U.S. v. Ware

• Decision Date: 25 October 1979
• Docket Number: No. 78-1834,78-1834
• Citation: 608 F.2d 400
• Parties: 79-2 USTC P 9608, 79-2 USTC P 9659 UNITED STATES of America, Plaintiff-Appellee, v. Omer W. WARE, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 400

608 F.2d 400

79-2 USTC P 9608, 79-2 USTC P 9659

UNITED STATES of America, Plaintiff-Appellee, v. Omer W. WARE, Defendant-Appellant.

No. 78-1834.

United States Court of Appeals Tenth Circuit.

Argued Sept. 11, 1979.

Decided Sept. 27, 1979.

Rehearing and Rehearing En Banc Denied Oct. 25, 1979.

John Oliver Martin, Asst. U. S. Atty., Kansas City, Kan. (James P. Buchele, U. S. Atty., Topeka, Kan., on the brief), for plaintiff-appellee.

Gary James Joslin, Salt Lake City, Utah, for defendant-appellant.

Before DOYLE, BREITENSTEIN and LOGAN, Circuit Judges.

WILLIAM E. DOYLE, Circuit Judge.

This is a tax evasion case in which the defendant is charged with failing to prepare and file an income tax return in accordance with the law during the years 1973, 1974 and 1975, all in violation of 26 U.S.C. § 7203. The trial was had to a jury and ended in verdicts of guilty as to all three counts. The defendant was sentenced to one year in prison on each count, sentences to run concurrently.

This is a case in which an individual is committed to not file tax returns. It is not, however, the ordinary type of income tax opposition. It presents some unusual questions.

The defendant testified in his own behalf to the effect that he did not believe that he had a legal obligation to file an income tax return for the reason that the income which he received was not dollars, but, rather, Federal Reserve notes which were mere promises to pay and not redeemable in gold or silver. He admitted that he had filed no income tax returns in 1973, 1974 and 1975.

There is no doubt about his having received income in the amounts specified in the information as follows:

The allegation in Count I was that he received $10,624.59 in 1973. His income, according to Count II, was $7,001.05 in 1974, and his income in 1975 was $13,421.28.

In each count it was alleged that, notwithstanding the amount of his income, he had willfully failed to prepare and file a tax return as required by Title 26 U.S.C. § 7203.

Defendant's contentions on appeal are:

First, that the court erred in refusing to instruct the jury in accordance with the defendant's request having to do with his mistaken good faith belief in the requirements of the law.

Next, that the court failed to instruct the jury as to the defendant's theory of the case. He cites decisions which say that an accused is entitled to submit his theory of the case to the jury even though illogical. Defendant wished to have the jury told that even if his belief was ill-founded in law, if he had a good faith conviction he was entitled to the instruction regardless of whether it conformed with the law or not.

His third contention is not unlike the other two. Here he argues that the evidence was insufficient to establish that the defendant received the requisite gross income which would require him to make a return. Also, the jury was merely told that a person was required to file a return if he had a gross income exceeding $750.00 and was filing separately, or had a gross income exceeding $2,800.00 if the return was a joint one.

I.

Inasmuch as the appellant's third argument more or less embraces the other two, we will consider it at the outset.

Counsel's theme in point III is that the defendant believed that there was a difference between Federal Reserve notes and dollars and that he was entitled to use the actual value of his earnings in terms of gold dollars. He also believed, so it is argued, that the difference was substantial in amount and for that reason he was not required to file a return. Counsel goes on to say that regardless of the correctness of his viewpoint, it should have been considered at least in ascertaining the sufficiency of the proof as to the element of willfulness. But in his oral argument counsel has gone much further. He stated that his concern was not with the defendant, his client. Such as it was, his concern was with obtaining a ruling which would nullify the use of Treasury notes as legal tender and which would compel such obligations to be paid in gold coin. In his brief, counsel also emphasized that the argument which he was making was intended to be "profoundly serious." He added that "it is based on a very careful, logical and reasonable presentation of the law on the subject, both statutory and judicial. It deserves a judicial analysis of some merit and scholarly courtesy." What we say will very probably not fully satisfy the request which he makes. It will, however, be based on the law as it exists.

The court does not have the power to declare what is legal tender. That power is in the Congress. Article I, § 8 of the Constitution, empowers the Congress "(t)o coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures." From the very early days of the Republic, the powers to coin money and to regulate the value thereof have been broadly construed to regulate every phase of the subject of currency. Among Congress' powers is that of requiring the surrender of gold coin and gold certificates in exchange for other currency not redeemable in gold. See Nortz v. United States, 294 U.S. 317, 55 S.Ct. 428, 79 L.Ed. 907 (1935). Also, its power over the currency extends to every contract for the payment of money, and the obligation of the parties is therefore said to be assumed with reference to that power. See Legal Tender Cases, Knox v. Lee, 79 U.S. (12 Wall.) 457, 549, 20 L.Ed. 287 (1871); Juilliard v. Greenman, 110 U.S. 421, 449, 4 S.Ct. 122, 28 L.Ed. 204 (1884).

The Supreme Court has sustained the power of Congress to declare Treasury notes to be legal tender in satisfaction of antecedent debts. Legal Tender Cases, 79 U.S. (12 Wall.) 457, 20 L.Ed. 287 (1871). It has also been held by the Supreme Court that Congress has the power to abrogate clauses in private contracts which call for payment in gold coin, even though the contracts had been executed before the enactment by Congress of legislation which provided that it was no longer necessary to pay such obligations in gold coin. See Norman v. Baltimore & Ohio Railroad Co., 294 U.S. 240, 55 S.Ct. 407, 79 L.Ed. 885 (1935). ¹

The cases cited show that this power of Congress has been regarded as plenary throughout our history. A definitive case on this is Norman v. Baltimore & Ohio Railroad Co., supra. This decision was announced at the height of the great Depression. It was an opinion by Chief Justice Hughes, and is referred to as the famous gold clause case. It involved the question of enforceability of bonds which contained a gold clause, that is, a clause requiring that payment be made in a stated number of dollars in gold coin of the United States of or equivalent to the standard weight and fineness existing on the date of the bond. The obligee under these bonds demanded that payment be in the stipulated quantity of gold in form of coin, but it was held that this was not a contract for payment in gold coin as a commodity or in bullion, but, rather, a contract for the payment of money. The gold clause was construed to provide a definite standard of value and it was to protect against depreciation of the currency and discharge of the obligation by payment of a lesser value than that prescribed. Congress had passed a joint resolution nullifying such gold clause stipulations in preexisting money contract obligations and providing that such obligations were dischargeable dollar-for-dollar in any coin or currency constituting legal tender for public and private debts. The Court characterized the power of Congress as being a broad, comprehensive and rational authority over the subjects of revenue, finance and currency derived from the aggregate powers in Article I pertaining to fiscal controls. Based upon the scope and breadth of the congressional power which authorized the joint resolution of Congress set forth in 31 U.S.C. § 463, which resolution abrogated the obligation to pay in gold, it was ruled that Congress had the power to enact the joint resolution set forth below. ² It is to be noted that the term "obligation" was stated in the joint resolution to mean an obligation of the United States. The resolution also provided that coin or currency of the United States included Federal Reserve notes and circulating notes of Federal Reserve banks and national banking associations.

It is also to be noted that Congress Has already come to grips with the question whether United States notes are legal tender in 31 U.S.C. § 452, which provides:

United States notes shall be lawful money, and a legal tender in payment of all debts, public and private, within the United States, except for duties on imports and interest on the public debt.

Section 453 of the same chapter provides:

Demand Treasury notes authorized by the Act of July 17, 1861, chapter 5, 12 Stat. 259, and the Act of February 12, 1862, chapter 20, 12 Stat. 338, shall be lawful money and a legal tender in like manner as United States notes. Treasury notes issued under the Act of July 14, 1890, chapter 708, 26 Stat. 289, shall be a legal tender in payment of all debts, public or private, except where otherwise expressly stipulated in the contract, and shall be receivable for customs, taxes, and all public dues.

Counsel has not mentioned any of the Acts of Congress dealing with this particular problem, nor has he cited any of the Supreme Court decisions which recognize the magnitude of congressional power in this area. More important is the fact that he has failed to cite the Supreme Court's landmark decision in Norman v. Baltimore & Ohio Railroad Co., supra.

Thus, counsel has not asked this court to overrule the Supreme Court or to declare any Acts of Congress unconstitutional. This does not mean that he has not in effect asked us to rule contrary to these statutes and Supreme Court decisions. Counsel's argument appears to assume that this court is empowered to deal with any law which is contrary to his...