Purity Extract & Tonic Co. v. Lynch

delivered the opinion of the court.

This is an action for breach of contract. The Purity Extract and Tonic Company (plaintiff below), a Tennessee corporation, is the manufacturer of beverage called “Poinsetta,” and in November, 1910, it made an agreement with the defendant Lynch for the purchase of the article by him on stated terms during the period of five years.. The agreement contemplated resales by, the defendant in Hinds County, Mississippi, to the making of which he was to devote his best efforts^ It was provided, that he was to sell only in that county where he was to have the exclusive right.of-salé.for which he was to pay to the plaintiff the sum of five hundred dollars within five days after the making of the contract. It was to recover this amount, that the action was brought, the defendant having' repudiated, the agreement at the outset

The statute which the agreément has been held to violate is Chapter 115'of the Laws of Mississippi of 1908, § 1, p. 116, which includes in its prohibition the sale of malt liquors.

The case was tried upon an agreed statement of facts in which the characteristics of “Poinsetta” are set forth at length. ' In substance, the statement is that it is composed of puré distilled water to the extent of 90.45 per. cent., the remaining 9.55 per cent, being solids derived from cereals, “which are in an unfermented state and are wholesome and nutritious”; that “it contains 5.73% of malt and is sold as a beverage”; that it does not contain either alcohol or saccharine matter, being manufactured in such a manner under a secret formula obtained from German scientists as to bring neither into its composition; that it is not intoxicating; that its taste and odor áre distinctive; that its appearance is such that, “it would not probably be mistaken for any intoxicating liquor”; and that it “cannot be employed as a subterfuge for the sale of beer because it is bottled in a distinctive way and its. name blown in each bottle which contains the beverage.” It is further agreed that “the United States Government does not treat Poinsetta as within the class of intoxicating liquors and does, not require .anything to be done With reference, to its sale.”

The state court, following its decision in Fuller v. City of Jackson, 97 Mississippi, 237, construed the statute as prohibiting the sale of all malt liquors whether in fact intoxicating. or not,' and this construction of the state law is binding here. The court said: “Poinsetta may or may not be an intoxicant, but it is a malt liquor, and as such

The agreed statement of facts also contained the following: “Poinsetta is put Up in bottles at Chattanooga, Tennessee, and is shipped in bottles, each separate and apart from the other, placed in a case to which they are in no way attached, and which is done merely to prevent breakage of the bottles in transit. The case is not fastened with nails or other device but merely closed. The bottles so contained are shipped in' interstate commerce from Chattanooga, Tennessee, and are to be received under the cohtract by the consignee in Mississippi in the same condition as when bottled, and are to be sold as each several package. There is to be no . retail sale under such right by said Lynch in the State of Mississippi, but all shipments-are to be made direct either to said Lynch, or to other persons who shall desire to purchase said drink, and are to be delivered to said purchasers of said bottles in. precisely the same shape as prepared in Tennessee, and said Poinsetta is still contained in the original package at the time it will be offered for sale in Mississippi by the purchaser thereof in the original package which was sent from Tennessee through Alabama into Mississippi.”

The plaintiff brings this writ of error assailing the validity of the statute, as construed by the state court, (1) as an unconstitutional interference with interstate commerce and. (2) as depriving the plaintiff of its liberty and property without due process of law.

First. We do not find that the decision of the state court involves a denial of any right incident to interstate commerce. .The contract, it is true, provided for purchases by the defendant from the plaintiff, the deliveries to be made at. Chattanooga, Tennessee, for transporta! on to the. defendant at Jackson, Mississippi/ So far as appears, however, there were no purchases and no deliveries. The

Nor is the contention of the plaintiff aided by the agreed statement of facts. This statement in one of its clauses says that there was to be “no retail sale” by the defendant. Whatever this may mean in the light of the words of the contract which contained no such limitation, it is clear that the defendant was not debarred from selling the bottles separately. On the contrary, the argument for the plaintiff is that “each bottle,” brought into-the State in cases as described, constitutes “an original package.” As to this, it is to be noted that by the terms of the contract the agreed prices on the purchases by the defendant from the plaintiff were per cask containing ten dozen bottles and per case containing six dozen bottles respectively. In short, the plain purpose was that the defendant was to buy in casks and cases, and in the light of the transactions thus contemplated, and, as they would

Second. Treating the matter then as one bf local sales, the question is whether the prohibitory law of the State as applied to a beverage of this sort is in conflict with the Fourteenth Amendment.

That the State in the exercise of its police power may prohibit the selling of intoxicating liquors is undoubted. Bartemeyer v. Iowa, 18 Wall. 129 ; Boston Beer Company v. Massachusetts, 97 U. S. 25 ; Mugler v. Kansas, 123 U. S. 623 ; Kidd v. Pearson, 128 U. S. 1 ; Crowley v. Christensen, 137 U. S. 86 . It is also well established that, when a State exerting its recognized authority undertakes to suppress what it is free to. regard as a public evil, it may adopt such measures having reasonable relation to that end as it may deem necessary in order to make its action effective. It does, not follow that because a transaction separately considered is innocuous it may not be included in a prohibition the scope of which is regarded as essential in the legislative judgment to accomplish a purpose within the admitted power of the Government. Booth v. Illinois, 184 U. S. 425 ; Otis v. Parker, 187 U. S. 606 ; Ah Sin v. Wittman, 198 U. S. 500 , 504; New York ex rel. Silz v. Hesterberg, 211 U. S. 31 ; Murphy v. California, 225 U. S. 623 . With the wisdom of the exercise of that judgment the court has no concern; and unless it clearly appears that

Thus in Booth v. Illinois, supra, the defendant was convicted under a statute of that State which made it a criminal offense to give an option to buy grain at a future time. It was contended that the statute as interpreted by the state court was “not directed against gambling contracts relating to the selling or buying of grain or other commodities, but against mere options to- sell or buy at a future time without any settlement between the parties upon the basis of differences, and therefore involving no element of gambling.” The argument was that it directly forbade the citizen “from pursuing a calling which, in itself, involves no element of immorality.” This court, in sustaining the judgment of conviction, said: “If, looking at all the circumstances that attend, or which may ordinarily attend, the pursuit of a particular calling, the State thinks that certain admitted evils can not be successfully reached unless that calling be actually prohibited, the courts cannot interfere, unless, looking through mere forms and at the substance of the matter, they can say that the statute enacted professedly to protect the public morals has no real or substantial relation to that object, but is a clear, unmistakable infringement of rights secured by the fundamental law.” It must be assumed, it was added, that, “the legislature was of opinion that an effectual mode to suppress gambling grain contracts was to declare illegal all options to sell dr buy at a future time,” and the court could not say that the means em-' ployed were not appropriate to the end which it was competent for the State to accomplish. (Id. pp. 429, 430.)

The same principle was applied in Otis v. Parker, supra,

A strong illustration of the extent of the power of the State is found in Silz v. Hesterberg, 211 U. S. 31 . The State of New York by its Forest, Fish and Game Law prohibited the. possession of certain, game during the close season. The statute covered game coming from without the State. It appeared that Silz was charged with the possession of plover and grouse which had been lawfully taken abroad during the open season and had been lawfully brought into the State; that these game birds were varieties different from those known as plover and grouse in the State of New York; that, although of the same families, in form, size, color and markings they could readily be distinguished from the.latter; and that they were wholesome and valuable articles of food. This court affirmed the conviction, saying (p. 40): “It is insisted that a. method of inspection can be established which will distinguish the imported game from that of the domestic variety, and prevent confusion in its handling and selling. That such game -can be distinguished from domestic game has been disclosed in the-record in this case, and it may be that such inspection laws would be all that would be required for the protection of domestic game. But, subject .to constitutional limitations, the legislature of the State is authorized to pass measures for the protection of the

It was competent for the legislature of Mississippi to recognize the difficulties besetting the' administration of laws aimed at the prevention of traffic in intoxicants. It prohibited, among other things, the sale of “malt liquors.” In thus dealing with a class of .beverages which in general are regarded as intoxicating, it was not bound to resort to a discrimination with respect to ingredients and processes of manufacture which, in the endeavor to eliminate innocuous beverages from the condemnation, would facilitate subterfuges and frauds and fetter the enforcement of the law. A contrary conclusion logically pressed would save the nominal power while preventing its effective exercise. The statute establishes its own category. The question in this court is whether the legislature had power to establish it. The existence of this power, as the authorities we have cited abundantly demonstrate, is not to be denied simply because some innocent articles or transactions may be found within the proscribed class. The inquiry must be whether, considering the end in view, the statute passes,the bounds of reason' and assumes the' character of a merely arbitrary' fiat.

That the opinion is extensively held that a general prohibition of the'sale of malt liquors, whether intoxicating or not., is a,necessary means to -the suppression'of trade in intoxicants, sufficiently appears from the legislation of other States , and the decision of the courts in its construction. State v. O’Connell, 99 Maine, 61; 58 Atl. Rep. 59 ; State v. Jenkins, 64 N. H. 375 ; State v. York, 74 N. H. 125 , 127; State ex rel. Guilbert v. Kauffman, 68 Oh.

The State, within the limits we have stated, must decide upon the measures that are needful for the protection of its people,, and, having regard-to the artifices which are used to promote the sale of intoxicants under the guise of innocent beverages, it would constitute an unwarrantable departure from accepted principle to hold that the prohibition of the sale of all malt liquors, including the beverage in question, was beyond its reserved power.

Judgment affirmed.