Court Opinion

ID: 9669280
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:47:43.470729+00
Date Added: 2024-06-11T18:15:54.969568
License: Public Domain

Ed. F. McFaddiN, Justice (dissenting). This suit attacks the constitutionality of Act 282 of 1949, which Act has three objectives: (1) — To fix the price of liquor and provide a penalty for sale at a different price (§§ 1 to 12, inclusive, and § 15 attempts to accomplish this objective) ; (2) — To levy an additional tax on liquor (§ 13 of Act 282 attempts to accomplish this objective); and (3) — To authorize the employment of twenty additional enforcement office's at salaries to be paid from the tax levied by § 13 (§§ 14 and 14-A of the Act attempt to accomplish this objective). There is no real challenge as to the constitutionality of Objective No. 2 (that is, the tax levy), or Objective No. 3 (that is, the emplo3ment); and I regard these objectives as clearly constitutional and severable from Objective No. 1. In other words, the tax and employment provisions are constitutional. This dissent is directed only to so much of Objective No. 1 of the Act as fixes a minimum price on liquor and forbids sale at less than such minimum price. I regard such legislation as granting the liquor dealers a privilege in violation of two sections of our Constitution. These are Article II, § 18 of our State Constitution, which says: ‘ ‘ The General Assembly shall not grant to any citizen or class of citizens privileges or immunities which upon the same terms shall not equally belong to all citizens1 ”; and also Article II, § 19 of our State Constitution, which says: “. . . nor shall . . . privileges . . . ever be granted or conferred in this State . . In the early case of Ex Parte Levy, 43 Ark. 42, 51 Am. Rep. 550, (also a liquor case), Mr. Justice Eakin, in considering this constitutional language, said of a privilege : “It is, according lo Burrell, some peculiar right or favor granted by law contrary to the general rule — an exemption or immunity from some general duty or burden — a right peculiar to some individual or body — a personal benefit or favor (see Bur. Law Die. in verb.).” To the same effect, see 50 C. J. 400, wherein cases are cited which say that the word “privilege” means: ■ “. . . a peculiar advantage; a peculiar benefit or advantage; a peculiar benefit, favor, or advantage; a personal benefit or favor; a private or personal favor enjoyed; ... a particular and peculiar benefit or privilege, enjoyed by a person, company, or class beyond the common advantages of other citizens; some peculiar right or favor granted by law contrary to the general rule; ...” Bouvier’s Law Dictionary says a privilege is: “Exemption from such burdens as others are subjected to.” I make the point that our Constitution prohibits granting one group an advantage not enjoyed by all groups; and I make the point that this Act 282 of 1949— insofar as it fixes a minimum price for which liquor may be sold — grants a “peculiar advantage” to liquor dealers, because by such legislation the State is guaranteeing them a gross profit in their business, whereas the State is not guaranteeing such a gross profit to farmers, mer- ■ chants, barbers, doctors, or any other group in our economic system. That the Act does guarantee such a gross profit to liquor dealers is definitely stated in §§ 3, 4, 10 and 15 of said Act 282.2 Wholesale liquor dealers are guaranteed 15 per cent, gross profit and retail liquor dealers are guaranteed from 33]/$ to 50 per cent, gross profit, depending on the type of liquor sold; and anyone attempting to sell at less than the fixed price is subject to prosecution. In short, liquor dealers are guaranteed a gross profit, because the State has the right to issue them permits and the State proposes to keep the liquor industry in a “healthy condition” by prohibiting one dealer from underselling another. "What other group is thus favored in our State? Several years ago the barbers of this State attempted to have their prices fixed; and Act 432 of 1941 was adopted, under which the State Board of Barber Examiners fixed the price of a haircut at forty cents and the price of a shave at twenty cents. Litigation ensued to test this price-fixing law, and it was held unconstitutional in the case of Noble v. Davis, 204 Ark. 156, 161 S. W. 2d 189. Mr. Justice McHaNey delivered the opinion of this Court in that case and spoke out in clear language against the entire evil of price fixing: “ ‘This class of legislation, that is, fixing prices, is new and likely resulted from the decision of the Supreme Court of the United States in Nebbia v. New York, 291 U. S. 502, 54 S. Ct. 505, 78 L. Ed. 940, 89 A. L. R. 1469, decided March 5, 1934, in which the court sustained a statute fixing the price of millc in New York. A dissenting opinion was filed in that case, concurred in by four members of the court. The various acts fixing prices to he charged by barbers, to which our attention has been directed, were passed since the decision in the Nebbia case.’ The following are some of the cases where the courts have held similar legislation invalid, in addition to the Tennessee case: Duncan v. City of Des Moines, 222 Ia. 218, 268 N. W. 547; State, ex rel. Fulton v. Ives, 123 Fla. 401, 167 So. 394; Mobile v. Rouse, 233 Ala. 622, 173 So. 266, 111 A. L. R. 349; Hollingsworth v. State Board of Barber Examiners, 217 Ind. 373, 28 N. E. 2d 64. The decisions in all these cases are based on the fact that the statutes of those states are not regulatory, but are mere price-fixing statutes, or a delegation of the power to fix prices to a board, which have no real or substantial relation to the public safety, health, welfare or prosperity, and are thus distinguishable from the Nebbia case. In the Tennessee case the further observation is made: ‘If the act in question is valid, then the Legislature can directly, or through a board, fix the fees that physicians and dentists may charge for their services; the prices that hotels, restaurants and lunch counters may charge for food; the prices of meats, packing house and canning factory products; and so on ad finitum until the liberty of the individual and the right to contract is destroyed.’ We agree with the principles announced in this case and the other cases above cited as also others that might be cited. ’ ’ Thus, regardless of “price fixing” in other States, the fact remains that we declared it unconstitutional in Noble v. Davis, supra. Although we held that barbers could not fix prices, yet the majority is now allowing liquor dealers to be protected by having their prices fixed. The trade of a barber is an old and respected trade, whereas the liquor dealer business lias always been one of a dangerous nature; yet we are guaranteeing a gross profit to liquor dealers, after refusing such a gross profit to barbers. This Act 282 of 1949 singles out one group— the liquor dealers — and guarantees them a privilege that we have denied to other groups in our economic system. Therefore I submit that it is unconstitutional insofar as it puts a floor on the price of liquor. It is said that if the State does not put a minimum price on liquor there will he a price war, and the State will lose revenue. This is a fallacious argument. The State will get just as much tax on liquor, whether liquor be sold at a profit or at a loss to the dealer. Have conditions reached the place where the State must prohibit merchants from having sales, for fear some will lose money? The free enterprise system is certainly in great danger if we are afraid to trust a merchant to run his business for fear he may lose money by selling his goods too cheaply. No, this Act, under the guise of protecting the State revenue, is granting a privilege to the liquor dealers which has been rightly refused the barbers 'in the ease cited. The whole idea of guaranteeing a profit— gross or net — to an industry is contrary to our Constitution. The majority seeks to distinguish the price fixing for liquor dealers from price fixing refused the barbers by saying that the liquor business is in a distinct sphere. My answer to such argument is, that the Constitution does not grant the liquor group any privileges refused other groups, and that the Constitution should be the guide. It is true that in some of our cases we have said that the liquor business existed at the “privilege” of the State. In Cook, Commissioner v. Glaser’s Wholesale Drug. Co., 209 Ark. 189, 189 S. W. 2d 897, in speaking of the liquor permit, this sentence was used: “The privileges conditionally extended witli the permit cannot be terminated nor abridged at the whim of an administrator . . .” The word “privileges,” as quoted in the sentence, was used as synonymous with sufferance or permission. In other words, the cases in which we have spoken of the liquor business as operating at the privilege of the State, the word “privilege.” was meant as engaging in a business that was not a matter of right but a matter of being permitted by the State. This is clearly reflected by the language of Mr. Justice Eakin in Ex Parte Levy, 43 Ark. 42: ‘ ‘ There are some trades and occupations confessedly dangerous to the public, either as to health, or safety, or morals. Government has the inherent power to regulate or prohibit them. It is not presumed that constitutions meant to prohibit this salutary exercise of power. The retail of liquors is one of them. As lawful as any other, when permitted, and as fully entitled to protection, it is nevertheless in questions of giving or withholding permission, considered as dangerous.” The majority is allowing a business, which operates only by permission, to now acquire a special privilege in violation of our Constitution. The Kentucky case of Reeves v. Simon, 289 Ky. 793, 160 S. W. 2d 149, does not seem to me to be sufficient justification for the evasion of our Constitutional inhibitions, as contained in Article II, §§ 18 and 19 and previously quoted. I respectfully submit that neither the Kentucky case nor the majority opinion in the case at bar has answered the argument which points out that the Constitution of our State prohibits the granting of a privilege. That Act 282 of 1949 does grant such a privilege is clear, because it puts a minimum price on the sale of liquor. That the State has a right to put a maximum price on liquor is clear, because the liquor business is of such a nature that it must be regulated; and those who engage in it must get their permits from the State on such terms as the State desires to impose, and one of these conditions is that those engaged in the business must not sell above a certain price. So the maximum price on liquor is constitutional. But the putting of a floor on the price of the article and prohibiting anyone from selling liquor at less than a fixed price is unconstitutional, because the effect of such legislation is to guarantee a profit to liquor dealers and to give them a privilege in violation of our Constitution. Therefore, for the reasons herein stated, I respectfully dissent from that portion of the majority opinion which holds to be constitutional the section of Act 282 of 1949 which fixed a minimum price on the sale of liquor. 1 am authorized to say that the Chief Justice has read this dissenting opinion and concurs with the views herein stated and may later issue an additional dissenting opinion of his own.   In Edelmann v. The City of Fort Smithy 194 Ark. 100, 105 S. W. 2d 528, we held that a statute granting tax immunity to World War Veterans was unconstitutional, yet the Act 282 of 1949 guarantees liquor dealers a profit which is not guaranteed to other citizens.    These sections read: “Section 3. The wholesaler’s selling price to the retailer shall be his cost (as defined in this Act) and determined by the Commissioner of Revenues, plus a mark-up of fifteen (15) per cent of cost on liquor, fifteen (15) per cent on cordials, liqueurs, and specialties, and fifteen (15) per cent on sparkling' and still wines, and he shall deliver such liquors to the retailers at such price without additional charge for delivery. “Section 4. The retailer’s selling price shall be his cost (as defined in this Act) and determined by the Commissioner of Revenues, plus a mark-up of thirty-three and one-third (33%) per cent of cost on liquor, forty-five (45) per cent on cordials, liqueurs, and specialties, and fifty (50) per cent on sparkling and still wines. “Section 10. Any rebates, loans, gifts, or other special inducements offered, given or accepted by either wholesaler or retailer shall be considered evasions of the requirements of this Act, . . .” “Section 15. Any person who violates any of the provisions of this Act shall be deemed guilty of a misdemeanor and upon conviction shall be fined not less than One Hundred ($100.00) Dollars nor more than Five Hundred ($500.00) Dollars and any permit which has been issued to such person so convicted shall be revoked and may not again be issued to such person for a period of two (2) years.”