United States Supreme Court Cases & Opinions

U.S. Supreme Court

Clarke v. Haberle Crystal Springs Brewing Co., 280 U.S. 384 (1930)

Clarke v. Haberle Crystal Springs Brewing Co.

No. 68

Argued January 9, 1930

Decided January 27, 1930

280 U.S. 384

Syllabus

1. Under § 234(a)(7) of the Revenue Act of 1918, which provides that, in computing the net income of corporations, there shall be allowed as a deduction "a reasonable allowance for the exhaustion, wear, and tear of property used in the trade or business, including a reasonable allowance for obsolescence," a brewing company is not entitled to a deduction for the fiscal year ending May 31, 1919,

Page 280 U. S. 385

on account of "exhaustion" or "obsolescence" of its goodwill, although it became certain prior to that period that the goodwill of the company would be destroyed by January 16, 1920, because of prohibition legislation. P. 280 U. S. 386.

2. When a business is extinguished as noxious under the Constitution, the government incur no liability for compensation to the owners. P. 280 U. S. 386.

3. It will not be presumed that Congress intended to provide partial compensation to the owners of a business extinguished as noxious under the Constitution by an allowance to them, under § 234(a)(7) of the Revenue Act of 1918, of deductions on account of the "exhaustion" or "obsolescence" of the goodwill of the business. P. 280 U. S. 386.

30 F.2d 219 reversed.

Certiorari, 279 U.S. 832, to review a judgment of the circuit court of appeals which reversed a judgment of the district court, 20 F.2d 540, dismissing the complaint in a suit to recover money exacted and paid as income taxes.