City of Dayton v. Christian Moerlein Brewing Co.

• Decision Date: 29 May 1917
• Citation: 176 Ky. 1,195 S.W. 133
• Parties: CITY OF DAYTON v. CHRISTIAN MOERLEIN BREWING CO.
• Court: Kentucky Court of Appeals

195 S.W. 133

176 Ky. 1

CITY OF DAYTON v. CHRISTIAN MOERLEIN BREWING CO.

Court of Appeals of Kentucky.

May 29, 1917

Appeal from Circuit Court, Campbell County.

The Christian Moerlein Brewing Company was charged under an ordinance of the City of Dayton with failing to pay a license tax, and the prosecution was dismissed. The City appeals. Affirmed.

E. E Kelly, of Newport, for appellant.

Harry Brent Mackoy, Paxton, Warrington & Seasongood, and Mackoy &amp Mackoy, all of Cincinnati, Ohio, for appellee.

CARROLL J.

There was in force in the city of Dayton at the time of the institution of this prosecution an ordinance providing in section 1 that:

"No person shall deal in, sell, barter, exchange, give or deliver to another any spirituous, vinous, or malt liquors in the city of Dayton, Kentucky, without first having obtained a license so to do as hereinafter set out."

Another section of the ordinance fixed the license tax "to sell or deliver by wholesale from vehicles or other conveyances in kegs, barrels or cases in quantities not less than five gallons" at $300.

In violation of this ordinance in failing to pay the license tax imposed, the Christian Moerlein Brewing Company was prosecuted under a warrant in the police court of the city of Dayton and found guilty. From the judgment imposing the penalty fixed in the ordinance for selling or delivering beer without obtaining a license so to do, the brewing company prosecuted an appeal to the Campbell circuit court, and in that court the prosecution was dismissed, upon the ground that the ordinance, as applied to the facts of the case, was in contravention of the commerce clause of the Constitution of the United States and void. The city appeals.

In the circuit court the case was heard and disposed of upon an agreed state of facts, which, after reciting that Dayton was a municipal corporation of the fourth class and had duly enacted the ordinance under which the prosecution was instituted, set forth that:

"In the month of June, 1916, while said ordinance was in force, the Christian Moerlein Brewing Company, a corporation under the laws of the state of Ohio, with its place of business in the city of Cincinnati, in said state, having complied with the laws of the United States and the state of Ohio in respect to the manufacture and sale of beer at its brewery in the city of Cincinnati, and having no place of business in the city of Dayton or elsewhere in the state of Kentucky, was engaged in the following course of business:

One Frank Baumann, whose place of business was at Sixth and Berry streets, Dayton, Ky. and who was duly licensed under the laws of Kentucky and the city of Dayton to sell at retail spirituous, vinous, and malt liquors for the purpose of securing beer, the product of defendant company, to be sold by him in Dayton as a licensed dealer, from time to time deposited in the mail, addressed to defendant at its place of business in the city of Cincinnati, postal cards and letters by which he ordered certain malt liquors, to wit, beer in kegs in certain amounts specified in each of said orders. On receipt of said orders at its place of business in Cincinnati, Ohio, defendant loaded its wagons with beer in kegs as called for in said orders, and the same were carried in defendant's wagons by defendant's employés over the bridge crossing the Ohio river from the city of Cincinnati, Ohio, to Newport, in the state of Kentucky, from Newport, through Bellevue, into the city of Dayton, where said kegs in pursuance of such orders were delivered by defendant's drivers to said Frank Baumann at his place of business in Dayton, Ky. In accordance with previous arrangements and the regular course of business, collection of the purchase price of such beer was made by a collector of defendant company from said Frank Baumann at his place of business in Dayton, Ky. at weekly intervals, for deliveries made during the previous week. Outside of such business carried on as aforesaid by delivery of beer to said Frank Baumann, defendant company made no sales or deliveries of spirituous, vinous, or malt liquors in the city of Dayton.

The summons herein was duly served upon a driver of one of defendant's wagons while he was in the city of Dayton engaged in the delivery of beer as above stated. At all times stated herein defendant, the Christian Moerlein Brewing Company, held under a lease the real estate and building at Sixth and Berry streets, Dayton, Ky. of which said Frank Baumann was a sublessee, but said defendant had no interest in the business there carried on by said Frank Baumann, nor any ownership of or interest in any property in said city of Dayton, except as above stated."

The only question for our consideration arising on these facts is: Was the brewing company in selling or delivering the beer to Baumann, engaged in the business of interstate commerce of such a nature as to exempt it from the payment of the license tax imposed by the ordinance? At the very outset it may be said that the Webb-Kenyon Law (Act March 1, 1913, c. 90, 37 Stat. 699 [U. S. Comp. St. 1916, § 8739]) has no application to this case, because the brewing company had the legal right to sell and deliver to Baumann the beer he purchased from it, and Baumann had the right to sell in Dayton, Ky. the beer so purchased. So that, unless the brewing company violated the law in failing to pay the license tax imposed by the ordinance, the business transactions between the brewing company and Baumann were entirely lawful. Adams Express Company v. Com., 154 Ky. 462, 157 S.W. 908, 48 L.R.A. (N. S.) 342; Adams Express Company v. Com., 238 U.S. 190, 35 S.Ct. 824, 59 L.Ed. 1267, L.R.A. 1916C, 273, Ann.Cas. 1915D, 1167.

Nor does the circumstance that the commodity in this case was beer affect the disposition of the question, because beer is a recognized article of commerce, and the sending of it from one state to a place in another state where it may lawfully be delivered and sold is afforded the same protection as would be afforded any other article passing in interstate commerce. Kirmeyer v. Kansas, 236 U.S. 568, 35 S.Ct. 419, 59 L.Ed. 721. It is also conceded that, unless the business transactions between the brewing company and Baumann constituted interstate commerce, there is no obstacle in the way of the city collecting the license tax. And so the question recurs: Was the brewing company, in selling or delivering this beer to Baumann, engaged in interstate commerce in the sense that the business could not be burdened with a municipal tax that might have been lawfully exacted from any domestic wholesale dealer that sold or delivered beer to Baumann?

It is of course, the settled law that neither states nor political subdivisions therein, such as cities or towns, can place any burden on interstate commerce. It has the right to come and go when and where it pleases, free from any exaction in the way of license taxes. But it is in many cases extremely difficult to determine when a particular transaction constitutes interstate commerce; and this difficulty grows out of the wonderfully complex and diversified nature of the various transactions that arise in interstate business and the effort of the Supreme Court of the...