Thorin v. Burke

• Decision Date: 11 May 1945
• Docket Number: 31505.
• Citation: 18 N.W.2d 664,146 Neb. 94
• Parties: THORIN et al. v. BURKE, Director of Agriculture, etc.
• Court: Nebraska Supreme Court

18 N.W.2d 664

146 Neb. 94

THORIN et al. v. BURKE, Director of Agriculture, etc.

No. 31505.

Supreme Court of Nebraska

May 11, 1945

Syllabus by the Court.

1. The Legislature may make a reasonable classification of persons, corporations or property for purposes of legislation concerning them, but the classification must rest upon real differences in situations and circumstances surrounding the members of the class relative to the subject of the legislation which render appropriate its enactment and to be valid, the law must operate uniformly and alike upon every member of the class so designated.

2. Under the Nebraska Constitution, art. III, section 18, and art. VIII, section 1, classification of business or property for taxation, whether the tax is a property tax or an excise tax, can be permitted only if the classification is reasonable and the tax operates uniformly upon all members of the class.

3.

Sections 81-294 to 81-2,110 R.S.1943, an act relating to revenues which imposes an excise tax of 15 cents a pound or fractional part thereof on imitation butter, provided any oleomargarine or imitation butter containing more than 50 per cent of animal oils or animal fats produced in the United States and containing no imported oils or fats, for the purposes of the act shall not be included in the term 'imitation butter' for tax purposes, is an unreasonable and arbitrary classification of the finished product of oleomargarines for purposes of taxation and does not operate uniformly upon all members of the class and is violative of section 1, art. 8 of the Nebraska Constitution.

4. If portions of an act are unconstitutional and the remainder is so connected with the invalid portions that it cannot be upheld without doing violence to the legislative intent as a whole, the entire act must fall, in this case, sections 81-294 to and including 81-2,110, R.S.1943.

Wear, Boland & Nye, of Omaha, and Paul F. Good, of Lincoln, for plaintiffs.

Leonard A. Flansburg and Perry, VanPelt & Marti, all of Lincoln amici curiae.

Walter R. Johnson, Atty. Gen., and Rush C. Clarke and Edwin Vail Asst. Attys. Gen., for defendant.

Heard before SIMMONS, C. J., and PAINE, CARTER, MESSMORE, YEAGER, CHAPPELL, and WENKE, JJ.

MESSMORE Justice.

This is an original action brought under the Uniform Declaratory Judgments Act approved April 24, 1929, appearing in sections 25-21,149 to 25-21,164, R.S.1943.

Declaratory judgment proceedings have frequently been employed to determine questions as to the construction or validity of statutes. 16 Am.Jur., sec. 24, p. 296. See Dill v. Hamilton, 137 Neb. 723, 291 N.W. 62, 129 A.L.R. 743; Lynn v. Kearney County, 121 Neb. 122, 236 N.W. 192.

The action is for a construction of that portion of the regulations adopted as to imitation butter in the year 1931. Laws 1931, ch. 131, secs. 1 to 16, pp. 365 to 370; R.S.1943, 81-294 to 81-2,110. The following facts are admitted by the pleadings: The plaintiff is a resident of Omaha, engaged in the retail grocery business, and the defendant is director of the Department of Agriculture and Inspection of Nebraska. The case proceeds with the present incumbent official substituted for the original defendant, as provided for by section 25-322, R.S.1943. The plaintiff's customers have sought to purchase from him oleomargarine, hereinafter called margarine, manufactured principally from vegetable oils, and the same product containing less than 50 per cent animal fats and containing imported oils or fats; that the plaintiff wishes to sell, in the state of Nebraska, margarine the fat or oil of which is derived wholly from domestic vegetable sources, and margarine the fat or oil of which is derived in part from vegetable sources, and in part from animal sources, but in which the animal fats or oils are less than 50 per cent of the total fats and oils, and less than 50 per cent of the total content of such margarine; and margarine made in whole or in part from imported vegetable fat or oil.

Defendant's amended answer denies the plaintiff sold margarine containing imported oils or fats to his customers in this state for many years prior to 1931; denies that he proposes to purchase and to sell to his customers margarine made in whole or in part from imported vegetable oil or fat; denies that large quantities of margarine containing imported oils or fats were sold in Nebraska prior to the enactment of the Act or that the sale of such product containing imported oils or fats practically ceased after the enactment of the statute; or that the statutory tax of 15 cents per pound imposed by the act has rendered impossible the sale of margarine containing less than 50 per cent of animal oils or fats produced in the United States and vegetable oil margarine and margarine containing imported oils or fats in competition with the tax-free margarines, which contain more than 50 per cent of animal oils or fats produced in the United States and which contain no imported oils or fats.

The act is designated, 'An Act relating to revenue; to impose a tax upon imitation butter, intended for commercial or domestic consumption; * * *.' The act, on its face, is an act for levying taxes, and its primary object must be assumed to be the raising of revenue. Section 1 of the act provides: 'There is hereby levied assessed shall be collected paid to the Department of Agriculture of the State of Nebraska, prior to or at the time of the sale delivery by any retail dealer or any agent or employee thereof, upon all imitation butter, a tax of fifteen cents per pound or fractional part thereof, * * *. For the purpose within the meaning of this act every edible article, substitute or compound other than that entirely produced from pure milk or cream from the same, made in the semblance of butter, or containing any oil or fat other than the fatty constituent of cows milk intended or designed to be used as a substitute for butter, is hereby declared to be 'imitation butter'; provided any oleomargarine or imitation butter containing more than 50% of animal fats or animal oils produced in the Unites States containing no imported oils or fats, for the purpose of this Act shall not be included in the term imitation butter for tax purposes. * * *'

This case does not present the question that the difference between butter and imitation butter, that is, margarine, is or is not sufficient to justify their separate classification for purposes of taxation, nor is there any question but that the state has a right to regulate the sale of imitation butter, and this right has been recognized and upheld in this state. In this connection, in Beha v. State, 67 Neb. 27, 93 N.W. 155, 2 Ann.Cas. 846, the act prohibited the sale or keeping for sale, imitation butter colored so as to resemble butter made from pure milk or the cream thereof. The statute did not undertake to prohibit the manufacture or sale of margarine, on the other hand, the express purpose was to regulate its manufacture and sale. In this connection, the police power of the state is properly exercised in the protection of the people in all matters concerning their health, and that it is within the scope of this power to regulate the manufacture and sale of articles of food even though the right to so manufacture and sell is a natural right guaranteed by the Constitution. The requisite simply is that it shall purport to be what it really is and shall not be so manufactured and put up as to deceive the consumer.

In the case of Carolene Products Co. v. Banning, 131 Neb. 429, 268 N.W. 313, sec. 81-1022, C.S. 1929, commonly called the 'filled milk' act, was held invalid as being an arbitrary and unreasonable regulation of a lawful occupation in so far as it prohibits the manufacture, sale and distribution of a food product composed of evaporated skim milk and cocoanut oil, both of which are wholesome and nutritious. Paragraph 4 of the syllabus held that the remedy for fraud in the sale of a wholesome and nutritious food product is by legislative regulation and not by a destruction of the business. This case recognized the power of the legislature to regulate imitation or substitute foods, and to so deal with them in such manner as to protect the health and safety of the public. It is the duty of the legislature to use its judgment in exercising police powers of the state. The presumption is that any such law enacted by it is constitutional and it is only when the courts determine that an enacted law invades personal and property rights protected by the constitution that it will not be sustained.

In this case, the plaintiff's contention is that the act constitutes an arbitrary classification of and a discrimination between margarine without a reasonable basis of distinction, and that is the issue we determine in this opinion. The testimony is by depositions.

Margarine is entirely a product of the laboratory and factory. Oleomargarine, or margarine as it is commonly called, is an edible fat product made by churning or emulsifying into 80 parts of edible food fat, 20 parts of cultured milk. There are usually incorporated table salt, flavor and benzoate of soda, and into the fat portion there are frequently incorporated one or more of the following: Vitamin A, Vitamin D and soya bean lecithin or some other emulsifying agent.

At the time the act was passed, several different kinds of margarine were produced in the industry; margarine, the fat or oil of which is derived wholly from domestic vegetable sources;...