Walling v. Michigan, 116 U.S. 446 (1886)
U.S. Supreme CourtWalling v. Michigan, 116 U.S. 446 (1886)
Walling v. Michigan
Argued December 3, 1884
Decided January 18, 1886
116 U.S. 446
A tax imposed by a statute of a state upon an occupation, which necessarily discriminates against the introduction and sale of the products of another state or against the citizens of another state, is repugnant to the Constitution of the United States.
The police power of a state to regulate the sale of intoxicating liquors and preserve the public health and morals does not warrant the enactment of laws infringing positive provisions of the Constitution of the United States.
A state statute which imposes a tax upon persons who, not residing or having their principal place of business within the state, engage there in the business of selling or soliciting the sale of intoxicating liquors to be shipped into the state from places without it, but does not impose a similar tax upon persons selling or soliciting the sale of intoxicating liquors manufactured in the state, is a regulation in restraint of commerce repugnant to the Constitution of the United States, and the defect is not cured by a subsequent enactment imposing a greater tax upon all persons within the state engaged in the business of manufacturing or selling such liquors therein.
In 1875, the Legislature of the State of Michigan passed an act relating to the sale of liquors in that state to be shipped into the state by persons not residing therein, known as Act No. 226 of the Session Laws of 1875, of which the following is a copy:
"Ax Act to impose a tax on the business of selling spirituous and intoxicating, malt, brewed, and fermented liquors in the Michigan to be shipped from without this state."
"SECTION 1. The People of the State of Michigan enact: that every person who shall come into, or being in this state, shall engage in the business of selling spirituous and intoxicating, malt, brewed, or fermented liquors to citizens or residents of this state at wholesale, or of soliciting or taking orders from citizens or residents of this state for any such liquors, to be shipped into this state, or furnished, or supplied at wholesale to any person within this state, not having his, their, or its
principal place of business within this state, shall, on or before the fourth Friday of June in each year, pay a tax of three hundred dollars if engaged in selling or soliciting or taking orders for the sale of such spirituous and intoxicating liquors, and one hundred dollars for malt, brewed, or fermented liquors. Such tax shall be paid to the Auditor General, and be by him paid into the state treasury to the credit of the general fund."
"SEC. 2. Upon the payment of such tax, the Auditor General shall issue to such person a receipt therefor, and, in case of loss thereof, a duplicate, when required by the person to whom the original receipt was issued. Every person making such sales or soliciting or taking orders as in the first section of this act provided shall exhibit such receipt to every person to whom he makes sale or from whom he takes or solicits orders for such liquors, and shall exhibit such receipt to any supervisor, justice of the peace, sheriff, under sheriff, or deputy sheriff, city or village marshal, chief of police, policeman, or constable, when required so to do, during business hours."
"SEC. 3. Any person liable to pay any tax under this act who shall sell any liquors or solicit or take orders for liquors to be shipped from without this state to any person within this state furnished or supplied by a person, co-partnership, association, or corporation not resident in, or having his, their, or its principal place of business within this state without the tax herein provided for having been paid, and having in his possession and exhibiting the receipt therefor, or a duplicate thereof, and any person residing or being in this state who shall purchase liquors from a person liable to pay a tax under this act, who has not paid such tax or shall give an order for liquors to such person liable to pay a tax under this act, which order is to be filled, and such liquors are to be shipped from without this state to a person within this state, furnished or supplied by a person, co-partnership, association, or corporation, not resident in or having his, their, or its principal place of business within this state shall be deemed guilty of a misdemeanor, and on conviction thereof shall be punished by a fine of not less than twenty-five dollars nor more than one hundred dollars, and, in default of payment thereof, shall be imprisoned not less than
ten nor more than ninety days, or both such fine and imprisonment, in the discretion of the court."
"SEC. 4. Selling at wholesale shall be deemed to mean and include all sales of such spirituous and intoxicating, malt, brewed, or fermented liquors, in quantities of five gallons or over, or one dozen quart bottles or more, or soliciting orders therefor at anyone time of anyone person."
In addition to the foregoing act, there was another independent law in operation in Michigan in 1883, being an act passed May 31, 1879, entitled "An act to provide for the taxation of the business of manufacturing and selling spirituous and intoxicating, malt, brewed, or fermented liquors," and to repeal a previous act for the same purpose, passed in 1875. Sess.Laws 1879, p. 293. The act of 1879 was amended by an act passed May 19, 1881. Howell's Annotated Statutes § 1281. As amended, it reads as follows:
"§ 1281. Sec. 1. In all townships, cities, and villages of this state there shall be paid annually the following tax upon the business of manufacturing, selling, or keeping for sale, by all persons whose business, in whole or in part, consists in selling or keeping for sale or manufacturing distilled or malt liquors or mixed liquors as follows: upon the business of selling or offering for sale spirituous or intoxicating liquors, or mixed liquors, by retail, or any mixture or compound, excepting proprietary patent medicines which in whole or in part consists of spirituous or intoxicating liquors the sum of three hundred dollars per annum; upon the business of selling or offering for sale, by retail, any malt, brewed, or fermented liquors, two hundred dollars per annum; upon the business of selling brewed or malt liquors at wholesale, or at wholesale and retail, two hundred dollars per annum; upon the business of selling spirituous or intoxicating liquors at wholesale, or at wholesale and retail, five hundred dollars per annum; upon the business of manufacturing brewed or malt liquors for sale, if the quantity manufactured be less than fifteen hundred barrels, sixty-five dollars per annum, and twenty-five dollars upon each additional thousand barrels, or part thereof; upon the business of manufacturing for sale spirituous or intoxicating
liquors, five hundred dollars per annum. No person paying a tax on spirituous or intoxicating liquors under this act shall be liable to pay any tax on the sale of malt, brewed, or fermented liquors. No person paying a manufacturer's tax on brewed or malt liquors under this act shall be liable to pay a wholesale dealer's tax on the same."
Howell's Annotated Statutes of Mich. 378.
It is not contended that this act alters or affects the act of 1875, on which the prosecution against Walling is based, except so far as it may have the effect of removing the discrimination against the citizens or products of other states which would be produced by the act of 1875 standing alone. The counsel for the state contend that the effect of the act of 1881 is not only to annul any such discrimination, but to create a discrimination against the citizens and products of Michigan in favor of the citizens and products of other states. Whether this is so is a question to be discussed further on.
In June, 1883, Walling, the plaintiff in error, was prosecuted under the Act of 1875, No. 226, being charged in one count of the complaint with selling at wholesale without license, and in another count with soliciting and taking orders for the sale, without license, and at wholesale, of spirituous and intoxicating liquors, to be shipped from out of the state, to-wit, from Chicago, in the State of Illinois, into the State of Michigan, and furnished and supplied to citizens and residents of said state by Cavanaugh & Co., a firm doing business in Chicago, not residents of Michigan, and not having its principal place of business therein. The prosecution was instituted in the Police Court of Grand Rapids, and Walling was convicted and sentenced to pay a fine, and to be imprisoned in default of payment. He appealed to the county circuit court, in which the case was tried by a jury, who, under the charge of the court, rendered a verdict of guilty. Exceptions being taken, the case was carried to the Supreme Court of Michigan, which adjudged that there was no error in the proceedings and directed judgment to be entered against the respondent. The decision of the supreme court is brought here by writ of error, and is now before us for consideration.
By the bill of exceptions, it appears that one Chapin Pease was
called as a witness for the prosecution and was asked what business the respondent (Walling) was engaged in. The respondent objected to the giving of testimony under the complaint on the ground that the act of 1875 is repugnant to the Constitution of the United States, and therefore void; that it is in conflict with paragraph 3, Section 8, Article I, giving Congress power to regulate commerce, etc.; paragraph 2, Section 10, Article I, prohibiting ex post facto laws and laws impairing the obligation of contracts, and paragraph 1, Section 2, Article IV, which declares that "The citizens of each state shall be entitled to all the privileges and immunities of citizens in the several states." The defendant also objected to the admission of any testimony, because the law referred to is in conflict with the state constitution. All the objections were overruled, and exceptions were duly taken. The witness then testified that Walling, on June 1, 1883, and before and since that time, was engaged as a traveling salesman for the firm of Cavanaugh & Co., of Chicago, Illinois (shown to be wholesale liquor merchants residing in Chicago), and that his business was that of selling liquor at wholesale for that firm; that the place of business of Cavanaugh & Co. was in Chicago, and that the firm had no place of business in Michigan; that on the first of June, 1883, Walling solicited the witness' order for a barrel of whisky to be shipped to him by Cavanaugh & Co. from the City of Chicago, and from without the State of Michigan; that witness gave his order for a barrel of whisky, and the same was shipped to him by said firm from Chicago, and he paid for the same, and that Walling exhibited to witness no receipt from the Auditor General of Michigan to show that he had paid the tax required by the statute. It was also shown that Walling had never paid any such tax nor received any such receipt. The evidence being closed, the respondent, on the ground of the alleged conflict of the law with the Constitution of the United States, made various distinct applications to the court: first, to strike out the evidence, and grant him a discharge; secondly, to charge the jury that the statute of 1875 is in conflict with the Constitution of the United States, and therefore void, and therefore that their verdict should be "Not guilty;" thirdly, to
charge that, under the facts disclosed, the jury should find the respondent not guilty. These applications were severally refused, and exceptions taken. The court then charged the jury that the act in question must be regarded as within the power of the legislature and as being a valid statute, and that if they should find that the evidence sustained the allegations of the complaint, they must find the respondent guilty, to which charge the respondent excepted.