 Sup. Ct., 45 L. Ed. 269): “So, in the present case, the exemption is not confined to Ohio corporations or copartnerships, but extends as well to foreign corporations whose place of manufacturing is within the state of Ohio; and so, likewise, the tax is imposed on Ohio corporations which manufacture goods in other states, and establish places for their sale within the state of Ohio, or which, manufacturing within the state, establish places within the state distinct from the manufactory where their liquors are sold and delivered”—the court citing its former ruling in People v. Roberts, 171 U. S. 658, 662, 19 Sup. Ct. 70, 43 L. Ed. 323. See, also, Hennington v. Georgia, 163 U. S. 299, 16 Sup. Ct. 1086, 41 L. Ed. 166. [358] We are constrained to the conclusion that this law is not discriminative within the meaning of the fourteenth amendment. Assuming that the decision in Scanlan v. Childs will be upheld, the ordinance, with the construction which flows from that case placed upon-it, does not discriminate against the producer of another state. In the state of Wisconsin, no brewer located otherwise than in the city of Superior may establish a warehouse in that city and sell its product without a license, nor can a brewer in that city establish a like depot in another place and dispose of its product without a license. There is no intent discernible to discriminate against a citizen of another state. All are placed upon the same footing. If it be said that the brewer of the city of Superior is exempted from the license by this ordinance, it is also true that under the law he is not exempted if he seeks to dispose of his product in any other place within the state; and, as is said by the Supreme Court of the United States in the last case cited: “The incidental disadvantage that the foreign manufacturer is under * * * does not appear to arise out of any intention * * * to make a hostile discrimination against foreign manufacturers.” It is a disadvantage shared in common with every brewer of the state of Wisconsin whose brewery is not established within the limits of the city of Superior. There are doubtless many reasons which induce the peculiar character of this legislation; but it is not discriminative in the sense of the constitutional amendment, but a legitimate exercise of the police power of the state, authorized by the charter of the city. Whether wise or not is not for us to consider. 3. It is alleged that the ordinance is invalid in that it contravenes the provision of the Constitution (article 1, § 8), that Congress shall have power to regulate commerce among the several states. It was. held in Leisy v. Hardin, 135 U. S. 100, 10 Sup. Ct. 681, 34 L. Ed. 128, that the prohibitory liquor law of the state of Iowa was unconstitutional in so far as it prohibited the sale in original packages of liquors shipped from other states. But subsequently to that decision Congress enacted the “Wilson Act,” so called (Act Aug. 8, 1890, c. 428, 26 Stat. 313 [U. S. Comp. St. 1901, p. 3177]), that all liquors transported into another state or territory, or remaining there for use, consumption, sale, or storage, shall upon arrival be subject to the operation and effect of the laws of such state, enacted in the exercise of its police powers, to the same extent and in the same manner as though such liquor had been produced in such state, and shall not be exempt therefrom by reason of being introduced therein in original packages or otherwise. The validity of this act has been sustained in Re Rahrer, 140 U. S. 545, 11 Sup. Ct. 865, 35 L. Ed. 572; Rhodes v. Iowa, 170 U. S. 412, 18 Sup. Ct. 664, 42 L. Ed. 1088; Vance v. Vandercook Company, 170 U. S. 438, 445, 18 Sup. Ct. 674, 42 L. Ed. 1100. It is not disputed that, if the ordinance in question was enacted in the exercise of police power, it would not be in conflict with the interstate commerce provision of the Constitution. But it is claimed that the ordinance was passed, not with a view to regulation. but of revenue. It may be conceded thát a state or a municipality, exercising the sovereignty of the state, may not, under the [359] guise of police regulation, exact a tax; that if revenue only is designed, it is not a police regulation. It is doubtless true that the legislation must have reference to the supervision, control, and regulation of some act or thing which may in some way injuriously affect the peace, good order, health, morality, or safety of society; but we are unable to say that it clearly appears upon the face of this ordinance that the purpose of it was to exact a tax and not to impose a license for regulation. The subject-matter is one peculiarly within the province of state regulation. The abuse of the appetite is productive of such evil tending to vice and immorality that the courts, while zealous to protect the rights of property, should be alike careful not to invade the province of the lawmaking power of the state in the exercise of its police power to regulate those things which may become potential to the injury of society. It may be that the sale of liquor in original packages does not in itself require the same strict regulation as does the saloon; but it is not improper for a local legislature in view of the evil sought to be regulated, to impose upon the wholesale traffic such regulations as will effectually prevent the abuse of the right to sell at wholesale and to exercise the police power to that end. It is not difficult for a wholesale dealer to sell at retail, and the temptation so to do, in view of the character of the business and the great profits arising therefrom, is ever present. It cannot be said, therefore, as we think, that it was without the exercise of police power to regulate the business, or to supervise the manner in which the appellant sold its products within the city. The ordinance bears a just and proper relation to the business in question, and cannot be said to be a mere arbitrary imposition of a tax. We are not able to see that the license imposed is so obviously excessive as to lead irresistibly to the conclusion that it is exacted as a tax and not as a license for regulation of the business. The elements entering into the amount of the license fee are various, and we are not able to say that the charge was so large and was so unreasonable as to demonstrate an abuse of discretion, and require us to declare it a tax, and not a license. Western Union Telegraph Company v. New Hope (decided January 5, 1903) 23 Sup. Ct. 204, 47 L. Ed.-. The decree will be affirmed. Footnotes [*] Since this opinion was prepared the Supreme Court of the state, in the case of Joseph Schlitz Brewing Company v. City of Superior, 93 N. W. 1120, has handed down an opinion upon the very ordinance here involved, sustaining its validity, and holding it applicable to wholesale dealers in liquor.