Jacob Ruppert v. Caffey, 603

• Citation: 251 U.S. 264,40 S.Ct. 141,64 L.Ed. 260
• Decision Date: 05 January 1920
• Docket Number: No. 603,603
• Parties: JACOB RUPPERT v. CAFFEY, U. S. Atty., et al
• Court: United States Supreme Court

251 U.S. 264

40 S.Ct. 141

64 L.Ed. 260

JACOB RUPPERT

v CAFFEY, U. S. Atty., et al.

No. 603.

Argued Nov. 20 and 21, 1919.

Decided Jan. 5, 1920.

[Syllabus from pages 264-265 intentionally omitted] Messrs. Elihu Root and William D. Guthrie, both of New York City, for appellant.

[Argument of Counsel from pages 265-278 intentionally omitted]

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Messrs. Assistant Attorney General Frierson and Solicitor General A. L. King, of Atlanta, Ga., for appellees.

Mr. Justice NRANDEIS delivered the opinion of the Court.

By the Act of August 10, 1917, c. 53, § 15, 40 Stat. 276, 282 (Comp. St. 1918, § 3115 1/8 l), a war measure known as the Lever Act, Congress prohibited the use after September 9, 1917, of food materials or feeds in the production of distilled spirits for beverage purposes and authorized the President to limit of prohibit their use in the production of malt or vinous liquors for beverage purposes, so far as he might, from time to time, deem it essential to assure an adequate supply of food, or deem it helpful in promoting the national security or defense. Under the power so conferred the President, by proclamation of December 8, 1917, prohibited the production after January 1, 1918, of any 'malt liquor except ale and porter' containing more than 2.75 per centum of alcohol by weight. By proclamation of September 16, 1918, the prohibition was extended to 'malt liquors, including near beer, for

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beverage purposes, whether or not such malt liquors contain alcohol'; and by proclamation of March 4, 1919, the prohibition was limited 'to intoxicating malt liquors.' Under section 2 of the act (section 3115 1/8 ee) the duty of enforcing the above provisions was assigned to the Commissioner of Internal Revenue. This act contained no provision prohibiting the sale of intoxicating or other liquors.

On November 21, 1918, the so-called War-Time Prohibition Act (40 Stat. 1045, c. 212) was approved. It provided that:

'After May first, nineteen hundred and nineteen, until the conclusion of the present war and thereafter until the termination of demobilization, the date of which shall be determined and proclaimed by the President of the United States, no grains, cereals, fruit, or other food product shall be used in the manufacture or production of beer, wine, or other intoxicating malt or vinous liquor for beverage purposes. After June thirtieth, nineteen hundred and nineteen, until the conclusion of the present war and thereafter until the termination of demobilization, the date of which shall be determined and proclaimed by the President of the United States, no beer, wine, or other intoxicating malt or vinous liquor shall be sold for beverage purposes except for export. * * *' Section 1.

On February 6, 1919, the Commissioner of Internal Revenue ruled (Treasury Decision 2788) that a beverage containing as much as one-half of 1 per centum of alcohol by volume would be regarded as intoxicating within the intent of the Act of November 21, 1918, and that after May 1, 1919, persons would not be permitted to qualify as brewers if the alcoholic content of their product equaled or exceeded that percentage. In so ruling the Commissioner adopted and applied to this prohibitory act the same classification of malt liquors which had been applied in administering the laws concerning the taxation of beer and other similar fermented liquors.

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For since 1902 (Treasury Decision 514) fermented liquor containing as much as one-half of 1 per centum of alcohol had been treated as taxable under Revised Statutes, §§ 3339 and 3242 (Comp. St. §§ 6143, 5965), and this classification was expressly adopted in the War Revenue Act October 3, 1917, c. 63, § 307, 40 Stat. 311 (Comp. St. 1918, § 6144b). The correctness of this construction of the act was promptly and earnestly controverted by the brewers, who insisted that Congress had intended to prohibit the production only of such beer or other malt liquors as were in fact intoxicating. The attempt was then made to remove the doubt by new legislation before May 1, 1919, when the act would by its terms become operative. On February 26 the House Committee on the Judiciary reported favorably an amendment to H. R. 13581 providing:

'The words 'beer, wine or other intoxicating malt or vinous liquors' in the war prohibition act shall be construed to mean any liquors which contain in excess of one-half of one per centum of alcohol.'

The Sixty-Fifth Congress ended on March 4 without acting on this bill, and the Sixty-Sixth Congress did not convene in extra session until May 19. On June 30, the House Committee on the Judiciary reported substantially the same provision as section 1 of title 1 of H. R. 6810; but it was not enacted until October 28, 1919, when as the Volstead Act (Act Oct. 28, 1919, c. 85) it was passed over the President's veto.^a

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Immediately after the passage of the Volstead Act, this suit was brought in the District Court of the United States for the Southern District of New York by Jacob Ruppert against Caffey, United States Attorney, and McElligott, Acting Collector of Internal Revenue, to enjoin the enforcement as against the plaintiff of the penalties provided in the War-Time Prohibition Act as amended by the Volstead Act. It was heard below on plaintiff's motion for a preliminary injunction and defendants' motion to dismiss, and, having been dismissed, was brought here by direct appeal under section 238 of the Judicial Code (Comp. St. § 1215). The bill alleged that plaintiff, the owner of a brewery and appurtenances, was on October 28, 1919, engaged in the manufacture of a beer containing more than one-half of 1 per centum of alcohol by volume, and less than 2.75 per centum by weight or 3.4 per centum by volume, and had then on hand a large quantity of such beer, and that this beer was not in fact intoxicating. Plaintiff contended (1) that the act of November 21, 1918, had become void or had expired by its own terms before the bill was filed; (2) that its prohibition by its terms was limited to beer which was in fact intoxicating; (3) that the Act of October 28, 1919, title 1, § 1, which purported to extend the prohibition to the manufacture and sale of beer not in fact intoxicating, exceeded the war power of Congress; and that thereby violation of rights guaranteed to plaintiff by the Fifth Amendment was threatened.

This case was heard and decided below with Dryfoos et al. v. Edwards and it was argued here on the same day with that case and Hamilton v. Kentucky Distilleries & Warehouse Co., 251 U. S. 146, 40 Sup. Ct. 106, 64 L. Ed. ——, decided December 15, 1919. For the reasons set forth in

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the opinion in those cases, the Act of November 21, 1918, was and remained valid as against the plaintiff and had not expired. For the same reasons section 1 of title 1 of the Act of October 28, 1919, was not invalid, merely because it was new legislation. But it is insisted that this legislation is nevertheless void as against the plaintiff, because Congress could not, even under its full war powers, prohibit the manufacture and sale of nonintoxicants, and, at all events, could not without making compensation, extend the prohibition to nonintoxicating liquor acquired before the passage of the act. These objections require consideration.

First. May the plaintiff show as a basis for relief that the beer manufactured by it with alcoholic content not greater than 2.75 per centum in weight and 3.4 per centum in volume is not in fact intoxicating? The government insists that the fact alleged is immaterial since the passage of the Volstead Act by which the prohibition of the manufacture and sale is extended to all beer and other malt liquor containing as much as one-half of 1 per centum of alcohol by volume.

If the war power of Congress to effectively prohibit the manufacture and sale of intoxicating liquors in order to promote the nation's efficiency in men, munitions and supplies is as full and complete as the police power of the states to effectively enforce such prohibition in order to promote the health, safety and morals of the community, it is clear that this provision of the Volstead Act is valid and has rendered immaterial the question whether plaintiff's beer is intoxicating. For the legislation and decisions of the highest courts of nearly all of the states establish that it is deemed impossible to effectively enforce either prohibitory laws or other laws merely regulating the manufacture and sale of intoxicating liquors, if liability or inclusion within the law is made to depend upon the issuable fact whether or not a particular liquor made or sold as a beverage is intoxicating. In other words, it clearly appears

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that a liquor law, to be capable of effective enforcement must, in the opinion of the Legislatures and courts of the several states, be made to apply either to all liquors of the species enumerated, like beer, ale or wine, regardless of the presence or degree of alcoholic content; or if a more general description is used, such as distilled, rectified, spirituous, fermented, malt, or brewed liquors, to all liquors within that general description regardless of alcoholic content;^b or to such of these liquors as contain

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a named percentage of alcohol; and often several such standards are combined, so that certain specific and generic liquors are altogether forbidden and such other liquors as contain a given percentage of alcohol.

A test often used to determine whether a beverage is to be deemed intoxicating within the meaning of the liquor law is whether it contains one-half of 1 per cent. of alcohol by volume. A survey of the liquor laws of the states reveals that in sixteen states the test is either a list of enumerated beverages without regard to whether they contain any alcohol or the presence of any alcohol in a beverage, age, regardless of quantity;^c in eighteen States it

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is the presence of as much as or...