Simmons v. United States

308 F.2d 160 (4th Cir. 1962).

Dawson, p. 212

 

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.

 

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