
    American Code Co., Inc., Petitioner, v. Commissioner of Internal Revenue, Respondent.
    Docket No. 9077.
    Promulgated February 2, 1928.
    
      Clark H. Hebner, Esq., for the petitioner.
    
      Bruce A. Low, Esq., for the respondent.
   OPINION.

Phillips:

The decision of this case appears to be controlled by the decision of this Board in Hidalgo Steel Co. v. Commissioner, 8 B. T. A. 76.

Further, it should be noted that in the present case the amount set up on the books of the petitioner on account of its liability was the amount becoming due to Farquhar under the terms of the agreement. The suit, however, was not for commissions due under the contract (except as to the month of April, 1919) but was for breach of the contract. While the amounts becoming due under the contract would be one element to be considered by the jury in fixing damages for its breach, it was by no means the measure of the damages sustained. It seems clear that the amounts set up on the books in 1919 and 1920 were not considered to be for damages for breach, but were intended to and did represent the amount which would have been a liability had the contract continued in force.

Decision will be entered for the respondent.  