Black v. Liquor Control Comm'n, 6.

• Decision Date: 17 December 1948
• Docket Number: No. 6.,6.
• Citation: 323 Mich. 290,35 N.W.2d 269
• Parties: BLACK et al. v. LIQUOR CONTROL COMMISSION.
• Court: Michigan Supreme Court

323 Mich. 290

35 N.W.2d 269

BLACK et al.

v.LIQUOR CONTROL COMMISSION.

No. 6.

Supreme Court of Michigan.

Dec. 17, 1948.

Appeal from Circuit Court, Wayne County, in Chancery; Frank B. Ferguson, Judge.

Suit by Thomas E. H. Black, and others, against the Liquor Control Commission of the State of Michigan to permanently enjoin defendant from engaging in the intoxicating liquor business or traffic as vendor or dealer in the State of Michigan. From the decree, plaintiffs appeal.

Decree affirmed.

Before the Entire Bench.

Thomas E. H. Black, of Detroit, for appellants.

Edmund E. Shepherd, Solicitor General, of Lansing (Ben H. Cole, Asst. Atty, Gen., on the brief), for appellee.

BUSHNELL, Chief Justice.

At the November election in 1932 the people adopted a constitutional amendment (Mich.Const.1908, art. 16, § 11), which reads:

‘The legislature may be law establish a liquor control commission, who, subject to statutory limitations, shall exercise complete control of the alcoholic beverage traffic within this state, including the retail sales thereof; and the legislature may also provide for an excise tax on such sales: Providing, however, that neither the legislature nor such commission may authorize the manufacture or sale of alcoholic beverages in any county in which the electors thereof, by a majority vote, shall prohibit the same.’

Following the adoption of this amendment the legislature created ‘a liquor control commission for the control of the alcoholic beverage traffic within this State,’ and prescribed ‘its powers, duties and limitations', etcetera. Act No. 8, Pub.Acts 1933, Ex.Sess., Comp.Laws 1929, 1940 Cum.Supp. § 9209-16 et seq., Stat.Ann. § 18.971 et seq. The legislature by this act, among other things, provided that the commission might ‘establish state liquor stores throughout the state of Michigan’ (§ 13, Comp.Laws Supp.1940, § 9209-28, Stat.Ann. § 18.984), where liquor could be sold, and directed the commission in § 16, Comp.Laws Supp.1940, § 9209-31, Stat.Ann. § 18.987, to establish uniform prices, fixing the maximum gross profit on sales at 40 per cent, since increased by amendment to not exceed 65 per cent. See Act No. 281, Pub.Acts 1937; Act No. 133, Pub.Acts 1945; and Act No. 349, Pub.Acts 1947.

The defendant liquor control commission of the State of Michigan, according to stipulation of counsel:

‘adopted various rules, resolutions, regulations, forms and inter-related business plans and systems of commercial business, by which it became a dealer, buyer and seller, owner, title holder, vendor and possessor of large and sundry kinds, classes and brands of alcoholic and intoxicating liquors and beverages for the purpose of sale, through its own branches and stores and to and through distributors, private retailers and dealers throughout the State of Michigan, and for the sale by itself, in original packages to the public from its own various established State stores, maintained and operated in various parts of Michigan, returning a net revenue over all expenses to the State of Michigan.’

It operates branch offices and stores, licenses various ‘hotels and established merchants,’ buys and stores in warehouses stocks of liquor, leases premises, and generally conducts a going liquor business to the exclusion of everyone else in the State of Michigan, except those licensed by it.

By legislative enactment (§ 10, Comp.Laws Supp.1940, § 9209-25, Stat.Ann. § 18.981) the commission is provided with a revolving fund of working capital for the conduct of the business, and it contracts for and purchases large stocks of intoxicating liquors and carries on merchandising operations as the sole and exclusive wholesale seller and vendor of such liquors in the State of Michigan. After some years of operation, this revolving fund on deposit with the state treasurer on June 30, 1945, according to stipulation of counsel, had attained a total of over $4,000,000, and the total revenue for the fiscal year ending that date was over $28,000,000; the commission then operating 108 stores in the State.

On December 20, 1944, plaintiff Thomas E. H. Black, who was later joined by other parties plaintiff, filed a bill of complaint in the Wayne circuit court in which he charged, as amended later, that the defendant liquor control commission, by reason of a violation of other provisions of the State Constitution, hereinafter discussed, was illegally, and contrary to sound public policy, public interest and welfare, operating such business, and he prayed that the defendant commission be permanently restrained and enjoined from:

‘in any way operating and functioning as a buyer, owner, seller and vendor of intoxicating alcoholic liquors and from in any way engaging in the intoxicating alcoholic liquor business and traffic as a vendor or dealer in the sale of intoxicating alcoholic liquors in the State of Michigan.’

After hearing proofs and considering certain stipulated facts, the trial court filed an opinion and entered a decree dismissing plaintiffs' amended bill of complaint. In reaching his conclusion the trial judge discussed attacks on similar legislation and operations in other jurisdictions and the decisions of courts of last resort in respect thereto, pointing out that statutes providing for the sale of intoxicating liquors by states and state agencies were held to be within constitutional limitations in South Carolina, Alabama, Montana, Pennsylvania, South Dakota, Utah, and Washington. He also quoted from State of Ohio v. Helvering, 292 U.S. 360, 369, 54 S.Ct. 725, 726, 78 L.Ed. 1307, where the court said as follows:

‘If the state chooses to go into the business of buying and selling commodities, its right to do so may be conceded so far as the Federal Constitution is concerned; but the exercise of the right is not the performance of a governmental function, and must find its support in some authority apart from the police power.’

He also quoted from Terre Haute Brewing Co., Inc., v. Liquor Control Commission, 291 Mich. 73, 288 N.W. 339, 342, as follows:

‘Except as limited or defined by statute, the Constitution itself vests the statutory commission with plenary power to control alcoholic beverage traffic in this state. * * *

‘The constitutional provision that the commission ‘shall exercise complete control of all alcoholic beverage traffic within this state, including the retail sales thereof’, is limited only by express provisions or necessary implications embodied in the legislative act (as amended) by which the commission was created and its powers, duties and limitations prescribed.'

With respect to public policy he cited Rohan v. Detriot Raching Association, 314 Mich. 326, 22 N.W.2d 433, 440, 166 A.L.R. 1246, from which we quote the following excerpts:

‘* * * the propriety, wisdom, necessity, utility, and expediency of legislation are exclusively matters for legislative determination. * * * The public policy of a State is to be found in its Constitution and statutes.

‘* * * The public policy of a state, when not fixed by the Constitution, is not unalterable but varies upon any given...