South Carolina v. United States

By several statutes, the state of South Carolina established dispensaries for the wholesale and retail sale of liquor, and prohibited sale by other than the dispensers. The United States demanded the license taxes prescribed by the internal revenue act for dealers in intoxicating liquors, and the dispensers filed the statutory applications for such licenses. The state, sometimes in cash and sometimes by warrant on its treasury, paid the taxes. No protest was made in reference to these payments prior to April 14, 1901. On that day a formal protest by the state dispensary commissioner was filed with the United States collector of internal revenue at Columbia, South Carolina. No appeal or application for the repayment of the sums paid by the various dispensers was made by them or by the state of South Carolina to the Commissioner of Internal Revenue, as authorized by §§ 3226, 3227, and 3228, Rev. Stat., U.S.C.omp. Stat. 1901, pp. 2088, 2089.

The dispensers had no interest in the sales, and received no profit therefrom. The entire profits were appropriated by the state, one half being divided equally between the municipality and the county in which the dispensaries were located, and the other half paid into the state treasury. In the year 1901 the profits arising from these sales amounted to $545,248.12. While the laws of South Carolina prohibited the sale of liquor by individuals other than the dispensers, of 373 special license stamps issued in that state by the United States internal revenue collector, only 112 were to dispensers, while 260 were to private individuals. Three separate actions were commenced in the court of claims by the state of South Carolina to recover the amounts paid for these license taxes. These actions were consolidated. Upon a hearing, findings of fact were made and a judgment entered for the United States. 39 Ct. Cl. 257. Whereupon the state appealed to this court.

Messrs. Jackson H. Ralston, Frederick L. Siddons, and Franklin H. Mackey for appellant.

[Argument of Counsel from pages 440-443 intentionally omitted]

Solicitor General Hoyt for appellee.

Statement by Mr. Justice Brewer:

[Argument of Counsel from pages 443-447 intentionally omitted]

Mr. Justice Brewer delivered the opinion of the court: