State ex rel. Atkins v. Missouri State Bd. of Accountancy

• Decision Date: 02 October 1961
• Docket Number: No. 23353,23353
• Citation: 351 S.W.2d 483
• Parties: STATE of Missouri ex rel. Burl Wilson ATKINS, (Relator), Respondent, v. MISSOURI STATE BOARD OF ACCOUNTANCY, (Respondent), Appellant.
• Court: Missouri Court of Appeals

Page 483

351 S.W.2d 483

STATE of Missouri ex rel. Burl Wilson ATKINS, (Relator), Respondent, v. MISSOURI STATE BOARD OF ACCOUNTANCY, (Respondent), Appellant.

No. 23353.

Kansas City Court of Appeals, Missouri.

Oct. 2, 1961.

Thomas F. Eagleton, Atty. Gen., Joseph Nessenfeld, Asst. Atty. Gen., for appellant.

Neale, Newman, Bradshaw, Freeman & Neale, Jean Paul Bradshaw, O. J. Taylor, Springfield, for respondent.

BROADDUS, Justice.

Respondent, Burl Wilson Atkins, is a certified public accountant and holds certified public accountant's certificate No. 1134 issued by appellant, Missouri State Board of Accountancy. On March 4, 1960, respondent was convicted in the United States District Court of the crime of willfully and knowingly failing to make federal income tax returns to the Director of Internal Revenue for the calendar years 1956 and 1957, in violation of 26 U.S.C. Sec. 7203.

On September 3, 1960, respondent was served with a notice of hearing to be held on October 6, 1960, to determine whether certified public accountant's certificate No. 1134 should be suspended or revoked for cause set forth in Section 326.130, subd. 2 RSMo 1959, V.A.M.S. on the ground that respondent was convicted of a misdemeanor, an essential element of which is dishonesty or fraud, alleged to be the offense aforesaid.

On September 22, 1960, respondent filed his petition in the Circuit Court of Cole County for a writ of prohibition to prevent the Missouri State Board of Accountancy from proceeding further in said matter pursuant to said notice of hearing. A preliminary writ of prohibition was granted on said date, requiring said Board to desist and refrain from conducting or attempting to conduct a hearing pursuant to said notice.

Respondent's petition for the writ, which was made part thereof, alleged that in hearing such charge said Board was exercising a judicial function without jurisdiction and in excess of its jurisdiction.

The petition alleged that the Board has jurisdiction to conduct the hearing only if the offense of which respondent was convicted is a crime, an essential element of which is dishonesty or fraud, and that as a matter of law neither dishonesty nor fraud is an essential element of the crime referred to in Section 7203, Title 26 U.S.C., of which respondent was convicted.

The petition alleged that for the foregoing reason, the notice of hearing affirmatively shows on its face the Missouri State Board of Accountancy has no jurisdiction or is acting in excess of its jurisdiction in conducting the hearing on the ground aforesaid, and that there is no way to amend said notice of hearing in order to confer said jurisdiction on said Board.

Appellant, Missouri State Board of Accountancy, filed a motion to dismiss and to dissolve the preliminary writ of prohibition. Said motion alleged that the Board has jurisdiction to proceed with the hearing to determine whether respondent has been convicted of the crime alleged, and stated that a conviction of the crime of willfully and knowingly failing to file an income tax return in violation of Section 7203, Title 26 U.S.C., constitutes a conviction of a crime, an essential element of which is dishonesty or fraud within the meaning of Section 326.130, subd. 1(2) RSMo V.A.M.S.

On October 17, 1960, the cause was submitted on the pleadings, and the court thereupon entered its order and judgment making the preliminary writ of prohibition permanent. After an unavailing motion for new trial this appeal was taken by the Missouri State Board of Accountancy.

The authority of the Missouri State Board of Accountancy to revoke or suspend respondent's certificate is limited in this case by the provisions of Section 326.130 RSMo 1959, V.A.M.S. The Board may so revoke or suspend only if it can show that the respondent has been convicted '* * * of any crime, an essential element of which is dishonesty or fraud.' It is a generally accepted doctrine that, where a statute authorizes the revocation of a license for causes enumerated, such license cannot be revoked upon any ground other than one of the causes specified. Robinson v. Missouri Real Estate Commission, 280 S.W.2d 138, (Mo.App.); State ex rel. Sbordy v. Rowlett, 138 Fla. 330, 190 So. 59, 62, 123 A.L.R. 769; In re Weathers, 159 Fla. 390, 31 So.2d 543, 544.

The above statute is as simple as are the facts in this case. Dishonesty or fraud must be an essential element of the crime. In other words, the question is not whether this particular respondent was in fact guilty of a dishonest or fraudulent intent; rather, the question is whether the offense with which he was charged and to which he pleaded guilty is one necessitating proof of fraud or dishonesty--that is, always requiring that fraud or dishonesty be present as an element of the offense.

The federal misdemeanor statute in question provides:

'Any person required under this title to * * * make a return * * * who willfully fails to * * * make such return * * * at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor * * *.' (23 U.S.C. Sec. 7203).

Since Section 7203 is a United States Statute, we must accept the interpretation given it by the United States courts. Urie v. Thompson, 1949, 337 U.S. 163, 174, 69 S.Ct. 1018, 93 L.Ed. 1282, 1295. 'It is scarcely necessary to say that decisions of the federal courts, particularly of the United States Supreme Court, are controlling upon this court in cases based upon alleged violation of federal statutes.' Illinois State Trust Co. v. Missouri Pac. R. Co., 1928, 319 Mo. 608, 5 S.W.2d 368, 370(2). In the construction of a Federal Statute it has long been the rule in Missouri that '* * * the state courts will follow and are bound by the decisions of the federal courts.' McElvain v. St. Louis & S. F. R. Co., 151 Mo.App. 126, 1910, 131 S.W. 736, 743(12).

The requirements of Section 7203 are perfectly apparent; the only proof necessary to a conviction is that the person in question: (1) is required to make a return before a certain time; and (2) he wilfully fails to make such a return within the prescribed time.

The requirement of the Federal Statutes concerning filing of individual income tax returns are contained in 26 U.S.C. Sec. 6012. A return is required of every individual having, for a taxable year, a gross income of $600 or more; and such return must be filed on or before the 15th day of the fourth month following the close of the taxable year 26 U.S.C. Sec. 6072.

Significantly, the necessity of filing a return is not determined by the amount of taxable income; rather, the gross income governs. For example, a taxpayer, may have received, during a particular year, a gross income of more than $600, and yet have actually sustained a taxable loss for the year. Nevertheless, he would be required, under the federal statutes, to file a return. It is even possible that the taxpayer may not owe any tax; he may, in fact, be entitled to a refund. And still in either event, he would be required to file a return before the prescribed date.

Fraud or dishonesty has nothing to do with this particular offense. Under the circumstances enumerated in the preceding paragraph, the taxpayer is guilty of the misdemeanor in question if he fails to file his return on time and if such action is wilful. These--and these alone--are the requirements of the offense.

That these are the only elements of the offense is spelled out in Haskell v. United States, 10 Cir., 1957, 241 F.2d 790, 794(12), where it is said:

'Considered in that manner, the instructions made it crystal clear to the jury that the elements of the offense laid in the indictment which must be proved beyond a reasonable doubt were that the defendant was required to file an income tax return for the year 1951; that he did not file a return on or before September 15, 1952; and that his failure to file such a return was purposeful, deliberate and intentional and not accidental, inadvertent, or negligent.'

The court did not say that the failure to file such a return must involve fraud. The language employed by the court '* * * purposeful, deliberate and intentional * * *' is merely another way of saying that the failure must be wilful.

The term 'wilful', as used in this federal misdemeanor statute does not include fraud as a part of its meaning. In Abdul v. United States, 9 Cir., 1958, 254 F.2d 292, the defendant was charged with both felonies and misdemeanors under the Internal Revenue Laws; the misdemeanors were under the same statute here involved. The court held that the word 'wilful' has a different meaning when used in felony statutes than when employed in misdemeanor statutes. The court said at page 293(1):

'The meaning of the word 'wilfully' as used in the tax statutes has been considered in a number of cases and seems to have come to rest in this Circuit, as well as others, as meaning with respect to felonies, 'with a bad purpose or evil motive.' (citing cases.) But the meaning of the word 'wilfully' as used in the statute defining a misdemeanor has not as yet reached such repose. The trial court in the instant case thought the word 'wilful' as used in defining a misdemeanor required a different interpretation, as evidenced by the instructions given after the jury had returned a second time asking clarification of the instructions.'

The court went on to explain that the trial court had first instructed the jury that the word 'wilful' meant '* * * with a bad purpose * * *' but later clarified this by telling the jury that, as to the misdemeanor counts, the word wilful: '* * * means with a bad purpose or without grounds for believing that one's act is lawful or without reasonable cause, or capriciously or with a careless disregard whether one has had right so to act * * *'. (Italics ours.)

As to the felony counts the trial court had said the word meant: '* * * with knowledge of one's obligation to...