United States v. Teitelbaum

• Decision Date: 30 March 1965
• Docket Number: No. 14672,14673.,14672
• Citation: 342 F.2d 672
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Abraham TEITELBAUM, Defendant-Appellant. Abraham TEITELBAUM, Plaintiff-Appellant, v. Eugene C. COYLE, Jr., et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

342 F.2d 672 (1965)

UNITED STATES of America, Plaintiff-Appellee, v. Abraham TEITELBAUM, Defendant-Appellant.

Abraham TEITELBAUM, Plaintiff-Appellant, v. Eugene C. COYLE, Jr., et al., Defendants-Appellees.

Nos. 14672, 14673.

United States Court of Appeals Seventh Circuit.

February 10, 1965.

Rehearing Denied March 30, 1965.

Abraham Teitelbaum, Chicago, Ill., for appellant.

Louis F. Oberdorfer, Asst. Atty. Gen., Jonathan S. Cohen, Atty., Dept. of Justice, Washington, D. C., Edward V. Hanrahan, U. S. Atty., Chicago, Ill., Lee A. Jackson, Joseph Kovner, Attys., Dept. of Justice, Washington, D. C., for appellees.

Before DUFFY and CASTLE, Circuit Judges, and GRUBB, District Judge.

DUFFY, Circuit Judge.

Each of these appeals involves federal income taxes together with penalties and interest for the taxable years 1949, 1950 and 1951. On August 23, 1957, assessments were made against taxpayer. For the year 1949, the assessment was for taxes and interest. For the years 1950 and 1951, the assessments included taxes, interest and penalties.

Taxpayer filed an appropriate petition with the Tax Court of the United States. On May 20, 1960, that Court entered its decision holding there were deficiencies in taxes, together with penalties and interest, as to taxpayer's tax liability for 1949, 1950 and 1951. A review was taken to this Court and the decision of the Tax Court was sustained, Teitelbaum v. C. I. R., 7 Cir., 294 F.2d 541. A petition for certiorari was denied, 368 U. S. 987, 82 S.Ct. 603, 7 L.Ed.2d 525.

Within six years of the date of the assessments, the Government brought suit against the taxpayer in the United States District Court for the Northern District of Illinois, Eastern Division. The purpose of this action was to reduce to judgment the Tax Court's deficiency determinations for 1949, 1950 and 1951. The suit also sought to reduce to judgment, assessments which had been made with respect to 1958 and 1961 taxes. Admittedly, one of the objectives of the suit was to obtain a judgment which would thus extend the statutes of limitations.

Taxpayer, who has appeared in these matters pro se, answered with a "special plea." Points raised were that 1) the United States was not the proper party plaintiff; 2) the suit was barred by res judicata or collateral estoppel since the Tax Court had already entered its decision on the same matter; 3) that as a deficiency assessment made against taxpayer's former wife had been abated, he was released on the legal principle that release of one joint obligor releases the others, and 4) that he had not been given proper credit to reflect payments which he had made on the tax liability involved.

The United States moved for summary judgment. The District Court granted the motion but only in part. It denied summary judgment for the years 1958 and 1961. On motion of the Government, the District Court dismissed, without prejudice, the collection action as to the years 1958 and 1961.

In the second case before us, the taxpayer, on May 23, 1963, commenced a suit for an injunction. The suit sought to restrain Coyle, the Chicago District Director of Internal Revenue, and Caplin, the then Commissioner of Internal Revenue, from enforcing collection of the 1949, 1950 and 1951 tax liabilities. The complaint further sought an order which, if issued, in effect would have abated the assessments made against him for the stated three year period.

In many respects, the complaint in the second suit is similar to taxpayer's "special plea" in the collection suit. In addition, the complaint contained allegations that the Government was harassing taxpayer, and that the prior Tax Court decision operated as a bar to any subsequent legal action by the Government to collect the taxes due.

In the second suit, the Government moved to dismiss taxpayer's complaint on the grounds 1) neither Messrs. Coyle nor Caplin had been personally served; 2) that Section 7421 of the Internal Revenue Code of 1954 was a bar to injunctive relief, and 3) that the complaint failed to state a claim upon which relief could be granted. On April 10, 1964, the District Court, on the Government's motion, dismissed taxpayer's complaint with prejudice. Thereafter a timely notice of appeal was filed.

In the first appeal, we hold that the granting of a summary judgment in favor of the...