Affiliated Distillers Brands Corp. v. Gillis, No. 10132

CourtSupreme Court of South Dakota
Writing for the CourtRENTTO
Citation81 S.D. 44,130 N.W.2d 597
Docket NumberNo. 10132
Decision Date12 October 1964
PartiesAFFILIATED DISTILLERS BRANDS CORP., a corporation, Plaintiff and Appellant, v. Bruce D. GILLIS, as Commissioner of Revenue of the State of South Dakota, and Max Brookens as Director of the Alcoholic Beverage and Cigarette Tex Division of the Department of Revenue of the State of South Dakota, Defendants and Respondents.

Page 597

130 N.W.2d 597
81 S.D. 44
AFFILIATED DISTILLERS BRANDS CORP., a corporation, Plaintiff
and Appellant,
v.
Bruce D. GILLIS, as Commissioner of Revenue of the State of
South Dakota, and Max Brookens as Director of the Alcoholic
Beverage and Cigarette Tex Division of the Department of
Revenue of the State of South Dakota, Defendants and
Respondents.
No. 10132.
Supreme Court of South Dakota.
Oct. 12, 1964.

Page 598

[81 S.D. 46] Woods, Fuller, Shultz & Smith, Sioux Falls, for plaintiff and appellant.

Frank L. Farrar, Atty. Gen., John Dewell, Asst. Atty. Gen., Pierre, for defendants and respondents.

RENTTO, Judge.

The Commissioner of Revenue adopted an amendment to Rule 10 of the Ruies and Regulations of the Department of Revenue relating to the alcoholic beverage laws of this state. It provided that those licensed as distillers and wholesalers of intoxicating liquor may not sell, give or deliver to a licensee of any class any intoxicating liquor other than high point beer and wine, in any container which is larger than a quart. Prior to the amendment gallon and half gallon sizes were permissible.

The plaintiff, engaged in the business of marketing, selling and distributing numerous well-known and extensively advertised brands of alcoholic beverages in the State of South Dakota, had built up a large and valuable volume of sales of whiskey in half gallon containers to licensed wholesalers therein. It brought this action to have the regulation declared invalid and asked an injunction to restrain its enforcement. It claimed that the authority under which the Commissioner issued the regulations is an impermissible delegation of legislative authority and, if not, the regulation was an arbitrary and unreasonable restriction on the liquor industry. The trial court ruled against the contentions of the plaintiff and entered an order dismissing the complaint. This appeal is from such action.

From the records in the Commissioner's office it appears that for the year 1963 there were licensed in the state 463 on-sale [81 S.D. 47] and 545 off-sale liquor establishments. Of these our municipalities operated 104 as on and off-sale combinations and 56 as off-sale stores. As the terms imply the off-sale store sells liquor by the package for use off the premises where sold and the onsale establishment sells it by the drink for consumption on its premises.

In the summer of 1963, prior to the issuance of the amendment on July 24th, the Commissioner learned from reports made to his office of a phenomenal increase in the importation into the state in half gallon containers of a brand of whiskey distributed by the plaintiff. At that time in 1963 one of our licensed wholesalers had bought from the plaintiff 2,150 cases of such whiskey in containers of that size. In 1962 and during several preceding years it had received only 25 cases annually. The Commissioner was of the view that this increase was occasioned by a promotional scheme instituted by the plaintiff underwhich a case of half gallons of such whiskey retailed for less than a case of quarts of the same liquor.

An investigation of the situation by the office of the Attorney General covering the second quarter of 1963 indicated that during that period, in 80 transactions, 475 half gallon bottles of such whiskey were sold to retailers licensed as on-sale dealers. An

Page 599

inspection of the premises of 25 of these licensees revealed that only six of them had half gallon bottles displayed on their bars. Of these one poured whiskey into drinks from such containers and the others only when specifically requested. The investigation disclosed that it was a rather common practice among on-sale dealers to refill the quart bottles of that brand displayed on their bars from the half gallon containers.

On the basis of these facts the Commissioner found that certain practices were taking place involving gallon and half...

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18 practice notes
  • Rushmore State Bank v. Kurylas, Inc., No. 15764
    • United States
    • Supreme Court of South Dakota
    • May 11, 1988
    ...this issue, it has referred to the right to sell alcoholic beverages as a privilege. Affiliated Distillers Brands Corp. v. Gillis, 81 S.D. 44, 130 N.W.2d 597 (1964); Burke v. Collins, 18 S.D. 190, 99 N.W. 1112 (1904). An examination of our liquor statutes supports this majority A liquor lic......
  • State v. Moschell, No. 22464-22466.
    • United States
    • Supreme Court of South Dakota
    • March 10, 2004
    ...powers and is an unlawful delegation of legislative powers." Id., at 497 (quoting Affiliated Distillers Brands Corp. v. Gillis, 81 S.D. 44, 50, 130 N.W.2d 597, 600 (1964)). [¶ 17.] In Oahe Conservancy Subdistrict v. Janklow, 308 N.W.2d 559 (S.D. 1981), the Court described the test as o......
  • House of Seagram, Inc. v. Assam Drug Co., No. 10662
    • United States
    • Supreme Court of South Dakota
    • April 16, 1970
    ...delegated to a governmental officer or agency constitutional procedures must be adhered to. Affiliated Distillers Brands Corp. v. Gillis, 81 S.D. 44, 130 N.W.2d 597. The action of the agency must be legislative in character and meet the same tests and standards of any legislative enactment.......
  • Moulton v. State, Nos. 14506
    • United States
    • Supreme Court of South Dakota
    • February 20, 1985
    ...in exercising the legislative power to eliminate leasing private cabin sites in the Park. Affiliated Distillers Brands Corp. v. Gillis, 81 S.D. 44, 130 N.W.2d 597 Therefore, I conclude, as did the trial court, that the Commission lacked the power to adopt a policy of elimination and that th......
  • Request a trial to view additional results
18 cases
  • Rushmore State Bank v. Kurylas, Inc., No. 15764
    • United States
    • Supreme Court of South Dakota
    • May 11, 1988
    ...this issue, it has referred to the right to sell alcoholic beverages as a privilege. Affiliated Distillers Brands Corp. v. Gillis, 81 S.D. 44, 130 N.W.2d 597 (1964); Burke v. Collins, 18 S.D. 190, 99 N.W. 1112 (1904). An examination of our liquor statutes supports this majority A liquor lic......
  • State v. Moschell, No. 22464-22466.
    • United States
    • Supreme Court of South Dakota
    • March 10, 2004
    ...powers and is an unlawful delegation of legislative powers." Id., at 497 (quoting Affiliated Distillers Brands Corp. v. Gillis, 81 S.D. 44, 50, 130 N.W.2d 597, 600 (1964)). [¶ 17.] In Oahe Conservancy Subdistrict v. Janklow, 308 N.W.2d 559 (S.D. 1981), the Court described the test as o......
  • House of Seagram, Inc. v. Assam Drug Co., No. 10662
    • United States
    • Supreme Court of South Dakota
    • April 16, 1970
    ...delegated to a governmental officer or agency constitutional procedures must be adhered to. Affiliated Distillers Brands Corp. v. Gillis, 81 S.D. 44, 130 N.W.2d 597. The action of the agency must be legislative in character and meet the same tests and standards of any legislative enactment.......
  • Moulton v. State, Nos. 14506
    • United States
    • Supreme Court of South Dakota
    • February 20, 1985
    ...in exercising the legislative power to eliminate leasing private cabin sites in the Park. Affiliated Distillers Brands Corp. v. Gillis, 81 S.D. 44, 130 N.W.2d 597 Therefore, I conclude, as did the trial court, that the Commission lacked the power to adopt a policy of elimination and that th......
  • Request a trial to view additional results

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