Source: https://supreme.justia.com/cases/federal/us/280/384/
Timestamp: 2019-04-22 00:38:54+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 280 › Clarke v. Haberle Crystal Springs Brewing Co.
Clarke v. Haberle Crystal Springs Brewing Co.
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.
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.
A writ of certiorari was granted in this case on May 13, 1929 on account of a conflict between the judgment below, 30 F.2d 219 (reversing 20 F.2d 540) and Red Wing Malting Co. v. Willcuts, 15 F.2d 626 (cert. denied, 273 U.S. 763), the latter case having been followed by Landsberger v. McLaughlin, 26 F.2d 77, and Renziehausen v. Commissioner, 31 F.2d 675, now pending here.
"a reasonable allowance for the exhaustion, including obsolescence, of its goodwill . . . , it having become certain prior to that period that the useful life of the goodwill would be terminated by January 10, 1920, because of prohibition legislation."
The good will was that of a brewery, and is found to have been destroyed by prohibition legislation. The deduction claimed is for the fiscal year ending May 31, 1919, it having been apparent early in 1918 that prohibition was imminent, and the officers having taken steps to prepare for the total or partial liquidation of the company. The amount of the deduction to be made is agreed upon if any deduction is to be allowed.
termination by law as an evil of a business otherwise flourishing, and neither becomes more applicable because the death is lingering, rather than instantaneous. It is incredible that Congress, by an Act approved on February 24, 1919, should have meant to enable parties to cut down their taxes on such grounds because of an amendment to the Constitution that it had submitted to the legislatures of the states in 1917 and that had been ratified by the legislatures of a sufficient number of states the month before the present Act was passed.

References: v. 
 v. 
 § 234
 v. 
 v. 
 v.