The statute of Ohio, known as the Dow Law, 83 Ohio Laws, 157,
which levies a tax upon the business of trafficking in spirituous,
vinous, malt or any intoxicating liquors, carried on within the
state, is not in conflict with the provisions of the Constitution
of the United States when applied to a corporation of West
Virginia, having its principal place of business in Wheeling in
that state and manufacturing there beer which it sends in barrels,
or wooden cases containing several bottles each, to Ohio for
sale
Page 179 U. S. 446
or for storing in the original barrels, cases or bottles, to be
sent out as stored to the State of Ohio for disposition and
sale.
The Dow Law is within the scope of the police power of the
state, and does not discriminate between foreign and domestic
dealers.
On January 13, 1898, the Reymann Brewing Company, a corporation
of the State of West Virginia with its principal office in the City
of Wheeling, filed a bill of complaint in the Circuit Court of the
United States for the Southern District of the State of Ohio,
against Harry Brister, Treasurer of the County of Jefferson, State
of Ohio, seeking to restrain and enjoin the said Brister from
retaining the possession of certain personal property belonging to
the brewing company which he had seized in enforcement of certain
laws of the State of Ohio which provide for the collection of a tax
known as the "Dow Tax."
The cause was submitted upon the bill, a general demurrer
thereto, and a statement of facts agreed upon by the parties. The
statement of facts was as follows:
"The Reymann Brewing Company, the complainant, is a corporation
resident in and a citizen of the State of West Virginia, and owns
and operates a brewery at Wheeling, West Virginia, where it
manufactures a beverage of malt and intoxicating liquor commonly
known as 'beer.' It packs said beer in wooden barrels of various
sizes and also in glass bottles, which bottles are packed in wooden
boxes called 'cases,' twenty-four quart bottles or thirty-six pint
bottles being packed in each case."
"These barrels and cases are packed at the brewery of the
Reymann Brewing Company at Wheeling, in the State of West Virginia,
there delivered to the common carrier, the railroad company, and
shipped to Steubenville, in the County of Jefferson, in the State
of Ohio, where they are received by Bert Meyers, who is employed by
the Reymann Brewing Company in the capacity of soliciting agent,
salesman, and driver, and who calls on retail dealers in
intoxicating liquors at their places of business in and about said
City of Steubenville, and as such agent then and there solicits
orders for and sells any number of the above-described packages
desired. He then loads on the wagon owned by the Reymann Brewing
Company the barrels or cases
Page 179 U. S. 447
above described, and delivers them to the purchasers in the
original and unbroken packages in the same shape and condition as
delivered to the common carrier at the brewery at Wheeling. Said
agent also makes sales of said packages at, and delivers the same
from, the place where stored at Steubenville. In no instance are
any of the barrels or cases opened until after sold and delivered
to the purchaser, and no change is made in any of the packages from
the time they are packed at the brewery at Wheeling until delivered
to the persons purchasing the same."
"Packages received by the said Bert Meyers at the railway
station at Steubenville for which he has not received orders or
which he has not already sold are stored in a room on the ground
floor of a cold storage house in said City of Steubenville, for
which the Reymann Brewing Company pays a regular monthly rental,
and of which room the said brewing company has the exclusive use
and possession. The packages not delivered directly from the
railway station to purchasers are delivered from the said storage
house or room upon orders solicited, as aforesaid, and upon sales
then and there at said storage room made. The price of the beer
thus delivered is collected in some instances from time to time by
a collector from the brewery at Wheeling, who calls on the
purchasers and collects, and in other instances such collections
are made by said agent, Bert Meyers at the time of sale and
delivery at said storage room."
"During the period for which the assessments hereinafter
mentioned were made, the said Reymann Brewing Company carried on
its beer business in said City of Steubenville in the same manner
as herein described."
"The horses, harness, and wagon described in the bill on which
the defendant, Harry Brister, has levied, and which he has taken
into his possession, are used by the Reymann Brewing Company solely
in the matter of delivering to purchasers the packages above
described."
"Two barrels and cases of beer described in the bill were packed
at the brewery at Wheeling and shipped in the manner above
described to Steubenville, Ohio, placed in the storeroom above
mentioned, and were to be there sold and delivered in the manner
above described, when they were levied on and
Page 179 U. S. 448
taken possession of by the defendant, Harry Brister. The
defendant, Harry Brister, is Treasurer of Jefferson County, in the
State of Ohio, and as such treasurer did so levy upon and take into
his possession and has advertised for sale the following personal
property of the Reymann Brewing Company:"
"Two horses (bay geldings), two horse covers, one set of double
harness, one beer wagon, thirty-seven of said original and unbroken
cases of beer containing quarts, four of said original and unbroken
cases of beer containing pints, sixty-five original and unbroken
barrels of beer, one-eighth size, one hundred and fourteen original
and unbroken wooden barrels of beer of one-quarter size,
twenty-nine original and unbroken wooden barrels of beer of
one-half size-all of which he has done as said Treasurer of
Jefferson County, Ohio, for the purpose of collecting from the said
Reymann Brewing Company certain taxes or assessments and penalties,
amounting to $873.60, and charged against said company on the tax
duplicate in the office of said treasurer under and by virtue of a
law of the State of Ohio entitled 'An Act Providing against the
Evils Resulting from the Traffic in Intoxicating Liquors,' passed
May 14, 1886 (
see 83 Ohio Laws, p. 157), as amended by
acts March 21, 1887 (
see 84 Ohio Laws, p. 224), March 26,
1888 (
see 84 Ohio Laws, p. 117), and February 20, 1896
(
see 92 Ohio Laws, p. 34), known as the 'Dow Law;' which
said levy and seizure were duly made, and which amount ($873.60)
the said Reymann Brewing Company lawfully owes, if, under the
circumstances in this statement set forth and the law herein
referred to, said company or its business in said City of
Steubenville, as herein described, should and may lawfully be
assessed, as aforesaid."
"The defendant will, unless restrained by the court, insist on
collecting future assessments of the complainant under said Dow Law
in the manner prescribed by said law -- that is to say by further
seizures."
"It is agreed by both parties to the above-styled cause that the
foregoing statement is a true statement of the facts, and that the
said cause may be submitted to the court on said statement of facts
agreed."
The Ohio statute referred to in the agreed statement of
facts,
Page 179 U. S. 449
known as the "Dow Law," and entitled "An Act Providing against
the Evils Resulting from the Traffic in Intoxicating Liquors,"
provides:
"SEC. 1. That upon the business of trafficking in spirituous,
vinous, malt, or any intoxicating liquors, there shall be assessed,
yearly, and shall be paid into the county treasury, as hereinafter
provided, by every person, corporation, or copartnership engaged
therein, and for each place where such business is carried on by or
for such person, corporation, or copartnership, the sum of three
hundred and fifty dollars."
"SEC. 2. That said assessment, together with any increase
thereof, as penalty thereon, shall attach and operate as a lien
upon the real property on and in which such business is conducted,
as of the fourth Monday of May each year, and shall be paid at the
times provided for by law for the payment of taxes on real or
personal property within the state, to-wit, one-half on or before
the twentieth day of June, and one-half on or before the twentieth
day of December, of each year."
"SEC. 4. That if any person, corporation, or copartnership shall
refuse or neglect to pay the amount due from them under the
provisions of this act within the time therein specified, the
county treasurer shall thereupon forthwith make said amount due
with all penalties thereon, and four percent collection fees and
costs, by distress and sale, as on execution, of any goods and
chattels of such person, corporation, or copartnership; he shall
call at once at the place of business of each person, corporation,
or copartnership, and in case of the refusal to pay the amount due,
he shall levy on the goods and chattels of such person,
corporation, or copartnership, wherever found in said county, or on
the bar, fixtures, or furniture, liquors, leasehold and other goods
and chattels used in carrying on such business, which levy shall
take precedence of any and all liens, mortgages, conveyances, or
encumbrances hereafter taken or had on such goods and chattels, so
used in carrying on such business; nor shall any claim of property
by any third person to such goods and chattels, so used in carrying
on such business, avail against such levy so made by the treasurer,
and no property, of any kind, of any person, corporation, or
copartnership
Page 179 U. S. 450
liable to pay the amount, penalty, interest, and cost due under
the provisions of this act, shall be exempt from said levy. The
treasurer shall give notice of the time and sale of the personal
property to be sole under this act, the same as in cases of the
sale of personal property on execution, and all provisions of law
applicable to sales of personal estate on execution shall be
applicable to sales under this act except as herein otherwise
provided, and all moneys collected by him under this act shall be
paid, after deducting his fees and costs, into the county treasury.
In the event of the treasurer, under the levy provided for under
this act, being unable to make the amount due thereunder, or any
part thereof, the county auditor shall place the amount due and
unpaid on the tax duplicate against the real estate in which said
traffic is carried on, and the same shall be collected as other
taxes and assessments on said premises."
"SEC. 8. The phrase 'trafficking in intoxicating liquors,' as
used in this act, means the buying or procuring and selling of
intoxicating liquors otherwise than upon prescription issued in
good faith by reputable physicians in active practice, or for
exclusively known mechanical, pharmaceutical, or sacramental
purposes, but such phrase does not include the manufacture of
intoxicating liquors from the raw material, and the sale thereof at
the manufactory, by the manufacturer of the same in quantities of
one gallon or more at any one time."
Subsequently the defendant, with leave of court, withdrew the
demurrer, and, the cause coming on to be heard, was, after
agreement, submitted to the court upon the bill and the agreed
statement of facts. On February 25, 1899, a final judgment was
entered dismissing the bill at the cost of the complainant.
Thereupon an appeal was allowed to this Court.
MR. JUSTICE SHIRAS delivered the opinion of the Court.
Page 179 U. S. 451
By the first section of the statute of the State of Ohio known
as the "Dow Law," it is provided
"that upon the business of trafficking in spirituous, vinous,
malt, or any intoxicating liquors there shall be assessed yearly,
and shall be paid into the county treasury, as hereinafter
provided, by every person, corporation, or copartnership engaged
therein, and for each place where such business is carried on by or
for such person, corporation, or copartnership, the sum of three
hundred and fifty dollars."
Ohio Laws, vol. 92, p. 34.
The Reymann Brewing Company, a corporation of the State of West
Virginia whose property has been seized to enforce payment of such
as assessment, alleges that, as respects such foreign corporation,
the statute is void because it discriminates in favor of
manufacturers and brewers of beer who have their plaints located
within the State of Ohio as against those who have their plants
located in other states, and because it constitutes, in its
practical operation a regulation of commerce between the
states.
So far as the terms of the statute are concerned, they do not
disclose any intention to discriminate between foreign and domestic
dealers in intoxicating liquors, as the tax in question is to be
assessed upon every person, corporation, or copartnership engaged
in the business of trafficking in such liquors. But it is contended
that the effect of the legislation necessarily results in such a
discrimination because of the provisions of the eighth section of
the statute, which is in the following words:
"The phrase 'trafficking in intoxicating liquors,' as used in
this act, means the buying or procuring and selling of intoxicating
liquors otherwise than upon prescription issued in good faith by
reputable physicians in active practice, or for exclusively known
mechanical, pharmaceutical, or sacramental purposes, but such
phrase does not include the manufacture of intoxicating liquors
from the raw material, and the sale thereof at the manufactory, by
the manufacturer of the same in quantities of one gallon or more at
any one time."
The effect of this is claimed to be that the domestic
manufacturer may sell liquor in quantities of one gallon or more at
the place of manufacture without being subjected to the tax,
Page 179 U. S. 452
and that thus he has an advantage over the foreign manufacturer,
who can only sell, in Ohio at some other place than the place of
manufacture, and is thereby subjected to the tax. In other words,
while the domestic manufacturer must pay the tax if he sells at
other places than the place of manufacture, yet, as he is declared
not to be within the act in selling at the place of manufacture in
quantities not less than one gallon at any one time, such a
provision operates as an illegal discrimination against the foreign
competitor, who must necessarily sell at places other than the
place of manufacture.
Under this provision, the manufacturers, whether within or
without the state, may sell at the manufactory and ship to any part
of the State of Ohio, and the incidental disadvantage that the
foreign manufacturer is under that if, instead of selling at the
place of his plant, he wishes to establish a place within the State
of Ohio, he is obliged to pay the tax does not appear to arise out
of any intention on the part of the state legislature to make a
hostile discrimination against foreign manufacturers. If an Ohio
corporation or copartnership should establish its place of
manufacture in another state, it would be subjected to the tax if
it sold intoxicating liquor at a place within the State of Ohio,
and if a foreign corporation should manufacture at a place within
Ohio, it would sell its product, in quantities not less than one
gallon, without being subjected to the tax.
A similar contention was disposed of by this Court in
New
York v. Roberts, 171 U. S. 658. In
that case, a corporation of the State of Michigan, and having its
factory within that state, had a warehouse and store for the sale
of its products in the City of New York. A statute of the State of
New York enacted that
"every corporation, joint-stock company, or association
whatever, now or hereafter incorporated, organized, or formed
under, by, or pursuant to law in this state, or in any other state
or country and doing business in this state, except . . .
manufacturing or mining corporations or companies wholly engaged in
carrying on manufacture or mining ores within this state, . . .
shall be liable to and shall pay a tax as a tax upon its franchise
or business into the state treasury annually,"
and that
"the amount of capital stock which shall be the basis for
Page 179 U. S. 453
tax . . . in the case of every corporation, joint-stock company,
and association, liable to taxation thereunder shall be the amount
of capital stock employed within this state."
It was claimed that the Michigan corporation, having come within
the jurisdiction of New York by compliance with all the provisions
of law imposing conditions for transacting business within the
state, was denied the equal protection of the law when subjected to
a tax from which were exempted other corporations, foreign and
domestic, which wholly manufactured the same class of goods within
the state, and that such a tax was an unjust discrimination against
the corporation, whose place of manufacture was in the State of
Michigan. But this Court held otherwise, saying:
"If the object of the law in question was to impose a tax upon
products of other states while exempting similar domestic goods
from taxation, there might be room to contend that such a
distinction was constitutionally objectionable as tending to affect
or regulate commerce between the states. But we think that
obviously such is not the purpose of this legislation. . . . It
will be perceived that the tax is prescribed as well for New York
corporations as for those of other states. It is true that
manufacturing or mining corporations wholly engaged in carrying on
manufacture or mining ores within the State of New York are
exempted from this tax, but such exemption is not restricted to New
York corporations, but includes corporations of other states as
well when wholly engaged in manufacturing within the state."
So in the present case the exemption is not confined to Ohio
corporations or copartnerships, but extends as well to foreign
corporations whose place of manufacturing is within the State of
Ohio, and so likewise the tax is imposed on Ohio corporations which
manufacture goods in other states and establish places for their
sales within the State of Ohio, or which, manufacturing within the
state, establish places within the state distinct from the
manufactory, where their liquors are sold and delivered.
In exempting sales in quantities exceeding one gallon at the
place of manufacture, and in imposing the tax upon such sales
Page 179 U. S. 454
when made at places elsewhere, the Legislature of Ohio was, in
the exercise of its police power, aiming to restrict the evils of
saloons, or places where liquors are drunk. By imposing the tax
upon the latter, the law to some extent is calculated to lessen an
acknowledged source of vice and disorder.
The Supreme Court of the State of Ohio, in construing the
statute in question, has clearly pointed out the reasons that
actuated the legislature in distinguishing between places where the
liquors are manufactured and those where liquors are sold to be
drunk on the premises. Thus, in the case of
Adler v.
Whitbeck, 44 Ohio St. 574, that court said:
"It was for the legislature to determine the form of the traffic
that required to be regulated as a source of evil. It has in a
measure drawn a line between a distillery and a brewery on the one
hand and a saloon on the other. There is nothing unreal in the
distinction. It is known by all men, and in one respect probably
too well by many men. And unless absolute prohibition is resorted
to, no more practical distinction could be made."
It remains to consider whether the court below erred in finding,
under the facts agreed upon, that the Reymann Brewing Company has
established a place in the City of Steubenville, in the State of
Ohio, where its beer was sold and delivered, and thus has become
liable to the tax prescribed by the law.
It is sufficient to say that it is distinctly admitted that the
brewing company not only ships its beer in barrels and cases, in
filling orders received, and delivers it directly to the purchasers
(which sales and deliveries are not by the statute subjected to any
tax), but also maintains a storehouse in Steubenville where it
sells and delivers beer and collects payment. Such transactions
constitute the brewing company a trafficker in intoxicating liquor
having a place other than the place of manufacture where the
traffic is carried on within the meaning of the law. And of course
it is obvious that such liquors, sold and delivered within the
State of Ohio, are within the provisions of the statute of the
United States known as the Wilson Law, which provides that
intoxicating liquors transported into any state for sale or storage
therein shall be subject to the operation and effect of the laws of
such
Page 179 U. S. 455
state, enacted in the exercise of its police powers, to the same
extent and in the same manner as though such liquor had been
produced in such state, and shall not be exempt therefrom by reason
of being introduced therein in original packages or otherwise. 26
Stat. 313, c. 728.
As this statute subjects intoxicating liquors imported into a
state to the operation and effect of the laws of such state only
when enacted in the exercise of its police powers, it is contended
that such is not the character of the Dow Law; that, as it contains
no prohibition upon the manufacture or sale of intoxicating
liquors, and only purports to regulate the trafficking therein, it
is not a police measure.
As we have heretofore stated, the Supreme Court of Ohio has
construed the law to aim at controlling and regulating sales in
quantities less than one gallon in saloons or at places other than
the place of manufacture, and to be therefore within the scope of
the police power. We think that this view of the meaning and intent
of the statute is consistent with its language, and, even if not
bound by the construction put upon the statute by the state court
when applying the provisions of the Wilson law, we do not hesitate
to adopt it.
A similar contention was disposed of by this Court in the case
of
Vance v. Vandercook Co., 170
U. S. 447, and where it was said
"From the fact that the state law permits the sale of liquor,
subject to particular restrictions and only upon enumerated
conditions, it does not follow that the law is not a manifestation
of the police power of the state. The plain purpose of the act of
Congress having been to allow state regulations to operate upon the
sale of original packages of intoxicants coming from other states,
it would destroy its obvious meaning to construe it as permitting
the state laws to attach to and control the sale only in case the
states absolutely forbade sales of liquor, and not to apply in case
the states determined to restrict or regulate the same."
These views prevailed in the court below, where it was held that
manufacturers of intoxicating liquors within and without the state
may sell at the manufactory and ship to any part
Page 179 U. S. 456
of the State of Ohio, and may solicit orders for their goods in
any part of the state to be shipped from the manufactory, but that,
if they establish places within the state, distinct from the
manufactory, where their goods are to be stored for the purposes of
sale and delivery, and such goods are there sold and delivered,
then they become traffickers within the meaning of the law, and are
liable to pay the tax. 92 F. 28.
Accordingly, the decree of the circuit court dismissing the bill
of complaint is
Affirmed.
MR. JUSTICE HARLAN concurs in the result.
