The publican has form in setting rules in his pubs having previously imposed a ban on bad language and mobile phones in 2017 to encourage "social conversation".
Smith, who owns the 261-year-old brewery, also banned music in about 300 of his pubs more than 10 years ago to avoid paying copyright fees.
He also ditched jukeboxes, gaming machines and televisions, while he also tried to ban the use of smartphones and tablets.
In 2016, the businessman refused to allow a the residents of a town to build a bridge because it interfered with his land. Their old bridge had been destroyed by flooding.
The pub's landlord who lived above the now boarded up venue, Eric Lowrey, is now homeless.
"I'm so sorry Mr Smith been down and shut the pub," he said on The Fox and Goose's Facebook page.
"l love all you people that have stood by me and Tracey and have looked after us."
A regular mourned the loss of the drinking hole.
"The pub had been shut for years before it opened again.
"It was fantastic to pop into after work.
"It was family friendly, takings were up, the pub was spotless and there had been no trouble, regulars were well behaved as we all pulled together as a community.
"He (Mr Smith) is notorious for having a strict ban on using mobile phones, bringing dogs in and swearing.
"He came in, had a drink and seemed happy.
"But he said he heard a man talking to a woman and the man swore. It wasn't aimed at him, it was nothing at all.
"He's shut the pub for one swear word taking all the money from the till and safe, and left the pub landlady and landlord jobless and homeless.
"It's not like it was closed after a brawl."
Another local said: "The man was telling his wife a dirty joke and said the F-word. It wasn't aggressive. They were both laughing and joking.
"No one can quite believe the pub's been shut. It's a bit daft really because a pub's where you go to let off steam and enjoy a bit of banter with other people.
"A ban on swearing is a bit much."
