Anheuser-Busch, Inc. v. Walton

• Court: Maine Supreme Court
• Writing for the Court: THAXTER, Justice
• Citation: Anheuser-Busch, Inc. v. Walton, 135 Me. 57, 190 A. 297 (Me. 1937)
• Decision Date: 09 January 1937
• Parties: ANHEUSER-BUSCH, Inc., et al. v. WALTON et al.

190 A. 297

ANHEUSER-BUSCH, Inc., et al.

v. WALTON et al.

Supreme Judicial Court of Maine.

Jan. 9, 1937.

Appeal from Superior Court, Androscoggin County, in equity.

Bill in equity by Anheuser-Busch, Incorporated, and another against David Walton and others, as State Liquor Commission of the State of Maine, and another. From a decree in favor of plaintiffs, defendants appeal.

Appeal dismissed, and decree affirmed.

Argued before DUNN, C. J., and THAXTER, STURGIS, BARNES, HUDSON, and MANSER, JJ.

Berman & Berman, of Portland, and M. J. Donnelly, of Chicago, Ill., for plaintiffs.

Clyde R. Chapman, of Augusta, and John P. Carey, of Bath, for defendants.

THAXTER, Justice.

The plaintiffs, Anheuser-Busch, Inc., and the West End Brewing Company, are foreign corporations located respectively in the States of Missouri and New York. They have brought a bill in equity seeking to enjoin the enforcement by the defendants, who constitute the State Liquor Commission of this state, of regulations 1, 2, and 4, which purport to have been promulgated by the commission in accordance with legislative authority. A decree was entered by the sitting justice enjoining the enforcement of regulations 1 and 2. From this decree the defendants have appealed.

The plaintiffs are brewers of beer and malt beverages and sell their products to wholesalers in the State of Maine, who are licensed by this state to sell and distribute the same here. The sales are made f.o.b. at the factories of the plaintiffs, and the commodity is transported by the purchasers at their expense to their places of business in the State of Maine. It is conceded that the sales are consummated and title passes at the point of shipment outside of this state. The plaintiffs have built up a lucrative business, and now claim that putting into effect the regulations of the commission will constitute an unlawful interference with the resale of their products by their customers here, and that thereby the good will of their business may be destroyed.

In 1933 an act was passed by the Legislature authorizing the manufacture and sale under various restrictions of malt liquors. Pub.Laws 1933, c. 268. A state licensing board which, under the provisions of Pub.Laws 1934, Sp.Sess, c. 300, has now become the State Liquor Commission, was established. It was given the usual administrative duties of such a board, among which was the power to issue licenses in accordance with the provisions of the statute. Its authority to make regulations is conferred by the following provisions of the statutes:

Pub.Laws 1933, c. 268, § 5, par. 2:

"To adopt rules and regulations for the administration of this act and for the supervision and regulation of the manufacture, sale and transportation of malt beverages throughout the state; the manufacture, sale and transportation of which is hereby permitted and authorized."

Pub.Laws 1935, c. 179, § 2:

"The commission shall have the right to establish regulations for clarifying, carrying out, enforcing and preventing violation of all or any of the laws pertaining to liquor and such regulations shall have the force and effect of law unless and until set aside by some court of competent jurisdiction or revoked by the commission. The commission shall have power by regulation to shorten the permissible hours of sale in state stores and to prevent the sale by licensees of wine and spirits to minors or persons under the influence of liquor. The commission shall at least annually on or before June 30th of each year publish in a convenient pamphlet form all regulations then in force and shall furnish copies of such pamphlets to every licensee authorized by law to sell liquor."

The Legislature likewise provided for various kinds of licenses and for the fees for each type. The pertinent part of these provisions for the purposes of this case reads as follows (Pub Laws 1935, c. 159, P. 364, § 8):

"Licenses for sale and distribution of malt beverages at wholesale under such regulations as the state licensing board may prescribe may be issued by the state licensing board upon an application in such form as may be prescribed by said board and upon payment of an annual fee of $300 for each distributing center or warehouse of said wholesale licensee. A manufacturer's license issued under the preceding section shall include the right to such licensee to sell and distribute malt beverages at wholesale without the payment of any additional fee."

There is also provided by section 19 of the 1933 act (Pub.Laws 1933, c. 268) an excise tax:

"Whereas the license fees hereinbefore provided for under this act are for the purpose of regulating the manufacture and sale of malt beverages, now, therefore, in addition thereto, there is hereby levied and imposed an excise tax on all malt beverages of $1.24 on each and every barrel containing not more than 31 gallons and at a like rate for any other quantity or for the fractional parts of a barrel. The payment of said tax shall be evidenced by a stamp affixed to each barrel, bottle or other container containing malt beverages. Said stamp shall express the amount of the tax paid evidenced thereby. No malt beverage shall be sold in or from a container unless such stamp shall be affixed thereto."

The regulations of the commission which are attacked in this bill read as follows:

"Manufacturers and Foreign Wholesalers. No manufacturer or foreign wholesaler of malt liquors shall hold for sale, sell, offer for sale, in intrastate commerce malt liquors or transport or cause the same to be transported into the State of Maine for resale unless such manufacturer or foreign wholesaler has obtained from the Commission a certificate of approval. The fee for a certificate of approval issued shall be two hundred dollars per annum, which sum shall accompany the application for such certificate.

"All manufacturers or foreign wholesalers to whom a certificate of approval has been granted shall furnish the Commission with a copy of every invoice sent to Maine wholesale licensees. They shall also furnish a monthly report on or before the tenth day of each calendar month in such form as may be prescribed by the Commission, and further, shall not ship or cause to be transported into the State of Maine malt liquors until the Commission has certified that excise stamps have been requisitioned and paid for by said Maine wholesale licensee.

"The purposes of the section are to regulate the importation, transportation and sale of malt liquors, also in addition thereto, to regulate and control the collection of excise taxes.

"The fee received under this section shall be used by said Commission for carrying out the purposes of this section.

"2. Wholesalers. No Maine wholesale licensee shall purchase or cause to be transported into this State malt liquors from an individual, partnership, or corporation, manufacturer of malt liquors or foreign wholesaler of said malt liquors, to whom a certificate of approval has not been granted by the Commission.

"All purchase order forms are to be furnished by the Commission, and all orders are to be executed in quintuplet. The original copy is to be sent direct to the brewery or foreign wholesaler. Three copies of the order are to be mailed to the Commission with a check for the amount of excise tax stamps required to cover the amount of the order. The Commission shall mail one copy, after having certified thereon that the excise tax stamps thereon have been purchased, to the brewery or foreign wholesaler with whom the order has been placed. One copy shall be mailed to the Maine wholesale licensee with a notation that the excise tax stamps have been paid, with the excise tax stamps, which stamps shall be kept for monthly cancellation. The brewery or foreign wholesaler may ship upon receipt of the original order upon permission being granted to do so by the Commission."

"No Maine wholesale licensee shall sell malt liquors to another Maine wholesale licensee, which were not purchased from a brewery or foreign wholesaler holding a certificate of approval.

"4. Excise Tax Stamps. Excise tax stamps on bottles or containers in lieu thereof shall be denominated as follows: sixteen ounces or under, one-half cent. thirty-two ounces or under, one cent.

"Excise tax stamps on barrels shall be denominated as follows: One dollar and twenty-four cents for a barrel, sixty-four cents for a half barrel, and thirty-two cents for a quarter barrel."

To compel the foreign manufacturer or wholesaler to pay the fee prescribed by regulation 1, the commission has resort to the customers of such manufacturer in the State of Maine, who, under the provisions of regulation 2, are prohibited, under penalty of forfeiture of their local licenses, from purchasing from any manufacturer who has not complied with the requirements of section 1. By pressure on the purchaser, here in Maine, compliance is sought from the plaintiffs and others similarly situated without the state. It is a case of the manufacturer paying the fee or losing his market in the state.

Regulation 4 provides for a different tax than that prescribed by the Legislature in section 19, supra. The act provides specifically that the excise tax shall be $1.24 on each and every barrel containing not more than thirty-one gallons "and at a like rate for any other quantity or for the fractional parts of a barrel." The commission by its regulation, however, has attempted to increase the tax from 62 cents for a half barrel to 64 cents and from 31 cents to 32 cents for a quarter barrel. Furthermore, in spite of the legislative mandate, the commission has prescribed a flat rate of one-half cent for beer in containers of less than 16 ounces and one cent for beer in containers of less than 32 ounces. The effect of this provision is to raise the rate for each 31 gallons of beer in 12-ounce bottles from $1.24 as provided in the statute to $1.65.

The sitting justice made no decree with...