The UCC Argument
Back in the early nineties, an Oregon patriot promoted the theory that "commercial law" was the foundation for all law around the world. Based upon this contention regarding commercial law, he developed the idea that an "affidavit of truth" submitted "in commerce" could create a lien which simply had to be paid. This fellow claimed that his findings were well known everywhere and that this lien process had been used for thousands of years. I obtained his memo regarding this argument and went to the law library. His contention that this "principle" manifested itself in the law was wrong; I could find nothing which supported this argument. This theory was a complete fabrication.
Did others act upon this man's ideas anyway? Leroy Schweitzer of the Montana Freemen took this patriot's ideas to heart and claimed that he created liens against public officials. Based upon these liens, Leroy started issuing sight drafts drawn upon some "post office" account and started passing them out to many gullible people who believed that such drafts were required to be paid by the feds. Not only did Leroy get into deep trouble, so did many who got drafts from him. There have been lots of people who have been prosecuted, convicted and jailed for using drafts allegedly justified by this crazy theory.
One of the most recent prosecutions of someone for using one of Leroy's drafts is Pete Stern, a patriot from North Carolina. Several years ago, Pete issued some of these drafts to the IRS. Pete has been one of the most vocal advocates of the UCC argument, "we are Brits," nom de guerre, etc. While I like Pete, still he has followed crazy arguments. Pete's federal criminal case was filed in the Western District of North Carolina and he was convicted.
As best I can tell, the popular "UCC" argument has its origins in Howard Freeman's flaky theories, the Oregon patriot's work and the "improvements" made by Leroy. The UCC argument is one of the most legally baseless ideas I have ever encountered, yet organizations like "Wrong Way Law" and people like Jack Smith continue to promote it. Here are some published cases which have correctly rejected this lunacy:
v. City of Little Rock, 314 Ark. 383, 862 S.W.2d
273, 274 (1993)(In reference to traffic tickets, the court
stated, "The Uniform Commercial Code does not apply to any of
2. United States v. Stoecklin, 848 F.Supp. 1521 (M.D. Fla. 1994)
3. Barcroft v. State, 881 S.W.2d 838, 840 (Tex.App. 1994)("First, the UCC is not applicable to criminal proceedings; it applies to commercial transactions")
4. United States v. Greenstreet, 912 F.Supp. 224 (N.D.Tex. 1996)(also raised flag and common law court issues)
5. United States v. Andra, 923 F.Supp. 157 (D.Idaho 1996)("The complaint filed by the plaintiff is not a negotiable instrument and the Uniform Commercial Code is inapplicable")
6. Watts v. IRS, 925 F.Supp. 271, 276 (D.N.J. 1996)("The IRS's Notice of Intent to Levy is not a negotiable instrument")
7. United States v. Klimek, 952 F.Supp. 1100 (E.D.Pa. 1997)(returning lawsuit complaint marked "Refusal For Cause Without Dishonor UCC 3-501" and refusing other court pleadings "for fraud" based upon UCC argument got nowhere; also raised nom de guerre and flag issues)
8. City of Kansas City v. Hayward, 954 SW2d 399 (Mo.App. W.D. 1997).
A substantial part of the UCC argument was "developed" by Howard Freeman. Freeman contended that some super secret treaty back in 1930 put this and other countries around the world in "bankruptcy" with the "international bankers" being the "creditor/rulers." Once these banker/rulers were ensconced in power, they needed some way to "toss out the old law" based upon the common law, and erect commercial law as the law which regulated and controlled everything. Roosevelt and his fellow conspirators then set to work and developed a plan to achieve the destruction of the "common law" and the erection of commercial law. This was accomplished by the decision in the Erie Railroad case in 1938. According to this theory, Erie RR banished the common law, leaving in its place only commercial law via the UCC. Freeman also alleged that lawyers were informed of this "takeover" by the "international bankers" and that they were required to take a secret oath to not tell the American people about the takeover. Of course, as the direct result of this change in the law from common law to commercial law, no court could ever cite a case decided prior to 1938. (See more complete explanation of this concept here).
But there are the tremendous flaws in this argument. I do not challenge the fact that big international bankers are economically powerful and that such power enables them to secure favorable legislation. However I do disagree with the "secret treaty" contention. Back in the 1930s and indeed all the way up to about 1946, all treaties adopted by the United States were published in the U.S. Statutes at Large. As a student of treaties, I looked for this secret treaty and could not find it and I had access to complete sets of all books containing treaties, especially those in the Library of Congress in DC. The major premise of this argument is this contention regarding the secret treaty, which even the proponents of the argument cannot produce. Their argument, "I cannot produce this secret treaty, but believe me anyway," simply is unacceptable to me as I want proof.
The advocates of this argument also contend that the Erie RR case was the one which banished the common law and erected commercial law in its place. The problem with this contention is that Erie RR does not stand for this proposition. This was a personal injury case; Thompkins was injured while walking along some railroad tracks as a train passed. Something sticking out of the train hit Thompkins and injured him, hence his suit for damages. Please read this case of Erie R. Co. v. Tompkins, 304 U.S. 64 (1938), which stands for the proposition that federal courts must follow the common law of the state where the injury occurred. How this case is alleged to declare the exact opposite escapes me, but in any event, Erie RR does not support the contention of the UCC advocates.
To prove that Erie RR changed the law, it is alleged that no court can cite a case decided prior to 1938. This is perhaps the simplest contention to disprove, achieved just by reading cases (which apparently the UCC activists do not do). All my life I have read cases which cited very old cases and I have never seen such a sharp demarcation where the courts did cite pre-1938 cases before 1938 and then ceased afterwards. Here are just a few post-1938 cases which cite pre-1938 cases, the constitution, the Federalist Papers and lots of other old authority:
INS v. Chadha, 462 U.S. 919 (1983)
New York v. United States, 505 U.S. 144 (1992)
Printz and Mack v. United States, 521 U. S. 898 (1997)
When you scan these cases, please note the parentheses like "(1997)" above for Richard Mack's case. This denotes the year any particular case was decided. You can easily see that these recent cases do in fact cites cases decided as far back as 1798. The contention that pre-1938 cases are not cited is nothing but lunacy, believed by folks like Dave DeReimer, a "redemption process" advocate.
This argument also contends that the States of this nation were placed in "bankruptcy" via the "secret treaty." If this were true, why did the Supreme Court decide in 1936 that states and their subdivisions could not bankrupt? See Ashton v. Cameron County Water Improvement Dist., 298 U.S. 513, 56 S.Ct. 892 (1936).
Finally, I must inform you that neither I nor any other lawyer I know has ever taken the "secret oath" as alleged by this argument. When I was sworn in as an Alabama lawyer, it was on the steps of the Alabama Supreme Court down in Montgomery in front of God, my parents and everybody else. I swore to uphold and protect the United States and Alabama Constitutions. Nothing in that oath could remotely be the alleged "secret oath." I have also been admitted to practice before the U.S. Supreme Court, and the U.S. Courts of Appeals for the 2nd, 3rd, 4th, 5th, 6th, 7th, 8th, 9th, 10th and 11th Circuits. I did not take the "secret oath" when I was admitted to practice before these courts, nor when I was admitted to practice before several U.S. district courts. I have not taken any other oath and I know that the only oath most other lawyers have taken is the same. But, I do not doubt that some lawyers are members of other secret societies who may have taken oaths of which I am unaware.
My advice is that if you hear anyone making some argument about the UCC, run away as fast as you can. The argument is crazy.
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