Exercise
Privilege-Exclusion from Courtroom
7203:
Willful Failure to File Return, Supply Information, or Pay Tax: Trial:
Exercise of Privilege --Exclusion From Courtroom
[91-1
USTC ¶50,164]
United States
, Appellee v. Joseph Lussier, Defendant, Appellant
(CA-1),
U.S. Court of Appeals, 1st Circuit, 90-1389, 3/29/91, Affirming an
unreported District Court decision
[Code Secs.
6103 and 7203
]
Confidentiality of returns: Information disclosure actions: Failure
to file return: Evidence: Not admissible: Exercise of
privilege-exclusion from courtroom.--A taxpayer's motion for release
of a jury panel list one month before trial was properly denied where
the process used by the court avoided any unfairness or statutory
noncompliance. Before swearing the jury in, the court questioned each
prospective juror as to whether he had been audited and allowed either
party to disqualify those answering affirmatively. Also, the IRS
confirmed the jurors' answers. Further, there was no error in allowing
the government's witness to remain in court where his testimony
summarized, and was consistent with, the evidence presented at trial.
Finally, evidence offered by the taxpayer to show a lack of willfullness
regarding a failure to pay taxes was properly excluded where the
exhibits lacked a proper foundation or offer of proof.
Lincoln
C. Almond, United States Attorney, Margaret E. Curran, Assistant United
States Attorney,
Providence
,
R.I.
02901
, for appellee. Joseph R. Lussier, pro se.
Before
CAMPBELL, SELYA and CYR, Circuit Judges.
Per
Curiam"
EC:
The appellant, Joseph R. Lussier, was convicted by a jury of three
counts of failure to file a federal income tax return in violation of 26
U.S.C. §7203 . The
evidence presented at trial showed (a) that Lussier owed federal income
taxes for 1983, 1984 and 1985, and (b) that in each year Lussier failed
to file an income tax return. The evidence also was sufficient to
support an inference that Lussier acted willfully.
Lussier
does not attack the sufficiency of the evidence. Instead, he challenges
the manner in which the proceedings against him were carried out. Each
of his arguments, however, falls short of its mark, and we affirm the
conviction.
Jurisdiction
Because
Lussier refused to appear willingly in response to a summons from the
government, he was arrested and brought before the magistrate for
arraignment. He contends that the arrest was invalid because it was
performed "outside the territorial limits and jurisdiction of the
United States" (that is, not on land actually owned and
admin
istered by the federal government, "such as a post office or a
fort"), and that the district court consequently lacked
jurisdiction over both his person and the subject matter of the
prosecution. Many courts have rejected this "silly claim." United
States v. Koliboski [85-1 USTC ¶9251 ], 732 F.2d 1328, 1329 (7th Cir. 1984)
and cases cited therein. We join them. It is well settled that a
district court has personal jurisdiction over any party who
appears before it, regardless of how his appearance was obtained. United
States v. Stuart [82-2 USTC ¶9602 ], 689 F.2d 759, 762 (8th Cir. 1982); United
States v. Warren, 610 F.2d 680, 684 n. 8 (9th Cir. 1980). 18 U.S.C. §3231
, moreover, gives the district court subject matter
jurisdiction over "all offenses against the laws of the
United States
." This category of offenses obviously includes the crimes defined
in Title 26. See United States v. Studley [86-1 USTC ¶9390 ], 783 F.2d 934, 937 (9th Cir. 1986).
Self-Incrimination
After
his arrest, Lussier refused to provide the government with routine
"booking" information regarding his name, age, address and so
forth. At the arraignment, the magistrate acknowledged that Lussier had
a constitutional right to remain completely silent, but notified him
that without the booking information he found it impossible to determine
whether Lussier should be released on bail. Consequently, the magistrate
remanded Lussier to the custody of the federal authorities. Twenty-two
days later, when Lussier relented and provided the requisite
information, he was granted bail and released. Lussier challenges what
he characterizes as an attempt to "coerce" him to waive his
Fifth Amendment right against self-incrimination. The magistrate, he
says, should neither have threatened him with incarceration if he did
not provide the booking information, nor actually jailed him when he
stood on his constitutional right to silence.
Whatever
the constitutional propriety of the magistrate's actions, the issue is
now moot. When Lussier provided the requested booking information, the
magistrate released him, and the information was not thereafter used
against Lussier in any way. Lussier currently has no need for or
entitlement to bail, and no claim that the magistrate's actions in any
way affected the fairness of his trial. See Murphy v. Hunt, 455
U.S.
478, 481-82 (1982) (a case becomes moot when the issues presented are no
longer alive or the parties lack a legally cognizable interest in the
outcome); United States v. Vachon, 869 F.2d 653, 656 (1st Cir.
1989).
Nature
and Cause
Lussier
argues that the district court failed to inform him of the "nature
and cause" of the charges against him, but does not identify the
omission specifically. The claim, in any case, is specious. Lussier was
provided with a copy of the criminal information issued by the United
States Attorney, a document that apprised him of the offense charged and
the elements thereof, including the amount of taxes due and owing, and
the actions alleged to constitute willful failure to file a return. The
Sixth Amendment requires nothing more. See United States v. Serino,
835 F.2d 924, 929 (1st Cir. 1987), citing Hamling v. United States,
418 U.S. 87, 117 (1974) (an indictment satisfies the Sixth Amendment if
it contains the elements of the offense charged and fairly informs the
defendant of the charge against which he must defend); United States
v. Little, 321 F.Supp. 388 (D. Del. 1971) (same for criminal
information).
Counsel
of Choice
Lussier
contends that he was deprived of his right to the "effective
assistance of his counsel of choice." He does not, however, make a
coherent argument in support of his claim. The record shows that Lussier
chose to represent himself, but that the court nevertheless appointed
"stand by" counsel to assist him as he desired. The record
also suggests that Lussier wanted, but was denied, the right to use lay
"counsel" to assist him in some manner before or during trial.
We
see no infirmity in the district court's exclusion of lay counsel from
the proceedings. The right to effective assistance of counsel is a
fundamental Sixth Amendment right, but the right to choose counsel is
not absolute.
United States
v. Machor, 879 F.2d 945, 952 (1st Cir. 1989). A criminal
defendant has no right to lay counsel. See Tyree v. United States,
892 F.2d 958, 959 (10th Cir. 1989); United States v. Turnbull,
888 F.2d 636, 638 (9th Cir. 1989); United States v. Tedder [86-1 USTC ¶9426 ], 787 F.2d 540, 543 (10th Cir. 1986); United
States v. Schmitt, 784 F.2d 880 (8th Cir. 1986); United States v.
Brown [79-2
USTC ¶9523 ], 591 F.2d 307 (5th Cir. 1979); United States v.
Wilhelm, 570 F.2d 461, 465 and n. 9 (3d Cir. 1978) and cases cited
therein.
Continuance
At
a hearing before the magistrate on
January 5, 1990
, the government agreed to allow Lussier and a family member to inspect
the government's documents relating to the case. The magistrate issued
an order directing that this inspection take place on January 19, but
the order apparently was lost and Lussier did not appear for the
inspection. On January 26 he called the prosecutor, who invited him to
come and inspect the government's records on January 31. When Lussier
insisted on bringing a "friend" rather than a family member,
however, the prosecutor refused him access, citing the specific terms of
the court's order.
Lussier
appeared in court for a calendar call on February 5, having filed a
motion for a continuance of trial the day before. The district court
sorted out the discovery issue, directed that Lussier be allowed to
inspect the government's documents that afternoon, denied the motion for
a continuance, and appointed stand-by counsel. The jury was empaneled
the next day, and the trial took place on February 12, 13 and 14.
Lussier claims that by denying the motion for continuance, the district
court deprived him of adequate time to prepare for his trial. We
disagree.
The
district court has broad discretion to grant or deny continuances. Only
an "unreasoning and arbitrary insistence upon expeditiousness in
the face of a justifiable request for delay" will abuse it. United
States v. Torres, 793 F.2d 436, 440 (1st Cir. 1986), citing Morris
v. Slappy, 461
U.S.
1, 11-12 (1983). In deciding whether denial of a continuance is an abuse
of discretion, we must evaluate each case on its own facts, paying
particular attention to the reasons presented to the trial judge at the
time the request was denied.
Id.
Other factors may also be relevant, including (1) the amount of time
available for preparation, (2) the likelihood of prejudice from the
denial, (3) the defendant's role in shortening effective preparation
time, (4) the degree of complexity of the case and (5) the availability
of discovery from the prosecution.
United States
v. Uptain, 531 F.2d 1281, 1286 (5th Cir. 1976).
The
reason Lussier gave for his motion for a continuance was his inability
to gain access to the government's evidence. It is quite clear, however,
that this was a circumstance at least in part of his own making, and
that the district court rectified the situation on the same day that
Lussier argued his motion. Lussier had nearly sixty days overall to
prepare for trial, including a full week after he saw the government's
evidence. The issues in this case, moreover, were far from complex. We
see no prejudice resulting from the district court's decision, and no
abuse of discretion.
Jury
Panel Information
On
February 2, Lussier filed a "Motion for Order of Court Directing
Jury Clerk to Divulge Jury Panel Information in Advance of Trial."
By this motion he sought a list of the names, addresses and Social
Security numbers of the prospective jurors in his case, for use in
securing information under 26 U.S.C. §6103(h)(5)
. When the United States is a party to a judicial proceeding, 26
U.S.C. §6103(h)(5) directs
the Secretary of the Treasury to divulge, to any party to the proceeding
who inquires, whether "an individual who is a prospective juror . .
. has or has not been the subject of any audit or other tax
investigation by the Internal Revenue Service. The Secretary shall limit
much response to an affirmative or negative reply . . . ." Citing
this statute, Lussier asked that he be provided with information
regarding the makeup of the entire jury panel at least one month before
trial began, so that he would have time to approach the IRS before jury
selection began.
Instead,
on February 5, the day before the jury was chosen, the district court
took a more practical approach. It indicated that it would ask each
prospective juror, as he or she was empaneled, whether he or she had
ever been the subject of an audit or tax investigation, and to allow
either party to disqualify those who answered affirmatively. It appears
that the jurors actually selected all responded negatively to those
inquiries. Once the jury had been seated, the court directed the
prosecutor to verify their negative answers by making a §6103(h)(5)
request to the Internal Revenue Service relative to each of the
chosen jurors. The prosecutor did so, and before the jurors were sworn
on February 12, reported that the answers of all jurors had been
verified by the Secretary, except that the IRS could not locate the
records of one juror because of a mistaken Social Security number. As to
this juror, the government later advised the court, just before it
charged the jury, that the IRS had at last located her records and
verified her negative answer as well.
Relying
on United States v. Hashimoto [89-2 USTC ¶9432 ], 878 F.2d 1126 (9th Cir. 1989),
Lussier insists that the district court committed reversible error. In Hashimoto,
the district court ignored the defendant's request that he be provided
with the jury panel list several months before trial. Pursuant to local
procedures, the defendant received such a list seven days before trial,
but did not then make a request under §6103(h)(5)
. At voir dire, according to the majority opinion, the court failed
to inquire sufficiently about the jurors' past dealings with the IRS.
A
majority of the Hashimoto panel ruled that the mandatory language
of §6103(h)(5) gave
the defendant an "absolute right" to juror information.
Reasoning that, "as a general rule, seven days will not be
sufficient time in which to file and receive a response to a written
request submitted pursuant to §6103(h)(5)
," the panel decided that "the defendant should be
permitted to receive the jury list as soon as it has been drawn."
878 F.2d at 1130.
Having
found an error, the Hashimoto majority then decided that the
error was reversible. It noted two alternative standards for determining
whether denial of §6103(h)(5)
information was reversible error: (1) the "standards used to
evaluate whether a trial court's restrictions on voir dire require
reversal," that is, whether the denial raised "a significant
risk of prejudice and examination of the jurors failed to negate that
inference," or (2) an absolute standard under which reversal would
be required in all cases in which juror tax information was improperly
denied, "inasmuch as Congress thought the right important enough to
create, by statute, an unqualified right to such information in tax
cases."
Id.
at 1133.
The
Hashimoto majority did not have to choose between the alternative
standards, since it found that even under the first, less stringent,
test, reversal was necessary. This was because "none of the
questions asked during voir dire was sufficient to counter the
presumption of risk of prejudice that, at a minimum, arises from a
violation of the statute."
Id.
at 1134.
The
Fifth Circuit has also considered the issue, but has rejected Hashimoto's
result. In United States v. Masat [90-1
USTC ¶50,156 ], 896 F.2d 88 (5th Cir. 1990), the defendant received
a list of jurors and made inquiry to the IRS, but had yet to receive
complete information before voir dire. The district court denied the
defendant's motion for a continuance, but asked the prospective jurors
whether or not they had been the subject of an audit or controversy with
the IRS.
The
Fifth Circuit stated that the court should have allowed Masat time to
obtain from the IRS the juror information he sought, but held that any
error committed by the district court was not prejudicial, "for the
jurors were [subsequently] asked the relevant questions by the trial
judge."
Id.
at 95.
We
do not think that §6103(h)(5) requires a tax defendant to receive the
names of the venire a month or more in advance of trial, as the Hashimoto
majority held. The statute itself makes no provision for such an extreme
alteration of normal trial arrangements. It merely directs the Secretary
of the Treasury to make certain information available upon request.
Subject only to review for abuse, the district court retains discretion
to ascertain the relevance and need for such information in a given
case, and the proper measures to accommodate a §6103(h)(5)
request. In a tax prosecution such as this, we encourage the
district court to take reasonable and feasible steps to enable a
defendant, who makes a clear and timely request, to procure §6103(h)(5)
information prior to the swearing of the jury. But we do not lay
down a hard and fast rule.
In
the circumstances of the present case, we hold that the approach taken
by the district court--winnowing the juror pool through questions on
voir dire, directing the prosecutor to verify the empaneled jurors'
answers by obtaining §6103(h)(5)
information about them from the IRS, and in fact obtaining such
verification before the jury was sworn--adequately enforced both the
letter and spirit of the statute. The process failed only insofar as the
Secretary's response concerning one of the jurors was not obtained
before proceeding to trial. Any error, however, was harmless since when
the information as to the last juror was received, it fully confirmed
the juror's response on voir dire. In the present case, unlike in Masat,
all of the information obtained on voir dire was thus confirmed by the
Secretary pursuant to §6103(h)(5)
. This clearly avoided any question of unfairness or statutory
non-compliance. We need not determine to what extent other, less
sedulous, efforts to ensure that the defendant received the statutory
information would still suffice for affirmance.
Failure
to Sequester
Pursuant
to Fed. R. Evid. 615, the district court sequestered all trial witnesses
except (1) the government's case agent, who served as the government's
designated representative under Fed. R. Evid. 615(2) and therefore was
entitled to remain in court, and (2) an IRS agent named Gary Soares, who
testified at the end of the government's case to his calculation of the
taxes due and owing by Lussier, based on "the testimony and
documents in evidence." Lussier objects to Soares' presence, but
there was no error in the district court's decision to allow him to
remain. Whether one denominates Soares as a "fact" or
"expert" witness, it is clear that his testimony was based on,
summarized, and was consistent with the evidence presented at trial, and
that there would have been "little, if any reason" to
sequester him. Morvant v. Construction Aggregates Corp., 570 F.2d
626, 629-30 (6th Cir. 1978) (little if any reason to sequester a witness
who is to testify in an expert capacity only and not to the facts of the
case). Lussier was not prejudiced by the decision to allow Soares to
remain in court, which consequently was not an abuse of the district
court's discretion. See
United States
v. Jewett, 520 F.2d 581, 584 (1st Cir. 1975).
Exclusion
of Exhibits
In
a supplemental brief, Lussier called attention to the recent Supreme
Court decision in Cheek v. United States [91-1
USTC ¶50,012 ], --
U.S.
--, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991). In Cheek, the Court
overturned a tax evasion conviction where the district court had
instructed the jury that a defendant's good-faith misunderstanding of
the requirements of the law would negate willfullness only if the
misunderstanding was "objectively reasonable." The inquiry,
the Court said, should properly focus on what the defendant actually
believed; the reasonableness or unreasonableness of a purported belief
is relevant only inasmuch as it casts light on the credibility of the
defendant's claim. 111 S.Ct. at 610-12. This has long been the rule in
this circuit, see United States v. Aitken [85-1
USTC ¶9209 ], 755 F.2d 188, 191-93 (1st Cir. 1985), and the
district court's instructions to the jury followed the law exactly.
Lussier
contends, however, that the district court violated Cheek when it
excluded three proffered exhibits: (1) a copy of the 1946 Federal
Register, which contained a long-superseded regulation saying that a W-2
form can be filed in lieu of a Form 1040 tax return, (2) a copy of the
tax code, and (3) a copy of the United States Constitution. Lussier says
that he wanted to introduce the exhibits to show that he actually
believed that he was not required to file a tax return.
Since
the critical element in a tax case is often the defendant's mental
state, many courts have given the accused "wide latitude" in
the introduction of evidence which may tend to show a lack of
willfulness or specific intent. United States v. Sternstein [79-1 USTC ¶9338 ], 596 F.2d 528, 530 (2d Cir. 1979). See
also
United States
v. Brown [69-2
USTC ¶9479 ], 411 F.2d 1134 (10th Cir. 1969). In Cheek, the
Supreme Court noted that the district court erred when it instructed the
jury to disregard evidence (in that case, the defendant's own testimony)
that the defendant was not required to file a return or to pay income
taxes, "as incredible as such misunderstandings of and beliefs
about the law might be." 111 S.Ct. at 611.
The
evidence at issue here, however, was properly excluded because the
exhibits lacked a foundation of evidence or offer of proof to link them
to the willfulness issue. The exhibits would have been relevant only
insofar as they supported other evidence offered to negate the element
of willfulness, for example, testimony that Lussier knew of the 1946
regulation and relied on it when he decided not to file a tax return, or
that he attempted to consult the tax code and was led astray by its bulk
and confusing language. But no evidence to that effect was introduced or
proffered. Absent such a foundation, the exhibits could only have
confused the jury. See
United States
v.
Wilson
, 798 F.2d 509, 515-16 (1st Cir. 1986).
Affirmed.
[55-2
USTC ¶9665]E. C. Lloyd, Appellant v.
United States of America
, Appellee
(CA-5),
In the United States Court of Appeals for the Fifth Circuit, No. 15207,
226 F2d 9, September 30, 1955
Appeals from the United States District Court for the Northern District
of Alabama.
[1939 Code Sec. 145(b)--similar to 1954 Code Sec. 7201]
Criminal tax evasion: Admissibility of evidence.--Taxpayer was
convicted of wilful attempts to evade and defeat his Federal income tax
for the years 1945, 1946, 1947. The following assignments of error were
overruled on appeal: (1) that there was not sufficient evidence to
support the jury's findings of wilfulness essential to the statutory
offense, (2) that the court erred in refusing to grant taxpayer's motion
to suppress, as illegally obtained evidence, his 1946 cash receipts book
and photostatic copies thereof, (3) that the court abused its discretion
in sequestering taxpayer's accountant witness and not sequestering the
Government's accountant witness, (4) that the court erred in admitting,
over taxpayer's objections, testimony of revenue agents claimed to be
inadmissible as conclusions and hearsay, (5) that the court erred in
admitting, over taxpayer's objections, testimony and records concerning
the financial circumstances of taxpayer's wife and daughter.
[1939 Code Sec. 145(b)--similar to 1954 Code Sec. 7201]
Criminal tax evasion: Evidence: Offer to compromise on prior year's
tax.--The trial court admitted, over taxpayer's objection, evidence
with respect to taxpayer's offer to compromise his tax liability for the
years 1924 to 1932, inclusive. There was held to be no logical probative
value as to taxpayer's intent in commission of later acts in addition to
the general proof of his criminal tendencies. Admission of such evidence
was held to be highly prejudicial; the judgment was accordingly reversed
and the cause remanded for a new trial.
William
S. Pritchard, Winston B. McCall,
Birmingham
,
Ala.
, for appellant. Frank M. Johnson, Jr., United States
Attorney
,
Leon
J. Hopper, Assistant United States Attorney,
Birmingham
,
Ala.
, for appellee.
Before
RIVES, TUTTLE and CAMERON, Circuit Judges.
RIVES,
Circuit Judge:
Appellant
was convicted upon a jury trial under three counts of two separate
indictments 1
charging him with the offense of willfully attempting to evade and
defeat his federal income tax for the calendar years 1945, 1946 and
1947, by filing false and fraudulent returns in violation of Title 26 U.
S. C. A. Section 145(b). He was sentenced by the district court to 18
months imprisonment and to pay a $2,500.00 fine.
On
a hearing of the defendant's motion for a bill of particulars, the
United States Attorney represented to the court and to counsel for the
defendant "that the method employed in computing the corrected net
income was the specific-item adjustment method," and thereupon the
court ordered the Government "to furnish the defendant with
information as to the categories in which the specific item adjustments
were made in said computations." The Government then informed the
defendant that the items upon which adjustments were made were for 1945,
receipts, merchandise purchases, and delivery expenses, and for 1946 and
1947, receipts and merchandise purchases.
The
evidence tended to show that, on his bakery books and in his returns for
the years involved, appellant overstated the expense of merchandise
purchased by approximately $17,350.00, principally by writing five
$3,000.00 checks on his bakery account, four of which were drawn on the
Commercial National Bank at Anniston, Alabama, and charged on his bakery
books as "flour purchases", and one of which, dated July 2,
1946, was drawn on his adopted daughter's account at that bank and shown
on the bakery books as a sugar purchase, which checks were supported by
no invoices or other records to corroborate appellant's claim that they
actually represented payment for merchandise purchases as reflected upon
his bakery books, and which actual use for such purpose was somewhat
negatived by testimony of a revenue agent, Potter, revealing that on the
date each check was drawn a corresponding amount was deposited to the
credit of appellant's personal loan account at that same bank; that four
other counter checks aggregating $1,650.00 were also drawn by appellant
during 1945 and 1946 on the Anniston Cotton Oil Company, and were
represented on his bakery books as "miscellaneous merchandise
purchases", though the owner of that Company, J. A. Stewart,
testified that he gave appellant cash for these checks and that they
were not received in payment for any merchandise or services rendered by
his Company either to appellant or his bakery establishment; that for
the year 1945 the delivery expenses of appellant's bakery were
overstated by $1,300.00, proof of which overstatement was made by
testimony that three checks drawn by appellant, dated December 7, 1945,
one of which was made payable to the Alabama Motor Company and the other
two to C. J. Alford, were not issued or received in payment of any
delivery expenses, as indicated by the books of the bakery, but were
simply cashed by appellant, the witness C. J. Alford testifying that at
the time appellant "laughed casually" and said he was
"going to the Elks Club" to "play blackjack";
further, that appellant's bookkeeper, for about two months in 1945 and
ten months in 1946, admittedly erased and altered original entries on
the cash book of the bakery so as to reduce by $300.00 per week the
record of actual cash receipts from merchandise sales, which
alterations, according to appellant's testimony, were made so that he
could use the $300.00 weekly to make necessary purchases of bakery
products on the "black market" from OPA violators. In addition
to this direct testimony by his bookkeeper and appellant's admission as
to these false understatements of cash receipts on the bakery books,
there is much circumstantial evidence of unreported cash receipts from
cash deposited by appellant during the tax years involved in bank
accounts in the name of his wife and adopted daughter, from cash
invested in United States Savings Bonds, and from purportedly nontaxable
"loans" made to appellant's bakery by his wife during the
prosecution years. 2
Appellant
in brief assigns twenty specifications of error, each of which has been
carefully considered, but we think that only those hereinafter discussed
require separate treatment.
(1)
Sufficiency of the evidence. Appellant insists that language from the
recent decision of the Supreme Court in Holland v. United States,
348 U. S. 121, 125-129, 139 [54-2 USTC ¶9714], and from several
decisions of this Court, 3
require direction of a judgment of his acquittal for insufficiency of
the evidence to warrant the jury's finding of guilt beyond a reasonable
doubt, particularly as to the element of willfulness essential to
constitute this specific statutory offense; that the Government failed
to eliminate in its computations, as available sources of funds for
appellant's proven deposits, loans and purchases, amounts which had been
accumulated by appellant and his wife in nonprosecution years, and
failed directly to trace any unreported cash receipts into the bank
accounts of either appellant, his wife or daughter, or to show that
amounts entered upon his bakery books for merchandise purchases did not
truly reflect deductible cash expenditures actually used for such
purpose; finally, that the starting point for the revenue agents' net
worth computations, under Bryan v. United States, 5 Cir., 175
Fed. (2d) 223, 227 [49-1 USTC ¶9322], was not established with the
definiteness required to support a tax fraud conviction based upon
wholly circumstantial proof. See Pollock v.
United States
, 5th Cir., 202 Fed. (2d) 281, 284 [53-1 USTC ¶9229].
It
is not this Court's function to determine guilt or innocence. That
judgment is exclusively for the jury, subject however to the decision of
the district court reviewable by this Court as to whether the evidence
is legally sufficient to sustain conviction, a matter, of course,
presenting a question of law. Kotteakos v.
United States
, 328
U. S.
750, 763. In the performance of its function, the court has no right to
invade the province of the jury by determining questions of credibility
and weight of evidence. Goldman v. United States, 245 U. S. 474,
477; Stilson v. United States, 250 U. S. 583, 588; Glasser v.
United States, 315 U. S. 60, 80; Mortensen v. United States,
322 U. S. 369, 374. "The verdict of a jury must be sustained if
there is substantial evidence, taking the view most favorable to the
Government, to support it." Glasser v.
United States
, supra. In circumstantial evidence cases, this Court has said that
the test to be applied is whether the jury might reasonably find that
the evidence excludes every reasonable hypothesis except that of guilt. Vick
v.
United States
, 216 Fed. (2d) 228, 232, and cases there cited; see also United
States v. Levy, 7th Cir., 138 Fed. (2d) 429, 430, 431.
We
think a fair reading of this record impels the conclusion that a jury
question as to appellant's guilt was presented, certainly under the
prosecution's "specific item adjustments method" of proving
unreported income by means of substantial understatements of cash
receipts and overstatements of merchandise purchases and delivery
expenses for the tax years involved. See Spies v. United States,
317
U. S.
492, 500 [43-1 USTC ¶9243]; Bostwick v. United States, 5th Cir.,
218 Fed. (2d) 790, 794 [55-1 USTC ¶9170]. The specific willful intent
and bad motive required for conviction under this statute is, of course,
inherently unsusceptible of direct proof, but as in the Bostwick
case, supra, might here have been inferred by the jury from
appellant's conduct, if the jury believed from the testimony that he
knowingly permitted the making of false book entries and alterations to
conceal cash receipts, purposely inflated his operating expenses, and
thereby depreciated his net taxable income by means of fictitious flour
and sugar purchases, delivery expenses, etc. See
United States
v. Rosenblum, 7th Cir., 176 Fed. (2d) 321, 329-330 [49-1 USTC ¶9314].
True, appellant correctly contends that "the intent to avoid
detection of price ceiling violation is not the specific intent to evade
income taxes," but by the same token, "if the tax evasion
motive plays any part in such conduct the offense may be made out even
though the conduct may also serve other purposes such as concealment of
other crime." Spies v.
United States
, supra at p. 499. That the appellant might conceivably have been
found innocent had his explanations been believed by the jury is no
tenable ground for attacking the submission of such cogent, prima facie
proof. Cf.
United States
v. Fleischman, 339
U. S.
349, 360-361; Casey v.
United States
, 276
U. S.
413, 418.
Appellant's
further reliance upon such authorities as this Court's Bryan
case, supra, for the proposition that indefinite proof of initial
net worth is sufficient to invalidate all subsequent computations of the
revenue agents, is here misplaced, for essentially this is a
"specific item adjustment" rather than a net worth tax fraud
prosecution, though in support of its prima facie case based on that
theory the Government introduced its net worth and circumstantial proof
in anticipation of the defense that appellant had available assets at
the inception of the prosecution years sufficient to account for his
proven expenditures over and above reported income. The jury might
plausibly have inferred that, if appellant and his wife had had
available in 1942 the approximately $101,000.00 cash reserve it was
shown they would have needed to explain appellant's subsequent excess
expenditures over reported cash receipts and deposited funds, they would
not have found it necessary to borrow several thousand dollars from
various banks and pay interest upon such loans during this period. Cf. Barcott
v.
United States
, 9th Cir., 169 Fed. (2d) 929 [48-2 USTC ¶9377]. In any event,
proof of guilt in such cases to a mathematical certainty is neither
possible nor required. While we think a jury case was made for each of
the three tax years, the sentence imposed would be justified if the
evidence supported the jury's finding that appellant willfully attempted
to evade a substantial part of his income tax during any one of the
three tax years involved. See
Holland
v.
United States
, supra; Schuermann v.
United States
, 8th Cir., 174 Fed. (2d) 397, 399 [49-1 USTC ¶9281]; United
States v. Schenck, 2nd Cir., 126 Fed. (2d) 702, 707 [42-1 USTC ¶9363];
Norwitt v. United States, 9th Cir., 195 Fed. (2d) 127, 135 [52-1
USTC ¶9252]; Pollock v. United States, 5th Cir., 202 Fed. (2d)
281, 284 [53-1 USTC ¶9229].
(2)
The motion to suppress evidence. The appellant moved to suppress as
illegally obtained evidence the 1946 Cash Receipts Book of Lloyd's
Bakery and photostatic copies of pages therefrom. 4
The examination and investigation of appellant's income tax returns for
the years 1942 to 1947, inclusive, was commenced by Agent Smith in May,
1947, as a "routine assignment--the usual examination without any
suspicion of fraud." By
March 9, 1948
, fraud had been suspected, and Special Agent Potter from the
Intelligence Unit was assigned to work with Agent Smith. Potter resigned
in 1951 or 1952, and another Special Agent Moorman was assigned to
complete the work with Agent Smith during 1953 and 1954. In such cases,
where many of the facts are discovered on a routine investigation before
fraud is suspected, it is not to be expected that a taxpayer will be
formally warned at the beginning of an investigation, and informed of
his constitutional rights. In any event, as we have several times held,
such circumstances do not require the exclusion of the evidence, but may
go to its weight or credibility.
Montgomery
v.
United States
, 5th Cir., 203 Fed. (2d) 887, 893 [53-1 USTC ¶9336], and cases
there cited; Vloutis v. United States, 5th Cir., 219 Fed. (2d)
782, 787 [55-1 USTC ¶9262]; White v.
United States
, 5th Cir., 194 Fed. (2d) 215, 217 [52-1 USTC ¶9204].
(3)
Sequestering appellant's accountant witness and not sequestering the
Government's accountant witness. In Bostwick v.
United States
, 5th Cir., 218 Fed. (2d) 790, 792 [55-1 USTC ¶9170], we refused to
hold that the district court had abused its discretion in sequestering
the defendant's accountant witness, and a like ruling is due here. We
deem it appropriate to state, however, that, in our opinion, ordinarily
and in the absence of unusual circumstances, the same treatment in this
respect should be accorded to the Government and to the defendant.
(4)
Admission of testimony and records concerning financial circumstances of
appellant's wife and daughter. Appellant filed both written and oral
objections to the court's admission of testimony by the revenue agents,
Smith and Moorman, relating to alleged unreported cash bakery receipts
supposedly deposited by appellant during the prosecution years in bank
accounts to the credit of his wife and daughter, the purchase of U. S.
Savings Bonds in their names, admission of their bank and tax records,
income and assets, etc. He insists there was no showing that he actually
deposited such funds, if any, to their name, or that he had any such
dominion or control over such funds as justified admission of such
evidence of their separate and independent financial estates. The wife
and daughter were members of appellant's household, and during the tax
years in question were employees in his bakery. Appellant had given a
statement to Government agents that his wife had no source of income
except her salary at the bakery and interest on loans. We think that
this evidence was competent for the purpose for which it was offered and
admitted--to establish a justifiable inference for the jury that these
excess funds and expenditures, not otherwise satisfactorily explained,
were actually derived from unreported income taxable personally to the
appellant. In view of the court's charge that "it is not up to the
defendant to assume the burden of proving that the deposits in the bank
accounts of his wife and daughter were not his income," no
prejudice to appellant's rightful presumption of innocence or unfair
shift of the burden of proof resulted from the admission of such
testimony. Cf. Ford v.
United States
, 5th Cir., 210 Fed. (2d) 313, 316-317 [54-1 USTC ¶9233].
(5)
Testimony of the revenue agents claimed to be inadmissible as
conclusions and hearsay. Appellant insists that certain testimony by the
revenue agents, Smith and Moorman, contained a series of theoretical
estimates and conclusions based on hearsay as to his unreported income
and practically required him "to prove himself innocent by assuming
the burden of overcoming the prejudicial effect of the mass of exhibits,
conjectures and conclusions which the Government has been allowed to get
into the record." See Demetree v.
United States
, 5th Cir., 207 Fed. (2d) 892, 894 [53-2 USTC ¶9646]. The order in
which both Smith and Moorman were permitted to express their conclusions
did tend, we think, to impress the jury with the idea that the
conclusionary figures were matters of original evidence rather than mere
summaries of the calculations of the witnesses from evidentiary facts.
For example, at the beginning of Smith's testimony he was permitted to
state, over the appellant's objection, that for each of the three years
he determined from his investigation that there was other taxable income
in addition to that reported by the appellant, and to state the amount
of the unreported income. He thereafter gave in some detail how those
figures were arrived at, but we think the order of proof should have
been reversed and his basic facts and figures first stated before his
conclusions were expressed. Moorman went into detail as to the records
which he had examined and other sources of his information, among other
things stating that "I interviewed several witnesses myself."
We think, however, that his subsequent testimony clearly revealed that
his computations were not based on any such objectionable hearsay, but
upon available facts and figures of record, the source of which was
adequately disclosed. Again, Moorman, after describing the records and
sources of his information, was permitted to testify, over the
appellant's objection, to his determination of what he considered to be
the appellant's correct income tax liability for each of the three tax
years based upon his investigation. That kind of conclusion should not
have been expressed until the facts and figures on which it was based
had first been adequately proved and explained to the jury. Moorman's
subsequent testimony was probably sufficient to sustain his conclusions,
and we do not say that we would base a reversal on the erroneous
admissions of his conclusionary statements when they were subsequently
connected up. We do, however, express our disapproval of permitting this
order of proof, especially in view of its tendency to divert the jury's
attention from the original and basic evidentiary facts and to emphasize
the conclusions of the witness when such conclusions were, in fact, mere
summaries of his calculations from other facts.
(6)
Admission in evidence and revenue agents' use of charts. Appellant
strenuously insists that the large scale charts summarizing the revenue
agents' computations and admitted in evidence over his objection were
offered and used before the jury as primary proof of his unreported tax
liability, and that their use should here be condemned as prejudicial
because the court permitted them to acquire "an existence of their
own, independent of the evidence which gave rise to them."
Holland
v.
United States
, supra; see Elder v. United States, 5th Cir., 213 Fed. (2d)
876. We think the general rule is that the admission of such charts is
discretionary with the trial court, and that its rulings thereon are
subject to review only upon a clear showing of abuse and resulting
prejudice to an accused. See United States v. Johnson, 319
U. S.
503, 519 [43-1 USTC ¶9470]; Noell v. United States, 9th Cir.,
183 Fed. (id) 334, 339; United States v. Bramson, 2nd Cir., 139
Fed. (2d) 298, 600;
United States
v. Weinbren, 2nd Cir., 121 Fed. (2d) 826, 829; Bomberg v.
United States
, 7th Cir., 71 Fed. (2d) 637, 640;
United States
v. Glazer, 110 Fed. Supp. 558 [53-1 USTC ¶9351]; 4 Wigmore on
Evidence, 3rd ed., Sec. 1230. While the Supreme Court's recent
admonition in the Holland case, supra, should make trial
courts mindful to guard against permitting any unrestricted acceptance
and use by a jury of such charts as a substitute for primary and
independent proof, practical problems inevitably encountered both by the
Government and by the accused in presenting this too often confusing and
complex tax fraud proof still justify the use of illustrative charts by
both sides to summarize the varying computations, and make the primary
and independent proof upon which such charts must be based more
intelligible to the jury. See United States v. Schenck, supra at
p. 709; United States v. Park Avenue Pharmacy, 2nd Cir., 56 Fed.
(2d) 753, 756. The use of this type evidence, however, has inherent
dangers to an accused, for a jury is often unfairly and unduly impressed
by the aparent authenticity of a government witness' chart computations,
as such, rather than by the truth and accuracy of the underlying facts
and figures supporting them. A trial court is charged with grave
responsibilities in such instance to insure that an accused is not
unjustly convicted in a "trial by charts," however impressive
the array produced. Ordinarily, it would be the better practice, not so
carefully observed in this instance, to require that the source of the
facts and figures upon which such a chart is based be fully disclosed
before its admission into evidence. Whenever possible, such charts
should be confined in their preparation to strictly mathematical
computations, subject to detailed explanation upon the trial by the
testimony of expert government witnesses, and they should not be
encumbered by such impressive, conclusionary captions as
"Overstatement of Merchandise Purchases", "Overstatement
of Delivery Expenses", "Unreported Cash Receipts of Lloyd's
Bakery", "Unreported and Undeposited Cash Receipts Invested in
United States Savings Bonds", "Unreported Net Income of Mr. E.
C. Lloyd", "Income Tax Unported and Unpaid by Mr. Lloyd",
such as were used on the Government charts here in dispute. While a
prosecution witness may testify as to such conclusions from his
mathematical computations, we think the danger in permitting the
unrestricted use of such phrases upon charts results from a jury's
natural tendency to accept such unsworn, conclusionary verbiage as
authentic, primary proof, instead of purely in summarization and
explanation of sworn testimony or authenticated documentary evidence.
Though
we have felt it timely and appropriate thus to elaborate upon the
Supreme Court's admonition to trial courts against permitting any
unrestricted and indiscriminate use of such charts, in view of the broad
discretion vested in the trial court in the admission of such evidence,
we pretermit a decision as to whether that discretion was abused in this
case and whether the appellant suffered such prejudice from the use of
the charts as would justify a reversal, a reversal of this case being
necessary in any event on account of the rulings next to be discussed.
(7)
Evidence with respect to appellant's offer to compromise his tax
liability for the years 1924 to 1932, inclusive. Over the appellant's
objections, the Government was permitted to prove that the appellant
submitted an offer of $750.00 to compromise an income tax liability
amounting to $3,107.68, which he had incurred for the tax years 1924 to
1932, inclusive. The offer was rejected and the Government was permitted
further to prove, over the appellant's objection, that an investigation
followed in regard to suspected fraud and misrepresentation of facts in
the filing of the offer in compromise; that the appellant had made a
sworn statement that he borrowed the $750.00 from relatives and that he
afterwards admitted that statement was untrue; and that certain other
facts stated as to his assets and liabilities were likewise untrue. The
court first stated:
"Overrule
the objection and will receive the evidence or permit it to be
considered by the jury only as bearing on the possible source of funds
which the evidence may disclose were in the possession of or received by
the taxpayer Defendant for the years '45, '6 and '7."
A
short time later, the court stated:
"That
evidence is admitted, gentlemen of the jury, only for such light as it
might shed in your deliberations on the issue of intent, which is one of
the elements of the charge in this case. Your consideration is limited
to that issue only."
The
jury must have been confused as to the purpose for which they could
properly consider such testimony. In our opinion, it was not admissible
for either purpose. The earliest tax year investigated by the agents was
1942, ten years after 1932, the last year for which the settlement was
offered, and eight years after 1934, the year in which the offer in
compromise was made. Appellant's attorney very properly called to the
attention of the court "the difference in the economy and values
whatever they were in the years 1932, '3 and '4 against now, and suggest
because of the vast difference in values and the economy it couldn't
throw any light we could rely upon for the years '45, '6 and '7." A
remark of the Supreme Court in United States v. Calderon, 348
U. S.
160, 164 [54-2 USTC ¶9712], is pertinent here. "Proof that the
taxpayer was impoverished by the depression, that he was working for his
meals and $8 a week in 1935, is too remote, absent proof of the
taxpayer's financial circumstances in the intervening years."
The
offer in compromise and testimony relating thereto were equally
inadmissible to show intent. Evidence of other wrongful acts to prove
intent must go further than showing that the defendant has a generally
criminal disposition or character, and must logically tend to prove the
defendant's criminal intent at the time of the commission of the act
charged. The prior acts must be similar to the one charged and must not
be so remote as to be lacking in evidentiary value. Excellent
discussions of this subject are contained in the opinions of this Court
in Weiss v. United States, 120 Fed. (2d) 472; on rehearing, 122
Fed. (2d) 675, 682-689; and in the opinion of the District of Columbia
Circuit in Boyer v. United States, 132 Fed. (2d) 12, 13. See,
also, Wolcher v. United States, 9th Cir., 206[200] Fed. (2d) 493,
497 [52-2 USTC ¶9547]; Lambert v. United States, 5th Cir., 101
Fed. (2d) 960, 964; 2 Wigmore on Evidence, 3rd ed., Secs. 302ff. In the Boyer
case, supra, the time elapsed between the two transactions was
"nearly two years," and the earlier wrongful act was held
inadmissible. In the present case, more than eight years had passed and
there was no logical probative value as to the appellant's intent in the
commission of the later act in addition to the general proof of his
criminal tendencies.
It
seems to us that the admission of such evidence was highly prejudicial
to the appellant, since it indicated to the jury that he had cheated on
his income taxes over a period of years theretofore and was further
unworthy of belief because he had made misstatements in his offer of
compromise. We are unwilling to say that without such inadmissible
evidence the jury might not have reached a different verdict. See Kotteakos
v.
United States
, supra, 328
U. S.
at p. 764. The judgment is accordingly reversed and the cause remanded
for a new trial.
Reversed
and remanded.
1
Count 2 of the original indictment mistakenly referred to the year 1945
instead of 1946, and was ordered nol prossed by the court on motion of
the United States Attorney. A separate indictment for the year 1946 was
consolidated for trial and on appeal with the indictment for 1945 and
1947.
2
According to the testimony of the revenue agents, Smith and Moorman, and
certain chart summarizations prepared by the latter witness, appellant
understated his cash receipts or sales on his bakery books and tax
returns for the years involved in the total sum of $52,072.00, which
aggregate understatement analyzed by years and disposition is as
follows:
3
Demetree v.
United States
, 207 Fed. (2d) 892, 894 [53-2 USTC ¶9646]; Ford v. United
States, 210 Fed. (2d) 313, 315 [54-1 USTC ¶9233]; Wardlaw v.
United States, 203 Fed. (2d) 884, 887 [53-1 USTC ¶9335]; Jones
v. United States, 164 Fed. (2d) 398, 400 [47-2 USTC ¶9402].
4
In his motion to suppress, "Defendant states that the Government
Agents in this case, when they first came to see him about his income
tax matters, told him that it was a routine check-up and that they would
let him know after the investigation how much taxes he owed. At no time
was it intimated to him that there might be a criminal prosecution.
Defendant was never warned and was never told by the said Agents that
the evidence here sought to be suppressed would be used in either a
civil or criminal prosecution against him. The defendant never consented
to the said Agents getting possession of or removing from his place of
business or photostating any pages contained in the said 1946 Cash
Receipts Book of Lloyd Bakery. Defendant states that said Daily Cash
Receipts Book was obtained by stealth by the said Government Agents and
secretly removed from his place of business and photostated by the said
Government Agents without his consent."
[55-1
USTC ¶9170]William C. Bostwick, Appellant v.
United States of America
, Appellee
(CA-5),
In the United States Court of Appeals, Fifth Circuit, No. 14934, 218 F2d
790, January 20, 1955
Appeal from the United States District Court for the Northern District
of Alabama.
[1939 Code Sec. 145(b)--similar to 1954 Code Sec. 7201]
Tax evasion: Trial: Admission of evidence: Instructions.--Taxpayer
was convicted on charges for tax evasion under 1939 Code Sec. 145(b) for
failure to report substantial amounts of income. The Appeals Court ruled
against taxpayer on all of the following assignments of error: (1) that
the court erred in failing to provide taxpayer an opportunity to object
to an instruction out of hearing of the jury, (2) that the instruction
itself as to gambling was in error, (3) that the court erred in
requiring the sequestration of a certified public accountant proposed to
be used by taxpayer as an expert witness, (4) that the court erred in
refusing to permit a witness to testify as to his opinion of the
adequacy of certain records on the ground that the Government's use of
the bank deposits and current expenditures method was in violation of
the provisions of 1939 Code Sec. 41, and (5) that the court erred in
overruling taxpayer's motion for acquittal at the close of the
Government's case.
Aubrey
M. Cates, Jr.,
Montgomery
,
Ala.
, for appellant. Fred S. Weaver, M. L. Gwathmey, Assistant United States
Attorneys, both of Birmingham, Ala., Frank M. Johnson, Jr., United
States Attorney, Birmingham, Ala., for appellee.
Before
BORAH, RIVES and TUTTLE, Circuit Judges.
RIVES,
Circuit Judge:
This
is an income tax prosecution, in which the Government computed the
defendant's net income on the basis of bank deposits and currency used
in each taxable year, and attempted to corroborate that proof by the
increase in net worth method. We have delayed decision of the appeal
until we could have the benefit of the opinions of the Supreme Court in
the four cases decided December 6, 1954. Holland v. United States,
23 L. W. 4024 [54-2 USTC ¶9714]; Friedberg v. United States, 23
L. W. 4032 [54-2 USTC ¶9713]; Smith v. United States, 23 L. W.
4020 [54-2 USTC ¶9715]; United States v. Calderon, 23 L. W. 4029
[54-2 USTC ¶9712].
The
appellant was convicted of having violated Section 145(b), Internal
Revenue Code by willfully and knowingly attempting to defeat and evade
income tax. The tax years involved were 1946, 1947 and 1948. The jury
found the defendant guilty for the latter two years and the court
sentenced him to 18 months' imprisonment and $1,000.00 fine.
The
first specification of error is that the court erred in failing to
provide the defendant an opportunity to object to the charge of the
court out of the hearing of the jury as required by Rule 30, Federal
Rules of Criminal Procedure. See also Rule 51, Federal Rules of Civil
Procedure. What occurred is set out in the footnote. 1
Whether that amounted to a compliance with Rule 30 or not is probably
immaterial because there seem to be no errors in the charge. The only
errors suggested relate to two passages quoted in another footnote, 2
both of which are so obviously sound as not to merit discussion.
Specification
2 is that: "The District Court erred in requiring the sequestration
of a certified public accountant proposed to be used by the defendant as
an expert witness." "Where 'the rule' is invoked as to
witnesses, the mode and manner of its enforcement is confided largely to
the discretion of the court, and the exercise of that discretion will
not be disturbed except in clearest cases of abuse." 53 Am. Jur.,
Trial, Sec. 31, p. 47; cf. Jennings v. United States, 5th Cir.,
73 Fed. (2d) 470, 471.
[Bank
Deposits Method]
Specification
3 is that: "The Court was in plain error in refusing to permit the
witness
Griffin
to testify as to his opinion of the adequacy of the records of the Turf
Exchange." This specification is bottomed upon 26 U. S. C. A. 41 3
which the Supreme Court in Holland v. United States, 23 L. W.
4024, 4026 [54-2 USTC ¶9714], held not to be applicable to the net
worth method. For the reasons stated in Dupree v. United States of
America, No. 14,659 [55-1 USTC ¶9169], also decided today, we hold
that that section does not apply to the bank deposits and current
expenditures method of proof primarily employed in this case though
supported by the increase in net worth method. If by any chance that
holding should be mistaken, and if that section should apply to a case
like the one before us, we, nevertheless, find that the record does not
support appellant's contention that the court erred in rejecting the
testimony.
The
revenue agent had testified for the Government that the records of the
Turf Exchange did not adequately reflect the income of the defendant and
his partners. The accountant testifying for the defendant was asked the
following question, to which the Government's objection was sustained:
"I will ask you if in your opinion the win and lost sheets that you
have just shown constitute an adequate set of records?" The
defendant's counsel did not pursue the subject, re-phrase the question,
nor make it any more definite that the inquiry was directed to whether
the records clearly and truly reflected the defendant's income from the
Turf Exchange. The form of the question was certainly objectionable.
Moreover,
it was self-evident that unless gains and losses from gambling were
truthfully and accurately entered in the "Win" and
"Lost" columns of the accounting sheets, they did not truly
reflect the income of the defendant and his partners in that enterprise.
The most adequate method of accounting will not clearly or truly reflect
income unless the items of receipt and expenditure are truthfully
entered. The adequacy of a set of records, the backbone of which
consists of entries in the columns "Win", "Lost" is
within the comprehension of the ordinary juror and hardly requires the
opinion of an expert witness. The jury were really concerned not with a
set of bookkeeping entries, but with the facts concerning the
defendant's income. This specification of error is without merit.
[Motion
for Acquittal]
The
remaining specifications of error relate to the sufficiency of the
evidence to sustain the conviction, as presented by the motion for
judgment of acquittal at the close of the Government's case and at the
close of all of the evidence and renewed after verdict and judgment
along with an alternative motion for new trial. We review the case
"bearing constantly in mind the difficulties that arise when
circumstantial evidence as to guilt is the chief weapon of a method that
is itself only an approximation." Holland v. United States,
supra at p. 4026.
The
taxpayer defendant had given to the special agent of the Internal
Revenue Department a sworn statement dated March 8, 1951, which was
introduced in evidence without objection and in which, among other
things, the defendant said:
"No,
I haven't filed any income tax except the first one when they checked
Conners and Jones about 1933 or 1934, and since then. When they told me
and Gene about the government checking them, they told us to start
making income tax returns, which I did--the first one I ever made. I had
never heard of gamblers paying income tax; I didn't think we were
supposed to. Johnny came out of the war, I think, with a lot of
money."
*
* *
"Q.
Mr. Bostwick, on December 31, 1941, could you tell me how much cash you
had invested in the Turf Exchange?
"A.
I couldn't hardly tell you. I imagine we could have had $10,000.00 or
$20,000.00. We had a bank roll of $10,000.00 especially to pay off
horses. Then the bank roll of the Turf Exchange never run more than
$5,000.00 or $6,000.00, but if it did, it would be cut down. I imagine
the total bank roll would run around $15,000.00 all told.
"Q.
And one-fourth of that would be yours?
"A.
That is right. When I drew out down there, I drew $5,000.00.
"Q.
Did you have any other cash on hand December 31, 1941?
"A.
Yes, sure I had money.
"Q.
Could you tell us how much you had on hand at that time?
"A.
No, I can't tell you about 1941, but I know what I had in 1939--that is
when I got married. I told my wife what I had. I had around $50,000.00.
I had that in cash money. When I got married, I had an apartment house
and one other house, an automobile, and some diamonds, and stock. This
is besides my $50,000.00 in cash. I probably had some mortgages because
I had some money loaned out. I didn't really put my money to working
until I adopted this child about 1944 or 1946. When I got married I
started saving my money; I quit throwing it away."
During
the course of this investigation, the agent examined the bank records
pertaining to the various accounts of the defendant, his wife, and small
adopted daughter, the defendant's stock account with Merrill, Lynch,
Fenner & Beane, brokers, the defendant's local tax assessments, all
of the Probate Court records in Montgomery and adjoining counties, and
formally interviewed and took sworn statements from the defendant, his
wife, his partners and other persons associated with him in the Turf
Exchange, and also interviewed the persons to whom, according either to
the mortgage records or to defendant's statement, he had made loans.
Starting
then with cash on hand December 31, 1939, $50,000.00, the agent made
detailed calculations for each year thereafter, adding the income as
reported in defendant's return, any loans repaid, proceeds from sale of
stock, etc., subtracting estimated cash living expenses and amounts
traced to defendant's investments for the year and any other
expenditures, and arrived at an amount of cash remaining on hand on
December 31, 1945 as $26,920.47.
The
agent then computed the defendant's net income for each of the years
1946, 1947, and 1948 on the basis of the bank deposits and currency used
for such year. He added the total deposits to all bank accounts and the
currency shown to be used, eliminated loans repaid, proceeds from sale
of stock and any depletion of currency on hand as of the end of the
previous year, subtracted allowable expenditures and nontaxable income
and calculated the defendant's net taxable income for the year 1946 as
$33,963.16 instead of $12,714.08 as reported; for 1947, $51,547.77
instead of $9,876.16 as reported, and for 1948 as $34,031.65 instead of
$11,891.52 as reported.
The
agent then made a computation of net worth of the defendant and his wife
as of December 31, 1945, 1946, 1947 and 1948, and arrived at practically
the same amounts that he had reached on the basis of bank deposits and
currency used during those years.
The
defendant on his part showed some matters not considered by the revenue
agent, for example, that he had purchased 30 shares of Alabama Power
Company preferred stock in 1937 and 1938 and sold them in 1940; that he
had sold a diamond to Sol Monsky for $2,400.00 on May 23, 1946; that he
had made a loan to Edward F. Taylor of $5,000.00 in June, 1939, which
was repaid in the amount of $2,000.00 in 1941, and $3,000.00 in 1942.
The defendant also introduced a statement purporting to show his net
worth as of December 31, 1939 as $96,974.00, but upon analysis it was
found to contain only the following items, which had not been taken into
consideration by the revenue agent:
1. Reynolds Loan ........... $ 5,000.00
2. Diamonds ................ 3,000.00
3. Taylor Loan ............. 5,000.00
4. Golden Loan ............. 5,000.00
5. Socony Stock ............ 1,600.00
6.
Alabama
Power Stock ..... 3,300.00
Totaling ................... $22,900.00
The revenue agent testified in rebuttal that assuming that the
defendant's net worth statement as of December 31, 1939 is correct in
every detail, it would reduce the total of defendant's net income for
1946, but would have no effect on the 1947 and 1948 results. The jury
found the defendant guilty only under Counts 2 and 3 of the indictment
covering 1947 and 1948. We think that the evidence was clearly
sufficient for the jury's consideration on the question of the amount of
the defendant's net taxable income for each of the years in question.
The
question remains as to whether the jury could reasonably find that the
defendant "did wilfully and knowingly attempt to defeat and
evade a large part of the income tax due and owing by him to the United
States of America for the calendar year 1947" and for the year
1948, as charged in the indictment. From the manner in which the records
were kept, the deposit of money in the name of M. W. Bostwick instead of
William C. Bostwick, the keeping of a safe deposit box in the name of
Frank B. Cyphers, the failure to keep records of the gambling which the
defendant admitted outside the Turf Club, the large amounts of
understatement of net income for each of said years, and all of the
other circumstances of the case, we conclude that the question of
defendant's intent also was for the jury. Spies v.
United States
, 317
U. S.
492, 499 [43-1 USTC ¶9243];
Holland
v.
United States
, supra at p. 4029.
Finding
no reversible error in the record, the judgment is
AFFIRMED.
1
"The Court:
"Now,
Mr. Cates has called my attention to the fact that the testimony which
he expects to offer with reference to the silence of the record as to
any objection to the Court's oral instructions, and to the fact that no
opportunity was given to the Defendant to make objection to the Court's
charge or omission to charge out of the presence of the jury.
"Now,
with respect to that, insofar as my own recollection is concerned, I
will state for the record that there was no request made of me at the
conclusion of my charge to register an objection to the charge, or the
failure to charge; nor was there any request made that an opportunity be
afforded the Defendant to make such an objection out of the presence of
the jury.
"My
further recollection is that I paused for some thirty seconds or more
after I concluded my charge before I told the jury to retire and
consider their verdict, since no objection was then made, nor was there
any evidence that an objection would be made. Certainly no request for
objection was made at that point.
"My
further recollection is that I concluded my charge to the jury and
directed them to retire and consider their verdict at 10 minutes before
10:00 in the morning. That time of course is approximate; that at about
11:30 or 25 minutes until 12, Mr. John Huddleston, Mr. George Huddleston
and Mr. Cates came into my chambers, after the jury had been
deliberating since about 10 minutes of 10:00 o'clock, and asked if then
they might register an objection to the charge which I had given the
jury.
"I
told them that they certainly might do it, but that I would let the
record speak the truth with respect to that, which would have shown that
the jury had been then deliberating approximately an hour and a half.
Then somewhat facetiously it was remarked that if the record showed that
there would be no use to make an objection.
"That
is my entire recollection of the whole point.
"Mr.
Fulford:
"The
Government is willing to stand on that recollection, Your Honor.
"The
Court:
"I
would not deprive the attorney for the Defendant the right of
disagreeing with that recollection, or putting forward anything else
that they might have. I think they should make the record complete.
"Mr.
Cates:
"Can
we pause just a minute and be off the record?
"The
Court:
"Oh,
yes.
"(Discussion
was had off the record.)
"Mr.
Cates:
"I
will ask Your Honor one further question.
"The
Court:
"You
may make any statement, I don't want you cut off. You make any statement
for the record you want to.
"Mr.
Cates:
"I
will just make this statement. And corret me if I'm wrong.
"The
Court:
"Sure.
"Mr.
Cates:
"My
recollection--and I would so testify--is that the Court did not by any
words ask if the defense was satisfied with the charge, or the omissions
therefrom.
"The
Court:
"That
is correct.
"Mr.
Cates:
"That's
for that part.
"The
Court:
"That's
correct.
"Mr.
Cates:
"As
to whether or not the Court made any signs such as nodding and glancing,
I wouldn't make any positive statement. The only thing I could say was
that the Court was facing the jury throughout the whole procedure, or
virtually all of it.
"The
Court:
"That's
true. When I delivered my instructions I did face the jury. And, my
recollection may be imperfect, but I will say this for the record, that
it is my practice not to call the jury's attention to any exceptions or
objections that the attorneys either in civil or criminal cases want to
take to my charge; but rather to put the onus on the attorneys to
approach the bench; and I feel sure that I looked to determine, and
paused to determine whether the counsel for the defendant had any
objections or exceptions.
"Mr.
Cates:
"I
think that's enough of a showing for the record. With that in view we
feel that the Court as the governor of the trial is the one who should
create the opportunity called for under the rule."
2
"You have a right to consider the evidence in the case, if you find
it to be a fact, that this Defendant was a gambler, that he had no other
business except that of gambling. You have a right to consider that in
determining whether you will believe the testimony of witnesses that the
Defendant had a good character during the the years concerned.
"The
presumption of innocence attends him at every stage of the proceedings
against him. It is a palpable, tangible element of the case and
continues to protect him until such a time as that the jurors in their
deliberations are convinced of guilt beyond a reasonable doubt. If that
time does come in your deliberations, when your minds are convinced of
guilt beyond a reasonable doubt, the presumption of innocence has served
its purpose. It disappears from the case and is no longer a part of the
case for consideration by the jury."
3
"Section 41. General rule
"The
net income shall be computed upon the basis of the taxpayer's annual
accounting period (fiscal year or calendar year, as the case may be) in
accordance with the method of accounting regularly employed in keeping
the books of such taxpayer; but if no such method of accounting has been
so employed, or if the method employed does not clearly reflect the
income, the computation shall be made in accordance with such method as
in the opinion of the Commissioner does clearly reflect the income. If
the taxpayer's annual accounting period is other than a fiscal year as
defined in section 48 or if the taxpayer has no annual accounting period
or does not keep books, the net income shall be computed on the basis of
the calendar year."
[54-2
USTC ¶9599]J. D. Charles, Appellant v.
United States of America
, Appellee
(CA-9),
In the United States Court of Appeals for the Ninth Circuit, No. 13,897,
215 F2d 825, September 24, 1954
Appeal from the United States District Court for the District of Hawaii.
[1939 Code Sec. 145--similar to 1954 Secs. 7201-7203]
Trial: Exclusion of witnesses from courtroom.--The District
Court's declaration that it had abandoned and would not follow the
practice of excluding witnesses from the courtroom was error, but since
the records did not show whether any witness was in the courtroom while
any other witness was testifying, the Circuit Court could not rule as to
whether the appellant was prejudiced by the District Court's refusal to
exclude witnesses or its failure to exercise its discretion.
[1939 Code Sec. 145--similar to 1954 Secs. 7201-7203]
Evidence: Admission of irrelevant testimony.--Testimony
indicating to the jury that appellant was "an income tax
violator" when the case before the jury involved possession of
marihuana without paying a transfer tax was irrelevant and should not
have been admitted, but, the District Court having instructed the jury
that they were not trying an income tax case, the Circuit Court
concluded that appellant was not prejudiced by the admission of the
testimony.
[1939 Code Sec. 2593(a)--similar to 1954 Sec. 4744]
Evidence: Criminal penalties: Taxes on narcotic drugs and
marihuana.--The District Court's instructions to the jury that it
had to prove only two things to warrant a conviction, that appellant
possessed marihuana and that he was put upon notice and demand to
produce an order form covering such possession, was prejudicial error.
The instructions stated that such notice and demand must be made by the
collector of internal revenue. Effective October 10, 1952, 29 days
before appellant's alleged violation, the functions of such collectors
relating to order forms for marihuana were delegated to district
supervisors and agents of the Bureau of Narcotics. The quoted
instructions were purportedly based on the presumptive evidence
provision of Sec. 2593(a). Since there was no proof that any notice or
demand had been made by Bureau of Narcotics agents or anyone else, the
provision was inapplicable. The Circuit Court ruled for the appellant,
holding that the giving of these instructions was reversible error.
Walter
H. Duane,
Rob
ert B. MacMillian,
San Francisco
,
Calif.
, for appellant. A. William Barlow, United States Attorney, Louis B.
Blissard, Assistant United States Attorney, Honolulu, Hawaii, Lloyd H.
Burke, United States Attorney, San Francisco, Calif., for appellee.
Before
MATHEWS, HEALY and LEMMON, Circuit Judges.
MATHEWS,
Circuit Judge:
On
November 18, 1952, in the United States District Court for the District
of Hawaii, appellant, J. D. Charles, also known as James D. Charles, was
indicted for violating 26 U. S. C. A. §2593(a), 53 Stat. 281, 1
which provided: "It shall be unlawful for any person who is a
transferee required to pay the transfer tax imposed by [26 U. S. C. A.
§2590(a), 53 Stat. 279] 2
to acquire or otherwise obtain any marihuana without having paid such
tax; and proof that any person shall have had in his possession any
marihuana and shall have failed, after reasonable notice and demand by
the collector, 3
to produce the order form required by [26 U. S. C. A. §2591, 53 Stat.
280, 60 Stat. 40] to be retained by him, shall be presumptive evidence
of guilt under [26 U. S. C. A. §2593(a), 53 Stat. 281] and of liability
for the tax imposed by [26 U. S. C. A. §2590(a), 53 Stat. 279]."
The
indictment alleged that on or about November 8, 1952, in the City and
County of Honolulu, Territory of Hawaii, appellant, "being a person
who, as a transferee, was required to pay the transfer tax imposed by
[25 U. S. C. A. §2590(a), 53 Stat. 279], did knowingly, wilfully,
unlawfully and feloniously acquire and obtain fifty-six and four-tenths
(56.4) grains of marihuana without having paid said transfer tax, in
violation of [26 U. S. C. A. §2593(a), 53 Stat. 281]."
Appellant
was arraigned, pleaded not guilty, had a jury trial and was found
guilty. Thereupon a judgment was entered sentencing him to pay a fine of
$2,000 and to be imprisoned for five years. 4
This appeal is from that judgment.
[Exclusion
of Witnesses from Courtroom]
I.
Eight witnesses were called by and testified for appellee, the
United States
. Appellant did not testify or call any witness or offer any evidence.
After the jury was impaneled and before any witness was called, the
following colloquy occurred:
"Mr.
Landau: 5
While we are discussing this matter, may we at this time ask that the
witnesses be excluded?
"The
Court: 6
No. As you have probably heard, the rule doesn't exist any more.
"Mr.
Landau: No. I am sorry I did not know that. * * * Is this a change in
the rules of court, if the court please?
"The
Court: No. There is no written rule that you are referring to. It is
simply a custom that has grown up here in
Hawaii
and has been observed for many years as you and I both know. But I find
that such a rule does not obtain generally elsewhere, * * * and it is my
view that people are required to tell the truth under oath whether they
hear anybody else testifying or not, and I know and you know that the
rule is something of a theoretical abstraction because witnesses who
have been placed under the rule have been known to testify and then run
out and tell the others what was going on. So we will no longer in this
division of the court 7
have any such rule."
Thus,
in effect, appellant requested, and the District Court refused to make,
an order excluding the witnesses from the courtroom. The refusal is
specified as error.
An
order excluding witnesses from the courtroom is commonly called a rule,
and witnesses so excluded are said to have been put under the rule. 8
United States
district courts have, and frequently exercise, the power to make such
orders. 9
The
practice of putting witnesses under the rule is a time-honored one 10
and should not be abandoned. Of course all witnesses are (as the
District Court said) "required to tell the truth under oath whether
they hear anybody else testifying or not." Unfortunately, however,
some witnesses pay little heed to this requirement. Such witnesses may,
and often do, shape their testimony to match that given by other
witnesses within their hearing. To prevent such matching of testimony is
the prime purpose of putting witnesses under the rule. 11
It
is true that the power to put witnesses under the rule is a
discretionary one, 12
and that where, in the exercise of its discretion, a district court
refuses to put witnesses under the rule, its action is reviewable only
in case of an abuse of discretion. 13
Here, however, there was no exercise of discretion. Instead, there was,
in effect, a declaration by the District Court that it had abandoned and
would not follow the practice of putting witnesses under the rule. This
was error.
However,
the record does not show that any witness was in the courtroom while any
other witness was testifying. We therefore cannot say that appellant was
prejudiced by the District Court's refusal to put the witnesses under
the rule or by its failure to exercise its discretion.
[Admissibility
of Testimony]
II.
George F. Richcreek, an agent of the Bureau of Narcotics, called as a
witness for appellee, testified 14
that about 4:55 P. M. on November 8, 1952, at a house in Honolulu, 15
Richcreek took appellant into custody; that Richcreek, assisted by
Lowell W. Cain, an agent of the Bureau of Narcotics, and by Charles A.
Gerlach, a police officer of the City of Honolulu, thereupon began a
search of the house and adjacent yard; that Richcreek, Cain and Gerlach
were later assisted in the search by other police officers, one of whom
was
Rob
ert F. Vierra; and that:
"The
search was continued and at about 6:45 P. M. Agent Cain asked Charles
[appellant] how much money he had in the house. Charles replied that he
had ten or twelve thousand dollars, he wasn't sure which was correct. He
said that he had it in his bedroom. Agent Cain then told him that he
would go to his bedroom and check the money so there wouldn't be any
mistake, as if anything happened to the money during the search. Charles
then led us to the bedroom, which is just off the rear door to the
house, where he opened a rawhide wardrobe steamer trunk * * * and
removed two brown grocery type bags of paper currency. This money was
counted by Agent Cain and myself in the presence of the defendant
[appellant]. * * * There was $17,011.11 in two brown paper bags. * * *
That money was then placed back in the brown paper bags and relocked in
the trunk by Mr. Charles. The search continued, and Mr. Herbert Chock
from the Internal Revenue Bureau, whom we had been trying to contact all
evening in relation to the $17,011, arrived, 16
and he interviewed Mr. Charles in relation to this money, and I believe,
I don't understand internal revenue angles too much, but I believe he
was talking to Mr. Charles about filing an estimated return for the year
1952."
The
admission of the above quoted testimony is specified as error.
The
above quoted testimony was irrelevant and should not have been admitted.
Appellant says that its admission was prejudicial, in that it referred
to the $17,011.11 found in appellant's possession and to Chock's
interview with appellant and thereby indicated to the jury that
appellant was "a large-scale operator in criminal enterprises of
some kind" and was "an income tax violator." Actually, it
did not so indicate. Furthermore, immediately following its admission,
the District Court stated in the presence of the jury: "We are not
trying an income tax case." Thereafter the District Court
instructed the jury that appellant was "not on trial for having in
his possession a large sum of money," and that there was
"nothing unlawful about that."
We
conclude that appellant was not prejudiced by the admission of the above
quoted testimony.
[Trial
Judge's Instructions]
III.
The District Court gave the jury the following instructions:
"*
* * Congress has said that if a person such as this defendant
[appellant], in relation to a charge such as this, is found to be in
possession of marihuana, and upon notice and demand fails to produce an
order form covering the transaction, that that person, if he fails to
explain that possession, may on that, on those two facts being
established beyond a reasonable doubt, alone may be convicted. And in
that event, should that be your finding, it is not necessary for the
Government [appellee] to prove those other things that I have mentioned
in the indictment.
"So,
consequently, although this indictment charges the defendant with being
a transferee required to pay the internal revenue tax imposed by the
law, and charges him also with acquiring and obtaining marihuana without
having paid such tax, and thus is described as being a transferee, you
are instructed that though that be the charge as written out
specifically in the indictment, and that although the Government must
prove this beyond all reasonable doubt, that the Congress has provided
that the Government may prove it in this particular way--by establishing
beyond all reasonable doubt two facts--one, that the defendant had
possession of the article mentioned in the indictment, and two, that the
defendant failed to produce the required order form covering the article
after a notice and demand to produce such form had been made upon him by
a representative of the collector of internal revenue, now the director.
17
Now, if those two facts are proven, and the defendant offers no
explanation, or if the explanation he offers does not satisfy, then the
Government need go no further, and those two facts, proven beyond a
reasonable doubt, warrant and require you to return a verdict of guilty.
* * *
"And
so I repeat that * * * to warrant a conviction at the hands of the jury
of this defendant, the Government has to prove only two things,
regardless of what is said in the indictment. One, it has to prove
beyond a reasonable doubt that the defendant did in fact have actual or
constructive possession of the marihuana, and two, it has to prove
beyond a reasonable doubt that the defendant was put upon notice and
demand was made upon him to produce an order form covering that
possession by him of marihuana. Now, if at that point the defendant
should go forward and offer an explanation of possession that was deemed
by the Government to even come close to being satisfactory, the
Government would then have to go forward with its burden of proving all
of the things stated in the indictment in the usual and customary way as
typical of any criminal case as I have told you. * * * But here we need
not concern ourselves with what might have happened if the defendant had
offered any explanation. Here the defendant offers no explanation * *
*" 18
The
giving of these instructions, hereafter called the quoted instructions,
is specified as error.
The
quoted instructions were purportedly based on the presumptive evidence
provision of 26 U. S. C. A. §2593(a), 53 Stat. 281--the provision that
"proof that any person shall have had in his possession any
marihuana and shall have failed, after reasonable notice and demand by
the collector 19
to produce the order form required by [26 U. S. C. A. §2591, 53 Stat.
280, 60 Stat. 40] to be retained by him, shall be presumptive evidence
of guilt under [26 U. S. C. A. §2593(a), 53 Stat. 281] and of liability
for the tax imposed by [26 U. S. C. A. §2590(a), 53 Stat. 279]."
Obviously,
the presumptive evidence provision of §2593(a) was inapplicable unless
there was proof that appellant had had in his possession the marihuana
described in the indictment and had failed, after reasonable notice and
demand by a district supervisor or agent of the Bureau of Narcotics, 20
to produce the order form required by §2591 to be retained by him.
There
was no such proof. There was evidence that appellant had had in his
possession the marihuana described in the indictment, but there was no
evidence that he had failed, after reasonable notice and demand by a
district supervisor or agent of the Bureau of Narcotics, to produce the
order form required by §2591 to be retained by him, or that any such
notice or demand was ever given to or made on him. 21
Hence the presumptive evidence provision of §2593(a) was inapplicable,
and the quoted instructions were unwarranted and improper.
Even
if the presumptive evidence provision of §2593(a) had been applicable,
the quoted instructions would have been improper for the following
reasons:
Although
purportedly based on the presumptive evidence provision of §2593(a),
the quoted instructions did not conform to, and were not in accord with,
that provision. Instead of reasonable notice and demand by a district
supervisor or agent of the Bureau of Narcotics to produce the order form
required by §2591 to be retained by appellant, 22
the quoted instructions spoke of "notice and demand * * * to
produce an order form covering the transaction," "notice and
demand to produce such form * * * made upon him by a representative of
the collector of internal revenue, now the director," 23
and "notice and demand * * * made upon him to produce an order form
covering * * * possession by him of marihuana." The quoted
instructions said nothing about reasonable notice and demand, nothing
about notice and demand by a district supervisor or agent of the Bureau
of Narcotics, and nothing about an order form required by §2591 to be
retained by appellant.
Attempting
to justify the giving of the quoted instructions, appellee cites Yee
Hem v. United States, 268
U. S.
178; Casey v. United States, 276
U. S.
413; White v. United States, 9 Cir., 16 Fed. (2d) 870; Pitta
v.
United States
, 9 Cir., 164 Fed. (2d) 601; Stoppelli v.
United States
, 9 Cir., 183 Fed. (2d) 391; Cavness v.
United States
, 9 Cir., 187 Fed. (2d) 719; Toy v.
United States
, 2 Cir., 266 Fed. 326; Acuna v.
United States
, 5 Cir., 74 Fed. (2d) 359; Howard v.
United States
, 7 Cir., 75 Fed. (2d) 562;
United States
v. Williams, 2 Cir., 161 Fed. (2d) 835;
United States
v. Markham, 7 Cir., 191 Fed. (2d) 936;
United States
v. Chiarelli, 7 Cir., 192 Fed. (2d) 528; Grabenheaimer v.
United States
, 6 Cir., 194 Fed. (2d) 447 [52-1 USTC ¶9225].
Such
justification cannot be found in any of these cases. The Yee Hem,
Casey, White, Pitta, Stoppelli, Cavness, Toy, Acuna, Howard and Chiarelli
cases did not, nor did any of them, involve §2593(a) or any provision
similar to the presumptive evidence provision of §2593(a). The Williams,
Markham and Grabenheaimer cases involved §2593(a), but they
did not, nor did any case cited by appellee, involve instructions
similar to the quoted instructions. Much less did any of the cited cases
express approval of such instructions.
We
conclude that the giving of the quoted instructions was reversible
error.
Judgment
reversed.
LEMMON,
Circuit Judge, did not participate in the decision of this case.
1
Section 2593(a) was derived from §8(a) of the Marihuana Tax Act of
August 2, 1937, 50 Stat. 555.
2
Section 2590(a) was derived from §7(a) of the Marihuana Tax Act of
August 2, 1937, 50 Stat. 554.
3
Section 2593(a) was enacted into law on February 10, 1939. See 53 Stat.
1, 281. At that time, the term "collector," as used in §2593(a),
meant collector of internal revenue. See 26
U. S.
C. A. §3797(a)(13), 53 Stat. 469, 470. However, effective October 10,
1952--29 days before appellant's alleged violation of §2593(a)--the
functions of such collectors relating to notice and demand to produce
order forms for marihuana were delegated to district supervisors and
agents of the Bureau of Narcotics. See Reorganization Plan No. 26 of
1950, 64 Stat. 1280, 15 F. R. 4935, 5
U. S.
C. A. §241 note; Reorganization Plan No. 1 of 1952, 66 Stat. 823, 17 F.
R. 2243, 26
U. S.
C. A. §3905 note; Treasury Department Orders Nos. 46 and 157, 17 F. R.
9051. No collector was authorized to exercise any such function after
October 10, 1952. Prior to December 1, 1952, the office of collector of
internal revenue was abolished, and the office of director of internal
revenue was established. Such abolition and establishment became
effective on different dates in different collection districts. In the
collection district of Hawaii, such abolition became effective on
November 25, 1952, and such establishment became effective on November
26, 1952--18 days after appellant's alleged violation of §2593(a). See
Reorganization Plan No. 1 of 1952 supra; Treasury Department Order No.
150-20, 17 F. R. 10747. No director was ever authorized to give or make
any notice or demand to produce order forms for marihuana.
4
See 26
U. S.
C. A. §§ 2557(b)(1), 2596, 65 Stat. 768, 769.
5
Mr. Samuel Landau, counsel for appellant.
6
The District Court, Chief Judge J. Frank McLaughlin presiding.
7
Meaning, we suppose, the District Court when presided over by Chief
Judge McLaughlin. The District of Hawaii has two judges, but no
divisions. See 28 U. S. C. A. §§ 91, 133, 62 Stat. 877, 895.
8
See 23 C. J. S., Criminal Law, §1010; 64 C. J., Trial, §127.
9
Most of the cases in which such orders have been made by
United States
district courts are not reported. See, however, Coates v. United
States, 9 Cir., 59 Fed. (2d) 173; Cagle v.
United States
, 6 Cir., 3 Fed. (2d) 746; Raarup v.
United States
, 5 Cir., 23 Fed. (2d) 547; Morrow v.
United States
, 7 Cir., 101 Fed. (2d) 654; Twachtman v. Connelly, 6 Cir.,
158 Fed. (2d) 501; Matz v.
United States
, D. C. Cir., 158 Fed. (2d) 190;
United States
v. Five Cases, 2 Cir., 179 Fed. (2d) 519;
United States
v. Chiarella, 2 Cir., 184 Fed. (2d) 903; Powell v.
United States
, 6 Cir., 208 Fed. (2d) 618.
10
See Wigmore on Evidence, Third Edition, §1837.
11
Witt v.
United States
, 9 Cir., 196 Fed. (2d) 285.
12
Witt v.
United States
, supra; Lii v.
United States
, 9 Cir., 198 Fed. (2d) 109; Hood v.
United States
, 8 Cir., 23 Fed. (2d) 472; Mithcell v.
United States
, 10 Cir., 126 Fed. (2d) 550; Kaufman v.
United States
, 6 Cir., 163 Fed. (2d) 404.
13
See cases cited in footnote 12.
14
All testimony of Richcreek mentioned in this opinion was given on direct
examination.
15
Other testimony showed that this was the house in which appellant
resided.
16
Other testimony of Richcreek indicated that Chock arrived about 12:25 A.
M. on November 9, 1952.
17
No collector or representative of a collector of internal revenue had,
at any pertinent time, any authority to give or make any notice or
demand to produce an order form for marihuana. No director of internal
revenue has ever had any such authority. See footnote 3.
18
The statement that appellant (defendant) offered no explanation was
correct. As indicated above, appellant offered no evidence whatever.
19
See footnotes 3 and 17.
20
See footnotes 3 and 17.
21
Agent Richcreek testified that in the course of the search mentioned
above, Officer Vierra found in appellant's yard a cigarette wrapper
containing marihuana; that Agent Cain then "asked [appellant] about
the tax stamps and marihuana order forms, to which [appellant] said he
didn't know what [Cain] was talking about;" that Cain
"explained to him that they were forms and tax stamps required to
legally transfer marihuana and that if you didn't have them, it was a
violation of the law;" that thereafter, in the course of the same
search, Richcreek found in appellant's yard a bottle containing
marihuana; that Cain "again asked the questions concerning the
special tax stamp and the order forms;" and that appellant
"again stated that he didn't know what it was all about." Cain
testified that when the cigarette wrapper containing marihuana was
found, he asked appellant "if he had order forms and tax stamps for
marihuana;" that appellant "said he didn't know anything about
that;" and that when the bottle containing marihuana was found,
Cain again "asked [appellant] about order forms and tax stamps,
which he did not know anything about." There was, however, no
testimony that any notice or demand to produce an order form was given
to or made on appellant by Cain or anyone else.
22
See footnotes 3 and 17 and subsection (d) of §2591.
23
See footnotes 3 and 17.
[54-2
USTC ¶9598]J. D. Charles, Appellant v. United States of America,
Appellee
(CA-9),
In the United States Court of Appeals for the Ninth Circuit, No. 13,903,
215 F2d 831, September 24, 1954
Appeal from the United States District Court for the District of Hawaii.
[1939 Code Sec. 145--similar to 1954 Secs. 7201-7203]
Criminal penalties: Trial: Exclusion of witnesses from courtroom.--The
District Court refused appellant's request to exclude witnesses from the
courtroom, and he contended that, in refusing to exclude witnesses who
would be "corroborative or cumulative of testimony of other
witnesses", the District Court abused its discretion. The Circuit
Court ruled that, so far as the record showed, though some witnesses
gave testimony which corroborated testimony given by some of the other
witnesses, it did not follow that one witness's testimony was shaped to
match another's or that the District Court abused its discretion in
refusing to exclude witnesses.
[1939 Code Sec. 145--similar to 1954 Secs. 7201-7203]
Criminal penalties: Evidence: Circumstantial evidence.--Appellant
moved for judgment of acquittal on the grounds that evidence against him
was circumstantial and insufficient to sustain a conviction. Motion was
denied. The Circuit Court affirmed the District Court's action, ruling
that the evidence, showing conclusively that heroin was found in the
appellant's possession minus required tax stamps, was prima facie
evidence of guilt, sufficient to sustain a conviction, and that the
motion for acquittal was properly denied.
[1939 Code Sec. 2553(a)--similar to 1954 Sec. 4704]
Criminal penalties: Evidence: Taxes on narcotic drugs and
marihuana.--The District Court instructed the jury that it was
required to find appellant guilty if he was proved beyond reasonable
doubt to have had possession of heroin without proper tax stamps, basing
its statement on the prima facie evidence provision of Code Sec.
2553(a). The Circuit Court rejected appellant's contention that the
statement was not warranted by that provision, stating that the evidence
showed conclusively that the stamps were absent from the heroin and that
the appellant failed to take the witness stand or adduce any material
evidence, much less explain or justify his possession of the drug.
Walter
H. Duane,
Rob
ert B. MacMillan, San Francisco, Calif., for appellant. A. William
Barlow, United States Attorney, Louis B. Blissard, Assistant United
States Attorney, Honolulu, Hawaii, Lloyd H. Burke, United States
Attorney, San Francisco, Calif., for appellee.
Before
MATHEWS, HEALY and LEMMON, Circuit Judges.
MATHEWS,
Circuit Judge:
On
February 18, 1953, in the United States District Court for the District
of Hawaii, appellant, J. D. Charles, also known as James D. Charles, and
Henry K. Chung were indicted for violating 26 U. S. C. A. §2553(a), 53
Stat. 271, 58 Stat. 721, 1
which provided: "It shall be unlawful for any person to purchase,
sell, dispense, or distribute any of the drugs mentioned in [26 U. S. C.
A. §2550(a), 53 Stat. 269, 58 Stat. 721] 2
except in the original stamped package or from the original stamped
package; and the absence of appropriate tax-paid stamps from any of the
aforesaid drugs shall be prima facie evidence of a violation of [28 U.
S. C. A. §2553(a), 53 Stat. 271, 58 Stat. 721] by the person in whose
possession same may be found; * * *"
The
indictment alleged that on or about January 11, 1953, in the City and
County of Honolulu, Territory of Hawaii, appellant and Chung "did
knowingly, wilfully, unlawfully and feloniously purchase, sell, dispense
and distribute a salt, compound and derivative of opium, to wit, two (2)
capsules containing heroin which heroin was not then and there in the
original stamped package and was not from the original stamped package,
in violation of [26 U. S. C. A. §2553(a), 53 Stat. 271, 58 Stat.
721]."
Appellant
and Chung were arraigned, pleaded not guilty, had a jury trial and were
found guilty. Thereupon a judgment was entered sentencing appellant to
pay a fine of $2,000 and to be imprisoned for five years. 3
This appeal is from that judgment.
I.
Six witnesses were called by and testified for appellee, the United
States. One witness was called by and testified for appellant. Appellant
offered no other evidence. Chung offered no evidence whatever. After the
jury was impaneled and before any witness was called, the following
motion and ruling were made:
"Mr.
Landau: 4
If your Honor please, at this time, the defendant Chung moves that all
witnesses who will be corroborative or cumulative of testimony of other
witnesses be excluded from the courtroom.
"Mr.
Soares: 5
We join in the motion, if your Honor please.
"The
Court: 6
Overruled."
Thus,
in effect, appellant and Chung requested, and the District Court refused
to make, an order excluding from the courtroom all witnesses who would
be "corroborative or cumulative of testimony of other
witnesses." 7
The refusal is specified as error.
An
order excluding witnesses from the courtroom is commonly called a rule,
and witnesses so excluded are said to have been put under the rule. 8
United States district courts have, and frequently exercise, the power
to make such orders. 9
The
power to put witnesses under the rule is a discretionary one. 10
Where, in the exercise of its discretion, a district court refuses to
put witnesses under the rule, its action is reviewable only in case of
an abuse of discretion. 11
Appellant here contends that, in refusing to exclude witnesses who would
be "corroborative or cumulative of testimony of other
witnesses"--which is to say, in refusing to put them under the
rule--the District Court abused its discretion. 12
We reject this contention for the following reasons:
The
prime purpose of putting witnesses under the rule is to prevent them
from shaping their testimony to match that given by other witnesses in
their hearing. 13
In this case, so far as the record shows, the District Court had no
reason to believe or suspect that any witness would shape his testimony
to match that given by any other witness, nor does it appear from the
record that any witness did so shape his testimony.
It
is true that some of the witnesses gave testimony which corroborated
testimony given by some of the other witnesses, but it does not follow
that the corroborating testimony was shaped to match the corroborated
testimony, or that the District Court abused its discretion in refusing
to put the corroborating witnesses under the rule.
II.
At the close of all the evidence, appellant moved for a judgment of
acquittal. 14
The stated ground of the motion was, in substance, that the evidence was
insufficient to sustain a conviction of appellant. The motion was
denied, and the denial is specified as error.
As
indicated above, appellant and Chung were indicted for violating §2553(a),
supra, by purchasing, selling, dispensing and distributing, on or
about January 11, 1953, two capsules of heroin--one of the drugs
mentioned in §2550(a), supra--which heroin was not in or from
the original stamped package.
As
indicated above, §2553(a) provided that the absence of appropriate
tax-paid stamps from any of the drugs mentioned in §2550(a) should be
prima facie evidence of a violation of §2553(a) by the person in whose
possession such drug might be found--a provision hereinafter called the
prima facie evidence provision of §2553(a).
There
was evidence showing conclusively that the heroin mentioned in the
indictment was found in Honolulu on January 11, 1953, and that
appropriate tax-paid stamps were absent from it when it was found. 15
There was substantial evidence that it was found in appellant's
possession. We therefore hold that there was prima facie evidence of
appellant's guilt; that such evidence was sufficient to sustain a
conviction of appellant; and that the motion for a judgment of acquittal
was properly denied.
Appellant
says that the evidence was circumstantial and not inconsistent with
every reasonable hypothesis of innocence. It is true that some of the
evidence was circumstantial. However, it could not and cannot be said,
as a matter of law, that reasonable minds could not conclude that the
evidence was inconsistent with every reasonable hypothesis of innocence.
Therefore whether the evidence was innconsistent with every such
hypothesis was a question for the jury and not for the District Court or
this court to determine. 16
III.
The District Court gave the jury five instructions the giving of which
is specified as error. These instructions, in effect, stated that the
jury was required to find appellant guilty if he was proved beyond a
reasonable doubt to have had possession of the heroin mentioned in the
indictment--a statement based on the prima facie evidence provision of
§2553(a). Appellant contends that the statement was not warranted by
that provision. We reject this contention for the following reasons:
The
evidence showed conclusively that appropriate tax-paid stamps were
absent from the heroin. Hence, if appellant had possession of the
heroin, the burden of explaining and justifying such possession was
placed on him by the prima facie evidence provision of §2553(a). 17
That burden was not sustained. Appellant did not take the witness stand
or adduce any relevant or material evidence. 18
Much less did he explain or justify his possession of the heroin. Hence
the statement that the jury was required to find appellant guilty if he
was proved beyond a reasonable doubt to have had possession of the
heroin was warranted by the prima facie evidence provision of §2553(a)
and was a proper statement. 19
In
support of his contention, appellant cites Lilienthal's Tobacco v.
United States, 97 U. S. 237; Webre Steib Co. v. Commissioner,
324 U. S. 164 [45-1 USTC ¶9170]; Di Salvo v. United States, 8
Cir., 2 Fed. (2d) 222; Ezzard v. United States, 8 Cir., 7 Fed.
(2d) 808. None of these cases is in point. The Tobacco, Webre Steib
and Ezzard cases did not involve the prima facie evidence
provision of §2553(a) or any similar provision. The Di Salvo
case involved the prima facie evidence provision of what is now §2553(a),
but the Di Salvo case is clearly distinguishable from this case
in that Di Salvo, who was indicted and tried for purchasing morphine
which was not in or from the original stamped package, took the witness
stand and testified that he had not made any such purchase, thus
rebutting the presumption arising from the absence of appropriate
tax-paid stamps from the morphine; whereas appellant, who was indicted
and tried for purchasing, selling, dispensing and distributing heroin
which was not in or from the original stamped package, did not take the
witness stand or adduce any evidence rebutting the presumption arising
from the absence of appropriate tax-paid stamps from the heroin. 20
Judgment
affirmed.
LEMMON,
Circuit Judge, did not participate in the decision of this case.
1
Section 2553(a) was derived from §1 of the Harrison Act of December 17,
1914, as amended, 44 Stat. 96, 97.
2
Section 2550(a) was derived from §1 of the Harrison Act of December 17,
1914, as amended, 44 Stat. 96, 97. The drugs mentioned in §2550(a)
included opium and any compound, salt or derivative thereof. One such
compound, salt or derivative is heroin.
3
See 26 U. S. C. A. §2557(b)(1), 65 Stat. 767.
4
Mr. Samuel Landau, counsel for Chung.
5
Mr. O. P. Soares, counsel for appellant.
6
The District Court, Chief Judge J. Frank McLaughlin presiding.
7
The witnesses who would be "corroborative or cumulative of the
testimony of other witnesses" were not named or identified until
long after the District Court made the ruling mentioned above.
8
Charles v. United States, 9 Cir., 215 Fed. (2d) 825.
9
Charles v. United States, 9 Cir., 215 Fed. (2d) 825.
10
Witt v. United States, 9 Cir., 196 Fed. (2d) 285; Lii v.
United States, 9 Cir., 198 Fed. (2d) 109; Charles v. United
States, 9 Cir., 215 Fed. (2d) 825.
11
See cases cited in footnote 10.
12
Appellant does not here contend that the District Court failed to
exercise its discretion. Cf. Charles v. United States, 9 Cir.,
215 Fed. (2d) 825. His contention that the District Court's discretion
was abused assumes and, in effect, asserts that it was exercised.
13
Witt v. United States, supra; Charles v. United States, 9 Cir.,
215 Fed. (2d) 825.
14
See Rule 29 of the Federal Rules of Criminal Procedure, 18 U. S. C. A.
15
The heroin mentioned in the indictment was put in evidence as appellee's
Exhibit A-2.
16
Stoppelli v. United States, 9 Cir., 183 Fed. (2d) 391; Remmer
v. United States, 9 Cir., 205 Fed. (2d) 277 [53-1 USTC ¶9421]; Schino
v. United States, 9 Cir., 209 Fed. (2d) 67 [54-1 USTC ¶9105].
17
Casey v. United States, 276 U. S. 413; Cavness v. United
States, 9 Cir., 187 Fed. (2d) 719; Acuna v. United States, 5
Cir., 74 Fed. (2d) 359; Goode v. United States, D. C. Cir., 149
Fed. (2d) 377; Landsborough v. United States, 6 Cir., 168 Fed.
(2d) 486; United States v. Chiarelli, 7 Cir., 192 Fed. (2d) 528.
18
The only evidence adduced by appellant was the testimony of
Rob
ert Takei. Takei's testimony did not relate to heroin or to any
pertinent matter or thing. It was wholly irrelevant and wholly
immaterial.
19
See cases cited in footnote 17.
20
See footnote 18.
[60-2
USTC ¶9577]Max Greenberg, Defendant, Appellant v. United States of
America, Appellee
(CA-1),
U. S. Court of Appeals, 1st Circuit, No. 5636, 280 F2d 472, 7/12/60,
Vacating and remainding an unreported District Court decision
[1954 Code Secs. 7201 and 7206]
Conviction for false filing and wilful evasion: Prejudicial conduct
of counsel: Hearsay evidence: Defendant's absence during trial.--A
new trial was ordered for a taxpayer who was convicted on counts of
filing false and fraudulent returns as the president and sole
stockholder of a corporation and of wilfully attempting to evade and
defeat individual taxes because: (1) the government counsel had made
improper comments in final arguments to the jury concerning improper,
irrelevant testimony that the taxpayer had made only a nominal tax
payment 10 years earlier; (2) the government counsel had improperly
expressed his personal belief and opinion in the government's evidence;
(3) testimony of an internal revenue agent that checks drawn on the
corporation were personal income was hearsay and was uncorroborated by
the payees or other third parties; and (4) the defendant's absence
during a part of the trial was not shown to be voluntary.
James
R. McGowan, Providence, R. I. (Lester H. Salter of Salter & McGowan,
Providence, R. I., with him on brief), for appellant. Joseph Mainelli,
United States Attorney, Providence, R. I. (Arnold Williamson, Jr., and
Samuel S. Tanzi, Assistant United States Attorneys, Providence, R. I.,
with him on brief), for appellee.
Before
WOODBURY, Chief Judge, and HARTIGAN and ALDRICH, Circuit Judges.
Opinion
of the Court
ALDRICH,
Circuit Judge:
The
defendant was found guilty by a jury of filing false and fraudulent
income tax returns on behalf of the Star Pharmacy, Inc., of which he was
president and sole stockholder, for the years 1952 to 1954 (3 counts),
and guilty of wilfully attempting to evade and defeat the payment of his
individual tax for the years 1952 and 1953 (2 counts). Following jail
sentences on each count to be served concurrently, and the imposition of
separate fines, he appealed. There must be a new trial. Without
considering whether there were other errors, we shall deal only with
those which seem most likely to reoccur. 1
These consist of prejudicial conduct by the United States attorney, and
proof of the government's case through hearsay evidence.
[Prejudicial
Conduct]
The
defendant did not file a personal return for the year 1952 or 1953. Over
his repeated objections the court permitted the government to show that
he had paid a personal income tax in 1943 of $17.81, had filed a return
showing no tax due in 1946, and had filed no personal return in any
other pre-indictment year. 2
In his closing argument to the jury, the United States attorney stated:
"Now going back to this year of 1943, as my brother has admonished
you--and I join in his admonition--when you go into the jury room don't
leave your common sense behind, don't leave your common knowledge
behind. Take it with you. In 1943, as you know, we were engaged in one
of the most crucial periods of our history, the greatest war in the
history of the world. We became embroiled in it, and the whole future of
this country was at stake. And the ultimate result of that war would
have determined whether our way of life was to continue or whether it
was to perish from this earth. And in pursuance and in prosecuting that
war there were hundreds of thousands of lives of the flower of American
youth lost on the battlefields or on the oceans or in the airways of
this world. And the taxpayers in this country, for prosecuting that war,
paid and committed themselves to pay hundreds of billions of dollars.
And Mr. Greenberg, along with his family, and all of us, are the
beneficiaries of the sacrifices that were made during the war years. And
Mr. Greenberg shows his gratitude by paying the magnanimous and
munificent amount of money of $17.81 by way of income taxes, as his
contribution." At this point defendant objected, and the court
replied, "I suppose counsel must indulge in a certain amount of
oratory."
We
do not know what the court had in mind. Oratory on the issues in the
case is one thing. The defendant was indicted for the years 1952 and
1953. Even if there were a showing that he had deliberately falsified
his return on one occasion ten years earlier, we would doubt its
relevancy. But here there was not even this, as there was no evidence
that $17.81, paltry as it may have seemed, was a penny less than the
amount owed. The government's tawdry charge of unpatriotism was not only
unwarranted, it was inexcusable. It called for immediate correction and
rebuke even if counsel had not risen to object.
The
United States attorney commenced his final argument by informing the
jury that he was "a sort of thirteenth juror [who] applies his
training in the evaluation of evidence, in analyzing evidence, and tries
to convey to the jury just what part the evidence plays in the
presentation of a case" (a description we find quite inappropriate,
since counsel, unlike a juror, is not required to be impartial). Near
the end of his argument the United States attorney sought to put this
self-appointment to use. In vigorous language he expressed his personal
opinion of the trustworthiness of the government's evidence and the
consequent guilt of the accused. Upon objection interposed, the court
ruled in the presence of the jury that the prosecutor had a right to
argue "his belief in the evidence." Counsel continued, and the
court overruled a second objection, but expressed a caution. The
argument was then repeated.
Rule
15 of the Canons of Professional Ethics of the American Bar Association
reads:
"It
is improper for a lawyer to assert in argument his personal belief in
his client's innocence or in the justice of his cause."
Government
counsel stated in oral argument before us that this was
"inapposite" because he is an "advocate." We are not
clear whether he disapproves of the principle, or whether he considers
himself outside of it. In either event we disagree. To permit counsel to
express his personal belief in the testimony (even if not phrased so as
to suggest knowledge of additional evidence not known to the jury),
would afford him a privilege not even accorded to witnesses under oath
and subject to cross-examination. Worse, it creates the false issue of
the reliability and credibility of counsel. This is peculiarly
unfortunate if one of them has the advantage of official backing. 3
The resolution of questions of credibility of testimony is for impartial
jurors and judges. The fact that government counsel is, as he says, an
advocate is the very reason why he should not impinge upon this
quasi-judicial function. We believe the canon to be elemental and
fundamental. See also 1 Bishop, New Criminal Procedure §293 (2d ed.
1913); 6 Wigmore, Evidence §1806 (3d ed. 1940).
It
is true that special circumstances, such as a personal attack upon
counsel, may occasionally justify a reply. See, e.g., United States
v. Socony-Vacuum Oil Co., Inc., 1940, 310 U. S. 150, 240-42; Gridley
v. United States, 6 Cir., 1930, 44 F. 2d 716, 739; United States
v. Battiato, 7 Cir., 1953, 204 F. 2d 717, 719. Too much has
sometimes been read into these cases due in part, perhaps, to language
in some of the opinions. 4
To the extent that cases may be found that permit counsel to state their
personal belief as a matter of course, we do not follow them. We agree
with the statement that "No one who is at all conversant with jury
trials can fail to see the possible prejudice . . .." State v.
Gunderson, 1913, 26 N. D. 294, 297, 144 N. W. 659, 660.
[Defendant
Absent]
Before
turning to the evidence, there is one further incident that merits
attention. During the trial, while testimony was being introduced
following a recess, the court remarked that the defendant was not in the
room. The United States attorney replied by inquiring whether it could
be "stipulated that the defendant had waived his presence in the
courtroom?" The court acceded. It may be assumed that defendant's
counsel also acceded. It does not appear, however, that the defendant
had authorized such a stipulation, or that he even knew that the trial
had resumed. Nor does it appear when he eventually returned. A trial may
continue in the defendant's absence only if such absence was
"voluntary." Fed. R. Crim. P. 43, 18 U. S. C. The government
has made no such showing. Cf. Echert v. United States, 8 Cir.,
1951, 188 F. 2d 336. But cf. Parker v. United States, 4 Cir.,
1950, 184 F. 2d 488 [50-2 USTC ¶9463].
[Hearsay
Evidence]
In
describing the government's case in his opening government counsel
informed the jury that the defendant drew "checks on the
corporation which he used for his own personal purposes." What this
meant was that the payment of defendant's personal bills by the
corporation was income to him. Whose bills it was that were paid, that
is to say the purpose of th checks, was an important element on the
corporate counts, and was essentially the whole of the government's case
on the personal counts. The government proceeded to prove this purpose
through conclusory statements of one Gray, a special agent of the
Internal Revenue Service, who stated the totals of the checks that
represented income and non-income in his opinion, and which were
personal and which for corporate purposes. The hearsay nature of this
opinion testimony was abundantly revealed. Gray's analysis and
compilations were, by his admission, made from . . . "monthly
statements provided by the bank, and from independent corroboration from
witnesses." "This determination was based on inquiries made of
the payees of the checks, the taxpayer, Mr. Greenberg, or his
representative . . .." Or, according to the government's brief,
"the purpose for which each of the checks was used was determined
by him through his investigation." Spelling this out, Gray
testified that, for example, on finding that there were corporate checks
payable to the telephone company and the light company, he went to these
companies and determined that the checks were to meet bills incurred by
the defendant at his residence, and were not charges at his place of
business. No payee or other third parties testified at the trial. 5
No records or admissions of the defendant corroborated this testimony. 6
To
justify the admission of this evidence the government in its brief
charges that the defendant "fails to discern the distinction
between testimonial and circumstantial evidence. . . . The statements of
the persons interviewed by witness Gray were not offered for the
truthfulness of their assertions as to the nature of the transactions
for which there checks were issued . . . [but] solely for the purpose of
showing as a fact the reaction of witness Gray in his
determination of the purposes for which the checks issued. Only the
credibility of witness Gray, who took the statements, was
involved." (Ital. in orig.) Encouraged by this flight from reality
the government moves into orbit, if we may use the vernacular. "The
issue before the Court was not whether these checks represented
payments for personal investments, fuel, furs, camping privileges,
groceries, clothing, life and health insurance, medical expenses, house
repairs and renovations, services and other miscellany." (Italics
supplied.) Then, after three irrelevant paragraphs, the trajectory
suddenly returns to earth. "The only genuine issue with reference
to these 336 checks was whether they were drawn for corporate or
personal purposes." The government, however, seems not to realize
where it has landed.
Even
without this inadvertent concession the government's position hardly
merits discussion. Obviously the jury was not trying Gray's state of
mind. 7
Both in his opening and in his final argument to the jury, the United
States attorney discussed the actual purpose of the checks, and nothing
else. Of course nothing else was material. It is elementary that this
purpose could not be established by what third parties told the witness
out of court, or by testimony of what he concluded therefrom.
At
the conclusion of the evidence the defendant moved for acquittal. This
motion was denied. Although the defendant moved for a new trial, he did
not move after verdict for judgment n. o. v. pursuant to Fed. R.
Crim. P. 29, 18 U. S. C. Passing the point of whether such motion is
necessary in a criminal, as distinguished from a civil case, Cone v.
West Virginia Pulp & Paper Co., 1947, 330 U. S. 212, we would
not be obliged to order an acquittal now even were we satisfied that no
properly admissible evidence warranted conviction. Bryan v. United
States, 1950, 338 U. S. 552 [50-1 USTC ¶9140]. On a review of the
entire record we believe that the more appropriate order is to require a
new trial.
Judgment
will enter vacating the judgment of the District Court, setting aside
the verdict and remanding the case for a new trial.
1
On this basis we do not pass upon certain testimony which the government
informs us should be considered in the light of the fact that it "crept
into the record inadvertently," although the basis for
asserting inadvertence does not appear, and the government did not seek
to withdraw the evidence after it allegedly "crept" in.
(Italics in original.) We accept this statement, however, as meaning
that it will not be reoffered.
2
All of this evidence was improperly admitted. In Spies v. United
States, 1943, 317 U. S. 492 [43-1 USTC ¶9243], it was held that
wilful failure to file a return and the wilful failure to pay the tax
known to be due were not sufficient to constitute the felony of
attempting to evade and defeat the tax. The district court seemed to
feel, however, that it was admissible evidence to show a fraudulent
intent. Whether or not that might be so in some circumstances, it was of
little relevance here without evidence that as to any specific
pre-indictment year the defendant even owed a tax. However, the evidence
itself was less prejudicial than the use the government made of it.
3
Where would this leave a criminal defendant who is entitled to
representation, but whose counsel does not believe in his innocence?
Must his counsel nevertheless assert such a belief in order to counter
the expressed opinion of government counsel, or does such a defendant
have an unrefuted witness against him, in the form of the prosecuting
attorney? Or should a prosecutor be permitted to argue, for example,
"Members of the jury, I tell you that in my opinion trained to
examine evidence this defendant is guilty as hell. I know it; he knows
it. Even his own counsel knows it. Oh yes, his counsel asked you to find
him not guilty. But I notice that not once did he suggest to you that he
had even a shadow of belief in his client's innocence. Why didn't he?
Because his conscience wouldn't permit him to. Even his own lawyer
doesn't think he is innocent, but he wants you . . ." etc., etc.
That is not the argument made in this case, but we see no stopping point
except the one stated in the canon.
4
In Battiato the court stated, "He does not state
uncompromising language or even hint the defendants are guilty. He
states merely that he is arguing that they are guilty and that he
believes them guilty." 204 F. 2d at 719. (Italics supplied).
Surely the court must have misspoken itself in suggesting that counsel's
personal belief in guilt is something less than a hint. We think the
court meant that government counsel had not hinted that there was any
evidence which he had in mind that was unavailable to the jury (a hint
that all agree would have been the clearest kind of error), and that its
actual holding was that his assertion of personal belief in the
defendants' guilt was justified by certain prior argument made by
defendants' counsel. Whether we would have found that argument adequate
special circumstances we need not decide. It is clear that there were
none in the case at bar.
5
The debatability of the witness' conclusions on this matter is
graphically illustrated by the fact that the government came in with two
sets of figures for the defendant's personal income deficiency--one
civil, and a smaller one for fraud because it was not sufficiently sure
of the balance. But apparently the government, through Mr. Gray, was to
be the arbiter of the extent that it was appropriate to be certain.
6
In many instances the checks themselves did suggest that the payments
were for the defendant's individual benefit (in which case the checks
were independently admissible), but in many others they did not. For
example, the corporation's checks to the telephone company and light
company, discussed above, do not show on their face whether they are
paying for services rendered the corporation, or someone else. The
meat-market checks were similarly ambiguous--having in mind that the
corporation made and sold sandwiches. However, the United States
attorney, pursuant, perhaps, to his announced ability to analyze
evidence, told the jury that "in no instance is a check payable
that could conceivably be considered to be a payment on behalf of the
corporation." Had this been true, there would have been no need of
Mr. Gray's testimony, a suggestion which the government has never made.
7
The government states that Gray's duties were to investigate among third
parties and to report, and by some unfathomable process it seeks to turn
this into an argument that the question before the jury was simply
"Gray's credibility." "[T]he availability of witness Gray
for cross-examination by the appellant satisfied his constitutional
rights of confrontation . . .." In marked contrast to this was the
government's position at the trial when it successfully resisted the
defendant's attempts to secure, for cross-examination of Gray, those
portions of his reports which disclosed what third parties had told him.
It is difficult, to say the least, to reconcile these two positions.
[50-2
USTC ¶9463]Josephus D. Parker, Appellant, v. United States of America,
Appellee
(CA-4),
In the United States Court of Appeals for the Fourth Circuit, No. 6133,
184 F2d 488, October 10, 1950
Appeal from the United States District Court for the Middle District of
North Carolina, at Greensboro.
Penalties: Wilful attempt to evade payment of income and victory tax:
Witnesses examined in absence of taxpayer: Waiver.--The taxpayer, a
partner in a winery business, was found guilty of a wilful attempt to
evade the payment of income and victory taxes. Some months after he
entered upon the service of his sentence, he moved to vacate the
judgment on the ground that he was not present in the court during the
examination of certain witnesses because he had been injured in an
automobile accident on his way to court. He was furnished with a
transcript of the testimony of the witnesses who had been examined in
his absence, but he offered no objection in apt time to their testimony
and waived his presence during the examination. Denial of motion to
vacate judgment was upheld.
W.
A. Hall, Jr., for appellant. Bryce R. Holt, U. S. Attorney (R. Kennedy
Harris and Theordore C. Bethea, Assistant U. S. Attorneys, on brief) for
appellee.
Before
PARKER, SOPER, and DOBIE, Circuit Judges.
PER
CURIAM:
This
is an appeal from the denial of a motion made under 28 USCA 2255 to
vacate a judgment and sentence of imprisonment in a criminal case. The
ground of the motion was that defendant was not present in court during
the examination of certain witnesses. We think it perfectly clear that
the motion was entirely without merit and was properly denied.
[Witnesses
Examined in Absence of Taxpayer]
After
a trial lasting many weeks, appellant was convicted of the crime of
fraudulently evading the payment of income tax. On October 10, 1949,
when the trial was drawing to a close, the case was continued to October
12th on account of the illness of counsel; and defendant, who was at
large on bail, returned to his home some distance from the city in which
court was being held. When he was returning to court on the 12th, he was
involved in an automobile accident in which he sustained injuries that
necessitated his being carried to a hospital. When court convened on the
morning of October 12th, appellant was not present because of the
injuries he had sustained; but neither court nor counsel knew of his
injuries and assumed that he had misunderstood the hour of convening or
had been temporarily delayed. His own counsel suggested that the hearing
proceed in his absence and five witnesses were examined before it was
learned that he had injured. The court then adjourned the hearing until
October 25th.
[No
Objections Made to Witnesses' Testimony]
When
the court convened on October 25th, appellant was present and had been
furnished with a transcript of the testimony of the witnesses who had
been examined in his absence. He did not object to their testimony, ask
to examine them further, move to exclude their testimony from the
consideration of the jury, move for a mistrial, or take any other action
indicating that he objected or excepted to what had been done. On the
contrary, his counsel, who embraced a number of able trial lawyers,
proceeded with the trial and submitted the case to the jury after full
argument, without even a suggestion that any point was made with regard
to the absence of appellant from court on October 12th. No such point
was made when verdict of guilty was returned or sentence entered, nor in
the motion for new trial which assigned nine separate grounds for
setting aside the conviction. No appeal was taken from the judgment of
the court, and after a stay of sentence granted to enable him to make
certain business arrangements, defendant entered upon the service of his
sentence. Not until some months later was the motion made under 28 USCA
2255, when for the first time the point was raised as to appellant's
absence from court on October 12th.
[Waiver
of Right to be Present]
It
is well settled that, in cases not capital, an accused on trial for
crime may waive his right to be present and that voluntarily absenting
himself from court after the trial has commenced constitutes such
waiver. Diaz v. United States, 223 U. S. 442. While the defendant
may not be said to have voluntarily absented himself from court on
October 12th, in view of his injury in the automobile accident, he
unquestionably waived his presence during the examination of the
witnesses whose testimony was then taken by afterwards proceeding with
the trial, with full knowledge of the facts and without objection, and
taking his change before the jury that had been empaneled to try him.
See Frank v. Mangum, 237 U. S. 309. The fact that the right to be
present at one's trial is a constitutional right does not mean that it
may not be waived or that any right to insist upon its infringement must
not be asserted in apt time. 23 C. J. S. 376, 16 C. J. S. 198. The right
to be present at all stages of the trial is no more sacred than the
right to be confronted by accusing witnesses or to have a common law
jury of twelve try the case; and there can be no question but that these
may be waived. Grove v. United States, 4 Cir. 3 Fed. (2d) 965; Eury
v. Huff, 4 Cir., 141 Fed. (2d) 554. Proceeding with the trial
without objection and with full knowledge of the facts constitutes such
waiver as clearly as anything could. As said by Mr. Justice Douglas in Johnson
v. United States, 318 U. S. 189, 201 [43-1 USTC ¶9288]:
"Any
other course would not comport with the standards for the
admin
istration of criminal justice. We cannot permit an accused to elect to
pursue one course at the trial and then, when that has proved to be
unprofitable, to insist on appeal that the course which he rejected at
the trial be reopened to him. However unwise the first choice may have
been, the range of waiver is wide. Since the protection which could have
been obtained was plainly waived, the accused cannot now be heard to
charge the court with depriving him of a fair trial. The court only
followed the course which he himself helped to chart and in which he
acquiesced until the case was argued on appeal. The fact that the
objection did not appear in the motion for new trial or in the
assignments of error makes clear that the point now is a 'mere
afterthought'."
For
the reasons stated, the absence of the appellant during the examination
of witnesses on October 12th would not have availed him if the question
had been raised by direct appeal from the judgment and sentence. A
fortiori, he may not avail himself of it by motion under 28 USCA 2255,
which may not be used in lieu of appeal to correct errors occuring
during the trial of the cause. As said by this court in Howell v.
United States, 4 Cir. 172 Fed. (2d) 213, 215:
"All
of appellant's complaints relate to matters which, if based upon fact,
should have been called to the attention of the court at the trial and
made the subject of timely appeal from its judgment, not raised by
habeas corpus or by a motion questioning collaterally the validity of
the proceedings leading to conviction. It is elementary that neither
habeas corpus nor motion in the nature of application for writ of error
coram nobis can be availed of in lieu of writ of error or appeal, to
correct errors committed in the course of a trial, even though such
errors relate to constitutional rights. It is only when there has been
the denial of the substance of a fair trial that the validity of the
proceedings may be thus collaterally attacked or questioned by motion in
the nature of petition for writ of error coram nobis or under 28 USCA
2255. Birtch v. United States, 4 Cir. 164 Fed. (2d) 880; Pifer
v. United States, 4 Cir. 158 Fed. (2d) 867; Eury v. Huff, 4
Cir. 141 Fed. (2d) 554; Sanderlin v. Smyth, 4 Cir. 138 Fed. (2d)
729; United States v. Brady, 4 Cir., 133 Fed. (2d) 476,
481."
Applicable
also is what was said by us in Crowe v. United States, 4 Cir. 175
Fed (2d) 799, as follows:
"This
is not the case of the accused who has been denied counsel and who has
failed to assert his constitutional rights at the proper time because of
ignorance, but of one who has had the assistance of able counsel who
knew how to raise and would have raised upon the original trial the
questions that he is now raising, if there had been any substance to
them."
The
order appealed from will be
Affirmed.
[43-1
USTC ¶9288]Enoch L. Johnson, Petitioner, v. The United States of
America
Supreme
Court of the United States, No. 273. October Term, 1942, 318 US 189, 63
SCt 549, February 15, 1943
On writ of certiorari to the United States Circuit Court of Appeals for
the Third Circuit.
Trial procedure in criminal cases: Exercise of privilege.--Where
a ruling of the trial court gave the taxpayer a choice between
testifying and refusing to testify as to his 1938 income, and where the
taxpayer refused to testify and the prosecuting attorney subsequently,
in his address to the jury, commented on such refusal, the court holds
that the procedure used deprived the taxpayer of an intelligent choice
between claiming or waiving his privilege but that a new trial would not
be granted because the taxpayer expressly waived his objection to the
prosecutor's comment by withdrawing his exception to it and by
acquiescing in the treatment of the matter by the court. No prejudice
resulted to taxpayer in being excluded from the courtroom where no
objection was made to the exclusion and the taxpayer was not put in
jeopardy by not being present. Affirming Circuit Court decision, Third
Circuit, 42-2 USTC ¶9578, 129 Fed. (2d) 954, which affirmed District
Court decision.
William
A. Gray and Benjamin M. Golder, both of Philadelphia, Pa., and John
Rauffenbart, for petitioner. Charles Fahy, Solicitor General, Samuel O.
Clark, Jr., Assistant Attorney General, Ellis N. Slack, Sewall Key,
Joseph W. Burns, and
Rob
ert R. Barrett, Special Assistants to Attorney General, and Archibald
Cox, Attorney, for respondent.
Mr.
Justice DOUGLAS delivered the opinion of the Court.
[The
Facts]
Petitioner
was convicted of wilfully attempting to defeat and evade his federal
income taxes for the years 1936 and 1937. He was acquitted for 1935.
Petitioner was a political leader in Atlantic City and Atlantic County,
New Jersey. The prosecution's theory was that he had received large sums
of money from those conducting the numbers game for protection against
police interference and had not reported those sums in his income tax
returns for 1935, 1936, and 1937. The defense was that his failure to
return all the income he had received resulted from the mistaken but
sincere belief that he was bound to return only the net balance
remaining after deducting amounts expended for political purposes. The
evidence was that one Weloff and one Towhey acting alternately delivered
to petitioner on behalf of the numbers syndicate $1,200 a week from July
1935 to November 1937. About November 1, 1937, Weloff and Towhey were
displaced by one Jack Southern to whom the syndicate delivered $1,200 a
week. Neither the prosecution nor the defense would sponsor Southern's
testimony. At the request of the prosecution the court called Southern
as a witness. He testified that during November and December, 1937, he
delivered the $1,200 a week to an inspector of police named Ferretti who
was dead at the time of the trial. He denied that he ever made any
weekly payments to petitioner. No evidence was adduced that petitioner
received any sums from the syndicate during November or December, 1937.
Petitioner took the stand and on direct examination admitted that he had
received the weekly payments from Weloff and Towhey up to November,
1937. For 1937 these admitted payments totalled $50,400. Petitioner
accounted for this sum by stating that he had reported $30,189.99 in his
1937 return as "Other commissions" and that he had paid out
the balance, roughly $21,000, as political contributions for that year.
On cross-examination he denied that he had received payments from
Southern during November and December, 1937. He was then asked "Did
you receive any money from numbers in 1938?" Counsel for the
defense objected to the question on the ground that it was not relevant
to the issue and would tend to prove a different offense than the one
charged in the indictment. The court overruled the objection. Petitioner
then answered the question in the affirmative. He was then asked.
"Who gave it to you?" Counsel for the defense objected. The
court had the jury withdraw. The prosecutor asked that petitioner
"also be excused from the court room during the argument, and that
when he resumes the stand he should do so without having any opportunity
to hear what the argument is about". The court said "that is a
fair request" and ordered petitioner to retire, which he did. No
objection was made to that action. Counsel for the prosecution argued
that the questions asked in cross-examination were proper to establish a
continuous practice of receiving the numbers income throughout 1937.
Counsel for the defense insisted that the cross-examination should be
limited to the subjects opened up by the examination in chief. The court
expressed the view that the cross-examination was permissible since it
bore directly upon credibility. Counsel for the defense then pressed the
point that even if it otherwise might be proper cross-examination,
nevertheless it was "improper cross-examination for the reason that
it is directed to a future prosecution." He asserted that he made
the claim of privilege on behalf of the accused "in view of the
avowed threat of the government to prosecute him for the very years
concerning which he is now asked to testify." The court replied
that it was for the accused, not his counsel, to make the claim and
added. "You may advise him of his rights, of course, but it is for
him to determine whether or not he wishes to take advantage of
them". After further argument, the court stated:
"It
seems to me that the testimony is perfectly relevant and material as
cross examination directed to credibility.
"In
view of the witness' testimony, unless it runs afoul of his right not to
be required to incriminate himself, it seems to me that that right is a
right which he may waive or claim, and that that is a personal right
that he may be advised by counsel when a question is asked, and that he
will have to determine himself whether he is going to claim it or
not."
Petitioner
resumed the stand. The question "who gave it to you?" was
repeated. Counsel for petitioner then advised him of his constitutional
privilege, which he thereupon claimed. The court ruled, "You may
decline to answer."
The
prosecutor in his address to the jury commented at some length on
petitioner's assertion of his constitutional privilege:
"I
asked him, 'Did you get the money in 1938? and he said, 'Yes'. Well, of
course, then a lot of little things happened. They didn't like that
because naturally you say, 'Well, I don't understand that, Mr. Johnson.'
I wish you could have asked him questions then. You say, 'Mr. Johnson,
you say that suddenly November 1st, 1937 you stopped getting the $1200
from numbers; then in 1938 you started to get it again? How come?' You
don't get it, you don't get it because it isn't the truth. That is what
cross examination is for.
So
then we went beyond that. We said, 'Who did you get it from?' He said, I
claim my privilege against self-incrimination. I violated the income tax
law in 1938; I don't want to tell you about that. I am having enough
trouble with 1935, six and seven.' If he could have claimed his
privilege on the stand here with respect to 1935, six and seven he would
have done it. He would claim anything that is necessary to get him out
of any predicament he is in. Well, now, ladies and gentlemen, if he got
that numbers money in 1938 who did he get it from? He must have got it
from Jack Southern. Maybe he got it from Inspector Ferretti, but he
admits he got it. Well, then, if he got it he got it during the last two
months of 1937. They didn't say anything about that to you because they
were trapped. No need of them talking about it. It is for me to point
that out to you.
"Now,
ladies and gentlemen, can you believe that man told you the truth about
anything on the witness stand when he admits that he got numbers money
in 1938 but won't tell you who he got it from on the ground it would
incriminate him? If you can believe that that man is innocent of this
charge when he stands right up in front of you and says he cannot answer
a question about 1938, that he just got through answering for 1937 on
the ground it would incriminate him, well, then, I just don't get
it."
An
objection was made to these statements and overruled and an exception
was noted. The next morning before the court charged the jury various
other objections were submitted. During the colloquy the court stated
that there "were a number of matters referred to last evening * * *
I ruled on some of them, all of which rulings I indicated I would
reconsider. Now, have you mentioned to me all the points you desire to
refer to?" Counsel for petitioner replied, "We withdraw
whatever was said last night * * * I think the only fair thing to do is
to forget everything that happened last night and start this
morning". The objection previously made to the prosecutor's comment
on the accused's failure to testify was not renewed. Nor was any request
made to the court to charge the jury to disregard petitioner's refusal
to testify. Though the prosecutor's comment on the accused's failure to
testify was again adverted to, it was in a different connection. Counsel
for petitioner contended that the prosecutor's statement that the claim
of privilege amounted to an admission of income tax violation in 1938
was "an entire misconception of * * * the claim of privilege"
inasmuch as the basis of the claim "is that the testimony * * *
would have a tendency to incriminate him", and "not that it
would prove him guilty". The court indicated that this objection
was well taken and should be called to the attention of the jury. The
court added, "He is not being charged with any 1938 tax." The
prosecutor then said, "it is a question of his good faith and his
credibility, and the answers he has already given on similar questions.
That is the purpose for which the questions were permitted." The
court thereupon stated. "I think I probably should indicate to the
jury that that is the full extent of it." Counsel for petitioner
remained silent, making no objection. No error was asserted in the
motion for a new trial or in the assignments of error on the ground that
the prosecutor's comment or the court's charge on the inference from the
claim of privilege was improper.
The
court in its charge stated that petitioner's refusal to answer the
question on the ground that it would tend to incriminate him "may
only be considered by you in testing his credibility as to the answers
which he did give and his good faith in the matter" and that
petitioner was not being tried for anything he did in 1938. To this
charge no objection was made.
The
Circuit Court of Appeals affirmed the judgment of conviction, one judge
dissenting. 129 Fed. (2d) 954 [42-2 USTC ¶9578]. The court held that
the exclusion of petitioner from the court room during the colloquy did
not result in prejudice; that the cross-examination covering 1938 income
was proper; and that the allowance of comment on the claim of privilege
was justified. The case is here on petition for a writ of certiorari.
[Exercise
of Privilege]
The
case of an accused who voluntarily takes the stand and the case of an
accused who refrains from testifying (Bruno v. United States, 308
U. S. 287) are of course vastly different. Raffel v. United States,
271 U. S. 494. His "voluntarily offer of testimony upon any fact is
a waiver as to all other relevant facts, because of the necessary
connection between all." 8 Wigmore, Evidence (3d ed., 1940) §2276(2).
And see Fitzpatrick v. United States, 178 U. S. 304, 315-316; Powers
v. United States, 223 U. S. 303, 314. The cross-examination did not
run afoul of the rule which prohibits inquiry into a collateral crime,
which is unconnected with the offense charged. Boyd v. United States,
142 U. S. 450. Inquiry into petitioner's income for 1938 was relevant to
the issue in the case. As contended by the prosecution, the receipt of
money from the numbers syndicate prior to November, 1937 and after
December, 1937 might well support a finding of the jury that in view of
all the circumstances the payments were not in fact interrupted during
the last two months of 1937. The amount and source of the 1938 income
accordingly were relevant to show the continuous nature of the
transactions in question. That line of inquiry therefore satisfied the
test of relevancy and was a proper part of cross-examination. See Cravens
v. United States, 62 Fed. (2d) 261, 273; Mchan v. United States,
112 Fed. (2d) 561, 563; Weiss v. United States, 122 Fed. (2d)
675, 682; Bullock v. State, 65 N. J. L. 557, 575. Though the
issue might have been more aptly phrased by the court in terms other
than credibility, the meaning of the ruling in its context is plain.
Thus we may assume that it would not have been error for the court to
deny petitioner's claim of privilege. In such a case his failure to
explain the source of his numbers income in 1938 could properly be the
subject of comment and inference. As stated by this Court in Caminetti
v. United States, 242 U. S. 470, 494, an accused who takes the stand
"may not stop short in his testimony by omitting and failing to
explain incriminating circumstances and events already in evidence, in
which he participated and concerning which he is fully informed, without
subjecting his silence to the inferences to be naturally drawn from
it." But where the claim of privilege is asserted and unqualifiedly
granted, the requirements of fair trial may preclude any comment. That
certainly is true where the claim of privilege could not properly be
denied. The rule which obtains when the accused fails to take the stand
(Wilson v. United States, 149 U. S. 60) is then applicable. As
stated by the Supreme Court of Pennsylvania, "If the privilege
claimed by the witness be allowed, the matter is at an end. The claim of
privilege and its allowance is properly no part of the evidence
submitted to the jury, and no inferences whatever can be legitimately
drawn by them from the legal assertion by the witness of his
constitutional right. The allowance of his privilege would be a mockery
of justice, if either party is to be affected injuriously by it." Phelin
v. Kenderdine, 20 Pa. 354, 363; Wireman v. Commonwealth, 203
Ky. 62-63. And see State v. Vroman, 45 S. D. 465, 473; Carne
v. Litchfield, 2 Mich. 340; People v. McGungill, 41 Calif.
429. We also think that the same result should obtain in any case where
the court grants the claim of privilege and then submits the matter to
the jury, if that action may be said to affect materially the accused's
choice of claiming or waiving the privilege and results in prejudice.
The fact that the privilege is mistakenly granted is immaterial.
The
ruling of the court gave the petitioner the choice between testifying
and refusing to testify as to his 1938 income. An accused having the
assurance of the court that his claim of privilege would be granted
might well be entrapped if his assertion of the privilege could then be
used against him. His real choice might then be quite different from his
apparent one. In this case it would lie between protection against an
indictment for 1938 and the use of his claim of privilege as evidence
that he did in fact receive the income during the last two months of
1937. Elementary fairness requires that an accused should not be misled
on that score. If advised by the court that his claim of privilege
though granted would be employed against him, he well might never claim
it. If he receives assurance that it will be granted if claimed, or if
it is claimed and granted outright, he has every right to expect that
the ruling is made in good faith and that the rule against comment will
be observed. Certainly the question whether petitioner had received
income from the syndicate during November and December, 1937, was an
extremely material issue in the case. As we have noted, petitioner
admitted receiving $50,400 from the numbers syndicate during 1937. And
all of this amount according to the testimony was received prior to
November 1, 1937. Of this amount he reported only $30,189.99 in his 1937
income tax return. He testified, however, that he had paid out $21,000
in political contributions for that year. Thus he attempted to account
for all the numbers income which he had received that year and defended
on the ground that his failure to return the $21,000 was due to his
mistaken but sincere belief that he was bound to return only the net
balance remaining after deducting amounts expended for political
purposes. The indictment, however, charged that he had received $62,400
from the numbers syndicate during 1937. And the prosecution claimed that
the weekly payments of $1,200 continued during November and December,
1937. If that were established, it would plainly destroy his defense and
would be cogent evidence of his wilful attempt to evade the tax. All of
the direct evidence in the record was to the effect that he had not
received income from the numbers syndicate during November and December,
1937. There was no basis for concluding that he had unless that fact was
to be inferred from the evidence that he had received the income until
November, 1937 and that he received it again in 1938. Hence it would be
highly valuable to the prosecution and equally damaging to the accused
to have his failure to testify employed to bolster such an inference.
It
is no answer to say that comment on a defendant's refusal to testify
does not in any way place him in jeopardy of being charged with or
convicted of the crime protected by his privilege. The may be admitted.
The problem here is a different one. It is whether a procedure will be
approved which deprives an accused on facts such as these of an
intelligent choice between claiming or waiving his privilege. Knowledge
that a failure to testify though permitted by the court would be
submitted to the jury might seriously affect that choice. If the accused
makes the choice without that knowledge, he may well be misled on one of
the most important decisions in his defense. We would of course not be
concerned with the matter if it turned only on the quality of legal
advice which he received. But the responsibility for misuse of the grant
of the claim of privilege is the court's. It is the court to whom an
accused properly and necessarily looks for protection in such a matter.
When it grants the claim of privilege but allows it to be used against
the accused to his prejudice, we cannot disregard the matter. That
procedure has such potentialities of oppressive use that we will not
sanction its use in the federal courts over which we have supervisory
powers.
We
are mindful of the fact that there is eminent authority which may be
said to represent the contrary view. State v. Ober, 52 N. H. 459.
That case stands for the general proposition that when the accused took
the stand "without claiming his constitutional privilege, it was
too late for him to halt at that point which suited his own
convenience." Id., p. 465. With that rule we agree. Whether
the facts of that case and the stage of the proof when the privilege was
claimed made the comment on the accused's failure to testify
prejudicial, cannot be determined from the report of the case. The point
with which we are here concerned was not adverted to in the opinion.
Indeed the court stated (52 N. H. p. 465) that the "whole argument
of his counsel now proceeds upon the erroneous assumption that the
ruling of the court [granting the claim of privilege] was right. That
assumption being groundless, his argument fails." But as we have
indicated, the problem in this case is quite different.
[Waiver
of Objection]
We
have considered this matter at length because the Circuit Court of
Appeals ruled upon it and approved the procedure followed by the
District Court. But we do not grant a new trial because of one
circumstance which seems to us controlling. As we have noted, though an
exception was taken to the prosecutor's comment on petitioner's refusal
to testify, it was later withdrawn. And when the court invited counsel
to bring to its attention any objections or requests to charge, counsel
did not renew the objection. Nor was any request made to charge the jury
on the matter. Moreover, though the question of the prosecutor's comment
was again adverted to by the defense, the objection was of a wholly
different character and one which the court indicated its willingness to
correct. And when the court stated what charge it would give the jury on
the point, counsel for the defense stood by and voiced no protest or
objection. We can only conclude that petitioner expressly waived any
objection to the prosecutor's comment by withdrawing his exception to it
and by acquiescing in the treatment of the matter by the court. It is
true that we may of our own motion notice errors to which no exception
has been taken if they would "seriously affect the fairness,
integrity or public reputation of judicial proceedings." See United
States v. Atkinson, 297 U. S. 157, 160; Clyatt v. United States,
197 U. S. 207, 221-222. But we are not dealing here with inadvertence or
oversight. This is a case where silent approval of the course followed
by the court (Boyd v. United States, 271 U. S. 104, 108) is
accompanied by an express waiver of a prior objection to the method by
which the claim of privilege was treated. In such a situation the rule
stated by Mr. Justice Sutherland in United States v. Manton, 107
Fed. (2d) 834, 848, is applicable:
If
the failure to enter an exception or assign error had been a mere
inadvertence the matter might stand in a different light. But that view
cannot be induiged. Plainly enough, counsel consciously and
intentionally failed to save the point and led the trial judge to
understand that counsel was satisfied. We see no warrant for the
exercise of our discretion to set aside standing rules, so necessary to
the due and orderly
admin
istration of justice, and review the challenge to the legal accuracy of
the charge where, as here, the failure of the judge to follow the text
of the requested instruction was, at the last, induced by the action of
counsel * * *
Any
other course would not comport with the standards for the
admin
istration of criminal justice. We cannot permit an accused to elect to
pursue one course at the trial and then, when that has proved to be
unprofitable, to insist on appeal that the course which he rejected at
the trial be reopened to him. However unwise the first choice may have
been, the range of waiver is wide. Since the protection which could have
been obtained was plainly waived, the accused cannot now be heard to
charge the court with depriving him of a fair trial. The court only
followed the course which he himself helped to chart and in which he
acquiesced until the case was argued on appeal. The fact that the
objection did not appear in the motion for new trial or in the
assignments of error makes clear that the point now is a "mere
afterthought." United States v. Manton, supra, p. 847.
[Minor Objections]
The
remaining objections may be briefly disposed of. It is claimed that the
expulsion of petitioner from the court room while counsel were arguing
the question of the propriety of the cross-examination on his 1938
income deprived him of his right to be present during the trial. Cf. Snyder
v. Massachusetts, 291 U. S. 97. It is also urged that petitioner was
denied the advice of counsel in that the court directed that when he
resumed the stand he do so without having an opportunity to confer with
his counsel about claiming the privilege. But there is a simple answer
to these objections. Not only were no exceptions taken to these rulings;
it also appears that they did not result in a loss of the privilege
which the court had indicated it would recognize. For when petitioner
resumed the stand, he was advised of his right to claim the privilege,
he claimed it, and it was granted. Accordingly we cannot see where any
prejudice resulted even if we assume, arguendo, that the rulings
of the court were not correct.
Affirmed.
Mr.
Justice MURPHY and Mr. Justice JACKSON did not participate in the
consideration or disposition of this case.
1
The indictment charged that the defendant had received $62,400 from the
numbers game in 1937. It was the difference between that amount and
$50,400 admittedly received which was in dispute.
[Concurring
Opinion]
Mr.
Justice FRANKFURTER, concurring:
In
reviewing criminal cases, it is particularly important for appellate
courts to re-live the whole trial imaginatively and not to extract from
episodes in isolation abstract questions of evidence and procedure. To
turn a criminal appeal into a quest for error no more promotes the ends
of justice than to acquiesce in low standards of criminal prosecution.
An
examination of the entire record of the proceedings leaves me without
doubt that Judge Maris conducted the trial with conspicuous fairness,
and that he committed no error in the rulings complained of unless it be
one in favor of the defendant. In allowing the defendant to withhold
testimony regarding gambling receipts for 1938, the trial court, in
recognizing the threat of future prosecution of the defendant for
evading taxes in that year, was exercising a merciful discretion. For
this avenue of inquiry plainly was relevant to the truth of the charges
against Johnson in the present proceeding. In view of all that took
place at the trial, to have denied the jury an opportunity to consider
the significance of the defendant's desire not to testify regarding
gambling receipts in 1938 would have been to withhold from them a factor
relevant in determining whether Johnson's explanation of what he did
with the "protection" money received by him in 1936 and 1937
was the truth or just a cock-and-bull story.
That
the defendant's senior counsel, a lawyer of long experience in federal
criminal practice, did not take exception to the manner in which Judge
Maris tempered concern for the proper
admin
istration of justice with solicitude for the rights of the defendant,
indicates not "waiver" of a right which had been denied but
recognition that the action of the trial judge was unexceptionable. The
claim that the trial was conducted improperly is obviously an
afterthought. Only after conviction and in an effort to upset the jury's
verdict on appeal was the fair conduct of the trial court sought to be
distorted into an impropriety.