This Court has jurisdiction of an appeal from the Circuit Court
of Appeals in this case, as the jurisdiction of the circuit court
did not depend only on diversity of citizenship, but the
constitutionality of a state law and the construction of a federal
statute were also involved.
Where relief in equity may be admissible under any circumstances
at all, the objection of adequate remedy at law comes too late when
made for the first time in this Court.
Where a common carrier threatens to abjure its functions and
duties as such in regard to a commodity, equity can grant relief to
a dealer in such commodity whose business would be ruined by such
continual action by the common carrier.
Beer and other intoxicating liquors are a recognized and
legitimate subjects of interstate commerce.
Page 223 U. S. 71
A state cannot forbid a common carrier to transport intoxicating
liquors from a consignor in one state to a consignee in another
state.
Until transportation of intoxicating liquor from one state to
another is concluded by delivery to the consignee, the article
transported does not become subject to state regulation.
The Wilson Act of August 8, 1890, c. 728, 26 Stat. 313, does not
apply to interstate shipments of liquor until delivery to the
consignee.
The Kentucky statute of 1906 prohibiting common carriers from
transporting intoxicating liquors to "dry" points in Kentucky,
while a valid enactment as to intrastate shipments, was not
effective as to interstate shipments; in that respect, it was an
unconstitutional interference with interstate commerce.
A state statute regulating shipments of common carriers,
although legal as to intrastate shipments, if illegal as to
interstate shipments imposes no obligation upon the carrier in
regard thereto, nor affords any excuse for refusal to perform its
duties as a carrier.
Where the action of the common carrier is not discriminatory and
the question is not an administrative one within the scope of the
Interstate Commerce Commission, a question of general law as to the
duties of the carrier arises which is one for a judicial tribunal,
and not competent for the Commission, and the fact that the carrier
may have filed notice with the Commission does not give it
jurisdiction of the subject.
Where reasonableness of, or discrimination in, rates is not an
element, but the common carrier bases a refusal to perform its duty
as such on legislative enactments, a shipper can resort to the
courts to compel him to do so without first obtaining a finding
from the Interstate Commerce Commission.
Texas & Pacific
Railway v. Abilene Cotton Oil Co., 204
U. S. 246, distinguished.
172 F. 117 affirmed.
This suit started in a court of the State of Indiana, and was
removed by the defendant, now the appellant, to the circuit court
of the United States.
The brewing company is an Indiana corporation, engaged in
brewing beer at Evansville, Indiana, and sells its product in state
and interstate trade. The railroad company is a Kentucky
corporation, owning and operating a line of railway extending into
many states, including Indiana and Kentucky.
Page 223 U. S. 72
The complaint averred that, although prepayment of freight had
been tendered and every shipping regulation complied with, the
railroad company had refused to accept for carriage from
Evansville, Indiana, to stations on the line of its railway in the
State of Kentucky, beer in kegs and cases, consigned to points
which were "local option" or "dry" localities under the law of
Kentucky, and had notified complainant and the public that it would
discontinue receiving consignments of beer or other liquors for
points in the State of Kentucky where the local option law of that
state was in operation. The prayer of the bill was that the
railroad company be enjoined from so refusing to accept the product
of the brewing company for transportation from Evansville to such
local option points in Kentucky.
A preliminary injunction was issued as prayed. Thereupon the
defendant removed the case to the circuit court of the United
States upon the ground that there was diversity of citizenship, and
also because the case involved questions arising under the
Constitution and laws of the United States -- namely, the validity
of the law of Kentucky prohibiting the transportation and delivery
of liquors to points in that state where the sale was prohibited,
and also as a case arising under the act of Congress regulating
interstate commerce of February 4, 1887, 24 Stat. 379, c. 104, as
amended June 29, 1906, 34 Stat. 584, c. 3591. An answer was then
filed and the cause heard upon bill and answer, with the result
that the preliminary injunction allowed by the state court was made
permanent, and the railroad company enjoined from refusing to
receive and carry beer from Evansville to any point upon its line
of road in the State of Kentucky, wet or dry. An appeal by the
railroad company to the circuit court of appeals resulted in an
affirmance of the order of the circuit court. For the opinion, see
172 F. 117
Page 223 U. S. 80
MR. JUSTICE LURTON, after making the above statement, delivered
the opinion of the Court.
1. The jurisdiction of this Court to entertain an appeal in this
case cannot be seriously controverted. The jurisdiction of the
circuit court was not dependent alone upon diversity of
citizenship. There was involved not only the validity of the law of
Kentucky as a regulation of interstate commerce, but a question as
to whether the sole remedy in any such case was not by an
application to the Interstate Commerce Commission.
2. The objection that there was an adequate remedy at law,
assuming that the subject is one for any tribunal other
Page 223 U. S. 81
than the Interstate Commerce Commission, comes too late, if ever
available, the objection being now made for the first time, so far
as is discoverable from the record. The announced purpose of the
railroad company to abjure its function and duty as a common
carrier in respect of interstate shipments of all intoxicating
liquors to localities in the State of Kentucky where the Kentucky
local option prohibition laws prevailed threatened the ruin of
complainant's business, and relief by injunction against such a
continued course of conduct was certainly one which in such
circumstances might be granted. Where the case is one in which,
under any circumstances, relief in equity may be admissible, it is
too late to say that there was an adequate remedy at law only upon
review proceedings.
Kilbourn v. Sunderland, 130 U.
S. 505.
3. The case was heard upon bill and answer. The defense is based
solely upon the terms of the Kentucky act of March 21, 1906, now ยง
2569a, Carroll's Kentucky Statutes of 1909, entitled an act "to
Regulate the Carrying, Moving, Delivery, Transferring or
Distribution of Intoxicating Liquors in Local-option Districts." By
that act, it is made unlawful for any common carrier to transport
beer or any intoxicating liquor to any consignee in any locality
within the state where the sale of such liquors has been prohibited
by vote of the people under the local option law of the state. A
violation of the law subjects the offender to a fine of not less
than fifty nor more than one hundred dollars for each offense.
Upon the assumption that this legislation effectively prohibited
both state and interstate transportation of such commodities within
the state, the railroad company notified all of its agents, in and
out of the state, to refuse to receive such liquors when consigned
to any local option point. This notification was by a printed
circular letter, which set out the full text of the act, and gave a
full list of all such local option points. In express terms,
this
Page 223 U. S. 82
notification applied to both inter- and intrastate shipments,
and, it is averred, this circular was filed with the Interstate
Commerce Commission. It is not, however, averred that the
Commission either took any action thereon or that it was asked to
take any action.
The legality of the attitude of the railroad company toward
interstate shipments of intoxicating liquors to local option points
in Kentucky must turn upon the validity of that legislation as
applied to interstate shipments.
By a long line of decisions, beginning even prior to
Leisy
v. Hardin, 135 U. S. 100, it
has been indisputably determined:
a. That beer and other intoxicating liquors are a recognized and
legitimate subject of interstate commerce;
b. That it is not competent for any state to forbid any common
carrier to transport such articles from a consignor in one state to
a consignee in another;
c. That until such transportation is concluded by delivery to
the consignee, such commodities do not become subject to state
regulation, restraining their sale or disposition.
The Wilson Act, which subjects such liquors to state regulation,
although still in the original packages, does not apply before
actual delivery to such consignee where the shipment is interstate.
Some of the many later cases in which these matters have been so
determined and the Wilson Act construed are:
Rhodes v.
Iowa, 170 U. S. 412;
Vance v. Vandercook Co., 170 U. S. 438;
Heyman v. Southern Railway, 203 U.
S. 270;
Adams Express Co. v. Kentucky,
214 U. S. 218.
Valid as the Kentucky legislation undoubtedly was as a
regulation in respect to intrastate shipments of such articles, it
was most obviously never an effective enactment insofar as it
undertook to regulate interstate shipments to dry points. Pending
this very litigation, the Kentucky Court of Appeals, upon the
authority of the line of cases
Page 223 U. S. 83
above cited, reached the same conclusion.
Cincinnati, N. O.
& T. P. R. Co. v. Commonwealth, 126 Ky. 563.
The obligation of the railroad company to conform to the
requirements of the Kentucky law so far as that law prohibited
intrastate shipments is clear, and to this extent its circular
notification was commendable. But the duty of this company, as an
interstate common carrier for hire, to receive for transportation
to consignees upon its line in Kentucky from consignors in other
states any commodity which is an ordinary subject of interstate
commerce and such transportation could not be prohibited by any law
of the state of such consignee, inasmuch as any such law would be
an unlawful regulation of interstate commerce not authorized by the
police power of the state. It is obvious, therefore, that, insofar
as the Kentucky statute was an illegal regulation of interstate
commerce, it neither imposed an obligation to obey nor affords an
excuse for refusal to perform the general duty of the railroad
company as a common carrier of freight.
The fact that the circular notice of the company referred to was
filed with the Interstate Commerce Commission is incidentally
stated in the answer of the company, and this fact is now made the
basis for an argument that neither the state court nor the circuit
court had any jurisdiction, and that an application should have
been made to the Interstate Commerce Commission for an order
requiring the railroad company to desist from refusing to transport
such articles in interstate commerce.
Why should the brewing company have made complaint to the
Commission? What relief could it afford? There was no tariff
question. There was no discrimination against shipments tendered by
complainant and like shipments tendered by other brewers to the
same points. There was no claim that the commodities tendered were
inherently dangerous to transport, or that the railroad company did
not have transportation facilities. Evansville
Page 223 U. S. 84
was not discriminated against in favor of like shipments to the
same points. To say that there was a discrimination between
shipments of intoxicants and other commodities does not make a case
of discrimination or preference where the denial of such shipments
is based, as is the case here, wholly and solely upon an illegal
restraint upon that kind of interstate commerce is to reason in a
circle, for the question comes back at last to the validity of the
law forbidding such shipments. There was no discrimination if the
law was valid, and the result must turn not upon any administrative
question or questions of fact within the scope of the power of the
Commission, but upon the validity of the legislation which
controlled the action of the carrier. That is a question of general
law, for a judicial tribunal, and one not competent for the
Commission, as a purely administrative body.
The decision in the case of
Texas & Pacific Railway v.
Abilene Cotton Oil Co., 204 U. S. 426, is
not applicable here. The question there was one of the
reasonableness of a rate. Such a question is primarily one of
administrative character, and the propriety of a prior resort to
the Commission to obtain a ruling upon the question of
reasonableness involved the very heart of the whole statute. That
there might be uniformity in ratemaking necessarily required a
resort to that body as a basis for a common law recovery of an
excessive charge.
The result is that the decree of the court below must be
Affirmed.
