Kresser v. Lyman
Opinion of the Court
The plaintiff having brought suit to restrain by permanent injunction the enforcement of the provisions of the act of the Legislature of the State of Hew York, approved March 23, 1896,. entitled “An Act in relation to the traffic in liquors, for the taxation and regulation of the same, and to provide for local option,”' commonly known as the Raines Law, has applied for an injunction pendente lite. His action proceeds upon the theory that the-license granted to him February 10,1896, in consideration of the payment of $200, for the term of one year from that date, by the board of excise of the city of Albany, pursuant to authority conferred upon them by chapter 401 of the Laws of the State of Hew York of 1892, entitled: “An Act to revise and consolidate the laws-regulating the sale of intoxicating liquors,” is a contract investing him with the right to conduct the business of a retail dealer in spirituous liquors, wines, ale and beer, at the place specified, until the expiration of the term; and that those provisions of the act of 1896 which declare that every license heretofore lawfully granted by a board of excise “shall cease, determine an.d be void after June 30, 1896,” and whereby he and others similarly situated are required to make application for a liquor tax certificate and pay
The conclusion that these provisions are not obnoxious to the Constitution seems so plain that the objection urged in behalf of the defendant that no special circumstances appear bringing the case within any of the recognized exceptions to the rule that a court of equity will not interfere by injunction to prevent the collection of a tax merely upon the ground of its illegality, or because the statute under which it is imposed is unconstitutional, will not be considered.
The argument for the plaintiff, deduced from a consideration of the various provisions of the pre-existing statutes that the license granted to him is a contract which can not be destroyed or impaired by subsequent legislation by the State and the privilege conferred by it a property right of which he cannot be deprived without due process of law. and just compensation, necessarily assumes the competency of the State through its legislature and administrative officers to enter into a contract hampering the future action of the State in the exercise of its police power to regulate, restrict or prohibit the traffic in intoxicating liquors. If this competency is wanting no form of words, whether expressed in a legislative act, or otherwise, can create a valid contract. That the State can not barter away or in any manner abridge any of those inherent powers of government the complete and untrammelled exercise of which is essential to the welfare of organized society, and that any contracts to that end are void upon general principles, and can not be protected by the provisions of the national Constitution, are propositions which are abundantly settled by the decisions of the highest federal tribunal. Without attempting an extended reference to these adjudications it will suffice to refer to two decisions of the Supreme Court of the United States. In Beer Company v. Massachusetts (97 U. S. 25), the question was, whether under the prohibitory liquor law of Massachusetts of 1869, the seizure and forfeiture of liquors belonging to the company was lawful in view of the charter of the company granted by legislative act in 1828, investing the company with the right to manufacture and sell
The regulation of the liquor traffic is an exercise of the police power of the State for the prevention of intemperance, pauperism and crime. The courts have sanctioned the validity of most stringent statutes enacted in that behalf, such as those which declare the liquor kept for sale a nuisance, which authorize its condemnation and destruction, and which provide for the seizure, and forfeiture of the building in which it is sold. Speaking of such statutes, Judge Cooley uses the following language: “Perhaps there is no instance in which the power of the Legislature to make such regulations as may destroy the value of property, without compensation to the owner, appears in a more striking light than in the case of these statutes. The trade in alcoholic drinks being lawful, and the capital employed in it being fully protected by law, the legislature then steps in, and, by an enactment based on general reasons of public utility, annihilates the traffic, destroys altogether the employment, and reduces to a nominal value the property on hand. Even the keeping of that, for the purpose of sale, becomes a criminal offense; and, without any change whatever in his own conduct or employment, the merchant of yesterday becomes the criminal of to-day, and the very building in which he lives and conducts the business which to that moment was lawful, becomes the subject of legal proceedings if the statutes shall so declare, and liable to be proceeded against for a forfeiture. A statute which can do this must, be justified upon the highest reasons of public benefit; but whether satisfactory or not, the reasons address themselves
The Court of Appeals of this State in Metropolitan Board of Excise v. Barrie (34 N. Y. 659) in considering the general question now involved declared: “These licenses to sell liquor are not. contracts between the State and the persons licensed, giving the latter vested rights protected on general principles and by the United States Constitution against subsequent legislation, nor are they property in any legal or constitutional sense. They have neither the qualities of a contract or of property, but are merely temporary permits to do what otherwise would be an offense against a general law. They form a portion of the internal police system of the State, are issued in the exercise of its police powers, and are subject to the direction of the State government, which may modify, revoke or continue them as it may deem fit.”
It is urged for the plaintiff that the act of 1896 is not a police regulation, but is a taxing act, but the contrary has been decided by the Court of Appeals in the recent judgment in People v. Murray. The Court said: “The character of the act of 1896, 'whether a tax law in a proper sense, or a law enacted under the police power, must be determined from its whole scope and tenor, and there can be no reasonable doubt, we think, that it is of the latter character.”
For these reasons, the conclusion is reached that, notwithstanding his license, the plaintiff would be without remedy if the legislature had absolutely prohibited the sale of liquors in this State after the 30th day of June. Instead of doing this, it has required him after that date to conduct his traffic under precisely the same conditions which are prescribed for all others, but for the purpose of saving his rights and those of others similarly situated, has authorized a recovery from the town or city in which the license was granted of such proportion of the whole license fee as the remainder of the time for which said license would otherwise have run bears to the whole period for which it was granted. He has no just ground for complaint.
The motion is denied.
Reference
- Full Case Name
- William J. Kresser v. Henry H. Lyman, as State Commissioner of Excise
- Status
- Published