Pabst Brewing Co. v. Crenshaw

Mr. Justice Brown, with whom the Chief Justice, Mr. Justice Brewer and Mu. Justice Day

concurred, dissenting.

The opinion of the court is put upon the ground that the Wilson Act subjects liquors shipped from one State into another, after their arrival at their destination, to the laws of the State or Territory enacted in the exercise of its police powers; and that, as an inspection law is a law enacted in the exercise of its police' powers, the law in question is within the act; and we are consequently precluded from inquiring whether such law is a legitimate exercise of the police powers or a mere revenue law to which the name of an inspection law is given for the purpose of obviating the difficulty, under the state constitution, of upholding it as a revenue measure. It may be conceded at once that if the.law in question be a legitimate inspection law it necessarily follows that, as it was enacted in the exercise of the police power of the State, it applies to foreign liquors to the same extent and in the same maimer *32as though such liquors or liquids had been produced in such State or Territory, and shall not be exempt therefrom by reason of being introduced in original, packages or otherwise.” The opinion practically concedes that the act must, if constitutional, be supported as an inspection law, passed under the police power of the State; and such was the position taken by the Supreme Court of Missouri. • It was admitted in that case, both by the majority and minority judges, that the act could not be supported as a revenue measure, because in conflict with the constitution of the State.

To determine the question whether it can be supported as an inspection law it is necessary to consider at some length the nature of its provisions.

The agreed statement of facts shows that the plaintiff manufactures in the State of Wisconsin ten different kinds or grades of beer and malt liquors, each kind being separately manufactured and requiring special treatment; that it ships into the State of Missouri annually not less than. 15,000 barrels of. malt liquors, of thirty-one gallons each, of the aggregate value of $100,000; that there are a large number of domestic manufacturers of malt liquor in the State of Missouri, whose annual productions amount to over 2,250,000 barrels of beer of the aggregate value of $12,250,000, of which 1,275,000 are sold within the State; that there are other manufacturers outside of the State standing in the same position as the plaintiff, who annually ship into the State not less than 165,000 barrels of the aggregate Nvalue of $1,725,000, beside that imported from abroad'; that plaintiff is licensed to carry on business in Missouri; that such business consists of shipping into the State, for the purposes of selling therein or reshipping therefrom, the product of its manufacture in Wisconsin; that in the usual course of its business it is compelled to maintain large warehouses in the State, as well as an office, as a necessary adjunct to the conduct of its business; that it maintains no manufactory in Missouri, and that it disposes of its beer in the original packages in which it is shipped,

*33There are insuperable difficulties in the way of the maintenance of this act as an inspection measure.

To inspect, as defined by Webster, is to examine, to view closely and critically, especially in order to ascertain quality and condition, to detect errors, etc.

The object of the act is declared by section 4 to be to exclude the use of any substance, material or chemical, in the manufacture of malt liquors other than pure hops, or pure extract of hops, or pure barley, malt or wholesome yeast or rice. So far as beer manufactured within the State is concerned, the inspection is made, or at least may be made, State v. Bixman, 162 Missouri, 1, 34, of the ingredients of the beer in the mash tub and before die beer is actually brewed. The inspector goes to the brewery and makes his test by taking a sample of the mash of the beer there fermenting, and, although thousands of gallons may be made from one mash, a single inspection is sufficient. With respect to beer manufactured outside of the State, section 5 requires that the consignee of the beer shall notify the inspector, who shall be furnished with a sworn affidavit, subscribed by an officer authorized to administer oaths, from the manufacturer thereof or other reputable. person having actual knowledge of the composition of said beer or malt liquors, that no material other than pure hops, or the extract of hops, or pure barley, malt or wholesome yeást or rice, was used in the manufacture of the same. “Upon the receipt of said affidavit the inspector shall inspect and label the packages containing said beer or malt liquors, for which services he shall receive like fees as those imposed upon the manufacturers of beers and malt liquors in this State.”

It is true this section seems to require that upon- receipt of such affidavit the inspector shall inspect and label the packages. But similar words used in section 7 with regard to domestic beer were interpreted by the Supreme Court in State v. Bixman, 162 Missouri, 1, as requiring only an inspection of the mash at the brewery, since the actual inspection of the beer-*34would require the opening of each package, or at least a sample package, which would practically ruin the contents. As it is impossible to suppose that the legislature should have contemplated that the inspectors should visit breweries outside of the State and inspect the mash, or that .they should open the packages after their receipt in the State, and thus spoil the beer, it would seem that the inspectors have no alternative but to accept the affidavit as a basis of their inspection. This is said to be the manner in which the law is practically administered. Indeed, the agreed facts show that the beer involved in this case was inspected while still in the hands of the plaintiff, that the packages were never opened, but the affidavit was,accepted as a sufficient compliance with the act.

While this may be the only inspection practicable, it is really no inspection at all, since it. is dependent entirely upon the veracity of the person making the affidavit. There is no power given to these inspectors to investigate the truth of the statements contained in these affidavits, except, possibly, by tasting or analyzing the beer. There is no penalty provided for making a false affidavit, nor can the State proceed against the manufacturer who is beyond the jurisdiction of the court. There is no assurance that the affidavit, which may be made in the State of .manufacture as well as. in Missouri, has any relation to the particular shipment to which it is sought to apply it, and there is no power given even to open the boxes in which bottled liquors purport to be enclosed, to examine their contents. The object of inspection laws is to require such examination of the thing inspected as will insure to the public a safe and wholesome article. Obviously to secure this the inspection must be made by officers appointed for that purpose; at least it cannot be delegated, as it virtually is in this case, to the manufacturer. The requirement of an affidavit, and the acceptance of this in lieu of an actual inspection, make the affiant, who is the manufacturer-or his agent, the sole judge of the fact whether the liquor contains only the ingredients allowed by law. We cannot treat this as a bona fide inspec*35tion. To justify an inspection in law there must be an inspection in fact.

We had occasion in Vance v. Vandercook Co., No. 1, 170 U. S. 438, 456, to pass upon a law requiring a sample of alcoholic liquor proposed to-be shipped, to be sent to the state officer in advance of the -shipment,- and as a prerequisite to making á subsequent shipment. We held that the inspection of a sample so sent in advance was not in the slightest degree an inspection of the goods subsequently sent into the State. “The sample may be one thing and the merchandise which thereafter comes in another.” This is a much stronger case for, the application of the principle, as there is no inspection at all, but the acceptance of an affidavit made by an interested party in lieu thereof. Indeed, so perfunctory is this inspection that it appears to have awakened a suspicion in the court below “that the legislature was more concerned in collecting fees to swell the exchequer of the State, than in the protection of.the people who might drink beer.”

The obvious inefficacy of the inspection has an important bearing upon the more serious objection to this act., in. that the fees for inspection bear no just relation to the’ expense, and make it evident that the law was not passed in a bona fide exercise of the police powers of the State, but as a convenient method of increasing the public revenues. Section 8 provides for an inspection fee of one cent per gallon and two cents for labelling each package containing eight gallons, making a total fee of one and a quarter cent per gallon. All of these fees are required to be paid into the state treasury, and pass to the general revenue- fund of the State. The inspectors cannot even deduct their salaries from the'fees, but are paid by a distinct appropriation for that purpose.

It is conceded in the stipulation of facts that the entire expenditure authorized on account of actual inspection amounts to $12,500, and that the inspection fees annually collected amount to $350,000, or $337,500 in excess of the costs for inspection, and that the fees chargeable under said act upon the *36malt liquors manufactured out of and brought into the State from other States and from foreign countries, for sale in Missouri, exceed the total authorized cost for inspection, approximately, $60,000 a year.

In this connection it is pertinent to notice that the bill in question when first introduced in the House was entitled “ An act creating the office of inspector of. beer and malt liquors, and providing for the creation of a fund for the construction of roads and highways;” and as originally introduced into the Senate contained the words providing for the increase of the general revenue fund.” In the bill as passed these words were stricken out, and the words “providing for the inspection of beers and malt liquors manufactured and.sold in this State” inserted in their place. Notw thstanding these changes in the title of the bill as finally passed, it is evident that the main object was to increase the general fund of the State by the amount of the inspection fees, less the expenses of the inspection, and that the inspection was really an incident to or an 'excusefor the revenue to be derived from the act. These facts are a cogent argument in favor of applying to this case the rule established in a number of recent cases, that fees cannot be imposed for the purpose of inspection upon companies doing an interstate business which are so -far in excess of the expenses of such inspection as to make it plain that they were adopted, not as a. means of paying such expenses, but as a means of raising revenue.

The latest of these is that of the Postal Telegraph-Cable Company v. Taylor, 192 U. S. 64, wherein a license fee was imposed upon the telegraph company which largely exceeded the entire cost to the company of maintaining its line, including repairs, reconstruction, costs of labor and of material and travelling expenses of employés, and all expenses incurred, by it in a careful inspection of its poles and wirés. The ordinance was defended as a police regulation. It was argued that the question of revenue was not its object, but that the defendant had the right to constantly inspect the poles and wires to protect *37the lives of its citizens. The court found the borough to have been sparsely settled; that it had done nothing in the way of inspection, and had incurred no liability therefor; that the fee was twenty times as large as was necessary to make the most careful and efficient inspection that could have been made. The ordinance was adjudged to be invalid, the court saying: “To uphold it' in such a case as this is to say that it may be passed for one purpose and used for another; passed as a police inspection measure and used for the purpose of raising revenue; that the enactment as a police measure may be used as a mere subterfuge for the purpose of raising revenue, and yet, because it is said to be an inspection measure, the court must take it' as such and hold it valid, although' resulting in a rate of taxation Which, if carried out throughout the country, would bankrupt the company, were it added to the other taxes properly assessed for revenue, and paid by the company.”

In previous cases arising under a similar state of facts the ordinances had been upheld as within the police power of the municipality, St. Louis v. Telegraph Co., 148 U. S. 92; 149 U. S. 465; Western Union Tel. Co. v. New Hope, 187 U. S. 419, in which the ordinances were sustained upon the ground that the fees were not so excessive as to justify the inference that they were.not imposed as a bona fide exercise of the police powers, and in Atlantic & Pacific Telegraph Co. v. Philadelphia, 190 U. S. 160, in which the question of reasonableness was held to have been properly submitted to the jury, and Postal Telegraph-Cable Co. v. New Hope, 192 U. S. 55, in which the verdict, of a jury for a less amount than that fixed by. the ordinance was held to be a verdict that the charge was unreasonable, and should have been followed by a judgment for the telegraph company.

The facts of this case show that the inspection, as applied to malt liquors manufactured out of the State, was purely perfunctory, and accomplished nothing for the protection of its citizens, but that.the fee.derivable therefrom was thirty times the actual cost of such- inspection, even when applied *38to liquors manufactured within the State. A disproportion so gross can only be accounted for upon the theory that the act was intended for the' purposes of revenue and not for inspection.

It is insisted, however, that as the Supreme Court of the State has in the case of State v. Bixman, 162 Missouri, 1, by a majority vote, upheld the constitutionality of the act as an inspection law, applied.to beer of domestic manufacture, and not as an act for raising revenue, we are bound by this definition, and are precluded from considering it in any other light than that of an inspection fee or license tax. But a question of constitutional law cannot be answered by a definition. While, as we have frequently said, we adopt the interpretation of the statute of a State affixed to it by the court of last resort thereof, wé still feel at liberty in accepting such interpretation., to determine for ourselves whether the act is a bona fide exercise of the police power of the State and not intended merely as an excuse for the taxation of interstate commerce.

As was said by this court in Mugler v. Kansas, 123 U. S. 623, 661: “If, therefore, a statute purporting to have been enacted to protect the public health, the public morals, or the public safety, has nó real or substantial relation to those objects, or is a palpable invasion of rights secured by the fundamental law, it is the duty of the courts to so adjudge, and thereby give effect to the Constitution.”

In Railroad Co. v. Husen, 95 U. S. 465, the validity of the act of the State of Missouri, which prohibited the introduction into the State of any Texas or Mexican cattle between the months of March and November of each year, was considered. It was insisted that the law was valid as a quarantine or inspection law, as its purpose was to prevent the introduction of cattle afflicted with contagious diseases. But the court pointed out that no provision was made for the actual inspection of the cattle, so as to secure the rejection of those that were diseased, but that all importation of cattle, whether sound or diseased, was forbidden for long periods; and it was *39held that the statute was void as a plain intrusion upon the exclusive domain of Congress.

And in Reid v. Colorado, 187 U. S. 137, 150, this court said:

“Certain principles are well settled by the former decisions of this court. One is that the purpose of a statute, in whatever language it may be framed, must be determined by its natural and reasonable effect. Henderson v. Mayor of New York, 92 U. S. 259, 268. Another is that a State may not, by its police regulations, whatever their object, unnecessarily burden foreign or interstate commerce. Railroad Company v. Husen, 95 U. S. 465, 472. Again, the acknowledged police powers of a State cannot legitimately be exerted so as to defeat or impair a right secured by the National Constitution, any more than to defeat or impair a statute passed by Congress in pursuance of the powers granted to it. Gibbons v. Ogden, 9 Wheat. 1, 210; Missouri, Kansas & Texas Ry. Co. v. Haber, 169 U. S. 613, 625, 626, and authorities cited.”

The reasonableness of the law as compared with the cost of inspection is made the test of the. validity of the law in Patapsco Guano Co. v. North Carolina Board of Agriculture, 171 U. S. 345; Willis v. Standard Oil Co., 50 Minnesota, 290.

But. treating it as an inspection law, the question remains whether, as applied to beer manufactured in other States, it is a bona fide exercise of the police powers of the State to protect the health of its citizens, and for the reasons already given we are of opinion it is not. The fact that the law may have been valid as applied to liquors manufactured within the State does not remove the difficulty, as the Wilson Act only applies to the police powers of the State to the same extent and in the same manner as though the liquors had been produced within the State. If foreign liquors were subject to the same inspection as domestic liquors there would be much force in the contention that the inspection was covered by the terms of the Wilson Act; but as in this case domestic liquors were actually inspected, and foreign liquors were not inspected at all, the *40act does not apply. The object of the act is merely to place foreign and'domestic liquors on the same footing as respects the police powers of the State. The inference is drawn in the opinion of the court that upon the arrival of foreign liquors at their destination .the State may. deal with such liquors as it pleases; in other words, that they have passed wholly beyond the Federal control as subjects of interstate commerce.

The Wilson Act was passed in consequence of our decision in Leisy v. Hardin, 135 U. S. 100, to the effect that a state statute prohibiting the sale of liquors was unconstitutional, as applied to a sale by the importer from another State in original packages. That case was put upon the ground that liquors had always been recognized by the commercial world as subjects of exchange, barter and traffic, and that the State could not prohibit their importation from abroad or their sale by the importer. To meet this exigency, and to enlarge the powers of the State with respect to intoxicating liquors, the Wilson Act was passed, declaring that upon their arrival in the State they should be subject to the police powers of the State to the same extent and in the same manner as though such liquors had been produced within such State. The constitutionality of this act was sustained in Rahrer’s case, 140 U. S. 545, although in the subsequent case of Rhodes v. Iowa, 170 U. S. 412, it was held that the Wilson Act did not operate to. attach to liquors the prohibitory, legislation of the State at the moment they reached the state line, or before the completion of the act of transportation by their arrival at their point of destination and delivery to the consignee.

The primary, if not the sole, object of the Wilson Act was to attach the prohibitory laws of the State as a police measure to liquors the moment they were delivered to the consignee, although they might still be in their original packages. The State was then at liberty to forbid their sale.

The act does not affect the right of inspection, since that right was one which existed-wholly independent of the act, *41and had been applied and recognized ever since the case of City of New York v. Miln, 11 Pet. 102, as one of the ordinary police powers of the State, which it was at liberty to exercise quite, irrespective of any Federal statute for. the protection of the health of its citizens. The Wilson Act neither creates, adds to, takes from or affects the police powers of the State with respect to inspection in any particular. The power of the State to enact inspection laws, provided that such laws are intended in good faith for the protection of the people, and not as a covert means for raising revenue by exorbitant charges, remains precisely as it was before the act was passed. In the Miln case an act of the State of New York, requiring the masters of vessels arriving from foreign ports to report to the city authorities the names, etc., of his passengers, was upheld as a proper exercise of the police power; though subsequently, in the Passenger Cases, 7 How. 283, a similar law, requiring the master of vessels to pay a certain sum on account of every passenger brought from a foreign country into the State, was held to be inoperative, although passed under the general denomination of a health law. It was said that, although the amount of the tax was small, it might have been increased so as to become prohibitory at the discretion of the legislature; and the fact that the tax was applied to the maintenance of a marine hospital, and to the reformation of juvenile delinquents, showed that it could not be sustained as an exercise of the police power.

While we may concede that the liquors in this case had arrived at their destination, it does not follow that they were subject to any law which the State chose to pass in an assumed exercise of the police power. The State has an undoubted right to inspect all goods arriving therein, but it does not follow that it has the right to subject them to an inspection which is. no inspection at all, and charge them with a fee out of all proportion to the costs of even a proper, inspection, and call it an exercise of the police power. Though these liquors had arrived at their destination, the State provided, by section 5 *42of the act, that they should he inspected before offering them for sale and before they had been commingled with the general mass of property. The fact that they had been delivered to the consignee was of no materiality, since the act which the State required should be done was one which applied a condition precedent to their admission to the State for commercial purposes. Until this act was performed, they were'protected against an unlawful interference. This inspection might have taken place at the state line, but for the convenience of the state officers, as well as that of the brewers, it was postponed until the arrival at their destination, as is frequently the case in foreign countries, where imported goods are not examined at the frontier, but at Paris or London,, upon their arrival there; but they are not legally entered until such examination takes place. To say that their character a,s interstate commerce existed at the state line, but had been lost upon their arrival at their place of destination before they had shown themselves entitled to enter the State, is to apply a test wholly irrelevant under the circumstances. Indeed, in the case of Rhodes v. Iowa, 170 U. S. 412, we held expressly that the prohibitory liquor laws did not apply to liquors while in transit from their point of shipment to their delivery to the consignee. The vital question is whether the inspection was applied at a time prior to their legal importation into the State as a commercial article. If it were, and the inspection were a lawful one,, it is a proper regulation of interstate commerce; but if the inspection were not a bona fide exercise of the police power it was an unlawful interference with such commerce. Whether the inspection was made at the state line or at the destination of the goods is absolutely immaterial.

The case of Vance v. Vandercook Company, No. 1, 170 U. S. 438, so strongly relied upon in the opinion of the court, seems to me to have little or no bearing on this feature of this case, and tends rather to support the theory that the Wilson Act had nothing to do with the.question of inspection. The eaise turned upon the power of the consignee of liquors to receive *43them for his own use within the State of South Carolina, as well As the power to sell them in the original unbroken packages as imported, to citizens of South Carolina. It was held in substance that the consignee had the constitutional right to receive them for his own use without regard to the state laws, but that under the Wilson Act he.could no longer assert Aright to sell them in original packages in defiance of the state laws. It was said that although the state law permitted the sale of liquors subject to particular restrictions and upon certain enumerated conditions, it did not follow that- the law was not a manifestation of the police powers of the State. The 'case, as do all others in which the Wilson Act has been construed, relates to the power to sell, and not to the power to inspect. I -have no criticism to make upon the extract from that opinion, particularly when taken in connection with the following extract from Scott v. Donald, 165 U. S. 58, also cited with apparent approval in the Vandercook case: “The question whether a given state law is a lawful exercise of the police power is still open, and must remain open, to this court. Such a law may forbid entirely the manufacture and sale of intoxicating liquors and be valid. Or, it may provide equal regulations for the inspection and sale of all domestic and imported liquors and be valid. But the State cannot, under the Congressional legislation referred to, establish a system which, in effect, discriminates between.interstate and domestic commerce in commodities to make and use which are admitted to be lawful.”

But we are not without authority upon this point. In Minnesota v. Barber, 136 U. S. 313, a law of Minnesota, as in this case, prohibited the sale of fresh meats except after an inspection, and was sought to be sustained as a law for the protection of the health of the inhabitants. The act required the inspection to take place within twenty-four hours before the animals were slaughtered, and was held to be void as a law intended to be applied only to cattle slaughtered outside the State. While the question was not discussed, it was as*44sumed that the meats had arrived at their destination within the State and been delivered to their consignee, and that the inspection, not being a bona fide one, was an unlawful discrimination against interstate commerce. So in the subsequent case of Brimmer v. Rebman, 138 U. S. 78, a law of Virginia provided that meat should not be sold from animals slaughtered a hundred miles or more from the place where offered for sale, unless previously inspected-by local inspectors. The act was held to be void as in restraint of commerce between the States, and as imposing a tax upon the products of other States. Both of these acts, as does the act of Missouri in question, provided against the sale of uninspected merchandise, and this court held, quite irrespective of other considerations, that the act was void. To the same effect is Walling v. Michigan, 116 U. S. 446.

For the reasons already given, I think the act in this case is void as to inspection law, and an illegal interference with interstate commerce, since the assumed inspection preceded the arrival of the liquors within the State as a constituent part of its general property.

The consequences of. this decision seem to.me extremely serious. If the States may, in the assumed exercise of police powers, enact inspection laws, which are not such in fact, and thereby indirectly impose a revenue tax on liquors, it is difficult to see any limit to this power of taxation, or why it may not be applied to any other, articles brought within the State, and the cases of Minnesota v. Barber, 136 U. S. 313, and Brimmer v. Rebman, 138 U. S. 78, be practically overruled. The Wilson Act does not give the legislature any greater authority with respect to the inspection of liquors than with respect to. other imported articles, and, as already observed, it léaves the question of inspection exactly where it found it. If the Wilson Act receive its natural application, that is, of meeting the exigency created by our decision in Leisy v. Hardin, and enabling the States to enforce their prohibitory liquor laws upon the arrival of the liquor within the State, as we have *45repeatedly held, the law has a definite and distinct value and is.readily understood.

I am authorized to state that the Chief Justice, Mr. Justice Brewer and Mr. Justice Day concur in this dissent.