Products Co v. Blair

• Decision Date: 01 June 1926
• Docket Number: No. 333,MA-KING,333
• Citation: 46 S.Ct. 544,70 L.Ed. 1046,271 U.S. 479
• Parties: PRODUCTS CO. v. BLAIR, Commissioner of Internal Revenue
• Court: U.S. Supreme Court

271 U.S. 479

46 S.Ct. 544

70 L.Ed. 1046

MA-KING PRODUCTS CO.

v BLAIR, Commissioner of Internal Revenue.

No. 333.

Argued May 7, 1926.

Decided June 1, 1926.

Messrs. B. D. Oliensis and Charles L. Guerin, both of Philadelphia, Pa., for appellant.

Mrs. Mabel Walker Willebrandt, Asst. Atty. Gen., for appellee.

Mr. Justice SANFORD delivered the opinion of the Court.

This is a suit in equity brought by the Ma-King Products Company, a corporation, in the Federal District Court for Western Pennsylvania, against the Commissioner of Internal Revenue. The bill alleged that the Company had duly made application to the Commissioner, in accordance with the National Prohibition Act¹ and regulations, and accompanied by a proper bond, for a permit to operate a plant for denaturing alcohol; and that, while under the law the Commissioner was authorized to grant such a permit, he had 'arbitrarily, illegally and without any reason or warrant in law or in fact' disapproved the application and refused to issue the permit. The prayer was that the court review the Commissioner's action, reverse his findings as to fact and law, and direct him to approve the application and grant the permit.

The Commissioner answered, denying that he had acted arbitrarily and illegally in disapproving the Company's application; and, alleging that, as the result of an investigation conducted by his agents, he was informed that the president and secretary-treasurer of the Company were not individually, or as its officers, 'entitled to be entrusted with a permit of the nature and kind set forth in the application,' under the provisions of the Act; and that, upon this information, he 'acted under full warrant of law and fact' in disapproving the application and refusing to issue the permit.

After a hearing before two District Judges, at which evidence was introduced by both sides, the judges concurred in the opinion that there was nothing in the record which would justify the court in finding that the Commissioner in refusing the application for the permit had 'abused the wide discretion invested in him by the Act of Congress,' and that the bill should therefore be dismissed; and a decree was entered accordingly. This was affirmed, on appeal, by the Circuit Court of Appeals which said that:

'After an examination of the proofs in the case we are of the opinion the associations and business connections of * * * the principal officers of this company, were such that the Commissioner had ample ground for declining to issue the company the permit. The holder of such a permit is entrusted by the goverment with a power which subjects him to the approaches and bribes of law breakers, and where, as in this case, the business associations of applicants have been with men whose conduct has already invited prohibition prosecutions against them, it goes without saying that the Commissioner would have been derelict in duty in granting them a permit.' 3 F.(2d) 936.

This appeal was allowed in March, 1925.

Titile 2 of the Prohibition Act provides that 'all the provisions of this Act shall be liberally construed to the end that the use of intoxicating liquor as a beverage may be prevented'; that, with certain exceptions not here material, no one 'shall manufacture, sell, purchase, transport, or prescribe any liquor without first obtaining a permit from the commissioner so to do'; that no permit shall be issued to any person who within one year prior to the application therefor shall have violated the terms of any permit or any Federal or State...