Compromise

---

[ Back ] [ Next ]

   

[36-2 USTC ¶9498]Joseph Burr, Appellant v. United States of America , Appellee

(CA-7), United States Curcuit Court of Appeals for the Seventh Circuit, Nos. 5939, 5940. October Term, 1936, October Session, 1936, 86 F2d 502, Decided November 5, 1936

Appeals from the District Court of the United States for the Northern District of Illinois, Eastern Division.Defendant was indicted on one charge for 1929 and on another for 1930. His offer in compromise for all civil and criminal liabilities for 1927 to 1930, including a plea of guilty on the first count, was accepted, the second count being nolled. Defendant was sentenced to three months in jail on the first count, execution of which was temporarily stayed, after which defendant's petition for admission to probation was denied. His later petition for suspension of sentence and stay of execution was also denied, but a further stay of execution was allowed. The sentence of the District Court on the plea of guilty is now upheld as being within the power and duty of such Court, where no question is raised as to the improvidence of such plea of guilty and as to the legality of the compromise agreement in connection therewith. Affirming District Court decision.

Before EVANS, and SPARKS , Circuit Judges, and BRIGGLE, District Judge.

[Facts]

BRIGGLE, District Judge:

An indictment consisting of two counts was returned against Joseph Burr on August 30, 1935 . The first charged the defendant with attempting to defeat and evade his income taxes for the year, 1929, and the second contained a like charge with reference to his income taxes for 1930. To this indictment Burr entered a plea of not guilty; but, subsequently, on May 15, 1936 , he withdrew his plea, and pleaded guilty to the first count. The second count was nolled. Later, on May 19, 1936 , the Court sentenced Burr to three months in jail. Execution of the sentence was temporarily stayed, and on May 25th, 1936 , Burr applied for admission to probation. His petition was denied. Subsequently, on June 8, 1936 , the defendant, Burr, filed a petition for "suspension of sentence and stay of execution." The District Court denied this petition, but allowed a further stay of execution.

Burr prosecutes two appeals--one No. 5939 from the order of May 19, 1936 , which imposed a sentence upon his plea of guilty and the other, No. 5940, from the order of June 11, 1936 , denying his petition to suspend sentence.

The appeal from the judgment order of May 19th, was not taken until June 15th, and was, therefore, in violation of Rule 3 of the Supreme Court, which provides that an appeal shall be taken within 5 days after entry of judgment of conviction (with certain exception not here material). The fact that execution of the judgment had been stayed from time to time would not avoid the necessity of compliance with this rule. Unless the appeal is timely taken this court acquires no jurisdiction.

The question presented by the appeal in No. 5940 from the order of June 11th, denying the petition to "suspend sentence" presents a narrow question.

The Probation Act, 18 USCA §724 provides that

* * * when it shall appear to the satisfaction of the court that the ends of justice and the best interests of the public, as well as the defendant will be subserved thereby, (they) shall have power after conviction or after a plea of guilty or nolo contendere, for any crime or offense not punishable by death or life imprisonment, to suspend imposition or execution of sentence and to place the defendant upon probation for such period and upon such terms and conditions as they may deem best * * *.

We know of no instance wherein the court may permanently suspend sentence or the imposition of sentence except by virtue of the terms of the Probation Act. Ex Parte U. S., 242 U. S. 27. U. S. v. Wilson, 46 Fed. 748. People v. Allen, 155 Ill. 61. Consequently, the Petition for Suspension of Sentence can only be appropriate in connection with an application for admission to probation, and an appeal from the court's order denying the same is reviewable by this court on the single question of abuse of discretion by the District Court.

[Appellant's Contention re Compromise]

It is not contended in appellant's printed briefs or upon oral argument that the District Court in any sense abused the discretion in it vested, by failing to place the defendant upon probation, but the entire argument concerns itself with the authority of the District Court to enter any judgment upon the plea of guilty, because of an asserted compromise made by the defendant with the executive department of the government, concerning a settlement of his liability for income taxes for the years 1927 to 1930, inclusive. The defendant asserts that he fully compromised his civil and criminal liability in pursuance of the provisions of Section 3229 of the Revised Statutes, 26 USCA §158 (1928 Edition). He submitted to the Executive Department of the government the following offer in compromise:

To secure the release of the proponents from the liabilities resulting from the violation or failure above specified, the total sum of $75,301.62 and a plea of guilty by each proponent will be entered by him on the first count of the indictment against him; which said sum and pleas are hereby tendered voluntarily with request that they be accepted in compromise of all the civil and criminal liabilities of the said proponents for the years 1927 to 1930, inclusive, and the other counts of the indictments dismissed.

The Attorney General wired, "Offer accepted March 6, subject to entry of pleas," (the offer and acceptance related to defendant and others). Following this it appears that the defendant paid to the Collector of Internal Revenue the sum offered, and entered his plea of guilty to the first count as indicated, whereupon, the second count was nolled. Appellant contends that the District Court should have imposed no sentence upon the plea of guilty for the reason that the entire controversy had been settled. He makes no contention that the plea of guilty was entered under any misapprehension or misunderstanding on his part and at no time has he sought to withdraw his plea of guilty, but he objects only to the penalty imposed thereon.

[Conclusions of the Court]

Upon this plea of guilty there was nothing that the District Court could properly do, except take appropriate action. The plea of guilty called for and necessitated action by the District Court. The Court could not close the case with a plea of guilty dangling in the air. Judge Sullivan correctly stated the question to be, "Has the Court any power or jurisdiction to impose sentence in this type of case on a plea of guilty * * *." His answer was in the affirmative. We likewise answer in the affirmative, with the further observation that he not only had the power but that it was his duty to do so and he was without power to do otherwise. He had no authority to permanently suspend the imposition of sentence and, likewise, no authority to permanently suspend the execution of sentence unless he did so in pursuance of the grant of power under the Probation Act. The District Court, once a plea of guilty has been understandingly entered by the accused, is not concerned with what motivated the defendant in entering the plea and is not concerned with any asserted compromise of his tax liability except as such matters bear upon the penalty or the exercise of the court's discretion vested under the Probation Act. Whether or not a valid contract of compromise had been entered into was not even before the Court. Congress has recognized such matters to be a proper subject of contract between the Executive branch of the Government and the taxpayer, but as far as the Judicial branch of the Government is concerned with the pending indictment and the plea of guilty entered therein--such plea required action by the Court.

The appellant has not at any time, in the District Court or here, suggested that the plea of guilty was improvidently or not understandingly entered and has at no time sought a withdrawal of the same. He makes no contention that he was improperly coerced into entering the plea or that he did so under any misapprehension or misrepresentation of fact. He acted knowingly and it is of no moment that he may have thought the Court would place him on probation.

Nor are we called to pass upon the legality or advisability of the supposed compromise which it is asserted was entered into by the defendant with the Commissioner of Internal Revenue. The only question before us is the correctness of the order denying the motion to "suspend sentence." In this connection it may be observed that the District Court had previously given full consideration to a petition for admission to probation and had denied it. So if we treat this motion to "suspend sentence" as a motion for admission to probation, then it unmistakably appears that there was no abuse of discretion by the trial court in the denial of the same. It would be but a renewal of a motion already fully considered and acted upon.

The appeal in No. 5939 is dismissed, and the judgment in No. 5940 is affirmed.

 

 

[46-2 USTC ¶9380] United States of America , Plaintiff-Appellee, v. Raymond N. Sabourin, Defendant-Appellant

(CA-2), United States Circuit Court of Appeals for the Second Circuit, No. 62--October Term, 1946, Docket No. 20324 Argued October 9, 1946., 157 F2d 820, October 31, 1946., Cert. denied, 329 U. S. 800, 67 St. Ct. 493

Appeal from the District Court of the United States for the Eastern District of New York.

The defendant has appealed from a judgment of conviction and sentence entered upon his plea of guilty to a charge of attempting to evade and defeat his income tax for the year 1935, contrary to Sec. 145(b) of the Internal Revenue Code, 26 USCA Sec. 145(b).

Penalties: Compromise: Sentence.--Pursuant to a compromise between taxpayer and a representative of the Attorney General, taxpayer paid a sum covering the amount of taxes, penalties and interest for the years 1935 to 1941, inclusive, and entered a plea of guilty to the first of eight counts in an indictment against him, in return for discharge of the indictment. On Count One of the indictment, to which he pleaded guilty, he was sentenced to nine months' imprisonment, and taxpayer now contends that the compromise settled his liabilities, criminal as well as civil, but the court upholds the sentence since the invocation of the civil sanctions of Code Sec. 293(b) does not exclude resort to the criminal sanctions of Code Sec. 145(b). Affirming the decision of the district court.

Louis J. Castellano, for appellant. J. Vincent Keogh, U. S. Attorney, Vine H. Smith, Edward S. Szukelewicz, Assistant U. S. Attorneys, for appellee.

Before: L. HAND, SWAN and FRANK, Circuit Judges.

SWAN, Circuit Judge:

In October 1944 an indictment was filed against the defendant charging him with criminal liability under the income tax provisions of the Internal Revenue laws for the calendar years 1935 to 1941, inclusive. ¹ Count One of the indictment alleged that an income tax of $696.36 was due from the defendant for the calendar year 1935 and that in April 1939 he wilfully attempted to evade and defeat said tax by making a false and fraudulent delinquent tax return which showed no tax liability for said year 1935, in violation of section 145(b) of the Internal Revenue Code. 26 USCA §143(b). Before the indictment came to trial, the defendant made an offer to compromise his civil and criminal liability which the Attorney General accepted pursuant to statutory authorization, 26 USCA §3761. The agreement was embodied in a letter of the Attorney General, dated November 9, 1945 , addressed to counsel for the defendant, and reading as follows:

In re: United States v. Raymond N. Sabourin.

Gentlemen:

This refers to your letter of September 12, 1945 , addressed to the Attorney General, wherein you offered on behalf of your client, the defendant, to pay the sum of $27,100.04 and to enter a plea of guilty to Count One of the indictment in settlement of the matter. The money payment covers the defendant's liability for taxes, penalties and interest for the years 1935 to 1941, inclusive, and the plea is to be in discharge of the indictment.

We are pleased to advise you that the offer referred to has been accepted on behalf of the Attorney General, subject only to the condition that you execute a stipulation disposing of the case now pending in the Tax Court. The stipulation is in the hands of the United States Attorney.

Sincerely yours,

For the Attorney General,

Samuel O. Clark, Jr.,

Assistant Attorney General.

Thereafter the defendant made the money payment required by the compromise, executed the requested stipulation for disposition of the case pending in the Tax Court, and entered a plea of guilty to Count One of the indictment. On Count One he was sentenced to nine months' imprisonment and the other counts of the indictment were thereupon dismissed on motion of the United States Attorney. Before sentence was imposed and immediately thereafter by motion to set it aside, which the court denied, the defendant questioned the court's power to impose a sentence after acceptance by the Attorney General of the offer of compromise. The appeal presents the same contention. The defendant was released on bail pending appeal.

The appellant argues that the compromise agreement should be construed to mean that the payment of $27,100.04 settled his liabilities--criminal as well as civil--for taxes, interest and "penalties," and that his "plea" was to be merely an admission of guilt without the judicial consequences which normally follow a plea of guilty. Had the indictment contained but one count relating to a single tax year, or if its eight counts were merely different ways of stating the same crime, there might be some reason to think that the plea meant only a confession. But since the settlement covered seven tax years and it was conceded upon argument that each of the years was dealt with in a separate count of the indictment (i. e., each count dealt with a separate and distinct offense), we think it clear that the compromise must be construed to mean that the money payment settled the taxpayer's civil liability for taxes, interest and "additions to the tax" imposed by 26 USCA §293(b), which the parties called "penalties," and that the accused was to accept a sentence on Count One, if the other counts of the indictment were "discharged." In other words, the defendant made his peace by paying up and pleading guilty to one crime out of seven.

With the agreement so construed, there can be no question as to the court's power to impose the prison sentence. The civil sanctions of §293(b) are distinct from the criminal sanctions of §145(b), and the invocation of one does not exclude resort to the other. Spies v. United States , 317 U. S. 492, 495 [43-1 USTC ¶9243]; Helvering v. Mitchell, 303 U. S. 391, 399 [38-1 USTC ¶9152]. A plea of guilty is more than an extra-judicial confession; "it is itself a conviction." Kercheval v. United States , 274 U. S. 220, 223. Thereupon it becomes the duty of the court to impose sentence. Rules of Criminal Procedure, Rule 1, 18 USCA following §688. As was said in Burr v. United States, 86 Fed. (2d) 502, 504 (C. C. A. 7) [36-2 USTC ¶9498], cert. den. 300 U. S. 664: "The court could not close the case with a plea of guilty dangling in the air."

Judgment affirmed.

¹ The indictment was in eight counts. Only Count One, which related to the 1935 tax, is reproduced in the record, but it was conceded upon the argument, and is fairly inferable from the compromise agreement hereafter set out, that each of the other tax years involved was covered by a separate count. The nature of the eighth count does not appear.