State v. Walruff

26 F. 178, 1886 U.S. App. LEXIS 1814

• Court: United States Circuit Court
• Decided: January 22, 1886
• Status: Published

Opinion

Brewer, J.

The facts upon which the foundation question in this case rests are few and simple. Between 1870 and 1874 the defendants constructed a brewery in Lawrence, Kansas. The building, machinery, and fixtures were designed and adapted for the making of beer and for nothing else. For such purpose they are worth $50,000; for any other use not to exceed $5,000. At the time of the erection of the building, and up to 1880, the making of beer was as legal, as free from tax, license, or other restriction, as the milling of flour. In that year a constitutional amendment was adopted, prohibiting the manufacture of beer except for medicinal; scientific, and mechanical purposes. In 1881 and 1885 laws were enacted to carry this prohibition into effect. Under these laws a permit was essential for the manufacture for the excepted- purposes. To the defendants this permit was refused. An injunction was thereupon sued out from the district court enjoining defendants absolutely from the manufacture of beer. Thus, in strict conformity to the laws of the state, the defendants are prohibited from using their property for the purposes for which alone it is designed, adapted, and valuable, and are required, without compensation, to surrender $45,000 of value which they had acquired under every solemn unlimited guaranty of protection to property which constitutional declaration and the underlying thought of just and stable government could give. The action in which this injunction was granted they now seek to remove to this court, and insist that, no matter what the state may think or do, the fourteenth amendment to the federal constitution does give protection,, or, at least, that they are entitled to the opinion and judgment of the federal courts upon the question whether that portion of the fourteenth amendment which forbids a state to “deprive any person of life, liberty, or property, without due process of law,” and “to deny to any person within its jurisdiction the equal protection of the laws,” is not violated by this action of the state as respects them.

It is idle to deny that the question here presented is one- of difficulty and grave importance. On the one hand, it is insisted that both the amendment and the laws were duly, and in compliance with established forms of procedure, adopted and enacted; that the withholding of the permit was the act of a judicial officer in the exercise of a proper and granted discretion; that the injunction was issued out of the regular court of general original jurisdiction, and in an ordinary and familiar form of action; that thus there has been “due process of law;” and that the amendment does not prohibit a state from depriving a person of his property, but only prohibits such deprivation “without due process of law.” While, on the other hand, it is apparent that the defendants, having invested large properties in a perfectly legal business, are stripped of the value of such properties; and that, not as the indirect and consequential result of legislative changes in the law, but by a direct prohibition upon the only use for which such properties are designed, adapted, and valuable. Is a state potent, through the forms of law, to take from a citizen by direct action the value of his property without compensation ?

As the judge of an inferior federal court, I turn naturally to the opinions of my superior, the supreme court of the United States, for information and guidance. In the case of Bartemeyer v. Iowa, 18 Wall. 129, the opinion of the court was delivered by Justice Miller, and in it the court uses this language:

“But if it were true, and it were fairly presented to us, that the defendant was the owner of the glass of intoxicating liquor which he sold to Hickey at the time that the state of Iowa first imposed an absolute prohibition on the sale of such liquors, then we can see that two very grave questions would arise, namely: Whether this would be a statute depriving him of his property without duo process of law; and, secondly, whether, if it were so, it would be so far a violation of the fourteenth amendment in that regard as would call for judicial action by this court.”

In the same case, in a concurring opinion, Justice Bhadlev said:

“The law, therefore, was not an invasion of property existing at the date of its passage, and the question of depriving a person of property without due process of law does not arise. No one has ever doubted that a legislature may prohibit the vending of articles deemed injurious to the safety of society, provided it does not interfere with vested rights of property. When such rights stand in the way of the public good, they can be removed by awarding compensation to the owner.”

And Justice Field adds these words:

“I have no doubt of the power of the state to regulate the sale of intoxicating liquors when such regulation does not amount to the destruction of the right of property in them. The right of property in an article involves tile power to sell and dispose of such articles, as well as to use and enjoy it. Any act which declares that the owner shall neither sell it, nor dispose of it, nor use and enjoy it, confiscates it, depriving him of his property without due process of law. Against such arbitrary legislation by any state the fourteenth amendment affords protection.”

In the subsequent case of Beer Co. v. Massachusetts, 97 U. S. 25, the court thus refers to this matter:

“If the public safety or the public morals require the discontinuance of any manufacture or traffic, the hand of the legislature cannot be stayed from providing for its discontinuance by an incidental inconvenience which individuals or corporations may suffer. All rights are held subject to the police power of the state. We do not mean to say that property actually in existence, and in which the right of the owner has become vested, may be taken for the public good without compensation; but we infer that the liquor in this case, as in the case of Bartemeyer v. Iowa, was not in existence when the liquor law of Massachusetts was passed.”

In the light of this declaration of the supreme court, that when a man owns, with the unrestricted right to use or sell, a glass of liquor,— mere personal property which, without injury or depreciation in value, can be carried outside the jurisdiction of the state, — legislation of a state prohibiting its sale, and to that extent only diminishing its value, presents a grave question under the fourteenth amendment; the further positive assertion of one of the justices that such legislation is void under that amendment; and a still further intimation of the court in a later ease that vested rights of property cannot be destroyed for the public good without, compensation, — it would seem a contemptuous disregard by a subordinate tribunal of the judgments of its superior for me to hold that legislation of a state, destroying the value by prohibiting the use of property which cannot be moved, and in whose use the owner had prior thereto an absolute and unrestricted title, is clearly not in conflict with that amendment, and presents absolutely no question for the cognizance and judgment of the federal tribunals.

But I am not content to leave this case upon these authoritative suggestions of the supreme court. As a new matter, it is clear to me that there is a federal question giving right of removal. And here I assert these propositions:

First. Debarring a man, by express prohibition, from the use of his property for the sake of the public, is a taking of private property for public .uses. It is the power to use, and not the mere title, which gives value to property. Give a man the fee-simple title to a flour-mill, coupled with an absolute prohibition on its use, and of what value is it to him ? In the most common and ordinary case of taking private property for public uses, — the condemnation of the right of way for a railroad, — the title is not divested. The owner still retains the fee-simple, and he is only debarred from the use. When the railroad abandons the use, he retakes it. In the leading case of Pumpelly v. Green Bay Co., 13 Wall. 166, which was a case where land was overflowed in consequence of the erection of a dam, the supreme court thus disposes of this matter:

“It would be a very curious and unsatisfactory result, if, in construing a provision of constitutional law, always understood to have been adopted for protection and security to the rights of the individual as against the government, and which lias received the commendation of jurists, statesmen, and commentators as placing the just principles of the common law on that subject beyond the power of ordinary legislation to change or control them, it shall be held that, if the government refrains from the absolute conversion of real property to tlie uses of the public, it can destroy its value entirely, can indict irreparable and permanent injury to any extent, can, in effect, subject it to total destruction without making any compensation, because, in the narrowest sense of that word, it is not taken for the public use. Such a construction would pervert the constitutional provision into a restriction upon the rights of the citizen, as those rights stood at the common law, instead of the government, and make it an authority for invasion of private rights under the pretext of the public good, which had no warrant in the laws or practices of our ancestors. ”

In the case of Munn v. Illinois, 94 U. S. 141, Mr. Justice Field uses this language:

•‘All that Is beneficial in property arises from its use, and the fruits of that use; and whatever deprives a person of them, deprives him of all that is desirable or valuable in the title and possession. If the constitutional guaranty extends no further than to prevent a deprivation of title and possession, and allows a deprivation of use, and the fruits of that use, it does not merit the encomiums it lias received.”

I meet hero the common argument that, when private property is taken for public use, there is always a transfer of the use from one party to another; that here the use is not transferred, but only forbidden ; and that this deprivation of the use is only one of the consequential injuries resulting from a change of policy on the part of the state for which no compensation or redress is allowed. It is damnum absque injuria. The argument is not sound. As a matter of fact, in condemnation cases, seldom is the particular use to which the property has been put transferred. Almost always that use is destroyed in order that another ma}^ be acquired. The farmer surrenders a.part of his farm to the railroad company, not that the company may continue its use for farming purposes, but that the public may acquire the benefit in another direction. So, where huid is flowed by a mill-dam. And thus is it generally. Here the use is taken away solely and directly for the benefit of the public. For no other reason, and upon no other ground, could it be disturbed. Of course, in this, as in other cases, some use remains to the owner; but here, as elsewhere, the use which is of special value is taken from him for the benefit of the public; and this is not a consequential, but a direct result. It is not that the profits of his manufacture are reduced by reason of a prohibition upon sales. The law speaks to him by direct command, and says, “Stop your manufacturing.” It is idle to talk of consequential results and injuries when the law, in direct language, forbids the use of the premises for a brewery.

I assert, secondly, that natural equity, as well as constitutional guaranty, forbids such a taking of private property for the public good without compensation. In the case of State v. Mugler, 29 Kan. 252, this question was presented to the supreme court of Kansas, and, as a member of that court, I then expressed the same opinion. I am aware that my brethren differed with me, and that the court held that the state constitution carried no such prohibition. In view of that decision I shall have little to say in respect to the guaranties in the state constitution. I may, however, be permitted to say, and I do it with the highest respect for the members of that court, and with the utmost deference to its opinions and judgments, that in the light of the frequent discussions of the question since that decision, and the more I have reflected thereon, the more profoundly am I convinced that the guaranties of safety and protection to private property contained within our state constitution forbid that any man should be thus despoiled of that which gives value to his property for the sake of the public good, without first receiving compensation for that which is taken from him.

Turning to the opinions of other courts, I find .strong indorsement of the proposition I have asserted. In the case of Lake View v. Rose Hill Cemetery Co., 70 Ill. 191, the court says:

“We are unwilling to concede the existence of an indefinable power, superior to the constitution, that may be invoked whenever the legislature may deem the public exigency may require it, by which a party may be capriciously deprived of his property or its use without compensation, whether such property consists of franchises or tangible forms of property.”

The constitution of New Jersey contains no such guaranty as ours, yet the supreme court of that state, in Sinnickson v. Johnson, 17 N. J. Law, 129, declares “that this power to take private property reaches back of all constitutional provision, and it seems to have been a settled principle of universal law that the right to compensation is an incident to the exercise of that power; that the one is inseparably connected with the other; that they may be said to exist, not as separate and distinct principles, but as parts of one and the same principle.”

The constitution of New York was similarly deficient, and yet, in Gardner v. Newburgh, 2 Johns. Ch. 162, Chancellor Kent granted an injunction to prevent the trustees of New'burgh from diverting the water of a certain stream flowing over plaintiffs land from its usual course, because the act of the legislature which authorized it had made no provision for compensating the plaintiff for the injury thus done to his land. After citing several continental jurists on this right of eminent domain, he says that, while they admit that private property maybe taken for public uses when public necessity or utility requires, they all lay it down as a clear principle of natural equity that the individual whose property is thus sacrificed must be indemnified; and he adds that the principles and practice of the English government are equally explicit on this point.

Were similar action taken by the state in respect to other industries, I can but think the vigor of constitutional guaranties would seem clearer. In my own city is a lai’ge manufacturing establishment, in which hundreds of thousands of dollars have been invested for the making of glucose. This is an inferior kind of sugar, and in the opinion of some a deleterious article. Yet the industry is legal, the manufacture not forbidden. Suppose the next legislature should believe that, glucose was injurious to the public health, and forbid its manufacture, could the wheels of that manufactory be stayed, and the value of that investment be destroyed, without compensation? Take, also, the illustration of playing cards, which, by reason of their use for gambling purposes, are, in the judgment of many good people, a bane to society. If a factory for their manufacture was established, when, as now, a perfectly legal industry, would the owner hold his investment subject to the opinions of perhaps a temporary majority ? Or, take a still stronger illustration. This is a corn-growing state, yet wheat also is raised abundantly, and many flour-mills exist. Suppose the legislature should determine that the best interests of the stale would be promoted by stopping the growing of wheat, and increasing the crop of corn, and to that end should prohibit the milling of flour, must the owners, without compensation, abandon their milling and sacrifice their investment? Does not natural justice, as well as constitutional guaranty, compel compensation as a condition to such sacrifice ? Yet who can slate what the law will recognize as a legal distinction between those cases and this. Of course, it will he said that no legislature would ever think of such extreme and unreasonable action. But the question for courts to determine is not what is likely to be done, hut what can be done.

Thirdly. I affirm that, no matter what legislative enactments may he had, what forms of procedure, judicial or otherwise, may be prescribed, there is not “due process of law” if the plain purpose and inevitable result is the spoliation of private property for the benefit of the public without compensation. It is a mistake to say that the forms of law alone constitute “due process.” No complete and perfect definition of the phrase “due process of law” has yet been given. The most familiar, and one for ordinary cases sufficiently accurate, is that given by Daniel Webster in the celebrated Dartmouth College Case,—the “law of the land” being substantially equivalent to “due process of law,” — as follows: “By the law of the land is meant the general law, which hoars before it condemns, which proceeds upon inquiry, and renders judgment only upon trial.” But, as said by Mr. Justice Miller in Davidson v. New Orleans, 96 U. S. 104, it is probably better “to leave the moaning to be evolved by the gradual process of judicial inclusion and exclusion, as the cases presented for decision shall require, with the reasoning on which such decisions may be founded.” In the same case Mr. Justice Bradley adds these words :

“In judging what is < due process of law,’ respect must be had to the causa and object of the taking, — whether under the taxing power, the power of eminent domain, or the power of assessment for/local improvements, or none of these; and; if found to be suitable or admissible in the special case, it will bo adjudged to be ‘due process.of law,’ but if found to be arbitrary, oppressive, and unjust, it may be declared to be not ‘ due process of law.’ ”

In Murray’s Lessee v. Hoboken L. & I. Co., 18 How. 276, the supreme court thus limits the meaning of the phrase:

“The constitution contains no description of these processes which it was intended to allow or forbid. It does not even declare what principles are to be applied to ascertain whether it be due process. It is manifest that it was not left to the legislative power to enact any process which might be devised. The article is a restraint on the legislative, as well as on the executive and judicial, powers of the government, and cannot be so construed as to leave congress free to make any process ‘ due process of law,’ by its mere will.”

Now, in the case at bar, while judicial proceedings are prescribed, yet the spoliation is the direct command of the legislature, and the judicial proceedings are only the machinery to execute that command. No discretion is left to the courts. The legislature has in terms said to defendants, “Stop your use of your brewery,” and has directed the courts to enforce that command. There is.nothing but mere machinery between the legislative edict and an unused valueless manufacture. As well might the executive as the courts be charged with the enforcement of this command. Such a command, no matter how enforced, operative to deprive a citizen of tlie value of his property without compensation, is, in the language of Mr. Justice Bradley, supra, “arbitrary, oppressive, and unjust,” and therefore should be “declared to be not due process of law.”

Fourthly, and as a necessary consequence of the preceding. jLeg-islation which operates upon the defendants as does this is in conflict with the fourteenth amendment, and, as to them, void. At least, it presents a question arising under such amendment, as to which they are entitled to the opinion and judgment of the federal courts. As the amount in controversy is unquestionably in excess of §500, the case is a removable one.

In view of what has hitherto .fallen from my pen in other cases, it may be unnecessary to add anything further; yet, to guard against any possible misapprehension, as well as to indicate'that my views as expressed upon other questions have not changed, let me say that E do not in the least question the power of the state to absolutely prohibit the manufacture of beer, or doubt that such prohibition is potential as against any one proposing in the future to engage in such manufacture. Any one thus engaging does so at his peril, and cannot invoke the protection of the fourteenth amendment, or demand the consideration and judgment of the federal courts. All that I hold is that “property,” within the meaning of that amendment, includes both the title and the right to use; that, when the right to use in a given way is vested in a citizen, it caimot be taken from him for the public good without compensation. Beyond any doubt, the state can prohibit defendants from continuing their business of brewing, but before it can do so it must .pay the value of the property destroyed.

Nothing that I have said in this opinion is to be taken as bearing on the question of the sale of beer, or the power of the state over that. Counsel claimed that the right to manufacture, without the right to sell, was a barren right. Whatever limitations may exist in this state, the markets of the world are opon, and, with such markets, the right to manufacture is far from a barren right.

NOTE". In "Weil v. Calhoun, 25 Fed. Kep. 805, a bill was filed in the United States circuit court for the Northern district of Georgia, for the punióse of testing the Georgia local option and prohibición law. The plaintiiis alleged, among other things, that the act was unconstitutional, because it would render wholly worthless the stock, fixtures, etc., of the brewery, and seriously interfere with the property, business, and vested interests of the complainants. The court say : “ The great complaint of this bill is that by this law the complainants are deprived of their property, and. injured in their business, etc. Nothing is better settled, by a large number of decisions of the supreme court of the United States, than that such losses.and such damages are not agood objection to a law. The states must have power to legislate for purposes of good order, the preservation of the public health, and a thousand other objects, and it is an every-day event that some man’s property is made less valuable — perhaps worthless — by the operation of laws passed by the legislature for the public good. Professions in which men make money, and devote their whole time, are declared illegal, and are broken up and destroyed, very much to the hurt and pecuniary loss of the persons .concerned, and they have no redress. I allude now to the profession of the gambler. So, too, so vastly profitable a business as a lottery, even though protected by a legislative grant, has been broken up by a law prohibiting its exercise, and its property and business dissipated to the winds without any remedy. So, of the oleomargarine manufactory; and so of a hundred different investments,-made under laws not prohibiting them, yet rendered valueless or far less valuable by means of the operation of laws passed by tlie legislature for the public good, as it supposed. This whole subject of the liquor traffic, and investments precisely like those of the complainants broken up or largely crippled by prohibitory laws, has boon a fruitful source of discussion before the courts, and they are all now agreed that such rights and properties as the complainants assert they are about to have injured or destroyed if this law be declared of force are not protected by the constitution of the united States. Passenger Cases, 7 How. 501; Beer Co. v. Massachusetts, 97 U. S. 25; Slaughter-House Cases, 16 Wall. 129; Stone v. Mississippi, 101 U. S. 814. This question has been before the supremo court of the United States, the court of the last resort in cases of this kindt and that court uniformly and clearly held that rights of the character here sot up mus, yield, however costly and devastating may be the evil, to the will of the legislature in its passage"of laws in their judgment for the public good. It is one of the risks that every man takes in entering a business or making an investment, and he cannot complain.”

Other questions were discussed by counsel at great length and with great ability. 1 have not noticed them in this opinion, already quite lengthy, because this question is in the case, cannot be ignored, and justifies a removal.

The motion to remand will be overruled.

One thing more I may be excused for referring to. In the course of the various arguments that have been made to me in this state, and the sister state of Iowa, on the question of removals to the federal courts of proceedings to enforce their prohibitory laws, it has more than once been intimated that jurisdiction in the federal courts of such proceedings meant the nullification of those laws. There could be no greater mistake. The judges of those, courts are citizens of these states, — as interested as any citizens in the good name of their .states, the enforcement of their laws, and the sobriety of their citizens. Experience has shown that those courts enforce laws as strictly as any, are "as little disposed to tolerate trifling or evasion of their orders, and generally punish with a severer hand. If it should so happen that, by the judgment of the supreme court of the United States, — the ultimate tribunal in this nation, — it should be determined that in this or any kindred case the zeal for temperance of the good people of this state has led them to infringe upon sacred and protected rights of property, I cannot doubt that they will gladly hasten to make that compensation which shall be found just. Indeed, it is a truth ever to be borne in mind, and never more so than in times of deep feeling and determined effort, that they who are striving to lift society up to the plane of a higher and purer life should see to it that every act and every step is attended by absolute justice. I commend this to the thoughtful consideration and judgment of the good people of my state, — a state in whose past I glory, and in whose future 1 believe.