Christian Moerlein Brewing Co. v. Hill

• Decision Date: 24 December 1908
• Citation: 166 F. 140
• Parties: CHRISTIAN MOERLEIN BREWING CO. et al. v. HILL, Sol. Gen., et al.
• Court: U.S. District Court — Northern District of Georgia

166 F. 140

CHRISTIAN MOERLEIN BREWING CO. et al. v. HILL, Sol. Gen., et al.

United States Circuit Court, N.D. Georgia.

December 24, 1908

Anderson Felder, Roundtree & Wilson, Spencer R. Atkinson, and Wm. K Miller, for complainants.

D. K Johnson, C. D. Hill, Lowry Arnold, and Mayson & Hill, for defendants.

NEWMAN District Judge.

On the 31st day of December, 1907, the complainants filed their bill against the defendants in the Circuit Court of the United States for the Atlanta Division of this district. The general purpose of the bill is to enjoin the enforcement of an act passed by the Legislature of the state of Georgia, and approved by the Governor on August 6, 1907, which by its terms was to take effect on January 1, 1908 (Acts 1907, p 81). The act of the Legislature as indicated by the title is as follows:

'An act to prohibit the manufacture, sale, barter, giving away to induce trade, or keeping or furnishing at public places, or keeping on hand at places of business of any alcoholic, spirituous, malt or intoxicating liquors, or intoxicating bitters or other drinks, which if drunk to excess, will produce intoxication; to except sales of alcohol in certain cases, upon certain conditions; to provide certain rules of evidence in connection with the enforcement hereof; to prescribe penalties, and for other purposes.'

The penal provision of the act is contained in section 2, as follows:

'That any person, firm or corporation who shall violate this act in any respect shall be guilty of a misdemeanor; any physician who shall issue a prescription hereunder containing any false statement shall be guilty of a misdemeanor; any druggist who shall fill any prescription for alcohol in any wise than as herein allowed, or who shall fail to file a prescription filled by him hereunder with the ordinary within the time prescribed, shall be guilty of a misdemeanor; any person who shall obtain alcohol for another in accordance with the terms hereof and who shall convert the same to any other use shall be guilty of a misdemeanor.'

The allegations in the original bill are that the Christian Moerlein Brewing Company is now and has been for a number of years operating a brewery in the state of Ohio, and sells beer manufactured at said brewery in the state of Ohio and other states of the United States. That it has authority under its charter to brew and sell malt liquors, and to do and perform such other things as may be incidental thereto.

That 'the Chattanooga Brewing Company is now, and has been for a number of years, operating a brewery in the state of Tennessee, and sells beer manufactured at said brewery in the state of Tennessee, and in other states of the United States.

It has the authority under its charter to brew and sell malt liquors, and to do and perform such other things as may be incidental thereto.'

That 'the Christian Moerlein Brewing Company is now, and has been for several years, maintaining branch offices in the city of Atlanta, where, through their agents and employes, they have sold, in large quantities, the product of their said brewery, and, in order to conduct their business in the city of Atlanta, they have acquired, by purchase or lease, warehouses, refrigerators, office furniture, bar fixtures, etc., and that said investments were and are indispensably necessary to the conduct of their business. That it has in the city of Atlanta property which it has used in the conduct of its business as aforesaid, of the value of five thousand dollars, or other large sum, besides having laid out and expended, in the prosecution of its business in advertisement, etc., five thousand dollars, or other large sum.'

That 'it owns a certain frame warehouse (the location of which is described), which is equipped with bottling machinery consisting of crowning and corking machines, boilers, engines, etc., beer coolers and refrigerators, of the value of one thousand dollars, or other large sum; a stable, two double wagons and harness; two single wagons and harness, and five horses, of the value of one thousand dollars, or other large sum.'

That in addition to this it has leased two places, one on Decatur street, and one on Piedmont avenue, for which it is obligated to pay the sum of $125 per month each (not stating, however, when the lease expires).

That the business done in Atlanta by the Christian Moerlein Brewing Company will amount to from $40,000 to $50,000 per annum, from which complainant derives a net profit of $5,000 per annum, or other large sum.

That the Chattanooga Brewing Company is now, and has been for several years, maintaining branch offices in the city of Atlanta, where, through their agents and employes, they have sold, in large quantities, the product of their brewery, and, in order to conduct their business in the city of Atlanta, they have acquired, by purchase or lease, warehouses, refrigerators, office furniture, and bar fixtures (the value of which is not given), and that these investments were necessary in the conduct of its business. That it has expended several thousand dollars in advertising its business and building up the same, with the result that its business in the city of Atlanta will amount to about $15,000 per annum, or other large sum.

It is then alleged that the complainants have each paid a license tax of $300 to the county of Fulton, and a license tax to the state of about $200. The bill then sets out a provision of the Constitution of the state of Georgia, art. 8, Sec. 1, that:

'There shall be a thorough system of common schools for the education of children in the elementary branches of an English education only, as nearly uniform as practicable, the expenses of which shall be provided for by taxation or otherwise.' Also article 8, Sec. 3, as follows:

'The poll-tax, any educational fund now belonging to the state (except the endowment of, and debt due to the University of georgia) a special tax on shows and exhibitions, and on the sale of spirituous and malt liquors, which the General Assembly is hereby authorized to assess, and the proceeds of any commutation tax for military service, and all taxes that may be assessed on such domestic animals as, from their nature and habits, are destructive to other property, are hereby set apart and devoted for the support of common schools.'

That complainants relied upon said constitutional guaranty of protection when they entered the state of Georgia for the purpose of transacting their business and made the large investments as stated.

The bill then refers to the penal clause of the act of the Legislature of August 6, 1907, and alleges that they can only conduct their business through agents and employes, and that the Chief Executive of the state, and many of the defendants named in the bill, made public statements to the effect that the prohibition law, when the same went into effect, would be rigidly enforced, and that in order that violations might not be repeated, the courts would be urged to exercise their discretion and inflict, as a punishment for such violations, service in the chain gang, in lieu of any of the other lighter and less humiliating penalties authorized to be imposed by the act. In view of such threats, and notwithstanding the fact that such employes and agents had been advised that said act of the Legislature was unconstitutional and void, said agents and employes became terrorized and declined to continue after January 1, 1908, to sell the products of complainants or be in any wise connected with the prosecuting of their business in the county and state aforesaid.

It is then alleged that the property of complainants used in the conduct of its business has been greatly damaged, if not wholly destroyed, by reason of the enforcement of the prohibition law, and that much of said property can be used for no other purpose.

The bill then sets out the official authority and duties of the respective defendants.

It is then alleged that the effect of the enforcement of this act is to deprive the public school system of the state of Georgia of the sum of $200,000, and that this loss must be made up by assessment on property, and that the burden of this increase in taxes must be borne by complainants as taxpayers of the state, and is the direct result of the loss of the revenue derived from the sale of spirituous and malt liquors.

It is then alleged that section 3, art. 8, of the Constitution of the state of Georgia, hereinbefore quoted, in so far as it provides for the assessment of a special tax on the sale of spirituous and malt liquors in the state of Georgia, is mandatory and imperative, and implies an inhibition on the part of the General Assembly of the state to the exercise of any authority in respect of that subject, which would frustrate or disappoint the purpose of that provision, and, therefore, said act is contrary to the provisions of the Constitution of the state of Georgia, and is unconstitutional and void.

That the incorporation of sections 1 and 3 of article 8 of the Constitution of the state of Georgia was a declaration by the people of the state, in convention assembled, of the policy of the state with reference to permission for the sale of spirituous and malt liquors within the state, and was a limitation upon the power of the General Assembly of the state in its dealing with the subject, and the General Assembly had no power or authority to enact any law absolutely prohibiting the manufacture and sale of spirituous, malt, and other intoxicating liquors in the state of Georgia, and that the act for this reason is unconstitutional and void.

Moreover it is alleged this provision was a recognition of the right of individuals and corporations to sell spirituous and malt...