Source: https://caselaw.findlaw.com/us-supreme-court/240/305.html
Timestamp: 2019-04-21 07:22:21+00:00

Document:
[240 U.S. 305, 307] Messrs. William H. Lyles, David W. Robinson, and Jo-Berry S. Lyles for plaintiff in error.
Messrs. Benjamin Lindsey Abney and Thomas H. Peeples for defendants in error.
These suits grew out of the legislation by which South Carolina sought to control traffic in liquors. They involve closely related matters, were heard together, and it will be convenient likewise to dispose of them. In Scott v. Donald, 165 U.S. 58 , 41 L. ed. 632, 17 Sup. Ct. Rep. 265, Vance v. W. A. Vandercook Co. 170 U.S. 438 , 42 L. ed. 1100, 18 Sup. Ct. Rep. 674, and Murray v. Wilson Distilling Co. 213 U.S. 151 , 53 L. ed. 742, 29 Sup. Ct. Rep. 458, the history and general purposes of the legislation are considered.
By act of 1892 the general assembly created a state board of control, with power to supervise the traffic; also provided for a state commissioner charged with the duty of purchasing and distributing liquors through local officers known as dispensers.
The statute of 1896 directed election, by the general assembly, of the board of control, and gave it power to make purchases and to appoint a commissioner who should supply local dispensers selected by and under direction of county boards. By an amending act of 1900 the board then existing was abolished; a board of directors of the state dispensary was created, with power to prescribe rules and regulations to govern dispensaries, [240 U.S. 305, 308] both state and county; and provision was made for the election of a dispensary commissioner. The new board was required to purchase liquor for lawful use within the state; and general management and control of the state dispensary was intrusted to the commissioner.
By act of February 23d, 1910, findings of the State Dispensary Commission were declared to be final; any sum ascertained to be due the state was required to be deducted from whatever a county dispensary might own such debtor; and authority was given the Commission to [240 U.S. 305, 309] command any county dispensary so indebted to turn over to it an equivalent amount of money. Notices of claims in favor of the state, creation of liens to secure the same, and enforcement of their payment, were also provided for.
'Appellant presented to the Commission a claim for $23,013.75 as the balance due it by the state for bottles and demijohns furnished to the dispensary under contracts made with the board of directors from and including April, 1906, until the business was closed out by the Commission. Appellant had also furnished the dispensary practically all the bottles and demijohns used since about December, 1902; but all accounts prior to April, 1906, had been settled. [240 U.S. 305, 310] 'Upon the filing of this claim, the Commission went into an investigation of all past dealings of appellant with the dispensary; and, after hearing a great deal of testimony and argument thereon, rendered its decision, dated Nov. 17, 1909, which will be set out in the report of the case.
'The conclusion and finding of the Commission was that, in pursuance of a conspiracy between some of the directors of the dispensary and some of the appellant's officers or agents to defraud the state, whereby legitimate competition was destroyed, appellant had a monopoly of the business of furnishing glass to the dispensary from the date of its beginning business, in 1902, until April, 1906; and that the prices paid it for glass during that period exceeded the fair market value thereof by $ 51,432.99. Therefore, allowing appellant's claim of $23,013.75, the Commission found that appellant was indebted to the state in the sum of $ 28,419.24, the difference between the amount of its claim and the sum it had fraudulently collected from the state.
'From that decision, this appeal was taken, under the provisions of the statute, giving every claimant the right of appeal to the supreme court, 'as in cases at law.' Appellant concedes that the jurisdiction of this court is limited in such cases to a review of alleged errors of law.
'The question, therefore, whether the commission had authority to entertain a 'set-off' or 'counterclaim' in favor of the state against a claimant, in the technical sense in which those terms are used in legal proceedings, is not germane or material to the present inquiry. To what purpose should the Commission investigate, unless it announced the result of its investigation? We see no error, therefore, in the Commission stating its findings as the result of its investigation.
'The findings of the Commission, however, are controlling only in its determination of the nonliability of the state upon appellant's claim. They have not the force or effect of a judgment, concluding appellant in any other proceeding,-such, for instance, as the state might institute in the proper court to recover the amount found by the Commission to be due it by appellant.
Manifestly, we think, the supreme court affirmed the Commission's action only in so far as it declined to approve the glass company's claim,- there was no final determination of the state's right to recover over against the company.
Error is assigned concerning supposed Federal questions upon the theory that there has been 'in practical effect an adjudication of the validity of the alleged claim of the state arising out of the ended transactions prior to April, 1906, and a satisfaction of such a judgment by the confiscation of plaintiff in error's property; that is, its claim against the state for goods furnished since 1906.' [240 U.S. 305, 312] This theory is entirely out of harmony with the supreme court's opinion, which holds the validity of possible demands against the glass company remains wholly undetermined, and that, acting within its plain powers, the state had only refused to recognize and discharge a claim against itself. The argument of counsel proceeds upon a fundamental misconception. We find no error in the judgment below, and it must be affirmed.
By this original proceeding begun in the supreme court of South Carolina, March 4, 1910, the Carolina Glass Company sought to restrain any effort to collect the so-called overjudgment for $28,419.24, pronounced by the Dispensary Commission under circumstances narrated supra (cause No. 12 ); and also to prevent the Commission from demanding or receiving sums of money alleged to be due the company from certain county dispensaries, or interfering with payment of such indebtedness.
Quotations from the opinion below (87 S. C. 270, 285) will adequately disclose the issues involved.
'Within a few days after the approval of the act, to wit, on February 26, 1910, the Commission, by its attorneys, filed in the office of the clerk of the court for Richland county, in which county plaintiff owned real estate, a notice, headed or entitled, The State v. Carolina Glass Co., and signed by the attorney general and other counsel [240 U.S. 305, 314] representing the state. The notice was as follows: 'Notice is hereby given to all whom it may concern, that the above stated cause has been instituted, and is now pending before the State Dispensary Commission for the recovery against the Carolina Glass Company of $29,000, the amount which has been found to be due from the said defendant to the state of South Carolina owing to overcharges made by said defendant in selling goods to the state dispensary, and this notice is given in accordance with the terms of an act of the legislature passed in February, 1910, and duly approved by the governor.' About the same time, notice was served on the plaintiff, pursuant to the provisions of the act, that the Commission would proceed to pass upon, fix, and determine the claim of the state against the plaintiff on account of the overcharges growing out of its dealings with the dispensary. Notice was also served on the county dispensary board of Richland county, requiring that board to pay to the Commission the amount due by said board to the plaintiff.
'Another feature of the case grows out of an agreement alleged to have been made between the attorneys for the plaintiff and the attorney representing the state with regard to payments for shipments of glass made by plaintiff to the county dispensaries after November 20, 1909.
'Under the provisions of the Constitution (art. 8, 11) and statutes ( 25 Stat. 463) the county dispensaries are conducted 'under the authority and in the name of the state.' Therefore, the officers in charge of them are agents of the state and the funds arising from the sale of liquors through them are the funds of the state, and the debts due for goods sold to them are the debts of the state. In exercising the powers conferred upon it by the legislature, the Dispensary Commission is also the agent and representative of the state, 'subject to no interference, [240 U.S. 305, 315] except that of the general assembly itself,' and a suit brought against it is, in effect, a suit against the state. State ex rel. Lyon v. State Dispensary Commission, 79 S. C. 316, 329, 60 S. E. 928. As the state cannot be sued without its consent, no court has power to interfere with or direct the disposition of the state's funds in the hands of its agents, unless it appears that they are acting without authority of law, or are refusing to recognize and obey the law to the detriment of private rights . . . . In ordering the funds in the hands of the officers of the county dispensaries due to the plaintiff turned over to itself, the commission acted within the limits of its authority and discretion conferred upon it by the legislature, and this court has no power to interfere. From the foregoing, it will be seen that it is unnecessary to inquire or decide whether there was an agreement between the attorneys for plaintiff and the attorneys for the state as to the collection of the amounts due plaintiff from the county dispensaries for shipments made prior to November 20th, or what the agreement was, or whether it has been violated. The Dispensary Commission is the sole arbiter of the rights of the plaintiff, if it has any, with regard to that matter.
Defendants were accordingly enjoined from asserting a lien upon the company's property, and the notice filed in Richland county was directed to be canceled; but the Commission's power to remove funds from county dispensaries was upheld.
Plaintiff in error now maintains the socalled overjudgment of November 17, 1909, was void; that by reason of claims against them it had contract and property rights in money held by the county dispensaries; and that removal of funds therefrom by the State Dispensary Commission impaired contract obligations in violation of 10, article 1, Federal Constitution, and deprived it of property without due process of law.
It was distinctly adjudged by the supreme court that the Dispensary Commission was without power to pronounce the overjudgment; that it was invalid and could not be enforced. In view of repeated holdings by that court and our opinion in Murray v. Wilson Distilling Co. 213 U.S. 151 , 53 L. ed. 742, 29 Sup. Ct. Rep. 458, it is clear that funds of county dispensaries were state funds, and, as such, subject to control by the Dispensary Commission. Their removal, therefore, violated no right which the glass company could assert,-the state had not consented to be sued. The judgment of the court below must be affirmed.
Holding it in effect a suit against the state, the district court dismissed the cause (197 Fed. 392); and it is here upon direct writ of error. We are of opinion that the action of the court below was correct. And in view of what has been said above and our opinion in Murray v. Wilson Distilling Co. further discussion of the questions involved would not be profitable. The judgment is affirmed.
This writ brings up a judgment rendered by the circuit court of appeals, fourth circuit, affirming the same final judgment of the district court considered in No. 205, supra. 124 C. C. A. 423, 206 Fed. 635. There is no allegation of diverse citizenship, and the trial court's jurisdiction was invoked solely upon the ground that the controversy involved application of the Federal Constitution.
In such circumstances the Circuit Court of Appeals is without jurisdiction to review. Union & P. Bank v. Memphis, 189 U.S. 71, 73 , 47 S. L. ed. 712, 713, 23 Sup. Ct. Rep. 604. Its judgment is accordingly reversed and the cause remanded, with directions to dismiss the writ of error improperly entertained.
Judgments in Nos. 12, 9, and 205, affirmed; judgment in No. 204 reversed and remanded to the Circuit Court of Appeals for the Fourth Circuit, with directions to dismiss writ of error for want of jurisdiction.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.