Mitsukiyo Yoshimura v. Alsup

• Decision Date: 30 March 1948
• Docket Number: No. 11584.,11584.
• Citation: 167 F.2d 104
• Parties: MITSUKIYO YOSHIMURA v. ALSUP, Collector of Internal Revenue.
• Court: U.S. Court of Appeals — Ninth Circuit

167 F.2d 104 (1948)

MITSUKIYO YOSHIMURA v. ALSUP, Collector of Internal Revenue.

No. 11584.

Circuit Court of Appeals, Ninth Circuit.

March 30, 1948.

Shiro Kashiwa, of Honolulu, T. H., for appellant.

Theron Lamar Caudle, Asst. Atty. Gen., George A. Stinson, Lee A. Jackson, Frederic G. Rita, and Harry Marselli, Sp. Assts. Atty. Gen., and Ray J. O'Brien, U. S. Atty., and Edward A. Towse, Asst. U. S. Atty., both of Honolulu, T. H., for appellee.

Before GARRECHT, DENMAN, and BONE, Circuit Judges.

DENMAN, Circuit Judge.

This is an appeal from a judgment dismissing a complaint seeking to enjoin the Collector of Internal Revenue from the collection of a tax claimed to be illegal because assessed against appellant upon documents signed by appellant but procured from him by the coercion and fraud of certain government agents.

The question here is whether the record shows the exceptional circumstances under which the tax may be enjoined despite the prohibition of 26 U.S.C.A. Int.Rev.Code, § 3653(a) that "Except as provided in sections 272(a), 871(a) and 1012(a), no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court."

Appellant claims that the following statement of the record shows the exceptional circumstances entitling him to an injunction against the enforcement of the tax within the principles established in Allen v. Regents of University System of Georgia, 1938, 304 U.S. 439, 58 S.Ct. 980, 82 L.Ed. 1448; Miller v. Standard Nut Margarine Co. of Florida, 1932, 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed. 422; Hill, Jr., et al. v. Wallace et al., 1922, 259 U.S. 44, 42 S.Ct. 453, 66 L.Ed. 822. Appellee's motion to dismiss appellant's complaint alleging the facts later set forth was denied. Appellee answered.

At the hearing of the complaint of the appellant in the United States District Court of Hawaii, the appellee renewed his motion to dismiss, which was denied. Then the appellee moved for judgment on the pleadings, which was also denied.

Thereupon at the hearing, the appellant introduced evidence to the following effect:

The appellant was a subject of Japan with limited education in the English language who operated a service station at Waiau, Oahu, Territory of Hawaii, which was less than a quarter of a mile from Pearl Harbor, Oahu, Territory of Hawaii. Appellant had returned and paid income taxes for the years 1941, 1942 and 1943.

Sometime during 1944, three men from the United States Bureau of Internal Revenue came to his place of business at Waiau to investigate. In the course of the investigation, one of the men discovered a misentry in the appellant's book in the sum of $150.00, and told the appellant that he could be interned for such a mistake, and, thereafter, constantly reminded the appellant during said investigation of such possibility.

At the request of one of the men, Mr. Irey, appellant went to Mr. Irey's office where the appellant was asked to and did sign a statement to the effect that he had defrauded the United States Government in taxes. The appellant was permitted to sign the statement although the appellant failed to understand its nature and significance.

Subsequently, three other men from the United States Bureau of Internal Revenue came to the appellant's place of business at Waiau and advised him to retain a lawyer. Following this advice, the appellant secured the services of Mr. Kashiwa, an attorney at law, who also could practice before the United States Treasury Department.

Finally, two men from the United States Bureau of Internal Revenue came to the appellant's place of business at Waiau to have the appellant sign Forms 870, a copy of which was introduced in evidence. The appellant inquired of these men what the forms were for, and told them that he didn't understand the nature and significance of these forms, and that he wished to see his lawyer, Mr. Kashiwa, before signing the forms. The appellant was told by the men that the forms concerned his taxes and that unless he signed them immediately he would thereby incur the wrath of the boss and thereby possibly suffer a jail term or a huge fine. Whereupon, the appellant signed the forms. Forms 870 which the appellant signed were blank forms, there being no figures whatsoever entered thereon.

The following day, the appellant saw Mr. Kashiwa, his lawyer, and told him about the signing of these Forms 870. Immediately thereupon, Mr. Kashiwa went to see Mr. Glutsch of the United States Bureau of Internal Revenue, who informed Mr. Kashiwa that the Forms 870 signed by appellant had already been mailed to Washington, D. C. Mr. Kashiwa then wrote to the Commissioner of Internal Revenue in Washington, D.C., but to no avail.

As the consequence of signing Forms 870, the appellant was assessed the total sum of $6,325.00 as additional federal income taxes for the years 1941, 1942 and 1943, plus $3,162.51 as penalties therefor.

The appellant was and is in no position whatsoever to pay these taxes and penalties.

Upon the close of the appellant's case, the appellee renewed his motion to dismiss. The motion was granted on the ground that 26 U.S.C.A. Int.Rev.Code, § 3653(a), prohibited the United States District Court for the District of Hawaii from entertaining the suit brought by the appellant. In ruling as aforesaid, the court stated:

"My sympathies are definitely, obviously, with the taxpayer, because I definitely think, if the facts are as the plaintiff's evidence picture them to be, that the representative of the Treasury Department certainly acted arbitrarily and in an unbecoming manner in this case. But no matter how much my sympathies might be with the taxpayer, based on these facts, unless he can successfully bring himself within the exception to this statute as carved out by the judicial decision, there is nothing much I can do about it. And I am not satisfied that the plaintiff has brought himself within the scope of this limited exception,...