Kresser v. Lyman

• Decision Date: 24 June 1896
• Citation: 74 F. 765
• Parties: KRESSER v. LYMAN, Commissioner of Excise.
• Court: U.S. District Court — Northern District of New York

74 F. 765

KRESSER v. LYMAN, Commissioner of Excise.

United States Circuit Court, N.D. New York.

June 24, 1896

Louis W. Pratt, for complainant.

Mead &amp Stranahan, for defendant.

WALLACE Circuit Judge.

The plaintiff, having brought suit to restrain, by permanent injunction, the enforcement of the provisions of the act of the legislature of the state of New York, approved March 23 1896, entitled 'An act in relation to the traffic in liquors, for the taxation and regulation of the same, and to provide for local option,' commonly known as the 'Raines Law,' has applied for an injunction pendente lite. His action proceeds upon the theory that the license granted to him February 10, 1896, in consideration of the payment of $200 for the term of one year from that date by the board of excise of the city of Albany, pursuant to authority conferred upon them by chapter 401 of the Laws of the State of New York of 1892, entitled 'An act to revise and consolidate the laws regulating the sale of intoxicating liquors,' is a contract investing him with the right to conduct the business of a retail dealer in spirituous liquors, wines, ale, and beer at the place specified until the expiration of the term; and that those provisions of the act of 1896 which declare that every license heretofore lawfully granted by a board of excise 'shall cease determine and be void after June 30, 1896,' and whereby he and others similarly situated are required to make application for a liquor tax certificate, and pay a tax at the rate of $500 per annum from July 1, 1896, and, in case of default, are liable to arrest by the defendant, as state commissioner of excise, and to fine and imprisonment, are repugnant to the constitution of the United States, and as to him are void, as impairing the obligation of a contract, and depriving him of his property without due process of law. The conclusion that these provisions are not obnoxious to the constitution seems so plain that the objection urged in behalf of the defendant that no special circumstances appear bringing the case within any of the recognized exceptions to the rule that a court of equity will not interfere by injunction to prevent the collection of a tax merely upon the ground of its illegality, or because the statute under which it is imposed is unconstitutional, will not be considered.

The argument for the plaintiff, deduced from a consideration of the various provisions of the pre-existing statutes, that the license granted to him is a contract which cannot be destroyed or impaired by subsequent legislation by the state and the privilege conferred by it a property right, of which he cannot be deprived without due process of law and just compensation, necessarily assumes the competency of the state, through its legislature and administrative officers to enter into a contract hampering the future action of the state, in the exercise of its police power to regulate, restrict, or prohibit the traffic in intoxicating liquors. If this competency is wanting, no form or words, whether expressed in a legislative act or otherwise, can create a valid contract. That the state cannot barter away, or in any manner abridge, any of those inherent powers of government, the complete and untrammeled exercise of which is essential to the welfare of organized society, and that any contracts to that end are void upon general principles, and cannot be protected by the provisions of the national constitution, are propositions which are abundantly settled by the decisions of the highest federal tribunal. Without attempting an extended reference to these adjudications, it will suffice to refer to two decisions of the supreme court of the United States. In Beer Co. v. Massachusetts, 97 U.S. 25, the question was whether, under the prohibitory liquor law of Massachusetts of 1869, the seizure and forfeiture of liquors belonging to the company was lawful, in view of the charter of the company, granted by legislative act in 1828, investing the company with the right to manufacture and sell such liquors; the contention being that the subsequent act impaired the obligation of the contract contained in the charter, and was void so far as the liquors in question were concerned. The court, in deciding against this contention, declared the principles that all rights are held subject to the police power of a state, and, if the public safety or the public morals require the discontinuance of any manufacture or traffic, the legislature...