Carling Brewing Co. v. Liquor Commission of N. H.

• Decision Date: 24 November 1959
• Citation: 155 A.2d 808,102 N.H. 284
• Parties: CARLING BREWING COMPANY, Incorporated, v. LIQUOR COMMISSION OF NEW HAMPSHIRE et al.
• Court: New Hampshire Supreme Court

Page 808

155 A.2d 808

102 N.H. 284

CARLING BREWING COMPANY, Incorporated, v. LIQUOR COMMISSION OF NEW HAMPSHIRE et al.

Supreme Court of New Hampshire.

Argued Oct. 6, 1959.

Decided Nov. 24, 1959.

Orr & Reno, Eugene C. Struckhoff, Concord, and William B. Norris, Cleveland, Ohio, for plaintiff.

Louis C. Wyman, Atty. Gen., and Warren E. Waters, Dep. Atty. Gen., for defendant.

Leonard G. Velishka, Nashua, and Devine, Millimet & McDonough, Manchester, for West End Beverage Co., Inc., as amicus curiae.

KENISON, Chief Justice.

I. At the threshold of this case is a problem of statutory construction in the field of liquor control legislation. 3 Sutherland, Statutory Construction (3d ed.) § 7203. The question appears to be one of first impression since counsel have not cited any case directly in point and research has not disclosed one. Cf. California Beverage and Supply Co. v. Distillers Distributing Corp., 158 Cal.App.2d 758, 323 P.2d 517. Specifically the question is whether the action of a manufacturer of malt beverages in reducing the territory of a wholesaler constitutes a discontinuance to sell within the meaning of RSA 181:26 if done because the wholesaler is selling beverages manufactured by another manufacturer. The pertinent part of that statute reads as follows: 'The commission, may, in its discretion, suspend or revoke the certificate of approval of such manufacturer or importer if such manufacturer or importer discontinues to sell beverages to holders of wholesale permits because such holders sell beverages manufactured or imported by another manufacturer or importer.' (Emphasis supplied.)

In construing this statute we find no definitive aid in its statutory history or in the administrative rulings of the Liquor Commission, and thus we turn to the matrix of liquor control ligislation and cases generally and particularly those in this state. See Alcoholic Beverage Control (An Official Study by the Joint Committee of the States to Study Alcoholic Beverage Laws, 1950) 'By and large, the delegation of authority has been very broad, the powers of control agencies over persons and property extraordinarily sweeping. For example, control authorities are given discretionary power to issue, deny, or revoke licenses, power to determine suitability of persons and premises for licenses, hold hearings, fix the number of licenses, forbid brewers, wholesalers, or manufacturers to have any interest in the retail licensee's property, regulate hours, location, size of containers, labeling, prices, advertising and employees.' Cooprider, Legal Questions in the Operation of the Licensing Systems, 7 Law and Contemporary Problems 621, 622.

Although the regulation of intoxicating beverages in this state has taken many forms, the legislative control has run broad and deep since colonial and provincial times. Sawyer, The Law Regulating the Traffic in Intoxicating Liquors: A Historical Review, 3 Grafton and Coos Bar Association 207 (1896). In more recent cases it has been noted that the laws controlling alcoholic beverages are to be interpreted as a unified whole and as a part of the comprehensive design to regulate the industry strictly in order that no one licensee shall exercise control over another, directly or indirectly. RSA 181:27; Nashua Wholesale Grocers v. State Liquor Commission, 95 N.H. 224, 60 A.2d 124; State v. Muscarello, 92 N.H. 214, 29 A.2d 115; New Hampshire Wholesale Beverage Ass'n v. New Hampshire State Liquor Commission, 100 N.H. 5, 116 A.2d 885. The legislative purpose to exercise a complete and well-rounded system for the regulation and control of intoxicating liquors has been given expression in numerous cases. Manchester Press Club v. Commission, 89 N.H. 442, 200 A. 407, 116 A.L.R. 1093; Pulaski Club v. State Liquor Commission, 89 N.H. 559, 200 A. 410. Even in those cases where legislation has been expressed in awkward phraseology the prohibitory features of the liquor control statutes have been construed in accordance with the legislative intent. State v. Small, 99 N.H. 349, 351, 111 A.2d 201.

In RSA 181:21, 27 the Legislature has provided that the three general classes of manufacturers, wholesalers and retailers of alcoholic beverages shall be separate and that no control, direct or indirect, and no interest, financial or otherwise, shall be exercised by one over the other. Nashua Wholesale Grocers v. State Liquor Commission, 95 N.H. 224, 60 A.2d 124. This was aimed at the historic evil of the 'tied house' (State v. Zazzaro, 128 Conn. 160, 20 A.2d 737) and was enacted to prevent the financial domination of the producer or seller over the purchaser. However, the Legislature did not stop there and in the controlling statute (RSA 181:26) it intended to prevent a manufacturer from obtaining an exclusive outlet or other financial domination. Such a statute is not to be construed strictly. Annotation 136 A.L.R. 1238; annotation 123 A.L.R. 748. See Black v. Magnolia Liquor Co., 355 U.S. 24, 78 S.Ct. 106, 2 L.Ed.2d 5; 1957 Annual Survey of American Law 216. A literal interpretation of RSA 181:26 might be thought to require a complete discontinuance to sell but such a literal construction would be inconsistent with the legislative determination to prevent control of the wholesaler by the manufacturer. It was the evident legislative purpose to prevent a manufacturer from obtaining an exclusive outlet or financial control of the wholesaler either by a discontinuance to sell or by a reduction in territory, if in such case it was done for the reason, or in the statutory language 'because,' the wholesaler was selling beverages manufactured by another manufacturer. See Annotation 2 L.Ed.2d 1565. Nashua Wholesale Grocers v. State Liquor Commission, supra. The statute is not violated because a manufacturer discontinues to sell to the wholesaler or reduces his territory, but it is violated when the manufacturer does this because the wholesaler is engaged in the sale of a competing brand. We conclude that the interpretation placed on the statute by the Liquor Commission was correct since any other ruling would permit the manufacturer to obtain an exclusive outlet or a domination of the wholesaler by the simple expedient of a series of threatened partial reductions and discontinuances. The reach of the statute (RSA 181:26) is...