Essenfeld Bros., Inc. v. Hostetter

• Decision Date: 12 December 1963
• Citation: 245 N.Y.S.2d 291,20 A.D.2d 34
• Parties: ESSENFELD BROS., INC., and Railway Express Agency, Inc., Plaintiffs-Respondents, v. Donald S. HOSTETTER, Benjamin Balcom, William H. Morgan, John C. Hart and Robert E. Doyle, being the Chairman, Members and Commissioners of the State Liquor Authority of the State of New York, Defendants-Appellants.
• Court: New York Supreme Court — Appellate Division

Page 291

245 N.Y.S.2d 291

20 A.D.2d 34

ESSENFELD BROS., INC., and Railway Express Agency, Inc., Plaintiffs-Respondents, v. Donald S. HOSTETTER, Benjamin Balcom, William H. Morgan, John C. Hart and Robert E. Doyle, being the Chairman,

Members and Commissioners of the State Liquor Authority of

the State of New York, Defendants-Appellants.

Supreme Court, Appellate Division, First Department.

Dec. 12, 1963.

Samuel A. Hirshowitz, New York City, of counsel (Mark T. Walsh, New York City, with him on the brief; Louis J. Lefkowitz, Atty. Gen., attorney), for appellants.

William M. Ivler, New York City, of counsel (Galef & Jacobs, New York City, attorneys), for respondents.

Before RABIN, J. P., and McNALLY, STEVENS, EAGER and STEUER, JJ.

McNALLY, Justice.

Plaintiffs have been granted summary judgment in this action for a permanent injunction and to declare the rights of the plaintiffs under sections of the Alcoholic Beverage Control Law.

Plaintiffs hold permits for the carrying of alcoholic beverages within the State of New York. Tourists International, Inc. distributes within New York by mail and through travel agencies 'Order Kits' for the purchase abroad of alcoholic beverages. Thereby the public is informed of savings up to 70%; that home delivery is guaranteed and that the price includes packing, shipping, customs clearance and insurance. Emphasized is the necessity for mailing the order and the payment therefor outside the United States and upon returning declaring to customs the liquor purchased. The orders are directed to a Swiss bank which forwards them to various suppliers in Switzerland and Belgium and makes payment therefor. Upon receipt of the United States customs forms, a foreign agent of plaintiff Railway Express Agency, Inc. (REA) causes each purchase to be packaged separately and with others placed in large containers which are shipped to New York City piers. There the containers are removed to terminals of REA within New York, the individual packages removed and delivered to the homes of the purchasers. Plaintiff Essenfeld is similarly engaged. During 1962 there were cleared through customs and delivered to residents of New York by REA 40,000 and by Essenfeld 30,000 gallons of alcoholic beverages.

The 21st Amendment of the United States Constitution (§ 2) provides: 'The transportation or importation into any State * * * of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.' The Amendment is implemented by Federal statute (27 U.S.C. § 121): 'All fermented, distilled, or other intoxicating liquors or liquids transported into any State * * * shall upon arrival in such State * * * be subject to the operation and effect of the laws of such State * * * enacted in the exercise of its police powers, to the same extent * * * as though such liquids or liquors had been produced in such State * * * and shall not be exempt therefrom by reason of being introduced therein in original packages or otherwise.'

The policy of the State of New York in respect of intoxicating liquors is reflected in the Alcoholic Beverage Control Law (L.1934, ch. 478). Section 2 thereof states 'that it is necessary to regulate and control the manufacture, sale and distribution within the state of alcoholic beverages for the purpose of fostering and promoting temperance in their consumption and respect for and obedience to law'. Advertising by mail or otherwise and solicitation in the state of orders for the sale of alcoholic beverages regardless of whether the sale is executed within or without the state is restricted to permittees and licensees. (§ 93, subd. 1; § 102, subds. 1(a) and (b).) Shipment of alcoholic beverages into the state except to one licensed to traffic therein is forbidden (id. subd. 1(c)) and no common carrier may bring into the state such beverages except if consigned to one so licensed (id. subd. 1(d)). To 'traffic in' includes the manufacture and sale of alcoholic beverages. (§ 3, subd. 30.) Subdivision 1(e) of section 102 embraces within the prohibition of subdivisions (c) and (d) beverages intended for personal use.

Plaintiffs have shipped and brought and caused to be shipped and brought into the State of New York alcoholic beverages not consigned to licensed traffickers of alcoholic beverages contrary to the provisions of subdivisions 1(c) and (d) of section 102. People v. Ryan, 274 N.Y. 149, 8 N.E.2d 313, relied on by plaintiffs and Special Term, does not aid them. Ryan involved a prosecution under subdivision 1(d) of section 102 which proscribes the bringing into the state by a 'common carrier or other person' of any liquors unless to a licensed trafficker thereof. The defendant purchased in Connecticut 11 bottles of wine and one bottle of hard liquor, placed them in his automobile and proceeded into the State of New York. The court held defendant was not within the ambit of 'other person' which under the doctrine of ejusdem generis had reference to one engaged in commercial transportation, an occupation similar to that of a common carrier. Ryan would be relevant if the purchasers of the alcoholic beverages had brought them into the State of New York. Here, plaintiffs brought the liquors into the state. It is immaterial that plaintiffs may be the agents of the purchasers because the statute proscribes shipment or bringing into the state except to a licensed trafficker of liquor and does not exclude therefrom proscribed acts performed as agents or in behalf of the purchasers. Moreover, it cannot be gainsaid that plaintiffs in the performance of the acts charged against them were and are engaged in commercial transportation.

Section 116 of the Alcoholic Beverage Control Law relates to transportation of alcoholic beverages within this state. It enables delivery from a steamship or railroad station or terminal to a purchaser for purposes of consumption provided the beverages have been validly brought into the state. Section 116 does not aid the plaintiffs. The beverages here involved were illegally shipped and brought into the state because not consigned to licensed traffickers.

Plaintiffs argue that subdivision 1(c) of section 102 is unconstitutional because it violates the 14th Amendment of the United States Constitution and article 1, section 6 of the Constitution of the State of New York. Insofar as plaintiffs seek to vindicate their constitutional rights, plaintiffs as licensees under the Alcoholic Beverage Control Law and exercising privileges are precluded from attacking its constitutionality. (Fahey v. Mallonee, 332 U.S. 245, 255, 67 S.Ct. 1552, 91 L.Ed. 2030.) Nor may plaintiffs assert and rely on the constitutional rights of the purchasers. (16 C.J.S. Constitutional Law § 76.)

Where, as here, the statute clearly precludes the shipment into the state of alcoholic beverages and expressly proscribes such action on the part of a common carrier, a bulletin of the agency responsible for its enforcement may not serve to vary the statute. (Matter of Restaurants & Patisseries Longchamps, Inc. v. O'Connell, 271 App.Div. 641, 67 N.Y.S.2d 362.) In the circumstances, plaintiffs may not rely on Bulletin 263 of the State Liquor Authority dated July 20, 1954, since withdrawn, to conduct their business hereafter in contravention of the statute.

In our view of the statute it is immaterial that the orders for the liquors were mailed by the purchasers and accepted by the vendors outside the borders of the United States. It is plainly the scheme and intent of the statute to exclude from the State of New York alcoholic beverages regardless of where the originating transaction or the passage of title materializes unless they are initially consigned to a person licensed to traffic therein. Nevertheless, the controlling factors establish that the sales here involved were executed and title in each instance passed in this state.

The Personal Property Law (§ 100, rule 5) provides that the property in goods passes to the purchaser at the place of delivery where the seller is required to deliver at a particular place or to pay the cost of transportation. Here, in each case delivery to the purchaser was guaranteed and the price included the cost and expense of transportation to the New York residences of the purchasers. In that aspect the plaintiffs are also in violation of section 100 of the Alcoholic Beverage Control Law in that they are selling alcoholic beverages within the state without the appropriate license. Subdivision 28 of section 3 of the statute includes within the statutory concept of 'sale' the delivery of any alcoholic beverage in the state.

The judgment appealed from should be reversed, on the law, with costs to defendants-appellants. There should be judgment declaring that Bulletin 359 of the defendants is in conformity with subdivision 1(c) of section 102 of the statute; that said section prohibits plaintiffs from bringing and shipping into this state alcoholic beverages unless they are consigned to a person duly licensed under the statute to traffic therein; and otherwise dismissing the complaint.

In the light of the foregoing disposition, the appeal from the order denying appellants' motion for an examination before trial should be dismissed as academic, without costs.

Order and judgment reversed, on the law, with costs to defendants-appellants and judgment directed declaring that Bulletin 359 of the defendants is in conformity with subdivision 1(c) of section 102 of the statute; that said section prohibits plaintiffs from bringing and shipping into...