Jefferson Cty. Dist. Co. v. Clifton, Dep. Com'R
| Citation | 249 Ky. 815 |
| Parties | Jefferson County Distillery Co. v. Clifton, Deputy Commissioner. |
| Decision Date | 16 June 1933 |
| Court | United States State Supreme Court (Kentucky) |
1. Intoxicating Liquors. — In event of repeal of Eighteenth Amendment, distillery authorized to manufacture, sell, and transport distilled spirits for other than beverage purposes could not, while present state constitutional provision and statutes continue in force, have right to continue manufacture in commonwealth of whisky for transportation and sale for beverage purposes in such other states as may permit sale thereof (Constitution U. S. Amend. 18; Constitution Ky., sec. 226a; Ky. Stats., sec. 2554a-1 et seq.).
2. Commerce. — In event of repeal of Eighteenth Amendment, prohibition under present state constitutional provision and statutes of transportation for sale for beverage purposes, in states where such sales are lawful, of whisky stored in Kentucky, held lawful, notwithstanding such whisky was manufactured for other than beverage use, as against contention that such prohibition would interfere with interstate commerce (Constitution U.S. Amend. 18; Constitution Ky., 226a; Ky. Stats., sec. 2554a-1 et seq.; Constitution U.S. art. 1, sec. 8).
3. Commerce. — State may forbid manufacture of whisky for any purpose, though to be used outside of state, without violating interstate commerce clause of Federal Constitution (Constitution U.S. art. 1, sec. 8).
Appeal from Franklin Circuit Court.
CARROLL & McELWAIN for appellant.
BAILEY P. WOOTTON, Attorney General, and S.H. BROWN, Assistant Attorney General, for appellee.
Affirming.
The appellant, Jefferson County Distillery Company, is a Kentucky corporation authorized by its charter to engage in the manufacture, sale, and transportation of distilled spirits under the provisions of the state and federal law, and is so engaged in this state. Being desirous of increasing its capital stock and to sell its shares to the public, it made application in the usual course to the appellee, Evalyn C. Clifton, deputy commissioner of the Kentucky securities department, in charge of the securities division, for permission to do so. In compliance with the various requirements pertaining to such applications, appellant filed with the appellee a copy of an advertisement or prospectus which it intended to use in connection with the sale of these securities. In substance it stated that, in the event of the repeal of the Eighteenth Amendment to the Federal Constitution, appellant will be authorized to engage in the manufacture of whisky in the state of Kentucky and the transportation and sale of such whisky for beverage purposes in such other states as do not prohibit such sales; that neither section 226a of the Kentucky Constitution nor the Rash-Gullion Act, section 2554a-1 et seq., Kentucky Statutes, would prevent the appellant from engaging in this business. On receipt of this application, appellee denied that the facts stated in the prospectus regarding the business and prospects of appellant were true, and denied that appellant, even in the event of the repeal of the Eighteenth Amendment, could engage in the state of Kentucky in the business as outlined in the prospectus. In all other particulars the application was found to be satisfactory, but the permit to sell shares was refused solely upon the ground that its statements concerning its prospects and the business it could do in the state of Kentucky, in the event of the repeal of the Eighteenth Amendment, were false. Thereupon this suit was brought under the Declaratory Judgment Act to have determined this dispute between appellant and appellee.
The issues presented may be summarized as follows: 1. In the event of the repeal of the Eighteenth Amendment, while section 226a of the Kentucky Constitution and the laws enacted pursuant thereto remain in force, will the Jefferson County Distillery Company have the right to continue the manufacture in Kentucky of whisky for transportation and sale for beverage purposes in such other states as may permit such sale? II. In the event of the repeal of the Eighteenth Amendment, while section 226a of the Kentucky Constitution and the laws enacted pursuant thereto remain in force, will the Jefferson County Distillery Company have the right to transport into other states for sale for beverage purposes, where such sales are lawful, whisky now stored or which may be hereafter stored in Kentucky, regardless of whether such whisky was manufactured for other than beverage purposes? The lower court answered both of these questions in the negative, and from its judgment so holding, this appeal is prosecuted.
I. Section 226a of the Constitution, the Seventh Amendment to our Constitution and adopted in 1919, provides as follows:
Section 1 of the Rash-Gullion Act, now section 2554a-1 of the Kentucky Statutes, is as follows:
"That it shall be unlawful to manufacture, sell, barter, give away, or keep for sale, or unlawfully have in possession or transport spirituous, vinous, malt or intoxicating liquors except for sacramental, medicinal, scientific or mechanical purposes in the Commonwealth of Kentucky."
It is earnestly contended by the appellant that the purpose of our constitutional and legislative provisions was to prohibit the use in this state of intoxicating liquors for beverage purposes and to regulate, but not prohibit, its manufacture, sale, or transportation for other purposes. It quotes the following from the case of Dials v. Commonwealth, 192 Ky. 440, 233 S.W. 888, 889:
"The purpose of the Legislature in the enactment of this chapter, as indicated by its title and terms, and in view of...
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