Schmitt v. F. W. Cook Brewing Co.

Dissenting Opinion.

Spencer, J.

— I am unable to agree with the majority of my associates that the manufacture of intoxicating liquors within the State of Indiana may lawfully be prohibited under the Constitution of the state and, in view of the importance of the question at issue, I feel impelled to state the grounds of my dissent.

As is suggested by the majority opinion, this action was instituted by appellee to restrain appellant from *636 enforcing the so-called Prohibition Law of 1917 (Acts 1917 p. 15) on the ground that said law is unconstitutional and void. Various reasons for the position taken by appellee are set out in its complaint but those to which I direct especial attention are contained in the following allegations:

“Plaintiff further says that on the-day of March, 1894, it was duly granted a corporate charter by the State of Indiana, upon a consideration paid by the plaintiff to the State, by which said charter this plaintiff was duly authorized to do the business therein specified, in the State of Indiana and elsewhere, for a period of fifty years from and after said date as a corporation, with all the authority and powers conferred by law on corporations; that under and pursuant to the provisions of said charter this plaintiff was authorized to and' did engage, and is now engaged in Vanderburgh County, Indiana, exclusively in the business of the manufacture of beer, ale and other liquor and the sale thereof in barrels, kegs, bottles and other packages throughout the United States of America and elsewhere; that immediately after said incorporation aforesaid, this plaintiff purchased real estate in said Vanderburgh County and improved the same by erecting thereon large and expensive buildings and installed therein machinery at an expense of several hundred thousand dollars for the sole purpose for which this plaintiff was incorporated as aforesaid, and since said date continuously to the present time has been and now is using said property exclusively for the purposes aforesaid.

“And plaintiff further says that at the time said charter was granted as aforesaid and continuously thereafter to the present'time the laws of the State of Indiana, as enacted and declared by the General Assembly of the State and by the Supreme Judicial Tribunals off the State, have made and do now make the business of the *637 manufacture and sale of intoxicating liquor a lawful business, and have extended to property used in the manufacture and sale of such liquor the same protection extended to other property and did then recognize and since said time continuously have recognized and protected the owner or owners of such property in the same manner as the owners of other property; and plaintiff further says that at the time of said granting of said charter as aforesaid and continuously thereafter to the present time, it has relied and acted upon the validity of said laws enacted and promulgated and in full force and effect as aforesaid, and relying upon said laws ás in force has, during said time since its incorporation to the present time, invested in said city aforesaid more than one million dollars in real estate, machinery and improvements thereon; that said machinery and improvements were made and acquired and are suitable only for the purpose for which the .same were made and acquired as aforesaid and for the sole and exclusive purpose of the manufacture and sale of intoxicating liquors, under and pursuant to the charter granted to this plaintiff as aforesaid, and that said real estate so acquired and the improvements and machinery so placed thereon are- now and during said time have been owned by this plaintiff and are now of the value of more than one million dollars; that said improvements and machinery aforesaid, are suitable only for the purpose of the manufacture of intoxicating liquors and cannot be used, and are worthless, for any other purpose whatsoever; that relying upon said laws as aforesaid and upon the said charter so granted to this plaintiff as aforesaid, this plaintiff purchased and improved said property as aforesaid and that if this plaintiff is deprived of the use of said property for the uses and purposes aforesaid said property will be worthless and will be a total loss to this plaintiff. * * *

*638 “And plaintiff further says that at the time said charter aforesaid was granted by the State and was accepted by this plaintiff, the laws of the State as aforesaid entered into and became a part of said charter, and that said charter, when so granted and accepted, became and was and is a valid contract between this plaintiff and the State of Indiana, and plaintiff says that said defendant should be enjoined from enforcing the provisions of said act of February 9, 1917, against this plaintiff, for the reason that said act is in violation of Section ten (10) of Article one (1) of the Constitution of the United States prohibiting a State from enacting a law impairing the obligation of contracts. .

“And plaintiff further says that said act of February 9, 1917, is unconstitutional and void and should not be enforced against this plaintiff for the reason that the Constitution of this State has not conferred upon the General Assembly of this State authority to prohibit arbitrarily the use by any citizen of the State of any property which such citizen may lawfully acquire, nor has the Legislature of this State been given any authority by the Constitution of this State to prohibit arbitrarily a citizen of Indiana from using property he may lawfully acquire in such manner and for such purpose as such citizen may deem best or most advantageous to himself, nor has the Constitution of this State conferred any authority, either expressly or impliedly, upon the General Assembly of this State, to prohibit the manufacture and sale of any particular class or classes of personal property. * * *

“Plaintiff further says that said act of February 9, 1917, should not be enforced against this plaintiff, and that the defendant should be enjoined and restrained from enforcing said act against this plaintiff for the reason that if this plaintiff is prohibited from using its said property and buildings and machinery aforesaid for the *639 purpose for which the same was constructed and acquired as aforesaid, that the same will become of no value as property, and will become materially diminished in value if not employed in the manufacture of malt liquor for every purpose, and that the enforcement of said act by said defendant as aforesaid will be a taking of the property of this plaintiff without due process of law, in violation of constitutional provisions of this State and of the United States.”

Appellant’s demurrer admitted the truth of all facts pleaded in appellee’s complaint, and it became the duty of the trial court, and now of this court, to determine whether the pleader’s conclusions as to the law are equally well founded. In approaching this question I am not unmindful of a growing public sentiment that the use of intoxicating liquors has been seriously abused and that traffic therein must be more strictly regulated. I recognize, also, that in a proper case, and as an aid to interpretation alone, public sentiment, when clearly defined, may be considered by the courts in determining what legislative intention is sought to be expressed in an enactment which is responsive to that sentiment. But this doctrine has no application where the sole issue to be decided is the right of the legislature, under the Constitution, to pass the act in question. As was once said by Rufus Choate, in speaking of the duty of a judge: “He shall know nothing about the parties, everything about the case. He shall do everything for justice, nothing for himself — nothing for his friends— nothing for his patron — nothing for his party. If on the one side is the executive power and the legislature and the people — the sources of his honors, the givers of his daily bread — and on the other, an individual nameless and odious, his eye is to see neither great nor small, attending only to the trepidations of the balance. If a law is passed by a unanimous legislature, clamored for *640 by the general voice of the public and a cause is before him on it, in which the whole community is on one side and an individual nameless and odious on the other, and he believes it to be against the Constitution, he must so declare it or there is no judge.”

The case at bar presents squarely an issue of constitutional authority and the decision of that issue must rest on sound principles of constitutional law. In its ultimate analysis, the decision by the majority of the court that the legislature may lawfully prohibit the manufacture of intoxicating liquors is based on the theory that its act constitutes a proper exercise of the police power of the state. The definitions of “police power,” as announced by various authors and jurists, contain some confusion and ambiguity but, in fact: “The police power of the government, as understood in the constitutional law of the United States, is simply the power of the government to establish provisions for the enforcement of the common as well as civil-law maxim, sic utere tuo, ut alienum non laedas. ‘This police power of the State extends to the protection of the lives, limbs, health, comfort and quiet of all persons, and the protection of all property within the State. According to the maxim, sic utere tuo, ut alienum non laedas, it being of universal application, it must of course be within the range of legislative action to define the mode and manner in which every one may so use his own as not to injure others.' Any law which goes beyond that principle, which undertakes to abolish rights, the exercise of which does not involve an infringement of the rights of others, or to limit the exercise of rights beyond what is necessary to provide for the public welfare and the general security, cannot be included in the police power of the government. It is a governmental usurpation, and violates the principles of abstract justice, as they have been developed under our republican institutions.” *641 Tiedeman, Limitations of Police Power 4, §1. With this principle in mind, the above author concludes, after a careful and extended discussion of his subject, “that no trade can be subjected to police regulation of any kind, unless its prosecution involves some harm or injury to the public or third persons, and in any case the regulation cannot extend beyond the evil which is to be restrained. It has also been maintained, and I think satisfactorily established, that no trade can be prohibited altogether, unless the evil is inherent in the character of the trade, so that the trade, however conducted, and whatever may be the character of the person engaged in it, must necessarily produce injury upon the public or upon individual third persons.” Tiedeman, supra, 301, §103. When one has assented to the truth of these principles, as he must, in their application to other cases of police regulation of employments, “his inability to adhere to them, in their application to the police regulation of the liquor trade, indicates either a lack of courage to maintain his convictions in the face of popular clamor, or an obscurity of his judgment through his sympathetic emotions, which are aroused in considering the gigantic evil to be combated.” Tiedeman, Limitations of Police Power 302.

Tested in the light of the above principles, which must serve as the basis for every proper exercise of the police power, it is apparent beyond question that the act now under consideration is invalid, at least in so far as it attempts to prohibit the- manüfacture of intoxicating liquors within the state. It is not to be doubted that the excessive use of intoxicants by the individual has contributed greatly to the increase of poverty and crime among the people, but that fact constitutes no valid objection against the right to manufacture the commodity. Physicians and scientists are equally certain that the *642 excessive use of particular foods, especially animal flesh, is responsible to a great degree for the prevalence of physical suffering and disease (auto-intoxication), yet can the beef packer be prohibited from pursuing his trade on that account? The use and abuse of gasoline is daily' exacting a heavy toll from the people of this country in motor accidents, yet no one will contend that the production of gasoline and similar substances may lawfully be prohibited. On what theory, then, is the manufacture of intoxicating liquors to be prohibited because their abuse by individuals tends to produce misery and want, when the same individual abuse of meat and gasoline may lead to equally distressing conditions without inducing lawful restraint on their manufacture? Obviously, the distinction is arbitrary and a legislative mandate against production ought no more to be sustained in the one case than in the other. “The police power rests upon necessity and the right of self-protection, but private property cannot be arbitrarily, invaded under the mere guise of police regulation.” C. J. Fuller in Lawton v. Steele (1894), 152 U. S. 133, 144 , 14 Sup. Ct. 499, 503, 38 L. Ed. 385 . Again, as was said by Mr. Justice Harlan, in Mugler v. Kansas (1887), 123 U. S. 623, 661 , 8 Sup. Ct. 273, 31 L. Ed. 205 , a case involving the constitutionality of the Kansas law enacted under a specific mandatory declaration in the Constitution of that state, which law was upheld: “The courts are not bound by mere forms, nor are they to be misled by mere pretences. They are at liberty — indeed, are under a solemn duty — to look at the substance of things, whenever they enter upon the inquiry whether the legislature has transcended the limits of its authority. If, therefore, a statute purporting to have been enacted to protect the public health, the public morals, or the public safety, has no real or substantial relation to those objects, or is a palpable invasion of rights secured by *643 the fundamental law, it is the duty of the courts to so adjudge, and thereby give effect to the Constitution.” This court said, by Hadley, C. J., in Republic Iron & Steel Co. v. State (1902), 160 Ind. 379 , at page 386, 66 N. E. 1005, 1007 , 62 L. R. A. 136, in quoting the words of Brown, J., in Lawton v. Steele, supra; “ 'The legislature may not, under the guise of protecting the public interests, arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful occupations. In other words, its determination as to what is a proper exercise of its police powers is not final or conclusive, but is. subject to the supervision of the courts.’ ” And this -court, speaking for itself, further said: “It follows that a statute to be wdthin the power must be responsive to some public necessity, suitable to subserve it, and reasonable in its operation.” Again, this court, in State v. Richcreek (1906), 167 Ind. 217 , at page 230, 77 N. E. 1085 , 5 L. R. A. (N. S.) 874, 119 Am. St. 491, 10 Ann. Cas. 899, uses this expression, in substance: The exercise of the police power is subject to the supervision of the courts and such acts may be declared void when they violate some constitutional right. •

There is nothing in the manufacture of intoxicating liquors which leads directly to public harm and no evil which inheres in the character of that trade. Indeed, the beneficent uses of such liquors are recognized in the very act now under consideration and this recognition, in itself, serves to overcome the only ground on which the prohibition of their manufacture can be ^sustained, viz.: “That the trade, however conducted, and whatever may be the character of the person engaged in it, must necessarily produce injury upon the public or upon individual third persons.” Section 5 of the act, supra, among others, recognizes the right of an individual to have and to use intoxicants in his own home and author *644 izes a registered pharmacist to sell intoxicating liquors for medicinal and sacramental purposes, thereby declaring, in effect, that there is a proper use for such liquors. This declaration and admission is necessarily destructive of the assumed power to prohibit their manufacture, for the right to engage in a proper business is a natural right which is entitled to constitutional protection. The assured right of possession and use on the part of the citizen necessarily implies the existence of an adequate lawful means of obtaining it and a proper source of supply, yet the act prohibits all citizens of Indiana from engaging in the production- of that supply. This constitutes a discrimination in favor of citizens of other states and is, in itself, sufficient to condemn the law. Furthermore, it appears from appellee’s complaint, and appellant’s demurrer admits the truth of the averment, that its business as a manufacturer of intoxicating liquors is not confined to the State of Indiana but extends “throughout the United States of America and elsewhere.” On what possible theory can appellee be legally deprived of the right to manufacture its products in Indiana for shipment into territory where their sale is not prohibited? Certainly that business would have no reasonable relation to or effect on the health, morals or general welfare of the people of this state and its prohibition cannot be justified on any legal ground.

Many other objections against the validity of this act as a proper exercise of the police power may be suggested, but the points above made cannot, in reason, be successfully controverted. I know that numerous cases may be found which seem to recognize a power in the states to prohibit the manufacture and sale of intoxicating liquors as tending to promote the general welfare of the people, but on an examination of such cases, most of which are collected in the majority opinion, it will be found either that they rest on constitutional provi *645 sions which differ from our own or that the holding of the court in the particular instance is as arbitrary and lacking in basic reason as is the law which it sustains.

In brief, I subscribe fully to the conclusion reached by Mr. Tiedeman, after a careful consideration of all the constitutional reasons for and against the prohibition of the liquor trade, that: “The prohibition of the manufacture and sale of spirituous and intoxicating liquors is unconstitutional, unless it is confined to the prohibition of drinking saloons, and the prohibition of the sale of liquor to minors, lunatics, confirmed drunkards, and persons in a state of intoxication. As has already been explained, there is an almost unbroken array of judicial opinions against this position, and there is not any reasonable likelihood that there will be any immediate revulsion in the opinions of the courts. But it is the duty of a constitutional jurist to press his views of constitutional law upon the attention of the legal world, even though they place him in opposition to the current of authority.” Tiedeman, Limitations of Police Power 311, §103. Tested solely by established principles of constitutional law, the absolute prohibition of the manufacture of intoxicating liquors is not a proper exercise of the police power of the state and, on any other theory, legislation looking to that end must constitute a taking of private property without due process-of law. 14th amendment, U. S. Constitution.

The above conclusions, to which reason and logic unerringly lead, are sufficient to require an affirmance of the decision in this casé, but there is an additional ground on which the decision of the trial court ought to be upheld. The majority opinion, which is solely a “case law” opinion, refers briefly to the case of Beebe v. State (1855), 6 Ind. 501 , 63 Am. Dec. 391 , and the decisions subsequent thereto, and says: “It cannot be determined by those cases on what principle the court *646 was acting. The question stood undecided for three years and then the law was pronounced void without assigning any reasons as to whether it was considered void under the state Constitution or federal Constitution.” I am unable to understand that statement. This court, in the Beebe case, by a vote of three to one, expressly held that the law of 1855, then under consideration, was void in so far as it undertook to prohibit the manufacture of intoxicating liquors within the state. Judge Perkins, with Judge Davison concurring, held that the act was to that extent violative of various sections of the Bill of Rights as set forth in the Constitution of Indiana and particularly the provision in §21 that “no man’s property shall be taken by law without just compensation.” Judge Stuart expressly agreed with the conclusion that it was unconstitutional to prohibit the manufacture of liquor, although not assigning his reasons therefor, while Judge Gookins alone dissented on that proposition. It is true, as was later stated by Judge Perkins, in the case of Ingersoll v. State (1858), 11 Ind. 464 , that those sections of the act which sought to prohibit the retail 'of intoxicating liquors were not judicially annulled until nearly three years had elapsed from the time of its going into effect, but the decision that the legislature, under the present Constitution of the state, has no power to enact a law prohibiting the manufacture of intoxicating liquor was clearly defined and has stood unchallenged to the present time. That decision was necessarily binding on the trial court in this case as the latest expression of the supreme judicial tribunal of the state on the issues involved, and it should be equally controlling in this appeal for either of two reasons. In the first place, it is sound in principle and therefore to be followed without question, but, if conceded to be erroneous as an original holding, it must now serve as the basis for a just appli *647 cation of the rule of stare decisis. The prevailing opinion holds that the latter rule “cannot be invoked to shut off police power” but, for reasons heretofore stated, I do not agree that its invocation in the present case would have that effect. Appellee’s complaint alleges, and. appellant’s demurrer admits, that large sums of money have been invested and valuable property rights acquired on the strength of the charter contract granted by the state to appellee, and on the rule theretofore announced in the decisions of this court that the legislature could not take from appellee, without fault on its part) the right to do business under that charter. The decision in Beebe v. State, supra, at least to the extent that it holds the legislature to be without such power, has become a rule of property in Indiana, and the rights acquired by appellee on the faith of that rule must be protected under the doctrine of stare decisis, if on no other ground. Moore-Mansfield, etc., Co. v. Indianapolis, etc., R. Co. (1912), 179 Ind. 356, 391 , 101 N. E. 296 , 44 L. R. A. (N. S.) 816, Ann. Cas. 1915D 917; Pond v. Irwin (1888), 113 Ind. 243, 247 , 15 N. E. 272 ; Frank v. Evansville, etc., R. Co. (1887), 111 Ind. 132, 136 , 12 N. E. 105 ; Diamond Plate Glass Co. v. Knote (1905), 38 Ind. App. 20, 25 , 77 N. E. 954 .

The decision of the Vanderburgh Superior Court should be affirmed.

Note. — Reported in 120 N. E. 19, 23 . Intoxicating liquors: general power of state to regulate and prohibit traffic, 2 Ann. Cas. 98, 23 Cyc 77, 12 C. J. 1164. Limitations on the doctrine of stare decisis, 73 Am. St. 98, 15 C. J. 947. Validity of liquor law under constitutional provision as to title and subject-matter of statutes, 20 Ann. Cas. 323. See under (2) 12 C. J. 887; (8) 23 Cyc 65.