Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States v. Hayes

decided: February 19, 1969.

UNITED STATES OF AMERICA AND ALAN D. CORNUE, SPECIAL AGENT, PETITIONERS-APPELLEES,
v.
ROBERT D. HAYES ET AL., RESPONDENTS-APPELLANTS



Swygert, Fairchild and Kerner, Circuit Judges. Kerner, Circuit Judge, concurring. Kerner, Circuit Judge, dissenting on rehearing.

Author: Fairchild

FAIRCHILD, Circuit Judge.

Proceeding to compel attendance, testimony, and production of records pursuant to summonses under the internal revenue laws.*fn1 Robert D. Hayes, one of the persons summoned, has appealed from an order requiring him to appear, testify, and produce records.

Messrs. Hayes, Stephenson, and Lauren are trustees of a trust operating under the name of "Americans Building Constitutionally (a trust) N.F.P.", sometimes referred to as ABC. Each was served with a summons in the matter of the tax liability of ABC, requiring him to appear, give testimony, and produce all records of the trust for the period from July 15, 1966, the date of the trust instrument, to September 30, 1967.

The summonses were served October 5, 1967, and appearance required October 16. On February 1, 1968, Special Agent Cornue, who issued the summonses, petitioned for enforcement and the district court issued an order to show cause. Hayes' answer put in issue petitioner's averments that compliance with the summons is essential to the determination of ABC's tax liabilities and set forth as affirmative defenses: (1) that ABC is a not for profit trust for educational purposes and exempt, (2) that the government and Cornue have violated the rights of Hayes, ABC, and its members under Article I, Section 1 of the constitution and the first, fourth, fifth, sixth, eighth, ninth, tenth, and fourteenth amendments, (3) that they have "embarked on a course of action calculated to harass and embarrass" Hayes, ABC, and its members, referring to certain testimony before a subcommittee of the House of Representatives and various newspaper clippings.

The hearing took place March 15, 1968. The district court thereafter made written findings that special agent Cornue was assigned to investigate the tax liabilities of ABC; that he determined it was necessary to examine its books and records in order to determine whether it was a taxable entity and, if so, the extent of its tax liabilities; that such examination is necessary; that on August 23, 1967, Cornue requested Hayes and Stephenson to supply relevant information, but it was not supplied; that on September 12 at the suggestion of Hayes and Stephenson and their attorneys, Cornue presented written questions, but these were never answered; that on September 28, Cornue requested Hayes to provide relevant information, but was again refused; that on October 13, after service of the summonses, trustees Lauren and Stephenson adopted a resolution directing that the books and records be put in the possession of Lauren and delivered to I.R.S.; that the three trustees later appeared before Cornue but failed to testify or produce records; that on October 20 and 24, Stephenson turned over some, but only a part of the requested records; that on November 3 Stephenson and Lauren delivered the ABC records to Hayes.

The court concluded that the three trustees have a duty to comply with the summonses and entered an order accordingly. Hayes has appealed.

The testimony at the hearings appears to support the findings. Hayes, indeed, does not suggest that the findings were clearly erroneous. He does argue two other propositions, which we consider as follows:

Striking Hayes' affirmative defenses.

The trustees took Cornue's deposition and the government took Hayes' deposition on March 14, the day before the hearing.

Except for identifying himself as a trustee of ABC, Hayes responded to virtually every question as follows:

"I respectfully decline to answer on the grounds that any answer would be an invasion of the right of privacy guaranteed under the Constitution of the United States, would violate my rights guaranteed under the First, Fourth, Fifth and Tenth Amendments to the Constitution of the United States, and on the further grounds that any answer would entail a violation of my fiduciary relationship as trustee and would violate the trust agreement."

He made the same response when asked about each of his three affirmative defenses.

At the hearing before the court Hayes declined to answer questions in the same areas on the grounds that his answer ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.