Oertel Co. v. Gregory

270 F. 789, 1921 U.S. Dist. LEXIS 1500
CourtDistrict Court, W.D. Kentucky
DecidedFebruary 10, 1921
DocketNo. 89
StatusPublished
Cited by7 cases

This text of 270 F. 789 (Oertel Co. v. Gregory) is published on Counsel Stack Legal Research, covering District Court, W.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Oertel Co. v. Gregory, 270 F. 789, 1921 U.S. Dist. LEXIS 1500 (W.D. Ky. 1921).

Opinion

WARTER EVANS, District Judge.

[1,2] The Eighteenth Amend- ■ . ment to the Constitution of the United States is as follows:

“Section 1. After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited.
“Sec. 2. The Congress and the several states shall have concurrent power to enforce this article by appropriate legislation.”

It was ratified by the requisite number of states in January, 1919, and by its terms became effective one year thereafter.

Titles 2 and 3 of the act passed by both Houses of Congress over the President’s objections thereto on October 28, 1919 (41 Stats. 307-322), and which is commonly known as the Volstead Act, had received an elaborate consideration by each House of Congress, inasmuch as it was, largely by anticipation, designed to provide adequate means for the enforcement of that amendment to the Constitution. It is not necessary in the case now before us io go elaborately into the provisions of those titles, and we shall limit ourselves to those of them which bring up the questions involved in this case.

Section 1 of title 2 of the act in its first clause provides:

“When used in title II and title III of this act (1) the word ‘liquor’ or the phrase ‘intoxicating liquor’ shah be construed to include alcohol, branuy, whisky, rum, gin, beer, ale, porter, and wine, and in addition thereto any spirituous, vinous, malt-, or fermented liquor, liquids and compounds whether medicated, proprietary, patented, or not, and by whatever name called, containing one-half of 1 per centum or more of alcohol by volume which are fit for use for beverage purposes: Provided, that the foregoing definition shall not extend to dealcoholized wine nor to any beverage or liquid produced by the process by which beer, ale, porter or wine is produced, if it contains less than one-half of 1 per centum of alcohol by volume, and is made as prescribed in section 37 of this title, and is otherwise denominated than as beer, ale, or porter, and is contained and sold in, or from, such sealed and labeled bottles, casks, or containers as the commissioner may by regulation prescribe.”

Section 7 of the title reads thus:

“The term ‘regulation’ shall mean any regulation prescribed by the commissioner with the approval of the Secretary of the Treasury for carrying out the provisions of this Act, and the commissioner is authorized to make such regulations.”

Pursuant to the power thus conferred the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury, on January 16, 1920, made regulations of the most elaborate character, and which, with the forms prescribed therein, cover 110 closely printed pages.

The bill alleges that the plaintiff is a Body corporate engaged in the business or profession of cereal beverage manufacturing and the operation of a dealcoholizing plant for the manufacturing of cereal beverages containing less than one-half of 1 per centum of alcohol in volume, and which said business is and has been operated and conducted under a permit issued by the Commissioner of Internal Revenue under section 37, title 2, of the Act approved October 28, 1919.

[791]*791In order to clearly understand the exact contention of the plaintiff it may be well to insert at this point certain of the important allegations of the bill as follows:

‘•Plaintiff states that in pursuance to the permit issued by the Commissioner of Internal Revenue to the Oertel Company as aforesaid, and in pursuance to the provisions of the ‘National Prohibition Act,’ this plaintiff has been manufacturing in accordance wiih section 37, title 2 of said act, certain cereal beverages, and is now engaged in the manufacture of said beverages in accordance with said act, and that it now lias on hand many thousand gallons of said cereal beverages containing less than one-lialf of one per cent, of alcohol by volume, and that this plaintiff is now and has at all times herein mentioned, been engaged in the business of selling said cereal beverages to dealers in Louisville, Ky., the vicinity thereof, and other parts of the United St ates.
'•Plaintiff slates that on the 10th day of January, 3920, the Commissioner of Iniornal Revenue wiih the approval of the Secretary of the ’Treasury, caused to be issued certain regulations relative to the manufacture and sale of said cereal beverages. Subsection C of section 49 of article 6 of Regulations 00, so issued by said Commissioner, reads as follows, to wit:
‘“(o) The containers of beverages produced at dealcoholizing plants, distilleries, or industrial alcohol plants, must, before or at the time of removal from the premises where produced, bear a statement either on the commercial label or separate label that the beverage contains less than one-half’ of 1 per cent, of alcohol by volumes- This statement must appear on every bottle or other container of such beverages and where such beverages are transferred to new containers a similar statement must appear on the new containers. ¡Sueli beverages may not be denominated as beer, ale, or porter.’
“Plaintiff states that in pursuance to said regulations, plaintiff caused a large number ol’ labels to be printed, which said labels described the cereal beverage manufactured and sold by this plaintiff as ‘Oertel’s Lager Style and Oortel’s Double linger.’ A copy of each of said labels is attached hereto as a part hereof, marked ‘Exhibits 1 and 2.’
“Said labels in all respects comply with the provisions of said National Prohibition Act, and particularly point out that said beverage contains less than one-half of one per cent, of alcohol by volume.
“Plaintiff stares that it 1ms sold many thousand bottles of said beverages, and on each of said bottles one of said labels has appeared; that it has conducted an expensive advertising campaign, advertising said beverage as ‘Lager Style' and ‘Double Lager,’ and that said names ‘Lager Style’ and ‘Double Lager’ have become well known to the purchasers of such cereal beverages, by reason of said advertisements, and that said brands constitute a valuable asset of this plaintiff, and have been established by plaintiff at great cost and expense as aforesaid.
“Plaintiff states that on the 20th day of October, 1920, the Commissioner of Internal Revenue, wiih the approval of the Secretary of the Treasury, issued Treasury Decision 3084, which said treasury decision reads in part as follows:
“ ‘The use of the words beer, ale, or porter, and the well-known synonyms for same, such as Lager, Bock or Stout, either with or without prefixes or suffixes, is not permissible on labels for cereal beverages.’ ”

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Cite This Page — Counsel Stack

Bluebook (online)
270 F. 789, 1921 U.S. Dist. LEXIS 1500, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oertel-co-v-gregory-kywd-1921.