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CAROLINA GLASS CO. v. STATE OF SOUTH CAROLINA, 240 U.S. 305 (1916)

U.S. Supreme Court

CAROLINA GLASS CO. v. STATE OF SOUTH CAROLINA, 240 U.S. 305 (1916)

240 U.S. 305

CAROLINA GLASS COMPANY, Plff. in Err.,
v.
STATE OF SOUTH CAROLINA.
No. 12.

CAROLINA GLASS COMPANY, Plff. in Err.,
v.
WILLIAM J. MURRAY, Chairman, John McSween, et al., Constituting the State Dispensary Commission, et al.

No. 9.

CAROLINA GLASS COMPANY, Plff. in Err.,
v.
WILLIAM J. MURRAY, John McSween, Adolphus N. Wood, Avery Patton, and James S. Brice.

No. 205.

CAROLINA GLASS COMPANY, Plff. in Err.,
v.
WILLIAM J. MURRAY, John McSween, Adolphus N. Wood, Avery Patton, and James S. Brice.

No. 204.

Nos. 12, 9, 205, and 204.
Argued January 20, 1916.
Decided February 21, 1916.[ Carolina Glass Co v. State of South

Carolina 240 U.S. 305 (1916) ]

[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.

Mr. Justice McReynolds delivered the opinion of the court:

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.

A legislative committee was appointed in 1905 to investigate the state dispensary. In 1907 the statute of 1896 was repealed; control through a state board was abolished and county boards substituted, clothed with authority to purchase 'in the name of this state' all liquors to be sold within their several counties, 'Provided, That the state shall not be liable upon any contract for the purchase thereof beyond actual assets of the dispensary for which the purchase is made.' At the same time another act created a State Dispensary Commission of five, gave it control of all funds, assets, and property other than real estate of the state dispensary, required it to investigate all facts concerning outstanding claims against the state dispensary, and thereafter to pay all just liabilities from dispensary assets which might come into its hands. This second act of 1907 was amended in 1908, and the commission given 'full power to pass upon, fix and determine all claims against the state growing out of dealings with the dispensary; and to pay for the state any and all just claims, which have been submitted to and determined by it, and no other, out of the assets of the dispensary which have been or may hereafter be collected by said Dispensary Commission: Provided, That each and every person, firm or corporation, presenting a claim or claims to said Commission, shall have the right to appeal to the supreme court, as in cases at law.'

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.

Number 12.

The history and disposition of this cause in the state tribunals sufficiently appear from parts of the opinion by the supreme court (87 S. C. 270, 69 S. E. 391) quoted below:

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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.

Number 9.

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.

Sec. 7. 'The State Dispensary Commission is hereby empowered to pass all orders and judgments and do any and all things necessary to carry out the purposes of this act; and all judgments rendered by them for any claim due the state shall be a lien on the property of the judgment debtor situated within this state, and a transcript of said judgment shall be filed in the office of the clerk of the court of common pleas in each county where any property of such judgment debtor is situated.'

Sec. 9. 'In all cases pending before the said State Dispensary Commission, upon any claim or claims against any person or persons or any corporation or corporations owning any real estate in any county in this state, the said Commission shall file in the office of the clerk of court in each county where such real estate is situated a notice of the pendency of such cases, and the said notice so filed shall be full notice to all persons whomsoever claiming any title to or lien upon such real estate acquired subsequent to the filing thereof, and the debt found by said Commission to be due the state shall have priority over the claims of all creditors, except creditors secured by mortgage or judgment entered and recorded prior to the filing of such notice, and the said real estate, in the hands of any person or persons whomsoever, shall be liable for the payment of such debt so found to be due the state.'

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... * *

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.

Number 205.

The Carolina Glass Company instituted this proceeding at law in the United States district court, South Carolina, December 13, 1911, to recover judgment against individual members of the Dispensary Commission for sums of money said to have been unlawfully withdrawn by them from county dispensaries which held the same for plaintiff's benefit. It is alleged that for supplies furnished partly before [240 U.S. 305, 317]   and partly after February 23, 1910, these county dispensaries became lawfully indebted to the company for more than $19,000, and that the money in their keeping was held in trust to pay such sum, and further:

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.

Number 204.

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.

Sec. 6. 'In any and all cases where the State Dispensary Commission has heretofore found any amount due the state by any person, firm or corporation on account of dealings with the state dispensary, the several county dispensary boards now existing, and all boards and other officer or officers in charge of any money due any such person, firm or corporation on account of any dealings with any and all county dispensaries heretofore existing, shall, upon demand, pay to the State Dispensary Commission a sufficient amount, or so much thereof as may be on hand, to cover the amount so found to be due the state.'

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.

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