Bohemian Breweries v. Koehler

• Decision Date: 10 December 1958
• Docket Number: No. 8597,8597
• Citation: 80 Idaho 438,332 P.2d 875
• Parties: BOHEMIAN BREWERIES, a division of Atlantic Brewing Company, a corp., Plaintiff-Respondent, v. Earle E. KOEHLER, Commissioner of Law Enforcement of the State of Idaho, Defendant-Appellant.
• Court: Idaho Supreme Court

Page 875

332 P.2d 875

80 Idaho 438

BOHEMIAN BREWERIES, a division of Atlantic Brewing Company, a corp., Plaintiff-Respondent, v. Earle E. KOEHLER, Commissioner of Law Enforcement of the State of Idaho, Defendant-Appellant.

No. 8597.

Supreme Court of Idaho.

Dec. 10, 1958.

Graydon W. Smith, Atty. Gen., Wm. C. Roden, Edward J. Aschenbrener, Asst. Attys. Gen., for appellant.

Clemons, Skiles & Green, Boise, for respondent.

KEETON, Chief Justice.

Bohemian Breweries, a division of Atlantic Brewing Company, a corporation, respondent, is a manufacturer and distributor of beer in the State of Idaho, and the holder of State Breweries License No. 1, issued to it pursuant to the provisions of Ch. 10, Title 23, I.C. The license authorizes the brewery to brew, distribute and sell beer, and it was, prior to the 17th day of July, 1957, and still is so engaged.

On or about the 17th day of July, 1957 defendant Earle E. Koehler, Commissioner of Law Enforcement, appellant here, caused to be served on the brewery a notice which advised it that the Commissioner had cause to believe that the brewery had violated the provisions of Ch. 10, Title 23, I.C., particularly Sec. 23-1013, subds. 9 and 5. The notice so served ordered the brewery to appear in the office of the Commissioner of Law Enforcement at the hour of ten a. m. August 2, 1957, and show cause why its license to manufacture and sell beer should not be suspended or revoked.

The alleged misconduct of the brewery concerning which the Commissioner complained is described by the brewery as an advertising scheme, and is referred to by it as the 'cash caps' plan. The brewery affixed to each bottle of beer to be sold to retailers, a cap with the words on the cap 'Bo's Cash Caps Worth Actual Cash'. These caps were redeemable at 2cents per cap for 12-ounce bottles of beer and 4cents for quart bottles. Envelopes addressed to the brewery for mailing the caps to it were contained in the beer cartons. The beer so manufactured by the brewery was and is sold to a wholesale licensee, the wholesale licensee to a retail licensee, the retail licensee to the consumer. The purchaser from the retail licensee could place in the envelopes so furnished for that purpose 24 stubby caps or 12 quart bottle caps, mail the same to the brewery and receive a cash dividend of 50cents for each 24 stubby caps or 12 quart caps. There was also distributed to said retail beer licensee a tag to be attached to the neck of Bohemian beer bottles in the establishment of the retail licensee on which was printed:

'Cash Get 50cents Dividend With Bohemian Club Cash Caps

'Get our check for 50-just mail a set of cash caps from 24 Stubby bottles or a set of cash caps from 12 Quart bottles of Bo! There's a handy self-addressed mailing envelope in each case or six-pack.'

On the envelopes was printed, among other things: 'Business Reply Envelope, First Class Permit No. 420' and

'Null and void if presented by any retail or wholesale licensee and their families--or anyone else to whom such redemption would be prohibited by liquor control laws of any governmental body'.

Paragraphs IV and V of the notice to the brewery detailed the claimed violations, and read as follows:

'That said 'Cash Caps' so delivered by Bohemian Breweries, a division of the Atlantic Brewing Company, to said retail beer licensees hereinbefore mentioned in Paragraph III are and constitute valuable property in that the delivery by Bohemian Breweries, a division of the Atlantic Brewing Company, of said 'Cash Caps' to said retail licensees allows the retail beer licensee to give his customer property of the value of 2cents per bottle cap in addition to the beer, which said 'Cash Caps' are given to said retail beer licensee without cost to said retail beer licensee; that said Bohemian Breweries, a division of the Atlantic Brewing Company, has not notified the Department of Law Enforcement of any increase or decrease in its posted price for the sale of beer and the posted price for the sale of beer by Bohemian Breweries, a division of the Atlantic Brewing Company, has not been changed to reflect the distribution of 'Cash Caps' to the retail beer licensee, all of which is contrary to the provisions of Section 23-1013(5) Idaho Code;

'That the delivery of said 'Cash Caps' by Bohemian Breweries, a division of Atlantic Brewing Company, to said retail beer licensees on July 2, 1957, to those persons mentioned in Paragraph III, constitutes and is in direct aid and assistance to a licensed beer retailer of property, said property not being a necessary incident of the sale of beer to said retail beer licensees, all of which acts of Bohemian Breweries, a division of the Atlantic Brewing Company, hereinbefore described, in paragraphs I through V, inclusive, are in violation of the laws of the State of Idaho, to-wit, Section 23-1013(9), Idaho Code, and Section 23-1013(5), Idaho Code;'

The brewery, prior to engaging in such cash cap plan, consulted appellant relative to the legality of the plan. The Director of the Liquor Law Enforcement requested an opinion from the Department and was advised by its attorney:

'It is our understanding also that no person or persons holding a retail or wholesale beer license issued by the State of Idaho would be eligible to participate in this promotion.

'It is our opinion that under the Idaho statutes relating to regulation and control of the sale of beer, the proposed plan would not be in violation of any such statutes. This, of course, is subject to the restriction that the brewery may not in any way give directly or indirectly financial assistance to the retailer. However, the proposed plan would appear to prevent such aid or assistance.'

While this opinion of the attorney would not be controlling or binding on the courts, it establishes that the brewery was acting in good faith and had no intention of violating any statute regulating the manufacture or sale of beer.

On June 17, 1957, at the suggestion and request of the Commissioner, the brewery was advised that the use of the tags above described on the bottles was in violation of law and their use by the brewery was immediately discontinued, and retailers of beer holding the tags were instructed to remove the same from the beer bottles or containers.

Shortly after receiving the notice above described and prior to the time fixed by the Commissioner for the hearing the brewery brought this action to enjoin and restrain the Commissioner from revoking or suspending the license of the brewery to do business in the State. The complaint gave a detailed description of the 'cash caps plan' and alleged that the acts claimed by the Commissioner to be a violation of law, were in all things legal, and admitting the facts alleged in the notice to be true, constitute no cause for suspension or revocation of the brewery's license.

To the complaint so filed the Commissioner filed a general and special demurrer, claiming, among other things, that the facts alleged were insufficient to constitute a cause of action, that the district court had no jurisdiction of the defendant or the subject matter of the action, also, misjoinder of parties; and that the complaint is unintelligible, ambiguous and uncertain in certain claimed particulars.

The trial court, on a showing made, issued a temporary injunction directed against the Commissioner, restraining him from revoking or suspending the license of the brewery. Thereafter the court overruled the demurrer of appellant. Appellant refused to plead further and the court entered judgment permanently enjoining and restraining the Commissioner from revoking or suspending the license of the brewery because of anything alleged in the Commissioner's order directed to the brewery to show cause. From this final order the Commissioner appealed.

In assignments of error appellant contends that the complaint fails to state a cause of action; that the court has no jurisdiction of the subject matter and that the cash caps plan as outlined in the complaint is in violation of Sec. 23-1013(9) I.C.

In argument the appellant asserts that before the action...