State v. Boston Club

On Application nor Rehearing.

Watkins, J.

The following are the several grounds on which the defendants rely in support of their application — the two motions, substantially, covering the same defences — to-wit:

1. That the judgment and decree of this honorable court are ultra petitionem and are in favor of the State upon a cause of action not alleged and not before the court.
“ 2. That the enumeration of persons and pursuits from and upon which license taxes may be levied, and enumerated in Art. 206 of the *594Constitution of the State of Louisiana, is an exclusion of a power to levy such taxes on any other persons.
“3. Under Art. 29 of the Constitution of the State of Louisiana, it is provided that every law enacted by the General Assembly shall embrace but one object, and. that be expressed in the title, and the only object contained in the title to the acts of 1886-90, upon which plaintiff herein relies for a recovery, is the levy of a license on businesses and occupations, and on nothing else whatsoever; and if the said acts be so construed as to levy a license upon anything else than a business or occupation, they are to such extent unconstitutional, null and void, because embracing more than one object, and those objects not expressed in its title.
“ 4. The fact that, in the year 1871, the Legislature of the State of Louisiana imposed a tax on club houses where spirituous liquors are used, sold or supplied to members, and that said tax has subsequently been eliminated from the legislative acts, shows the intention of the Legislature not to levy a license upon such clubs.
“5. The proviso, at the end of the eleventh section of the acts of 1886-90, merely fixes a minimum license, which must be paid by every business establishment which either sells or gives away, or disposes of intoxicating liquors in quantities, however small. This proviso is not intended to levy a license upon a class of persons upon whom the license is not levied by the rest of the section. It must be read in connection with the rest of the section, and applies solely to business establishments where liquor is given away.”

I.

On the first proposition the contention of counsel is that the State claims that the defendants were eondueting, or carrying on, a certain kind of business, and demands of them, respectively, a license therefor, under the provisions of the two hundred and sixth article of the Constitution and the revenue laws of 1886 and 1890; and that our opinion inaccurately holds that the claim is not well founded in respect to their pursuit of a business of any kind, and yet compels them to pay a license tax.

It is quite true that our opinion states that claim is made for a license for conducting a business, but that business is particularly denominated as that of retailing liquor. It then gives a definition of the term business to be, in a legislative sense, that which occupies *595tlie time, attention and labor of man for purposes of profit or a livelihood. It then announces that neither of defendants are, in any sense, business corporations, and that all subjects of license designated in the license acts have reference to business except the sale of liquors; and then adds, that the license law under consideration must be taken as a whole, and that it includes all places and establishments in which liquors are distributed.

The opinion then declares that the defendants “ are subject to the license tax without reference to any business in which they may o may not be engaged. The history of legislation upon this subject in this State precludes the possibility of concluding that it was not the intention to tax them in inserting a paragraph as broad and comprehensive as Sec. 11 of the license law. It is not limited to a license for the business of bar room, etc., but extends to all places and establishments selling or giving away, or otherwise disposing of liquor.

This reaches the transfer of liquors by sale “or other disposition.”

Just here the question arises as to whether the relief granted the State is ultra petitionem or not. We are of opinion that it is not, for the reason that our opinion states that the demand of plaintiff is that the defendants pay “ license taxes for conducting the business of retail liquor dealers,” and not for conducting a business simply. It is quite evident that the plaintiff’s case is brought within the province of the license law, because of defendants being charged with retailing liquors, notwithstanding it is not a business within the terms of the license law, in this particular instance, it not being conducted by the defendants with a view of making a profit — giving liquor away laying them liable under the law quite as well as selling it.

This principle is well grounded in authority, as an examination of decided cases will show — the test being, that the disposition was of the liquors, as property of the corporation, among its members, and not that the business was conducted profitably. Hence the main question is as to right of proprietorship in the liquors, whether in the corporation or its members. In many cases the additional test is put as to the disposition being a sale, but with the object in view of determining the proprietorship of the goods disposed of.

The case of Commonwealth vs. Pomphret, 137 Mass. 564, is one of the most conspicuous and frequently cited cases on the subject of retailing liquors without license, and the court says:

*596“ The Legislature has prohibited the selling, or exposing for sale, of spirituous or intoxicating liquors, but it has not undertaken to prohibit the drinking, or buying of intoxicating liquors, or the distribution of it among, persons who own it in common. If, therefore, two or more persons unite in buying intoxicating liquors, and then distribute it among themselves, they do not violate the statute, and the intent with which they do it is immaterial.”

And in Commonwealth vs. Smith, 102 Mass. 147, the defence was that the goods sold were property of a club of which the defendant was a member, which advanced a certain sum for the purchase of liquors and refreshments for the use of its members, and to whom it was issued out on checks and certificates; and the court held that “if the liquors really belonged to the members of the club and had been previously purchased by them, or on their account, or some per - son other than the defendant, and if he merely kept the liquors for them, and to be divided among them according to a previously arranged system, these facts would not justify the jury in finding against the defendant.”

It was on this principle that the clubs therein involved were held not liable — they having, at time of distribution, no right of proprietorship in the goods disposed of, same being exclusive property of the members among whom the distribution was made.

Likewise the court held a club not liable in Groff vs. Evans, 8 Q. B. D. 378, the court basing its opinion “ on the ground that there was no transfer of the general or absolute property, but a transfer of a special interest, as all the members of the club were owners in common,” and held that “ the furnishing of liquors to a member was not a sale within the meaning of the English Licensing Act.”

Stein vs. State, 55 Md. 566, was decided on the same ground, and there are some other cases to the same effect.

But in Reckart vs. People, 79 Ill. 85, the court say: “The proposition is absurd, that a ticket holder really owned the liquors with which the bar is stocked, as evidently the liquors belong to the company as partnership stock, and the company would have no more rightful authority ¡to sell to the individual members or partners at retail without a license than a mere stranger would have;” but they say: “on the contrary, it has been repeatedly held that the delivering by the club or society, through its agents, of (liquor) which was common property of the society, to a member of the society, upon credit *597or for cash, and which thereby became the separate property of the member, was a sale within the meaning of the licensing statutes.”

To the same effect are the following cases: Marmont vs. State, 48 Ind. 21; State vs. Mercer, 32 Iowa 405; Martin vs. State, 59 Ala. 34.

In People vs. Soule, 74 Mich. 250, the question was whether a club “can distribute liquors among its members, receiving pay for such liquors as they are distributed by the glass, the proceeds to go into the treasury of the club to be used in purchasing other liquors or in paying expenses, without being liable under the laws of the State to paya retail tax,” and the court said: “It must be held that the liquors purchased and kept by the club were, before they were dealt out to the members, the property of the corporation.

“ When the liquor was passed by the agent of the corporation— the respondent in this case — over to the individual member, it became his property, and was a sale to him, as he paid for it when it was delivered to him. He could then do with it as he pleased — drink it himself, give it to a friend to drink or throw it away. Being sold within the quantity prescribed by statute it was a sale by retail, and a corporation or its agent making a business of it, the sale constituted the business of selling by retail. The law includes all persons, and the places of sale prohibited, without the payment of the tax are not limited. It reaches a club house or a private house, as well as a saloon or a tavern. The object of the law is to tax the business when found or by whom carried on.”

After examining and analyzing many decisions the court said:

“ It appears to be a simple and unanswerable proposition that the liquor was, in the first place, owned by the corporation as corporate property, the same as any person might own it; that when it was delivered to a member of the corporation for money paid to the corporation or its agents, and going into the funds, it was a sale to that member the same as if it had been passed to a stranger to the corporation in the same way, and the liquor, by such sale, then becomes the absolute property of the member, the same as if he had purchased it in a saloon or in any other place where it is sold.”

That opinion is particularly appropriate in this connection, because it not only presents in a clear light the liability of the club on the theory of its proprietorship of the liquors that were dealt in, but it distinctly holds that as the club made a custom or business of such a traffic, the sales of liquors constituted the business of selling by retail, as the law includes all persons and the..places of sale are not limited.

*598In Chesapeake Club vs. State, 63 Md. 446, the question under consideration arose under a statute declaring it unlawful for any one “ to sell directly or indirectly, at any place, or to keep or give away at his, her or their or its place of business, any spirituous, fermented or intoxicating liquors,” and the plaintiff was a corporation organized for literary, musical and scientific purposes.

The question was one of violating the statute, by the club providing and keeping at its club rooms spirituous and fermented liquors, with the intent and for the purpose of supplying the same to its own members, as same might be called for or desired, either on checks or otherwise, as the association might provide.

On a full consideration of the question then raised, the court said:

“ There, as we have seen, by the recital of the terms of-the statute, the language is broad and comprehensive as could well be employed. In express terms, it applies as well to all corporations and associations, as to all persons; and the great object in view is the absolute prohibition of all dispensing of intoxicating drinks, either by sale or gift, except under special conditions not existing here.
“ Intoxicating liquors can not be sold directly or indirectly, nor can they be given away at the place of business of the donor. The place, and only placé of business of the appellant is the club room, where the liquors are kept and dispensed to the members of the club upon application.
“ It is not pretended that the liquors were bought by any individual member of the club on his own account and kept by him. Nor by all the members of the club jointly, in their personal capacities. But the appellant, by its constitution and by-laws, has provided the ways and means by which to raise funds — that is, by entrance fees and by assessments,'and these funds, when paid over, are the funds of the corporation in the hands of its treasurer. The liquors and other articles purchased for the benefit of the club with the funds thus raised are dealt out by a steward or janitor regularly appointed by the corporation, and who is its agent for that purpose. Therefore, whatever is done by him within the scope of his authority is the act of the corporation, and for which it is liable.
“This being the case, why is not the liquor thus supplied disposed of either by sale, or gift, according to the conditions of its delivery, to the particular member receiving it from the agent of the corporation?
*599“ It is supposed that because the members are joined in an association for social and other purposes, no matter how numerous and indiscriminate their membership may be, that they may do, as among themselves, with entire impunity, what individuals in their relations and dealings with their fellow-members of the commuity may not do under the statute?
“ But is there any substantial ground discoverable either in the letter or policy of the statute for any such distinction? The reason and good sense of the distinction is not perceived, and in view of the manifest object and policy of the statute such a distinction is wholly inadmissible. If the liquors, the property of the corporation, be kept to be given to the members at the club room, it is a violation of the letter and spirit of the act; and if it be sold to the member, either for money or for checks previously purchased, it is equally a violation of the law, for by its terms the statute declares that liquors shall not be sold, either directly or indirectly.
“The framers of the statute would seem to have been studious to avoid the possibility of allowing any combination, or contrivance whereby the objects of the law could be defeated. All means, whether direct or indirect, tending to defeat or evade the provisions of the act are prohibited; and to say that a corporation, or any association, whether formed for the particular object or otherwise, can, with entire impunity, dispense liquors to its members at pleasure, according to any artful device that may be adopted, would be simply to disregard not only the terms of the statute, but the manifest object to be effected by the Legislature.”

It is quite true that that opinion was expressed by a divided court, but subsequently the same question was presented to and decided, in the same way, by a full bench and an unanimous court, in State vs. Easton Social Club, 73 Maryland, 97, and the principles announced in the preceding case were affirmed.

The answer of the defendant in that case was very much the same as that of the defendant in this, to the effect that the club was a corporation organized for the purpose of rational entertainment and amusement, and was not engaged in the transaction of any business whatsoever for the purpose of making a profit, directly or ndireetly, and that the income derived from various sources is solely applied to defraying the expense of the corporation — enumerating, much the same as in this case, as the various sources of its revenue, the entrance or admission fees of members, monthly dues, and the *600money paid by members for what refreshments, liquors and cigars they obtained for their personal use at the club house.

The court stated the question to be “whether the furnishing of spirituous and fermented liquors by the steward or manager of the club to the members thereof, upon the payment of the prices fixed by the regulations of the corporation, constituted sales of such liquors, in violation of law?” and held that such a transaction constituted a sale, and, |as such, was a violation of the statute; and asked this pertinent question, to-wit:

“And such being the case, why should this court be astute and indulge in questionable refinements in order to relieve these corporations of the just consequences of their acts? ”

And then answered the question thus:

“By holding that the supply of liquor by the club to its members, in the manner admitted by the answers, does not constitute a sale * * we should certainly afford impunity to gross violations of the spirit and intent of the statute, and thereby open the door to all the evils intended to be suppressed by it; and that done by simply allowing a combination of individuals to do what individuals without combination could not do without incurring the penalty of the law. We think the facts admitted in the answers clearly show habitual and constant violations of the law by these corporations by the sale of liquors at their club rooms to the members of the club; and the fact that the sales are made without actual profit to the corporation is wholly untenable, and affords no ground of defence to these proceedings.”

This case and the one preceding cover every possible view that can be taken of the question under discussion, and fully support the views announced in our opinion; it matters not as to the character of the disposition of the liquor, whether sale or gift, it is equally amenable to the law and makes the defendant liable for license taxes. It is equally immaterial whether the disposition was profitable or unprofitable; or whether profit was contemplated by this course of dealing or not. This is the substantial claim of the State in this case as set out in her petition and as announced in our opinion. Hence the first ground of objection is not well taken.

II.

We do not understand Art. 206 of the Constitution as imposing any restriction whatever in the matter of levying license taxes, but on *601the contrary, as granting permission to the General Assembly in respect to them, for the language employed is, to-wit:

“ The General Assembly may levy a license tax, and in such case shall graduate the amount o£ such tax to be collected from the persons pursuing the several trades, professions, vocations and callings.”

Then follows this declaration, viz.:

“ All persons, associations of persons and corporations pursuing any trade, profession, business or calling, may be rendered liable to such tax,” etc. Art. 206.

Looking into the license law of 1886 that was enacted in pursuance of the provisions of that article of the Constitution, we find its provisions to be, to-wit:

“ That there is hereby levied an annual tax * * * upon each person or association of persons, or business firms and corporations, pursuing any trade, profession, vocation, calling or business, except those expressly exempt from such license tax ,by Arts. 206 and 207 of the Constitution.” Sec. 1, Act 101 of 1886.
“ That for every business of bar room, cabaret, coffee house, café, beer saloon, liquor exchange, drinking saloon or other place where anything to be drunk or eaten on the premises is sold directly or indirectly, the license shall be,” etc.

After enumerating the nine different classes and grading them ac _ cording to gross receipts, this proviso occurs, to-wit:

“No license shall be charged for selling refreshments for charitable or religious purposes; ” and the further proviso, “ that no establishment selling or giving away, or otherwise disposing of any spirits, wine, alcoholic or malt liquors in less quantities than one pint shall pay less than fifty ($50) dollars.” Sec. 11, Id.

See. 1 of the license law of 1890 is couched in identically the same language as that of the license act of 1886. Vide Sec. 1 of Act 150 of 1890.

And Sec. 11 thereof is practically identical with Sec. 11 of the act of 1886. Vide Sec. 11, Id.

The terms of these licensing laws are almost identical with the language of the Constitution- in respect to the persons, associations, and corporations pursuing the different trades, professions and vocations designated, though superadding “the business of bar room, liquor exchange, drinking saloon or other place where anything to be drunk or eaten on the premises is sold, directly or indirectly; ” and *602as if to emphasize and enforce the idea that was intended to be thereby conveyed, the proviso is made that “no license shall be charged for selling refreshments for charitable or religious purposes ” — thus, by the plainest possible implication, excluding all other disposition of refreshments or liquors from the contemplation of the Legislature in framing these license statutes.

But if it be doubtful whether a sufficient grant of power is delegated to the General Assembly by Art. 206 of the Constitution for such a purpose, we have only to look into the provisions of Art. 170 to ascertain that “the regulation of the sale of alcoholic or spirituous liquors is declared a police regulation,” and that “ the General Assembly may enact laws regulating their sale and use.” Art. 170 of Constitution. And it is not perceived in what more appropriate way the General Assembly could regulate the disposition of alcoholic and spirituous liquors than by ^bringing the sale or other disposition of them under subje. .on to the license laws. There can not be a doubt of our right to examine and contrast different articles of the Constitution in pari materia, in order to determine the scope and meaning of either; and applyn g this test, we think it evident that Art. 206 of the Constitution not only does not contain any exclusion of power to levy the license taxes that are imposed by the licensing acts, but that the grant of constitutional power is full and complete.

The argument of the learnea counsel for the defendants on this proposition is neither cogent nor persuasive, as will appear from the subjoined extract we have selected from one of their briefs, to-wit:

“The enumeration of powers to levy lieense taxes on certain persons, in Art. 206 of the Constitution, is an exclusion of the power to levy such taxes on any other persons. This is the rule laid down by Cooley in his Constitutional Limitations, p. *64, and which is cited with approval in La. Cotton M. Co. vs. New Orleans, 31 An., p. 444. And in that case e. ^rge number of decisions of this court are cited to the effect that where the General Assembly is authorized to exempt certain property, it may not exempt other property. And see cases cited in Endlich on Stat., Sec. 533.
“It follows, that when Art. 206 confers authority to levy license taxes on persons, associations of persons and corporations pursuing any trade, profession, business or calling, it by implication denies the *603power to impose license taxes on persons or corporations that do not pursue any trade, profession, business or calling — that is, on such corporations as you find these literary and social clubs to be. And see City vs. Telephone Co., 40 An. 42 (pp, 4 and 5).”

The requirement of the Constitution in reference to the levy of taxes is that “all property shall be taxed,” and in reference to licenses, that “the General Assembly may levy a license tax * * on all persons, association of persons,” etc.; but in respect to tax exemptions its language is that “ the following property shall be exempt from taxation, and no other.” Arts. 203, 206 and 207. From these constitutional precepts it is clear that the power to levy taxes is to be liberally construed, while exemption from taxation must be strictly construed. /

This is the universal rule of interpretation. Hence the argument and authorities appertaining to tax exemptions are wholly inapplicable to the question under discussion.

III.

While it is true that the Constitution provides that no law shall embrace more than one object, and requires that it shall be expressed in its title (Art. 29 of Constitution), and that in the title of the license laws drawn in question the only object expressed is the levy of a license tax — it pursues, however, the exact phraseology of the Constitution, and adds the guarded expression, to-wit: “ except those who are expressly excepted from such license tax by Arts. 206 and 207 of the Constitution.” It seems quite apparent that the conclusions we arrived at in the previous paragraph in regard to the constitutional grant of power to the General Assembly is equally applicable to the question presented here. For if it is permissible for us to examine and compare the provisions of Arts. 170 and 206 of the Constitution in order to ascertain the extent and scope of the grant of power to General Assembly to levy a license tax on the sale of liquor, we may with equal propriety examine and compare ¿hem with the provisions of Art. 29 of that instrument, in order to determine the constitutional legality of the titles of said licensing acts.

IV.

It is argued that because the license laws under discussion do not contain any such specific provision as the law of 1871 did to the effect “every club house where spirituous liquors are uáed, sold or *604supplied to members or visitors ” (See. 3, Act 42 of 1871), should pay a license, therefore we must conclude that it was the legislative intention to exclude same therefrom; but we take it to be perfectly clear that the language employed in the licensing acts of 1886 and 1890 ar„e equally as clear and strong as that of the act of 1871. For although the term “every club house ” is omitted, the phraseology employed, to-wit: “the business of bar room, liquor exchange, drinking saloon, or other place where anything to be drank or eaten on the premises is sold, directly or indirectly,” is equally indicative of the legislative intention to include club houses. This is further strengthened and fortified by the terms of the proviso, which declares “ that no establishment selling or giving away, or otherwise disposing of any spirits, .wines, alcoholic or malt liquors,” shall escape the payment of a license; and such a term certainly includes a club house.

Y.

While it is quite true, as contended by counsel, that the proviso to the eleventh section of the two licensing acts ‘ ‘ merely fix es a minimum license which must be paid by every business establishment which either sells or gives away, or disposes of intoxicating liquors,” and was “not intended to levy a license upon a class of persons upon whom licenses are not levied by the rest of the section,” and that same must be read in connection with the remainder of the section; yet it is certainly competent to examine and construe the language employed in the provisos for the purpose of determining the proper interpretation to be given the entire act. And particularly is this true of the proviso that declares that “ no license shall be charged for selling refreshments for charitable or religious purposes.”

The construction of the provisos contended for has been, in effect, applied in the preceding argument.

In conclusion we feel constrained to say that after making a most careful examination of the law and evidence in this case, making a careful comparison of our original opinion with the averments and prayer of plaintiff’s petition and with the opinions of many courts of other jurisdictions, and having carefully examined and compared the terms and phraseology of the licensing statutes with the precepts of the Constitution, we feel bound to adhere to the conclusions originally announced and refuse the application of the defendant.

Rehearing refused.

Mr. Justice Fenner recuses himself on the ground of interest.