Opinion
No. 47360.
March 7, 1949.
Benjamin Mahler, of New York City, for plaintiff.
Elizabeth B. Davis, of Washington, D.C., and Theron Lamar Caudle, Asst. Atty. Gen. (Robert N. Anderson and Andrew D. Sharpe, both of Washington, D.C., on the brief), for defendant.
Before JONES, Chief Judge, and LITTLETON, HOWELL, MADDEN, and WHITAKER, Judges.
Action by John Randolph Hopkins against the United States to recover an alleged overpayment of income taxes.
Petition dismissed.
Plaintiff paid an income tax deficiency, including penalty and interest, of $23,397.79 for 1932, and seeks in this proceeding to recover $36,291.95 asserted as the overpayment in a claim for refund filed in May 1937. This suit is not based on the ground stated in this claim, but plaintiff contends that other claims filed were proper and legal amendments. The deficiency resulted from the inclusion in plaintiff's income of the amount of $131,839.27 paid to plaintiff by the Lambert Pharmacal Company under an agreement made by J.W. Lambert with plaintiff's great-grandfather in April 1881, as modified in January 1885.
Defendant says, first, that plaintiff may not recover because the suit is not based upon timely claims for refund, and, second, that in any event plaintiff is not entitled to recover on the merits.
Special Findings of Fact
1. Plaintiff is a citizen and a resident of the State of Florida, with address % Joseph Frank, 11 West 42nd Street, New York, N.Y. He is the son of Russell and Vera Lawrence Hopkins, and a great-grandson of Dr. J.J. Lawrence. Vera L. Hopkins was the granddaughter of Dr. J.J. Lawrence.
2. On April 20, 1881, one Jordan W. Lambert executed an instrument in writing whereby in consideration of being "furnished" with the formula of a medicine called Listerine, he agreed to pay $20 per gross of Listerine sold, and which agreement reads as follows:
"Know all men by these presents, that for and in consideration of the fact that Dr. J.J. Lawrence of the City of St. Louis, Mo., has furnished me with the formulae of a medicine called Listerine to be manufactured by me, that I Jordan W. Lambert, also of the City of St. Louis, Mo., hereby agree for myself, my heirs, executors, and assigns, to pay monthly to the said Dr. J.J. Lawrence, his heirs, executors or assigns, the sum of twenty dollars for each and every gross of said Listerine hereafter sold by myself, my heirs, executors or assigns."
3. Thereafter and on June 28, 1881, an application for registering the name "Listerine" as the trade-mark to be used by it was filed in the United States Patent Office by Lambert Company, a partnership, by Jordan W. Lambert, a member of the firm. The name was registered on August 2, 1881. This reads:
"To all whom it may concern:
Be it known that we, Lambert Co., citizens of the United States, domiciled at the city of St. Louis, State of Missouri, being a firm located and doing business at the city of St. Louis, State of Missouri, have adopted for our use a Trade-Mark for a Chemical or Medical Preparation manufactured by us under a private formula, of which trade-mark the following is a full, clear, and exact specification.
Our trade-mark consists of the word `Listerine.' This word has generally been printed upon a label, as shown in the fac-simile presented in this case. Upon the label appear the words and letters `Lambert Co., Man'f. Chemists, St. Louis,' inclosed in an ornamental border, and with ornamental flourishes interspersed upon the face of the label; but all these words may be changed or omitted at pleasure, and the border may be changed, and likewise the flourishes, or omitted at pleasure, without materially changing the character of our trade-mark, the essential feature of which is the word `LISTERINE.'
This trade-mark we have used continually in our business since May 1, 1881.
The class of merchandise to which this trade-mark is appropriated is drugs, and the particular description of goods comprised in such class on which we use the said trade-mark is a chemical or medical preparation manufactured by us under a private formula.
It has been our practise to print said trade-mark upon a label, as shown by the label with the fac-simile thereon presented in this case, and to fasten the label thus printed, with adhesive substance, to the side of the bottle containing our preparation. We have been also accustomed to stencil the words mentioned in the foregoing specification on a label applied to the outside of the cases in which the particular goods are packed.
Lambert Co., By Jordan W. Lambert, A member of the firm. Witnesses: Eugene O. Slevin, MacDougald Haman.
Declaration
State of Missouri, City of St. Louis:
Jordan W. Lambert, being duly sworn, deposes and says that he is one of the members of the firm of Lambert Co., who are the applicants in the foregoing statement; that he verily believes that the foregoing statement is true; that said firm of Lambert Co. have at this time a right to the use of the trade-mark therein described; that no other person, firm, or corporation has the right to such use, either in the identical form or in any such near resemblance thereto as might be calculated to deceive; that it is used in commerce with Great Britain; that the description and fac-simile presented for record truly represent the trade-mark sought to be registered, and that said applicants are citizens of the United States.
Jordan W. Lambert."
The foregoing was duly sworn to under date of July 2, 1881.
4. Thereafter and under date of November 12, 1884, a corporation known as Lambert Pharmacal Company was incorporated under the laws of the State of Missouri for the purpose of manufacturing, selling, and dealing in pharmaceuticals.
5. On November 15, 1884, a motion was adopted by the board of directors of Lambert Pharmacal Company which provided that the president and secretary were authorized to buy from Lambert Company rights and titles to the medical preparations known as Listerine and Lithiated Hydrangea. The minutes further state:
"Mr. Lambert read an agreement to be entered into between the Lambert Pharmacal Co. and J.J. Lawrence, binding the Company to pay Lawrence a royalty of six dollars per gross sales of Listerine and Lithiated Hydrangea and ten percent upon gross of sales upon any preparations which may hereafter be manufactured or sold by the Company."
On January 2, 1885, Lambert Pharmacal Company by J.W. Lambert, president, and J.R. Peacock, secretary, executed an instrument in writing, reading as follows:
"J.J. Lawrence of St. Louis, Missouri, having originated and heretofore sold to J.W. Lambert, the formulae and processes for the manufacture of two medical preparations, known as Listerine and Lithiated Hydrangea, with all the rights and benefits accruing therefrom and has received therein a monthly royalty from J.W. Lambert and J.W. Lambert having sold said formulae of Listerine and Lithiated Hydrangea to the Lambert Pharmacal Company, a corporation organized under the laws of the State of Missouri, and doing business in St. Louis, and furthermore said J.J. Lawrence having sold to said Corporation his sole and exclusive rights to the formulae and processes originated by him for making two preparations called `Dugonol' and `Mentholated Camphor' therefore know all men by these presents that for and in consideration of these facts, the said Lambert Pharmacal Company hereby agrees and contracts for itself and assigns to pay to the said J.J. Lawrence, his heirs, executors and assigns, six dollars on each and every gross of Listerine and Lithiated Hydrangea manufactured or sold by the said Lambert Pharamacal Company or its assigns, and ten percent (10%) in gross amount of sales of the said Dugonol and Mentholated Camphor, and all other goods which said Lambert Pharmacal Company or its assigns may hereafter manufacture or sell or formulae furnished by said Dr. J.J. Lawrence, account of sales to be rendered and payment of said royalty to be made on the third day of each month. In testimony whereof said Lambert Pharmacal Company has caused these documents to be sealed with its corporate seal and signed by its President and Secretary this second day of January 1885."
6. On March 1, 1909, Dr. J.J. Lawrence executed a trust agreement providing that Lawrence assign to a trustee, among other things, "all my right, title, and interest in, to, and concerning the royalties and moneys due and to become due to me by the Lambert Pharmacal Company on sales of Listerine and of other articles and preparations manufactured and sold by it" for the purpose of collecting the income therefrom, such income to be paid to the grantor during his life and upon his death to his wife and granddaughter Vera Lawrence Hopkins. Upon the death of the survivor of the wife and granddaughter, the trust was to terminate at which time the principal was to be distributed to the children of the granddaughter in equal parts.
The trust created by Lawrence on March 1, 1909, contained a provision that trustor "expressly reserve[s] the power to revoke or modify [it] — by an instrument in writing —."
Dr. J.J. Lawrence died on March 14, 1909.
7. Josephine Lawrence, widow of Dr. J.J. Lawrence, died on January 10, 1921. Vera Lawrence Hopkins, granddaughter of said Dr. J.J. Lawrence, died on February 16, 1928, leaving surviving her as her only children or descendants, John Randolph Hopkins, plaintiff herein, and his three sisters, Josephine L.B. Hopkins (now Josephine H. Tucker), Susan McRee Hopkins (now Susan H. Whitmore), and Minnie Fox Hopkins (now Minnie F. Gilbert), all of whom were, on the date of the death of their mother, under the age of twenty-one.
8. Upon the death of Josephine Lawrence, Henry R. Strong, who was then trustee under the trust of J.J. Lawrence, was appointed and duly qualified as testamentary guardian of the minor children. Thereupon and on May 29, 1929, he, as trustee, assigned and transferred over to himself as testamentary guardian the corpus of the trust created on March 1, 1909, by Dr. J.J. Lawrence.
9. Such distribution was made pursuant to decree entered by the Circuit Court of the City of St. Louis on June 19, 1929, in a proceeding entitled "Henry R. Strong, as trustee, v. Josephine Lawrence Bennett Hopkins, and others."
The decree determined among other things that the value of the entire corpus of the trust estate under said trust, at or about June 1929, was $7,800,000. The corpus of the trust at that time consisted of (1) certain rights, title, and interest in and to and concerning royalties and moneys due and to become due Joseph J. Lawrence from Henry R. Strong, growing out of the purchase by Strong from Lawrence of the Journal known as the "Medical Brief"; (2) all right, title, and interest in and to and concerning royalties and moneys due and to become due Lawrence by Lambert Pharmacal Company on sales of Listerine and other articles sold by it under contract already referred to; (3) all right, title, and interest in and to and concerning royalties and moneys due and to become due Lawrence from Battle Company on sales of Bromidia, Iodia, and other articles; (4) all right, title and interest in and to and concerning royalties and moneys due and to become due Lawrence from Rio Chemical Company on sales of Celerina, Aletris Cordial, and other articles and preparations manufactured and sold by it; (5) 207 shares of stock of Od Chemical Company; (6) 67 shares of stock of Dad Chemical Company; (7) 336 shares of stock of Peacock Chemical Company; and (8) 305 shares of stock of Sultan Drug Company.
10. During the period April 1909 to December 31, 1928, the following payments were received on account of all the assets contained in the trust corpus:
From Lambert Phamacal Co. ...... $4,095,804.93 From Battle Co. .............. 364,111.54 From Peacock Chemical Co. ...... 216,755.69 From Rio Chemical Co. .......... 310,164.74 From Od Chemical Co. ........... 385,674.63 From Sultan Drug Co. ........... 63,499.63 From R.H. Strong ............... 7,629.50 _____________ Total ........................ $5,443,640.66
Of the total receipts set forth above, the following amounts were received from the Lambert Pharmacal Company on the one hand, and from all other sources including the Lambert Pharmacal Company on the other hand, during the five years' period ending December 31, 1928, the three years' period ending December 31, 1928, and the year 1928, respectively:
Receipt from Period Lambert Total Receipts 5-year ........ $2,613,910.59 $3,076,892.45 3-year ........ 1,955,507.14 2,212,347.71 1-year ........ 726,691.09 803,656.86
During the four years' period 1929 to 1932, inclusive, the Lambert Pharmacal Company made the following royalty payments on account of the manufacture and sale of Listerine products:
1929 ....................... $848,475.46 1930 ....................... 790,746.60 1931 ....................... 714,533.76 1932 ....................... 527,359.04
The evidence offered by plaintiff is not sufficient to establish the fair market value in March 1928, of the right to receive the royalty payments from the Lambert Pharmacal Company for the sale of Listerine.
11. On April 10, 1932, plaintiff attained the age of twenty-one years. Thereupon, Henry R. Strong, as testamentary guardian, duly distributed and delivered to the plaintiff certain securities, cash and an undivided one-fourth interest in and to the contracts comprising a part of the corpus of the trust created on March 1, 1909.
12. During the year 1932 plaintiff received directly and through his guardian one-fourth of the sums paid by the Lambert Pharmacal Company. The sums so received by plaintiff in 1932 from the Lambert Pharmacal Company totalled $131,839.77. Plaintiff also received sums from other medicinal manufacturing companies as a result of the transfer to him of his undivided one-fourth interest in the trust corpus.
13. On April 15, 1933, plaintiff filed an income tax return for the calendar year 1932 showing gross income of $92,416.57, deductions of $20,061.94, and a net income of $72,354.63, and a tax due of $16,101.47. Under the heading Rents and Royalties included in gross income there was set forth the amount of $81,656.33. This was explained in "Schedule B" as follows:
Royalties: From Lambert Pharmacal Co., St. Louis, Mo. ............ $72,998.98 Rio Chemical Co., New York 2,037.69 Battle Co., St. Louis, Mo...... 2,344.16 Od Peacock Sultan Co., St...... Louis, Mo. ................... 4,275.50 __________ $81,656.33
The correct tax was determined to be $16,537.40 which, together with interest of $20.13 incurred as a result of late filing of the return, was assessed and paid as follows:
Apr. 20, 1933 ...... $4,045.50 to the Collector of District of Conn. June 17, 1933 ...... 4,170.67 to the Collector of District of Conn. Aug. 24, 1933 ...... 52.53 to the Collector of District of Conn. Sept. 19, 1933 ...... 4,144.42 to the Collector of District of Conn. May 28, 1935 .. 4,144.41 to the Collector of Boston, Mass.
On that same date plaintiff also paid interest in the amount of $718.36.
14. On March 7, 1935, a 90-day deficiency letter was mailed to the plaintiff advising him of a deficiency in income tax for 1932 in the amount of $28,128.28, penalty of $1,406.41, and interest of $3,795.39. In arriving at this deficiency the income from rents and royalties was increased by the amount of $57,374.65, making the total received $139,030.98, itemized as follows: Lambert Pharmacal Company, $131,839.77; Rio Chemical Company, $2,921.41; Battle Company, $4,269.80. This additional amount of $57,374.65 represented sums received from the above companies by plaintiff's guardian from January 1, to April 10, 1932, and turned over by him to plaintiff and by plaintiff direct from April 10, 1932, to December 31, 1932. This additional tax, interest and penalties were duly assessed by the Commissioner of Internal Revenue.
15. Plaintiff paid $5,000 of the additional tax above referred to on March 10, 1936, $5,000 on March 20, 1936, and $15,956.25 on July 23, 1936, leaving an unpaid balance of $7,373.83.
16. On May 19, 1937, plaintiff filed a claim for refund of $26,537.40. This claim was predicated upon the ground that the amount of $139,030.98 [the amounts received during the year from Lambert Pharmacal Company, Rio Chemical Company, and Battle Company] did not represent taxable income but a return to the taxpayer of a capital sum "receivable as of March 1, 1913, resulting from the sale before March 1, 1913, by the taxpayer's great-grandfather of certain valuable formulae; the payments received are part consideration of the selling price and not taxable income."
17. Upon consideration of the abovementioned claim for refund and of protest filed by plaintiff, the Commissioner of Internal Revenue made certain adjustments in plaintiff's tax liability for 1932 which reduced the deficiency in tax to $19,754.55, the deficiency in penalty to $987.73, and in interest to $2,655.51. The computation of the correct tax liability for the year based on the correct deficiency and the tax of $16,537.40 originally paid, resulted in a total overassessment of tax, interest, and penalty of $9,922.29. In arriving at this final determination, the Commissioner of Internal Revenue made no change in the income from royalties set forth in the deficiency letter of March 7, 1935, but allowed as a deduction the amount of $424.14 with the explanation that this item represented additional exchange expense allowed in connection with royalties received. This together with other additional adjustments resulted in a determination by the Commissioner of Internal Revenue of a net income of $110,949.32.
18. A certificate of overassessment showing the total overassessment of $9,922.29, above mentioned, was duly issued.
19. On April 15, 1939, plaintiff filed a claim for refund of $36,291.95. This was predicated upon the ground that the royalty income is not taxable income but represents return of capital to the taxpayer arising out of the sale by the taxpayer's great-grandfather of certain valuable formulae. The claim for refund further stated that the "payments received are part consideration of the selling price and not taxable income. The taxpayer acquired the contracts under which the payments are being made, in 1928, upon distribution of a trust estate, and is entitled to recover the value of said contracts as of that date or as of March 1, 1913, before any receipts are taxable."
Conclusion of Law
Upon the foregoing special findings of fact which are made a part of the judgment herein, the court concludes as a matter of law that plaintiff is not entitled to recover, and his petition is therefore dismissed.
Judgment is entered against plaintiff for the cost of printing the record herein, the amount thereof to be entered by the clerk and collected by him according to law.
During the year 1932 plaintiff received a total of $131,839.77 from the Lambert Pharmacal Company pursuant to an agreement made with plaintiff's great-grandfather, Dr. J.J. Lawrence, in 1881 (finding 2), as modified by an agreement in January 1885 (finding 5). Under the terms of these written documents, Lawrence furnished, or licensed the right to manufacture and sell, a certain medicinal formula known as Listerine, in consideration of the payment to him, of a "royalty," first, of $20 "for each and every gross of said Listerine hereafter sold" under the first agreement of 1881 executed by the Partnership of Lambert Company, by Jordan W. Lambert, and $6 a gross under the 1885 agreement executed by the corporation of Lambert Pharmacal Company to which the partnership transferred, with the consent of Lawrence, the Listerine formula and the right to use the trade-mark "Listerine" thereon. Lambert Co had duly registered in its name the trade-mark "Listerine" on August 2, 1881.
In 1909, Lawrence executed a trust to which he transferred, among other things, all his right, title and interest in, to, and concerning "the royalties and moneys due and to become due to me by the Lambert Pharmacal Company on sales of Listerine," for the purpose, among others, of collecting the income and paying the same to the grantor during his lifetime (finding 6). The trust provided that upon the death of Lawrence the income was to be paid to the grantor's wife and granddaughter (plaintiff's mother). It was further provided that upon the death of the survivor of the beneficiaries the trust would terminate and direction was given that the corpus or principal of the trust be distributed to the children of the granddaughter in equal parts. Lawrence died shortly thereafter. The granddaughter, who survived her mother, died February 16, 1928, leaving four children, including plaintiff, surviving her. They were under twenty-one years of age and a guardian for the children was appointed and the trustee transferred the corpus of the trust to him (findings 8-10).
Plaintiff attained the age of twenty-one on April 10, 1932, whereupon the guardian distributed and delivered to him certain securities, cash and an undivided one-fourth interest in the agreements, hereinbefore referred to, comprising a part of the corpus of the trust created in 1909.
Plaintiff returned as income for 1932 only $72,998.98 of the sum of $131,839.77, received by him from the Lambert Pharmacal Company. Upon audit of the return the Government held, among other things, that the entire amount received was taxable income, and in a statutory deficiency notice issued March 7, 1935, the net income and tax liability was recomputed and a deficiency in tax, interest and penalty, was determined in the amount of $33,330.08. This deficiency was duly assessed. Plaintiff paid $25,956.25 of the deficiency in March and July 1936, and filed a protest as to the balance, and also filed a claim on May 19, 1937, for the refund of $26,537.40. The ground set forth in this claim was that "the so-called `Royalty' Income is not taxable income but represents a return to the taxpayer of a capital sum receivable as of March 1, 1913, resulting from the sale before March 1, 1913, by the taxpayer's great-grandfather of certain valuable formulae; the payments received are part consideration of the selling price and not taxable income."
As shown in finding 17, the Treasury Department, upon consideration of plaintiff's protest and claim for refund, redetermined the net income and the deficiency to be $110,949.32 and $23,397.79, respectively, which showed a total overassessment, on the basis of the total amount assessed and the correct tax liability, of $9,922.29, of which $2,548.46 was an overpayment and was withheld and applied on a 1935 deficiency, resulting in a net overassessment of $7,373.83, which was abated. A certificate of overassessment was issued.
In arriving at this final determination, the Commissioner of Internal Revenue made no change in the income from royalties, including the item here in question, set forth in the deficiency notice of March 7, 1935.
Thereafter, on April 15, 1939, and before the first refund claim of May 1937 had been formally rejected, plaintiff filed another refund claim for $36,291.95 on the same ground stated in the first claim, with the additional statement that "The taxpayer acquired the contracts [agreement to pay $6 a gross for Listerine sold] under which the payments are being made, in 1928, upon distribution of a trust estate, and is entitled to recover the value of said contracts as of that date or as of March 1, 1913, before any receipts are taxable."
Plaintiff was granted a hearing April 24, 1945, upon his refund claims and on May 12, he was advised by letter that they were disallowed. Formal notice of rejection was mailed by the Commissioner on December 18, 1945.
The grounds upon which plaintiff bases his right to recover in this case are (1) that he is entitled to treat the sum of $131,839.77 received in 1932 from the Lambert Pharmacal Company as proceeds from a sale subject to tax at capital gain rates; (2) in the alternative, that he is entitled to treat these receipts as a return of capital; and (3), also in the alternative, that he is entitled to reduce the sum of $131,839.77 by a sum representing annual depreciation computed at 2% on the February 16, 1928, value of the property right to receive the payments from the Lambert Pharmacal Company.
The first ground for recovery, asserted herein, was not made the basis of either the refund claim filed in May 1937, or the one filed in April 1939, and cannot, therefore, be allowed even if there had been such a transaction as would come within the capital gains provision. Real Estate Land Title Trust Co. v. United States, 309 U.S. 13, 60 S.Ct. 371, 84 L.Ed. 542. Moreover, the capital gains provisions contained in Sec. 101, Revenue Act of 1932, 26 U.S.C.A.Int.Rev. Acts, page 504, requires that the sale or exchange must have been consummated after December 31, 1921. In the case of Josephine Hopkins Tucker [plaintiff's sister] v. Commissioner (memorandum opinion), decided September 18, 1942, 47 B.T.A. 1045, the Board of Tax Appeals (now the Tax Court) held, on identical facts, that there had been no sale at any time by the taxpayer's great-grandfather or by the taxpayer. The Board decided that the transaction in which J.J. Lawrence "furnished" the Listerine formula to be manufactured was a licensing arrangement and the payments agreed to be made to him as compensation for such right to manufacture and use, were royalties, and, therefore, taxable as ordinary income. The Board also considered the agreement of 1885, and held that it did not change the nature of the original transaction between Lawrence and J.W. Lambert in April 1881. We think this decision was clearly correct. Compare, Burnet v. Harmel, 287 U.S. 103, 53 S. Ct. 74, 77 L.Ed. 199; Hirschi v. United States, 67 Ct.Cl. 637.
With reference to plaintiff's second claim herein, it appears that after plaintiff acquired the rights under the royalty agreements of the manufacturers, upon the termination of the trust, he made no sale of the formula or the name "Listerine," but simply continued to receive such payments per gross of Listerine manufactured and sold. Therefore, plaintiff's second contention, which is based upon Sec. 113(a)(5), Revenue Act of 1932, 26 U.S.C.A.Int.Rev. Acts, page 515, cannot be sustained. This claim appears to have been first included as a new ground in the second refund claim filed April 15, 1939, and can cover only the sum of $2,548.46 withheld during that year, as shown by the certificate of overassessment, from the 1932 overpayment to be applied on a 1935 deficiency.
Plaintiff's contention in support of this ground overlooks the fact that the statement in Section 113(a)(5), supra, upon which he relies, that "the basis shall be the fair market value of the property at the time of the distribution to the taxpayer," relates back to Section 111 of the Act, 26 U.S.C.A.Int.Rev. Acts, page 510, which has to do with the determination of gain or loss upon the sale or other disposition by the taxpayer of the property. As we have said, plaintiff made no sale or disposition. Whatever rights plaintiff had were acquired by a specific bequest of property under Section 113(a), supra, and Section 22(b) of the 1932 Act, 26 U.S.C.A.Int.Rev. Acts, page 487, provides that property received by inheritance is not taxable but that the income therefrom shall be taxable. Irwin v. Gavit, 268 U.S. 161, 44 S.Ct. 475, 69 L.Ed. 897; Brooks v. United States, 6 F. Supp. 844, 79 Ct.Cl. 470; Regenold v. United States, 60 F. Supp. 765, 104 Ct.Cl. 238. The case of Burnet v. Logan, 283 U.S. 404, 51 S.Ct. 550, 75 L.Ed. 1143, relied upon by plaintiff is not in point. The question in that case related to the proper method of taxing amounts received from the sale of stock.
The last ground on which plaintiff seeks to recover, that is, depreciation, cannot be sustained for several reasons; (1) this claim was not asserted in either of the two refund claims; (2) the evidence is not sufficient to show the fair market value of the property on the proper date under Section 114, 26 U.S.C.A. Int.Rev. Acts, page 519, that is, March 1, 1913; (3) under Section 23(k), Revenue Act of 1932, 26 U.S.C.A.Int.Rev. Acts, page 491, depreciation is allowable only on property used in trade or business, and plaintiff was not engaged in either; (4) the right to receive the income under the privilege or license agreements in question, which were not limited as to time, is not a depreciable asset in plaintiff's hands. Brooks v. United States, supra; Codman v. Miles, 4 Cir., 28 F.2d 823; Peters v. Commissioner, 4 T.C. 1236.
Since plaintiff may not recover on any of the claims advanced, the petition must be dismissed. It is so ordered.
HOWELL, MADDEN, and WHITAKER, Judges, and JONES, Chief Judge, concur.