The general power of the states to control and regulate, within
their borders, the business of dealing in, or soliciting orders
for, the purchase of intoxicating liquors is beyond question.
The purpose of the Wilson Act, 26 Stat. 713, as a regulation of
interstate commerce was to allow the states to exert ampler power
as to intoxicating liquors when the subject of such commerce than
could have been exercised before the enactment of that statute,
which enabled the states to extend their authority as to such
liquor shipped from other states before it became commingled with
the mass of other property in the state by a sale in the original
package.
Since the enactment of the Wilson Law, which expressly provides
that intoxicating liquors coming into a state should be as
completely under control of the state as though manufactured
therein, the owner of intoxicating liquor in one state cannot,
under the commerce clause of the Constitution, go himself or send
his agent into another state and, in defiance of its laws, carry on
the business of soliciting proposals for the purchase of such
liquors.
Although a state may not forbid a resident therein from ordering
for his own use intoxicating liquor from another state, it may
forbid the carrying on within its borders of the business of
soliciting orders for such liquor although such orders may only
contemplate a contract resulting from final acceptance in another
state.
Vance v. W. A. Vandercook Co., 170 U.
S. 438, distinguished.
The law of South Dakota imposing an annual license charge on
traveling salesmen selling, offering for sale, or soliciting orders
for intoxicating liquors in quantities of less than five gallons is
not unconstitutional because repugnant to the commerce clause of
the Constitution of the United States.
The highest court of South Dakota having held that the act
imposing a license on traveling salesmen soliciting orders for
intoxicating liquors is a police regulation, and not a taxing act,
it is within the purview of, and not in conflict with, the Wilson
Act.
Pabst Brewing Co. v. Crenshaw, 198 U. S.
17, followed.
104 N.W 539 affirmed.
The facts are stated in the opinion.
Page 205 U. S. 96
MR. JUSTICE WHITE delivered the opinion of the Court.
A firm established in St. Paul, Minnesota, which was engaged in
dealing in intoxicating liquors, employed Delamater, the plaintiff
in error, as a traveling salesman. As such salesman, Delamater, in
the State of South Dakota, carried on the business of soliciting
orders from residents of that state for the purchase, from the firm
in St. Paul, of intoxicating liquors in quantities of less than
five gallons. The course of dealing was this: the orders were
procured in the form of proposals to buy, and when accepted by the
firm, the liquor was shipped from St. Paul to the persons in South
Dakota who made the proposals at their risk and cost, on sixty
days' credit. At the time Delamater engaged in South Dakota in the
business just stated, the law of that state imposed an annual
license charge upon "the business of selling or offering for sale"
intoxicating liquors within the state, "by any traveling salesman
who solicits orders by the jug or bottle in lots less than five
gallons." A violation of the statute was made a misdemeanor
punishable by fine or imprisonment, or both, in the discretion of
the court. Delamater, not having paid the license charge, was
prosecuted under the statute. At the trial, although the
uncontradicted proof established the carrying on of business within
the state, as above mentioned, Delamater requested a binding
instruction to the jury in his favor on the ground that the statute
did not apply,
Page 205 U. S. 97
and if it did, that it was void because repugnant to the
commerce clause of the Constitution of the United States. Exception
was taken to the refusal to give the instruction. The federal
ground was reiterated in motions to arrest and for a new trial, and
the supreme court of the state, to which the cause was taken, in
affirming the judgment of conviction, expressly considered and
disposed of such federal ground. 104 N.W. 537.
All the assignments of error involve the proposition that the
state statute, as construed and applied by the court below, is
repugnant to the commerce clause of the Constitution. It is
manifest, as the subject dealt with is intoxicating liquors, that
the decision of the cause does not require us to determine whether
the restraints which the statute imposes would be a direct burden
on interstate commerce if generally applied to subjects of such
commerce, but only to decide whether such restraints are a direct
burden on interstate commerce in intoxicating liquors as regulated
by Congress in the act commonly known as the Wilson Act. 26 Stat.
313, c. 728. For this reason, we at once put out of view decisions
of this Court which are referred to in argument and which are noted
in the margin [
Footnote 1]
because they concerned only the power of a state to deal with
articles of interstate commerce other than intoxicating liquors, or
which, if concerning intoxicating liquors, related to controversies
originating before the enactment of the Wilson Law.
The general power of the states to control and regulate the
business of dealing in or soliciting proposals within their borders
for the purchase of intoxicating liquors is beyond question. With
the existence of this general power we are
Page 205 U. S. 98
not therefore concerned. We are hence called upon only to
consider whether the general power of the state to control and
regulate the liquor traffic and the business of dealing or
soliciting proposals for the dealing in the same within the state
was inoperative as to the particular dealings here in question,
because they were interstate commerce, and therefore could not be
subjected to the sway of the state statute without causing that
statute to be repugnant to the commerce clause of the Constitution
of the United States.
It is well at once to give the text of the Wilson Act, which is
as follows (26 Stat. 313, c. 728):
"That all fermented, distilled, or other intoxicating liquors or
liquids transported into any state or territory or remaining
therein for use, consumption, sale, or storage therein, shall, upon
arrival in such state or territory, be subject to the operation and
effect of the laws of such state or territory enacted in the
exercise of its police powers, to the same extent and in the same
manner as though such liquids or liquors had been produced in such
state or territory, and shall not be exempt therefrom by reason of
being introduced therein in original packages or otherwise."
It is settled by a line of decisions of this Court, noted in the
margin, [
Footnote 2] that the
purpose of the Wilson Act, as a regulation by Congress of
interstate commerce, was to allow the states, as to intoxicating
liquors, when the subject of such commerce, to exert ampler power
than could have been exercised before the enactment of the statute.
In other words, that Congress, sedulous to prevent its exclusive
right to regulate commerce from interfering with the power of the
states over intoxicating liquor, by the Wilson Act adopted a
special rule enabling the states to extend their authority as to
such liquor shipped
Page 205 U. S. 99
from other states before it became commingled with the mass of
other property in the state by a sale in the original package.
The proposition relied upon, therefore, when considered in the
light of the Wilson Act, reduces itself to this: albeit the State
of South Dakota had power within its territory to prevent the sale
of intoxicating liquors, even when shipped into that state from
other states, yet South Dakota was wanting in authority to prevent
or regulate the carrying on within its borders of the business of
soliciting proposals for the purchase of liquors, because the
proposals were to be consummated outside of the state, and the
liquors to which they related were also outside the state. This,
however, but comes to this -- that the power existed to prevent
sales of liquor, even when brought in from without the state, and
yet there was no authority to prevent or regulate the carrying on
of the accessory business of soliciting orders within the state.
Aside, however, from the anomalous situation to which the
proposition thus conduces, we think to maintain it would be
repugnant to the plain spirit of the Wilson Act. That act, as we
have seen, manifested the conviction of Congress that control by
the states over the traffic of dealing in liquor within their
borders was of such importance that it was wise to adopt a special
regulation of interstate commerce on the subject. When, then, for
the carrying out of this purpose, the regulation expressly provided
that intoxicating liquors coming into a state should be as
completely under the control of a state as if the liquor had been
manufactured therein, it would be, we think, a disregard of the
purposes of Congress to hold that the owner of intoxicating liquors
in one state can, by virtue of the commerce clause, go himself or
send his agent into such other state, there, in defiance of the law
of the state, to carry on the business of soliciting proposals for
the purchase of intoxicating liquors.
Passing from these general considerations, let us briefly more
particularly notice some of the arguments relied upon.
As we have stated, decisions of this Court interpreting the
Page 205 U. S. 100
Wilson Act have held that that law did not authorize state power
to attach to liquor shipped from one state into another before its
arrival and delivery within the state to which destined. From this
it is insisted, as none of the liquor covered by the proposals in
this case had arrived and been delivered within South Dakota, the
power of the state did not attach to the carrying on of the
business of soliciting proposals, for, until the liquor arrived in
the state, there was nothing on which the state authority could
operate. But this is simply to misapprehend and misapply the cases
and to misconceive the nature of the act done in the carrying on
the business of soliciting proposals. The rulings in the previous
cases to the effect that, under the Wilson Act, state authority did
not extend over liquor shipped from one state into another until
arrival and delivery to the consignee at the point of destination
were but a recognition of the fact that Congress did not intend, in
adopting the Wilson Act, even if it lawfully could have done so, to
authorize one state to exert its authority in another state by
preventing the delivery of liquor embraced by transactions made in
such other state. The proposition here relied on is widely
different, since it is that, despite the Wilson Act, the State of
South Dakota was without power to regulate or control the business
carried on in South Dakota of soliciting proposals for the purchase
of liquors, because the proposals related to liquor situated in
another state. But the business of soliciting proposals in South
Dakota was one which that state had a right to regulate, wholly
irrespective of when or where it was contemplated the proposals
would be accepted or whence the liquor which they embraced was to
be shipped. Of course, if the owner of the liquor in another state
had a right to ship the same into South Dakota as an article of
interstate commerce, and, as such, there sell the same in the
original packages, irrespective of the laws of South Dakota, it
would follow that the right to carry on the business of soliciting
in South Dakota was an incident to the right to ship and sell,
which could not be burdened
Page 205 U. S. 101
without directly affecting interstate commerce. But, as by the
Wilson Act the power of South Dakota attached to intoxicating
liquors, when shipped into that state from another state, after
delivery, but before the sale in the original package, so as to
authorize South Dakota to regulate or forbid such sale, it follows
that the regulation by South Dakota of the business carried on
within its borders of soliciting proposals to purchase intoxicating
liquors, even though such liquors were situated in other states,
cannot be held to be repugnant to the commerce clause of the
Constitution because directly or indirectly burdening the right to
sell in South Dakota -- a right which, by virtue of the Wilson Act,
did not exist.
2. Nor is there merit in the arguments based on the ruling in
Vance v. W. A. Vandercook, 170 U.
S. 438. The controversies in that case and the matters
therein decided were recapitulated in
Pabst Brewing Co. v.
Crenshaw, 198 U. S. 17, as
follows (p.
198 U. S.
25):
"In
Vance v. W. A. Vandercook Co., 170 U. S.
438, the operation of a liquor law of South Carolina was
considered. By the act in question, the State of South Carolina
took exclusive charge of the sale of liquor within the state,
appointed its agents to sell the same, and empowered them to
purchase the liquor which was to be brought into the state for
sale. The fact was that, by the act in question, the State of South
Carolina, instead of forbidding the traffic in liquor, authorized
it, and engaged in the liquor business for its own account, using
it as a source of revenue. The act in addition affixed prerequisite
conditions to the shipment into South Carolina from other states of
liquor to a consumer who had purchased it for his own use, and not
for sale. Considering the Wilson Act and the previous decisions
applying it, . . . insofar as it took charge in behalf of the state
of the sale of liquor within the state, and made such sale a source
of revenue, was not an interference with interstate commerce.
Insofar, however, as the state law imposed burdens on the right to
ship liquor from another state to a resident of South Carolina,
intended for his own use and not for sale within the state, the law
was held to be repugnant to the Constitution because the Wilson
Act, whilst it delegated to the state plenary power to regulate the
sale of liquors in South Carolina shipped into the state from other
states, did not recognize the right of a state to prevent an
individual from ordering liquors from outside of the State of his
residence for his own consumption, and not for sale."
It having been thus settled that, under the Wilson Act, a
resident of one state had the right to contract for liquors in
another state and receive the liquors in the State of his
residence
Page 205 U. S. 102
for his own use, therefore, it is insisted, the agent or
traveling salesman of a nonresident dealer in intoxicating liquors
had the right to go into South Dakota and there carry on the
business of soliciting from residents of that state orders for
liquor, to be consummated by acceptance of the proposals by the
nonresident dealer. The premise is sound, but the error lies in the
deduction, since it ignores the broad distinction between the want
of power of a state to prevent a resident from ordering from
another state liquor for his own use, and the plenary authority of
a state to forbid the carrying on within its borders of the
business of soliciting orders for intoxicating liquors situated in
another state, even although such orders may only contemplate a
contract to result from final acceptance in the state where the
liquor is situated. The distinction between the two is not only
obvious, but has been foreclosed by a previous decision of this
Court. That a state may regulate and forbid the making within its
borders of insurance contracts with its citizens by foreign
insurance companies or their agents is certain.
Hooper v.
California, 155 U. S. 648. But
that this power to prohibit does not extend to preventing a citizen
of one state from making a contract of insurance in another state
is also settled.
Allgeyer v. Louisiana, 165 U.
S. 578. In
Nutting v. Massachusetts,
183 U. S. 553, the
Court was called upon to consider these two subjects -- that is,
the power of the state, on the one
Page 205 U. S. 103
hand, to forbid the making within the state of contracts of
insurance with unauthorized insurance companies, and the right of
the individual, on his own behalf, to make a contract with such
insurance companies in another state as to property situate within
the state of residence. The case was brought to this Court to
review a conviction of Nutting, a citizen of Massachusetts, for
having negotiated insurance with a company not authorized to do
business in Massachusetts, contrary to the statutes of that state.
Briefly, the facts were that Nutting, an insurance broker,
solicited in Massachusetts a contract of insurance on property
belonging to McKie situated in that state. The proposal was
accepted outside of the State of Massachusetts and the policy also
issued outside of that state. The contention of the plaintiff in
error was that, as the contract was consummated outside of
Massachusetts, the conviction was repugnant to the Fourteenth
Amendment, because the acts done did not fall within the general
principle announced in
Hooper v. California, supra, but
were within the ruling in
Allgeyer v. Louisiana. The
conviction was affirmed, not because the contract was consummated
in Massachusetts, but upon the ground that the right of an
individual to obtain insurance for himself outside of the State of
his residence did not sanction the conduct of Nutting, as an
insurance broker, in carrying on the business in Massachusetts of
soliciting unauthorized insurance. After reviewing the
Hooper and
Allgeyer decisions and pointing out
that there was no conflict between the two cases, the Court said
(p.
183 U. S.
558):
"As was well said by the Supreme Judicial Court of
Massachusetts: 'While the legislature cannot impair the freedom of
McKie to elect with whom he will contract, it can prevent the
foreign insurers from sheltering themselves under his freedom in
order to solicit contracts which otherwise he would not have
thought of making. It may prohibit not only agents of the insurers,
but also brokers, from soliciting or intermeddling in such
insurance, and for the same reasons.' 175 Mass. 156. "
Page 205 U. S. 104
The ruling thus made is particularly pertinent to the subject of
intoxicating liquors and the power of the state in respect thereto.
As we have seen, the right of the states to prohibit the sale of
liquor within their respective jurisdictions in and by virtue of
the regulation of commerce embodied in the Wilson Act is absolutely
applicable to liquor shipped from one state into another, after
delivery, and before the sale in the original package. It follows
that the authority of the states, so far as the sale of
intoxicating liquors within their borders is concerned, is just as
complete as is their right to regulate within their jurisdiction
the making of contracts of insurance. It hence must be that the
authority of the states to forbid agents of nonresident liquor
dealers from coming within their borders to solicit contracts for
the purchase of intoxicating liquors which otherwise the citizen of
the state "would not have thought of making" must be as complete
and efficacious as is such authority in relation to contracts of
insurance, especially in view of the conceptions of public order
and social wellbeing which it may be assumed lie at the foundation
of regulations concerning the traffic in liquor.
3. The contention that the law of South Dakota was a taxing law,
and not a police regulation, and therefore not within the purview
of the Wilson Act, is in conflict with the purpose of that law as
interpreted by the Supreme Court of South Dakota.
State ex Rel.
Griggsby v. Buechler, 10 S.D. 156. Besides, the contention is
foreclosed by the ruling of this Court in
Pabst Brewing Co. v.
Crenshaw, supra.
Affirmed.
THE CHIEF JUSTICE dissents.
[
Footnote 1]
Robbins v. Shelby Taxing District, 120 U.
S. 489;
Corson v. Maryland, 120 U.
S. 502;
Asher v. Texas, 128 U.
S. 129;
Stoutenburgh v. Hennick, 129 U.
S. 141;
Leisy v. Hardin, 135 U.
S. 100;
Lyng v. Michigan, 135 U.
S. 161;
Crutcher v. Kentucky, 141 U. S.
47;
Brennan v. Titusville, 153 U.
S. 289;
Caldwell v. North Carolina,
187 U. S. 622;
Norfolk & W. R. Co. v. Sims, 191 U.
S. 441;
Rearick v. Pennsylvania, 203 U.
S. 507.
[
Footnote 2]
In re Rahrer, 140 U. S. 545;
Rhodes v. Iowa, 170 U. S. 412;
Vance v. W. A. Vandercook Co., 170 U.
S. 438;
American Express Co. v. Iowa,
196 U. S. 133;
Adams Express Co. v. Iowa, 196 U.
S. 147;
Pabst Brewing Co. v. Crenshaw,
198 U. S. 17;
Foppiano v. Speed, 199 U. S. 501;
Heyman v. Southern Ry. Co., 203 U.
S. 270.