Brown-Foreman Co. v. Com.

• Decision Date: 19 April 1907
• Citation: 125 Ky. 402,101 S.W. 321
• Parties: BROWN-FOREMAN CO. v. COMMONWEALTH.
• Court: Kentucky Court of Appeals

101 S.W. 321

125 Ky. 402

BROWN-FOREMAN CO. v. COMMONWEALTH.

Court of Appeals of Kentucky.

April 19, 1907

Appeal from Circuit Court, Franklin County.

"To be officially reported."

Action by the commonwealth against the Brown-Foreman Company. Judgment for the commonwealth and defendant appeals. Affirmed.

T. H Paynter, Kohn, Baird, Sloss & Kohn, W. M. Hough, W. O Bradley, and David W. Baird, for appellant.

James S. Morris, N. B. Hays, Atty. Gen., C. H. Morris, J. W. Ray and N. L.

South for the Commonwealth.

HOBSON J.

At the last session of the General Assembly the following act was passed:

"An act relating to revenue and taxation, providing for license taxes on compounded, rectified, adulterated or blended distilled spirits, known and designated as single stamp spirits, and providing penalties for violations of its provisions.

Be is enacted by the General Assembly of the commonwealth of Kentucky:

Section 1. Every corporation, association, company, copartnership or individual engaged in this state in the business or occupation of compounding, rectifying, adulterating or blending distilled spirits, known and designated as single stamp spirits, shall pay to the commonwealth of Kentucky a license tax of one and one-fourth cent upon every wine gallon of such compounded, rectified, blended or adulterated distilled spirits.

Sec. 2. It shall be the duty of each corporation, association, company, copartnership or individual engaged in this state in the business or occupation of compounding, rectifying, adulterating or blending distilled spirits, known and designated as single stamp spirits, to make and deliver to the Auditor of Public Accounts, on the thirtieth day of June, one thousand nine hundred and six (or within ten days thereafter), and at the end of each six months thereafter, a report sworn to, upon blanks to be furnished by the Auditor, stating the name, place of business and the number of wine gallons of compounded, rectified, adulterated or blended distilled spirits, known and designated as single stamp spirits, made during the six months then ended, and such other information as the Auditor may require, and at the same time pay into the state treasury, through the Auditor, the amount of taxes due the state, as herein provided, imposed by the last preceding section.

Sec. 3. Before any corporation, association, company, copartnership or individual shall engage in the business or occupation of compounding, rectifying, adulterating or blending, in this state, the Auditor of Public Accounts shall be given notice of the intention of such corporation, association, company, copartnership or individual to engage in such business or occupation. The notice shall contain the name and place of residence of such corporation, association, company, copartnership or individual, and the approximate number of wine gallons of such compounded, rectified, adulterated or blended spirits the applicant contemplated making prior to the first date at which he is required to report the number of gallons made to the Auditor of Public Accounts under this act.

Sec. 4. Upon receipt of such notice by the Auditor of Public Accounts, he shall issue to each applicant a certificate, showing that he has complied with this act. Any corporation, association, company, copartnership or individual, who shall engage in the business of compounding, rectifying, adultering or blending distilled spirits, known and designated as single stamp spirits, without first receiving said certificate herein provided for from the Auditor of Public Accounts, shall be guilty of a misdemeanor and subject to indictment in the Franklin circuit court, and fined any sum not less than five hundred dollars nor more than two thousand dollars.

Sec. 5. Upon the payment of the license tax to the Treasurer through the Auditor of Public Accounts, as provided in this act, the Auditor of Public Accounts shall issue to such corporation, association, company, copartnership or individual authority to continue in the business or occupation of compounding, rectifying, adulterating or blending distilled spirits known and designated as single stamp spirits, if such authority is desired for six months or until the date provided in this act when reports are to be made.

Sec. 6. Any compounder, rectifier, adulterator or blender liable for taxes imposed by this act, or embraced by its provisions, who shall fail or refuse to make and deliver to the Auditor of Public Accounts a sworn report, containing all the facts required to be reported, and pay the license tax as required by this act, shall be deemed guilty of a misdemeanor, and, upon conviction, shall be fined not less than fifty nor more than one hundred dollars for each day of such failure or refusal, to be recovered by indictment in the Franklin circuit court, and shall forfeit his right to engage in said business in this state.

Sec. 7. Any corporation, association, company, copartnership or individual who shall ship any compounded, rectified, blended or adulterated distilled spirits, known and designated as single stamp spirits, into this state for the purpose of labeling, branding, marking or stamping the same as Kentucky whisky, product or spirits, or which, before shipment into this state, shall have been, or may thereafter be, labeled, branded, marked or stamped as Kentucky whisky, product or spirits, shall be deemed compounders, rectifiers, blenders or adulterators under the provisions of this act, and shall pay the license tax imposed herein on compounders, rectifiers, blenders or adulterators of such spirits in this state, and shall make the report required herein to the Auditor of Public Accounts.

Any corporation, association, company, copartnership or individual who shall violate this section of this act shall be deemed guilty of a misdemeanor, and fined in any sum not less than five hundred nor more than one thousand dollars. Each shipment shall be deemed a separate offense. The Franklin circuit court shall have jurisdiction of all offenses committed under this act.

Sec. 8. All laws or parts of laws in conflict with this act are hereby repealed."

See Acts 1906, p. 549.

On June 30, 1906, the Brown-Foreman Company filed a report with the Auditor showing that it had compounded or rectified distilled spirits, from what is known as "single stamp spirits," 2,795.64 wine gallons; also that it had compounded or rectified distilled spirits, from what is known as "double stamp spirits," 17,100 wine gallons. It paid the tax of 1 1/4 cents on the 2,795.64 gallons made from the single stamp spirits, but declined to pay the tax on the 17,100 gallons made from the double stamp spirits. The commonwealth brought this suit to recover the taxes, amounting to $201.25. The defendant filed a demurrer to the petition, and also filed an answer. In the answer it was averred that all distilled spirits in the United States are divided into two classes, and known as "double stamp spirits" from the fact that they carry two stamps under the internal revenue laws, and "single stamp spirits" by reason of the fact that they carry but a single stamp; that single stamp spirits are of two classes, those which carry a rectifier's stamp indicating that there has been a mixing of distilled spirits, and those carrying a wholesale liquor dealer's stamp, which does not indicate a mixing of distilled spirits, but only a transfer of packages. The court overruled the demurrer to the petition, and sustained the demurrer to the answer, and, the defendant failing to plead further, entered judgment in favor of the plaintiff. From this judgment the defendant appeals.

It is insisted for the appellant that the act is invalid under section 51 of the Constitution, which requires that an act shall relate to only one subject, and that this subject shall be expressed in the title. It is said that the purpose of the act, as shown by the title, is to impose a tax on rectified spirits, and not a license tax on the occupation. If the title of the act had stopped with the words "An act relating to revenue and taxation," it would have been sufficient under the rule repeatedly laid down by this court. Commonwealth v. Godshaw, 92 Ky. 435, 17 S.W. 737; Conly v. Commonwealth, 32 S.W. 285, 98 Ky. 125; Rosenham v. Commonwealth, 2 S. W. 230, 8 Ky. Law Rep. 519. The remainder of the title in no way narrows the meaning of the words "An act relating to revenue and taxation." On the contrary, the remaining words of the title clearly show that the Legislature had in mind a license tax on compounded, rectified, adulterated, or blended distilled spirits. This court has steadily enforced the rule that section 51 of the Constitution should receive a reasonable, not a technical, construction, and no provision of a statute fairly within the purview of the subject expressed in the title shall be deemed within the constitutional inhibition. Jacobs v. L. & N. R. R. Co., 10 Bush, 263; Allen v. Hall, 14 Bush, 85; Trustees of Augusta v. Maysville, etc., R. R. Co., 30 S.W. 1, 97 Ky. 145.

It is also insisted for appellant that the act levies a property tax, and that it is invalid, under section 171 of the Constitution, for the reason that it is not uniform upon all property subject to taxation within the territorial limits of the authority levying the tax. It is insisted that rectified spirits, like other property, must be taxed ad valorem, and that the act imposes an additional tax upon this class of property. The power to provide for taxation based on income licenses, or franchises is expressly reserved in section 174, which provides that all property shall be taxed in proportion to its...