United States v. Cherokee Brick & Tile Company
| Decision Date | 21 January 1955 |
| Docket Number | No. 15199.,15199. |
| Citation | 218 F.2d 424 |
| Parties | UNITED STATES of America, Appellant, v. CHEROKEE BRICK & TILE COMPANY, Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Carolyn R. Just, Ellis N. Slack, Hilbert P. Zarky, Sp. Assts. Atty. Gen. D. of J., H. Brian Holland, Asst. Atty. Gen., Washington, D. C., Frank O. Evans, U. S. Atty., Macon, Ga., for appellant.
Joseph B. Brennan, Atlanta, Ga., Charles J. Bloch, J. Rene Hawkins, Macon, Ga., W. A. Sutherland, Atlanta, Ga., Bloch, Hall, Groover & Hawkins, Macon, Ga., Sutherland, Asbill & Brennan, Atlanta, Ga., of counsel, for appellee.
Before HOLMES, BORAH, and RUSSELL, Circuit Judges.
This appeal is by the United States from a judgment in favor of the Cherokee Brick and Tile Company, which is engaged in mining common brick and tile clay. The taxpayer uses the raw clay to produce burnt brick, which it sells as the finished product. The judgment was entered pursuant to an opinion of the district court, which is reported in 122 F.Supp. 59, to which reference is made for a more detailed statement of the issues of law and fact presented on this record. In brief, the question is should the taxpayer's gross income from mining be permitted to include transforming the clay into brick or tile by an extrusion or molding machine, by burning the units in kilns, and by loading the burnt brick and tile for shipment?
The processes are the ordinary ones in the industry in mining raw clay and producing burnt brick and tile. The Commissioner used the allocation of taxpayer's costs to the several processes as shown in its books and records. The taxpayer paid the deficiency assessed, and filed a claim for refund which was rejected by the Commissioner. After institution of this suit for refund, both parties filed motions for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure, 28 U. S.C.A. The court below granted the taxpayer's motion, holding that the first commercially marketable mineral product was obtained only after all the processes of manufacturing brick and tile had been completed.
The Government contends that clay rarely requires much preparation to make it marketable; that a percentage depletion allowance is granted under Sec. 114(b) (4) (A) (i), 26 U.S.C.A., to mineral deposits of clay, but not of brick and tile; and, specifically, that clay has reached the form of the first commercially marketable mineral product at the time it enters the...
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Henderson Clay Products v. United States
...clay were permitted to base their depletion on the gross income upon the sale of the finished product. See United States v. Cherokee Brick and Tile Co., 5 Cir., 1955, 218 F.2d 424, United States v. Merry Brothers Brick and Tile Company, 5 Cir. 1957, 247 F.2d 708, cert. denied 1957, 355 U.S.......
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Hugoton Production Company v. United States
...by their own "commercially marketable mineral products," i.e., the products which they sold. See, e. g., United States v. Cherokee Brick & Tile Co., 218 F.2d 424 (5th Cir. 1955). This led not only the Supreme Court but Congress as well to reexamine and redefine the base for percentage deple......
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McClelland v. Comm'r of Internal Revenue
...marketable mineral product or products.‘ Under this general language, many court decisions, beginning with United States v. Cherokee Brick & Tile Co., 218 F. 2d 424 (5th Cir. 1955), had interpreted the phrase ‘commercially marketable‘ to allow percentage depletion on the gross income derive......
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Barton Mines Corporation v. CIR
...the depletion allowance based on the gross income from the sale of the manufactured product. See e. g., United States v. Cherokee Brick & Tile Co., 218 F.2d 424 (5 Cir. 1955) (selling price of burnt brick not raw clay); Dragon Cement Co. v. United States, 244 F.2d 513 (1 Cir.) cert. denied,......