Simmons v.
308 F.2d 160 (4th Cir. 1962).
Facts: There was a fishing contest and Simmons caught the
fish. Simmons knew about the contest
when he went out to go fishing, but wasn’t explicitly trying to catch the special
fish. He didn’t want to have to pay
taxes on the prize, so he argued in court that the $25,000 was either an “award
for civic achievement” or a gift because there was no consideration.
Issue: Did catching the fish constitute consideration
necessary to create an enforceable non-gratuitous promise?
Rule: If someone knows of an outstanding offer, they may
accept the offer by rendering performance even if the performance is done for
other reasons.
Analysis: The court reasons that since Simmons knew about the
contest before he went fishing, his catching the fish constituted performance
of the contract, and thus there was consideration and the $25,000 was not a
gift.
Conclusion: The $25,000 is found to be taxable income.