WRIGHT, District Judge.
The appellant, Harry J. Alker, Jr., an attorney, was convicted of willfully attempting to defeat and evade the income tax by filing a false and fraudulent return for each of the taxable years 1947, 1948, 1949 and 1950 pursuant to 26 U.S. C.A. § 145(b). The several years constituted separate counts in the indictment. Confinement for one year and a day and imposition of a $10,000 fine were decreed on each of the first three counts; the periods of imprisonment to run concurrently. On count four, appellant was sentenced to three years imprisonment to run consecutively with the sentence imposed on counts one, two and three. Execution on the fourth count was suspended and appellant was placed on probation for three years provided that within the first year bona fide efforts are made to conclude all matters involving tax liabilities between himself and the United States. This appeal followed.
The grounds urged for a new trial are set forth below:
1. The evidence was insufficient to support the verdict.
2. Defendant's motions for the withdrawal of a juror because of the improper cross-examination of one of his character witnesses should have been granted.
3. Defendant was prejudiced by the trial judge's failure to charge as requested.
4. Defendant was prejudiced by the trial judge's erroneous rulings on the admission of evidence;
(a) The trial judge erred in admitting the opinion testimony concerning the value of the Freihofer stock.
(b) The trial judge erred in admitting evidence concerning defendant's failure to file an income tax return for 1946, a year prior to the years covered by the indictment.
5. Defendant was deprived of a fair trial because of the denial of his motion for continuance.
The contentions will be considered seriatim.
Section 145(b) of the 1939 Internal Revenue Code in pertinent part states:
Proof that a taxpayer had net income greater than the amount disclosed in his return requiring the payment of a tax substantially in excess of that reported coupled with independent evidence that the understatement was willful is a violation of the denominated provision.
The Government sought to sustain its burden of showing that appellant had net income greater than the amount reported by evidence of specific items of revenue purportedly received in the examination period. Appellant concedes, as he must, that the proof adduced would have enabled the triers to conclude that he had significantly understated his net income and correspondent tax liability for each of the indictment years.
At the commencement of proceedings the Government introduced appellant's returns for 1947, 1948, 1949 and 1950 which disclosed the following data:
Fig. 1 Net Income or Year (Loss) Tax 1947 ($11,238.54) None 1948 ($10,204.29) None 1949 $14,975.77 $3,643.11 1950 ($27,512.02) None
The prosecution then proceeded to reconstruct appellant's true income for the period. Income from three principal sources was revealed: Professional fees; dividends and interest; directors' fees.
The dividend/interest figure was substantiated by testimony from representatives of the various corporations whose stocks and/or bonds were registered in the name of appellant. Cancelled checks were produced by these witnesses disclosing that the instruments were payable and endorsed by appellant.
The evidence concerning directors' fees consisted primarily of testimony by duly designated officials from the corporations
The largest item of unreported income involved earnings from appellant's thriving law practice. These sums were substantiated in part by direct testimony of clients which was documented where possible. In addition, transcriptions from appellant's books by revenue agents were submitted. Further, the Government relied on certain statements and schedules prepared by appellant or his accountant compiled for purposes of audit during administration of the Hurst and Freihofer estates. It is noted that the last mentioned documents were rendered by appellant in his capacity as executor of the estates. Finally, cancelled checks signed by appellant as executor of the Hurst and Freihofer estates which were submitted by him to Federal and State auditors of the estates were introduced.
From the previously noted evidence the Government summarized and presented what it deemed a fair representation of appellant's income for the crucial period. A qualified Revenue Agent prepared and submitted this resume to the triers.
Fig. 2 NET INCOME Year Reported Corrected Additional 1947 ($11,238.54) $ 79,450.88 $ 90,689.42 1948 ($10,204.29) $ 46,968.85 $ 57,173.14 1949 $14,975.77 $ 20,171.37 $ 5,195.60 1950 ($27,512.02) $161,224.77 $188,736.79 ____________ ___________ ___________ TOTALS ($33,979.08) $307,815.87 $341,794.95 ============ =========== =========== TAX LIABILITY Year Reported Corrected Additional 1947 --0-- $ 46,131.71 $ 46,131.71 1948 --0-- $ 20,900.71 $ 20,900.71 1949 $3,643.11 $ 5,888.57 $ 2,245.46 1950 --0-- $109,720.69 $109,720.69 _________ ___________ ___________ TOTALS $3,643.11 $182,641.68 $178,998.57 ========= =========== ===========
Appellant does not challenge the Government's proof elicited pertinent to the dividend, interest and director fee sources. The sole contention herein relevant is that certain documents introduced with respect to professional fees were admissions requiring corroboration which was lacking. Appellant urges that if the questioned exhibits be discarded the evidence is insufficient to sustain a finding that his net income was understated for 1947, 1948, 1949 and 1950.
Exhibit G-44 consists of 24 checks drawn on the estate of Winfred S. Hurst and payable to Harry J. Alker, Jr., (the drawer of the checks was Harry J. Alker, Jr., Executor of the estate of Winfred S. Hurst). The earliest of the 24 is dated January 20, 1950; the last October 12, 1950. They range in amount from $500 to $7,000 and total $90,206.49. The checks were submitted by appellant to the Internal Revenue Service in connection with the audit of estate tax return in the Hurst estate wherein the appellant was executor and attorney. Revenue Agent Gurbarg, who received the checks testified that defendant related they were in payment of a fee for services to the decedent during his lifetime, his executor's commission and his fee as attorney for the estate. These checks were furnished to substantiate particular deductions for debts and administration expenses claimed upon the estate tax return. G-44 was admitted without objection.
Exhibit G-71 comprises the original notes of testimony transcribed at a hearing on May 14, 1951 by Frank Rogers Donahue, Esq., the auditor of the estate of William Freihofer, pursuant to the direction of the Philadelphia Orphans' Court by whom the auditor was duly appointed. Harry J. Alker was both executor and counsel for the Freihofer estate. At the May 14 hearing Alker submitted in his official capacity, at the auditor's request, a list of expenses paid by him from the estate denominated attorney's fees. The statement was prepared from the records of the estate by Rhoads, appellant's accountant and bookkeeper. It disclosed numerous payments to Hall, Bruce & Alker, Attorneys, aggregating $92,100 for 1947, $32,600 for 1948 and $148,000 for 1949. Mr. Donahue personally testified and identified G-71.
With reference to the information set forth in the exhibit A. D. Bruce, Esq., testified that he was associated with Alker during the years 1947, 1948 and 1949 and that he received for his services relating to the Freihofer estate $5,000 in 1947 and $10,000 in 1949. He identified exhibit D-3, a check dated July 19, 1949 for $10,000 which he stated represented the 1949 payment.
Edwin Hall, II Esq., testified he had been associated with Alker from 1947 through 1950, and that his fees from the Freihofer estate were $5,000 in 1947, $500 in 1948 and $30,000 in 1949.
G-77 is a statement of administrative expenses for the years 1947 and 1948 in the estate of William Freihofer voluntarily presented by Alker to auditors of the Internal Revenue Service. It lists certain legal fees paid to Alker as counsel and claimed by him in his executor capacity as deductions from the gross estate. The Revenue Service representatives were interested in the Freihofer estate tax return and the record is void of any evidence that they were investigating the subject matter of the present prosecution.
Accompanying G-77 was G-78 consisting of 8 cancelled checks drawn on the Freihofer estate and payable to Alker submitted by appellant to the Federal auditors of the estate to substantiate G-77.
G-94 and G-95 are transcripts prepared from appellant's fee ledger and cash book by agent Segal for the years 1947 and 1948. The transcriptions were made with appellant's consent in his law office. G-94 discloses that in 1947 Alker received fees of $97,122.44, and commissions of $4,928.84 totaling $102,051.28 less $3,585 paid to other attorneys. G-95 shows for 1948 total legal fees, directors' fees and commissions of $117,988.24, dividends of $2,181.68 and fees paid to other lawyers of $14,397.09.
G-96 is a list prepared by appellant's accountant, Rhoads, and submitted by defendant to former Revenue Agent, Mednick, during the course of the latter's investigation. The list purports to contain data concerning appellant's legal fees, directors' fees, commissions, rental income and payments made to other lawyers for 1949. It reflects total income of $239,457.22 and payments to
G-97 is a schedule prepared by appellant's accountant, Rhoads, and submitted by appellant to former agent Mednick, during the course of the latter's investigation. The list purports to show defendant's legal fees and payments made to other lawyers for 1950. It indicates legal fees of $60,253.46 and payments to other lawyers of $11,811.25.
G-100 is a transcript of defendant's fee ledger prepared by former Revenue Agent Mednick, during the course of his investigation. It lists all fees and commissions in excess of $500 which had been entered in the fee ledger and some fees and commissions that were less than the stated amount. Also listed were payments to other lawyers appearing in the fee ledger. The transcript pertains to 1947 and 1948 and discloses total fees and commissions of $97,373.63 for 1947, less payments to other lawyers of $2,335 and total fees and commissions of $88,433.50 for 1948, less payments to other lawyers of $14,522.09.
G-101 consists of entries copied by agent Mednick from appellant's 1946 fee account which divulged fees received in January, 1947 of $3,000.
The court is unable to subscribe to appellant's view that all of the aforementioned documents are admissions and therefore subject to the strict legal rules pronounced by the Supreme Court.
G-71 although unable to claim the sanctity accorded G-44 and G-78 is similarly not susceptible to appellant's characterization. The portion of the document particularly relevant is the schedule of fees and expenses incurred by the Freihofer estate during the course of its administration. The information submitted by Rhoads, appellant's accountant, was prepared from the records of the estate, a distinct entity.
The record is replete with materials tending to substantiate the accuracy of G-71. The schedules are directly traceable with minor exceptions into appellant's
Exhibit G-77, a statement submitted by appellant to Federal auditors of the Freihofer estate, presumably prepared from the accounts of the estate, complements substantially the Orphans' Court report previously discussed. All items appearing therein with few exceptions, tie directly into appellant's bank statements and duplicate deposit slips. The accuracy of the transcription is further supported by the cancelled checks forming G-78.
With respect to the remaining enumerated documents there is perhaps merit to the contention that they should be considered statements of the accused whether they be technically denominated an admission or not. The Smith principle,
There is no constraint in the instant case, however, to determine whether the remaining contested documents G-94, 95, 96, 97, 100 and 101 are admissions necessitating corroboration. For as will presently be demonstrated, the record is replete with the requisite independent substantiation.
The standard pronounced in Smith may be met either by independently establishing the crime, or corroborating the admission. At page 157 of 348 U.S., at page 199 of 75 S.Ct. Mr. Justice Clark states:
In the present prosecution the extrinsic evidence was sufficient to meet both measures.
Witness Michie, a partner in the firm of Andrew Y. Michie & Sons of Philadelphia stated that Harry J. Alker, Jr., as counsel for the firm received $500 in 1947, $1,000 in 1948 and $2,000 in 1949.
Witness Culleton, an accountant employed by Chandler Laboratories, Inc. testified that the company in 1947 paid Harry J. Alker, Jr., $559.05 for legal services.
Witness Frazier, the secretary and assistant treasurer of Phillips & Jacobs, Inc. testified that Harry J. Alker, Jr., as company's counsel received $3,500 in 1947, $2,000 in 1948, $2,500 in 1949 and $2,500 in 1950.
Witness Geuther, an attorney, stated that he and Alker were counsel for the executors of the Peiffer Estate and that in 1949 a check for $2,500 was issued by the executors as attorney's fees. The witness endorsed the check to Alker and received his check for $1,250.
Witness Palermo, co-executor of the Griffith Estate, testified that Alker was paid $25,000 (1948 — $9,500; 1949 — $6,500; 1950 — $9,000) for services performed on behalf of the estate. The cancelled checks supporting the payments were marked Exhibit G-11.
Witness Lohmar, the comptroller of Mrs. Smith's Pie Co. stated that Alker was counsel for the company. In 1949 and 1950 he was paid counsel fees of $2,000 and $2,800 respectively.
Witness Guth, an attorney, stated that in 1949 a fee of $6,000 was paid to Alker, who in turn issued checks totaling $5,000 to the witness and another attorney as their share of the fee.
Witness Hartnett, secretary-treasurer of Penn Paper & Stock Co. testified that Alker had been paid counsel fees of $5,000 in 1947, $5,000 in 1948, $1,000 in 1949 and $6,000 in 1950.
Witness Andriuzze, treasurer of Linen Thread Co. stated that Alker had been paid $500 in counsel fees for each year covered by the indictment.
Witness Ward, an attorney administering the estate of Lemuel B. Schofield, Esq., disclosed that the decedent had paid appellant $3,650 in 1947 as his share of a legal fee in connection with settling the Neville Estate and the Daniel Murphy Trust.
Witness Branin, a trust officer of the Girard Trust Corn Exchange Bank, testified that the bank was fiduciary for the Reeves and Bunting Estates which records divulged payments for legal fees to Alker of $500 in 1948, $500 in 1949 and $2,000 in 1950.
Witness Reissinger, treasurer of Paper Corporation of United States, testified Alker received $750 in 1949 for legal services.
Witness Wilkinson, a record's clerk employed by Tradesmens Bank & Trust Co. of Philadelphia, testified that Alker was paid $5,000 in legal fees in 1948.
Witness MacDonnell, first assistant clerk of the Philadelphia Orphans' Court, stated that the records of various estates disclosed attorney's fees received by Alker of $1,106.50 in 1947, and $4,443.50 in 1948.
Witness Dorch, secretary-treasurer of Freihofer Baking Co. testified to the following payments made to Alker for legal services: 1947 — $1,100.15; 1948 — $2,500; 1949 — $2,500.
Witness Sarah Freihofer, testified she sent appellant a certificate for 2,000 shares of William Freihofer stock in December, 1950 with the understanding that appellant was to transfer to himself 200 shares as payment for legal services. On one occasion on cross-examination, witness Freihofer stated that the posting of the certificate might have been in January, 1951 instead of December, 1950.
Appellant's letter of February 12, 1952 to Agent Mednick recites that 50 shares of the questioned Freihofer stock were received in 1948, 100 shares in 1949, and 50 shares in 1950.
A guilty verdict having been returned, the Government is entitled to the inference that the jury found beyond a reasonable doubt the stock was received in the indictment period.
A tabulation of the amounts indicated by the direct testimony coupled with receipts from the Freihofer and Hurst estates as set forth in G-44, G-71, G-77, G-78, and the dividends, interest and directors' fees shown on the Government's resume G-102, which sums appellant concedes were founded upon substantial evidence, discloses:
Fig. 3. Source 1947 1948 1949 1950 Witness testimony Legal fees $ 15,915.70 $30,443.50 $ 26,750.00 $124,800.00 Freihofer Estate G-71, 77, 78 91,600.00 50,083.55 148,000.00 Hurst Estate G-44 90,206.49 ___________ __________ ___________ ___________ Total from Profession $107,515.70 $80,527.05 $174,750.00 $215,006.49 Dividends G-102 2,523.60 8,257.55 10,466.40 20,186.75 Directors' fees G-102 605.00 675.00 750.00 615.00 ___________ __________ ___________ ___________ $110,644.30 $89,459.60 $185,966.40 $235,808.24 =========== ========== =========== ===========
Comparing the professional fees set forth in the preceding chart with the gross receipts from profession listed in appellant's returns, reveals in each instance substantial nonreporting and understatement:
Fig. 4. 1947 1948 1949 1950 Figure 3 $107,515.70 $80,527.05 $174,750.00 $215,006.49 Per appellant's returns G-1, G-2, G-3, G-4 68,307.79 66,808.45 137,967.22 53,103.63
*___________ __________ ___________ ___________ Difference $ 39,207.91 $13,718.60 $ 36,782.78 $161,902.86 =========== ========== =========== ===========
In neither appellant's 1947 nor 1948 return was any sum styled dividends or interest reported. For 1949 and 1950 appellant included in his return as dividends $3,005.50 and $8,143.25 respectively, in both instances the amounts were significantly less than the proof adduced. The evidence thus portrayed renders appellant's contention untenable and, accordingly, demonstrates that the Government has shouldered the burden of understatement.
In addition to the foregoing, the second standard pronounced in Smith v. Commission is similarly met.
G-94, 95, 100 and 101 as noted were transcripts of appellant's books and records prepared by Revenue Agents. The individual entries to a large extent are traceable into appellant's bank statements and duplicate deposit slips.
G-96 and G-97 having been prepared by appellant's accountant during the course of investigation are unquestionably representative of the class of documents termed suspect by the Supreme Court not only from the standpoint of the accused but also from the Government's position.
Thus evaluated the court concludes that the evidence adduced under any standard was competent to sustain a finding of substantial understatement.
Appellant next urges that the element of willfulness was not present. The court is keenly aware of the judicial construction requiring its independent existence
Properly before the triers were the following factors which have been decisionally cited as evidencing the proscribed conduct. First, the record discloses that the appellant was an attorney specializing in estate and tax matters. The jury was therefore entitled to infer that an astute practitioner learned in the area of taxation is required to file returns fairly reporting income, subject to taxation.
In view of the foregoing appellant's contention is deemed meritless.
Appellant's second assignment of error involves the permissive bounds of cross-examination applicable to a character witness. The examination complained of is set forth below:
Counsel for appellant timely objected to each of these questions and moved for the withdrawal of a juror. The trial court overruled the motion and objection but cautioned the jury as follows: "I say to you that regardless of the answers of the witness or witnesses you are not to assume that the incident asked about actually took place. All that is happening is that the witnesses' standard of opinion of the reputation of the defendant is being tested.
Both appellant and appellee rely on Michelson v. United States
Mr. Justice Jackson's commentary is therefore deemed as setting forth certain standards that an appellate court may consider in review. They should neither be termed minimum nor maximum
1. The trial court should ascertain out of the presence of the jury that the target of the question was an actual event which would probably result in some comment among acquaintances, if not injury to defendant's reputation.
2. The inquiry must be in approved form. "Have you heard" is correct, whereas, "Do you know" is improper.
3. The event inquired about must show a defect of character similar to that which defendant's witnesses said he was reputed not to exhibit.
4. The jury must be instructed concerning the limited purpose of the inquiry.
5. The question may not be hypothetical nor assume unproven facts and ask if they would affect the conclusion.
The interrogation under consideration exceeded the bounds of propriety. One question not specifically assigned as error but covered by counsel's trial objection was in hypothetical form manifestly violative of the decisional law.
To permit inquiries of this nature would undermine the cautioning instruction sanctioned by Michelson
As previously observed, however, an appropriate cautionary instruction was accorded.
Having found, however, some trace of impropriety the issue is whether it is
Hamilton's testimony comprised merely seven pages of the record totaling approximately 1700 pages. Seven witnesses, including Hamilton, vouched for appellant's reputation "as a law-abiding citizen." The favorable testimony of eleven other members of the community was stipulated; the persons when called stated their name and address then withdrew. Hamilton was the sole witness interrogated concerning the discredited acts. The government in rebuttal summoned two witnesses who stated that appellant's character trait for honesty and integrity was "not good."
Of the three alleged incidents it would be difficult to conceive of any having a more telling effect than the Hurst event. This was the only real imputation of illegal conduct. Except for the hypothetical question following the initial inquiry whether witness Hamilton had heard of appellant's indictment, the examination respecting this matter was in every manner proper. In fact, appellant essentially concedes this to be the case.
The trial consumed twenty-one days encompassing four months. The record indicates that the substantive proof overwhelmingly
It is important to note that the visiting trial judge had inexhaustible patience, counsel representing appellant and appellee eminently seasoned in litigation techniques were continually taxing the full mental and physical capacities of the court. Under these circumstances it is remarkable that the record should be so devoid of alleged improprieties to accord appellant only five averments of error.
In accordance with the foregoing the court is unable to conclude that the cross-examination of witness, Hamilton, was prejudicial under Michelson,
One final observation is deemed appropriate. The reference in Michelson to the heavy responsibility conferred on the trial court in administering receipt of character testimony seems somewhat restrictive.
Appellant's third averment of error is that the trial court erred in refusing to adopt appellant's points for charge Nos. 13 and 20.
Requested instruction 20 was addressed to the element of willfulness. Appellant urges that the court's charge was legally vulnerable because it failed to enunciate specifically the evidence required to sustain a jury determination. Point for charge 20 stated:
It is elementary that the trial judge is never bound to instruct a jury in the exact language requested.
Appellant's point for charge 13 was directed toward proper allocation of a fee received for legal services from Mrs. Sarah Freihofer consisting of 200 shares of William Freihofer Company stock. There was some conflict in the testimony concerning the year it was received by appellant.
Failure to instruct the triers with respect to the negative aspects of the Freihofer stock, namely, if the jury were in doubt as to the year the fee was paid, it may not be considered in any year is the thrust of appellant's allegation. The court holds the trial judge's instruction noted in the margin
The fourth assignment of error questions rulings of the trial judge relating to the admissibility of certain evidence. Appellant initially urges that opinion testimony offered by Government witness Greenstein, concerning the value of 200 shares of William Freihofer Company stock transferred to appellant by Mrs. Sarah Freihofer in payment for services was an uninformed guess and hence improperly received into evidence.
The admissibility of expert testimony is a matter peculiarly within the sound discretion of the trial judge.
1. The nature of the subject matter and whether it is such that the issues cannot be properly understood or determined without the aid of opinions of persons of special knowledge or experience.
2. The credentials of the person offering to testify as an expert in order to determine whether he possesses the requisite qualifications and the degree of expertise to accord an informed opinion.
3. The proposed expert's acquaintance with the basic facts necessary to form an intelligent opinion.
Appellant's sole contention is that witness Greenstein was not sufficiently acquainted with the facts to evaluate the worth of the stock at $510 per share. Failure of witness Greenstein to apply revenue regulation 105, § 81.10 in arriving at his determination is the basis of the averment. Section 4 of the aforementioned ruling provides:
While adherence to Section 4 standards is certainly commendatory it would be too exacting and unrealistic to hold as a matter of law the nonconsideration of all these elements precludes the proffering of an opinion. In areas concerning the value of property, real or personal, the sufficiency of acquaintance with facts concept should be liberally construed for the subject matter is not susceptible to measurement by mathematical formula. Especially is this true where unlisted stock holdings are involved. Once the proponent has elicited testimony indicating a factual basis for the opinion and that the determination was not the product of conjecture, a trial judge cannot be charged with an abuse of discretion. The weight and final appraisal accorded an expert's testimony tested by the means and extent of his information as developed on cross-examination is an issue to be resolved by the triers.
Witness Greenstein, testified that in arriving at his opinion he considered: prior sales;
It is next urged that the trial judge erred in admitting evidence concerning defendant's failure to file an Income Tax Return for 1946. Appellant contends that failure to file a return and tax evasion are not similar acts; therefore, proof of the former does not logically eliminate the possibility that the latter occurred innocently.
In United States v. Long this Circuit,
There is a body of case law unrelated to the tax field which allows in evidence integral parts of the principal event (concomitant parts of the criminal act, Wigmore, 3d Ed. Vol. I, § 218, Vol. II, § 306) to more or less fill in the background
The case at bar presents compelling reasons for the admission of such evidence for not only was the misstatement an integral component of a return composing a segment of the indictment but it is also relevant on an essential element of the crime of tax evasion, namely, willfulness. See People v. DePompeis, 1952, 410 Ill. 587, 102 N.E.2d 813.
The law is well settled that prior and subsequent acts whether they portray criminality or not when substantially similar to the subject matter forming the basis of the indictment are probative to negate the inference that the crucial conduct was unintentional, innocent, inadvertent or the product of mistake.
Thus while evidence of Alker's failure to file a return in 1946 would be improper to prove Alker willfully evaded the income tax, United States v. Long, supra, it would be admissible to show that Alker's statement in his 1947 return that he filed in 1946 was false. It is this falsity rather than Alker's failure to file a return in 1946 which is relevant upon the question of willfulness. This principle is not in conflict with the holding in the Long case,
Appellant's final assignment is directed to disposition of a motion for continuance prior to trial wherein said application was denied. Reversal in this area is only justified on a showing of patent abuse of discretion.
The record discloses —
The indictment forming the basis of the present prosecution was returned on
The evidence elicited on behalf of appellant disclosed that he was 72 years old and had a history of rather serious maladies that necessitated hospitalization at intervals. During the week preceding the date set for trial he had experienced a fainting attack which confined him to bed. Evidence of compression fractures of two vertebrae was diagnosed, the cause at the time, although not precisely known, being restricted to osterporosis or cancer. At a subsequent date cancer as a causative factor was eliminated. Appellant's medical witnesses testified he was unable to withstand the rigors of a trial and the attendant efforts necessary in preparation.
The Government countered by demonstrating that appellant had engaged in the practice of law within a few weeks of the trial date. Evidence, uncontradicted, was introduced revealing that appellant had been to his office on several occasions during the week directly preceding the hearing before Judge Van Dusen. Extensive preparation at considerable cost had been undertaken by the Government in contemplation of the impending trial. Finally, Dr. T. Grier Miller, an eminent physician whose examination both appellant and appellee on one occasion had agreed would be acceptable and determinative,
Against this background the petition was denied.
Trial commenced as scheduled on June 4, 1956. After the jury had been impaneled and the first witness sworn, the appellant voluntarily absented himself pursuant to Federal Rule of Criminal Procedure 43.
Further, counsel submitted that any change in appellant's state from that time which would render appellant's absence involuntary would be promptly brought to the court's attention. The trial judge during the Government's presentation was apprised of no changed circumstances in appellant's condition.
Appellant's case graced by his attendance was thereafter presented to the triers. It is essential to note that appellant testified for a period encompassing three days. No ill effects from this display were apparent.
Under these circumstances the court deems that Judge Van Dusen's denial of appellant's motion was in all respects proper from both legal considerations and the realities.
The inordinate delay between the Government's case and the accused's presentment although not specifically urged as error has caused the court much concern. A continuance lasting two months in a criminal prosecution of a non-corporate defendant tried to a jury can hardly be termed commensurate with the minimal standards required for the efficient administration of justice. Under the particular circumstances appellant's acts having precipitated the unfavorable situation and there being no showing that appellant's rights were in any manner prejudiced, the disposition of this appeal will not be altered. An observation, however, is deemed appropriate.
Long delays in proceedings are unquestionably inimical to our system of justice and should not be contenanced save for compelling reasons. In instances where a short stay will not suffice the trial judge should (1) revoke the bail of the accused and force trial, or (2) grant a mistrial.
The judgment of the district court will be affirmed.
"If we assume for the moment that the prosecution's evidence was sufficiently corroborated, it would have enabled the jury to conclude that defendant had understated his net income and his tax liability for each of the years involved. From this evidence the jury could have decided that defendant had net income in addition to that declared in his returns of approximately $90,600 in 1947, $57,000 in 1948, $5,200 in 1949 and $188,700 in 1950." (N.T. 1593-99)
"Mr. Donahue: And this list is taken from the books of Mr. Alker or the estate?
"Mr. Rhoads: From the books of the estate."
1947 1948 1949 1950 Total Receipts Fig. 3 $110,644.30 $89,459.60 $185,966.40 $235,808.24 Less deductions per appellant's returns 79,546.33 77,012.74 128,618.60 92,336.76 ___________ __________ ___________ ___________ Net Income $ 31,097.97 $12,446.86 $ 56,147.80 $143,471.48 Less exemptions per returns 1,500.00 1,200.00 1,200.00 1,200.00 ___________ __________ ___________ ___________ TAXABLE INCOME $ 29,597.97 $11,246.86 $ 56,147.80 $142,271.48 =========== ========== =========== =========== Appellant's returns for the same period disclose: Net Income or (Loss) ($11,238.54) ($10,204.29) $14,975.77 ($27,512.02) ============ ============ ============ Less exemptions 1,200.00 __________ TAXABLE INCOME $13,775.77 ==========
"* * * His understatements of income must be viewed in their setting, and so viewed we are convinced that the jury could well find that the understatements were wilful, for if the jury accepted the Government's evidence, as it was entitled to do, it could well have found that the defendant was an intelligent, astute and successful business executive with many years of experience who had full records of his income available, and that the understatements in his returns for the years involved, which he made out himself, were gross. Under these circumstances it seems to us clear that the jury could very reasonably have inferred that beyond a reasonable doubt the defendant's understatements of income were made wilfully in an attempt to evade or defeat taxes, and wholly discounted his defense that those understatements for the most part were made stupidly or carelessly. * *"
"There was a sufficient showing of intent. The prosecution showed understatement of income for several other years specifically for the declared purpose of showing intent. This is itself enough." United States v. Frank, 3 Cir., 1957, 245 F.2d 284, 287, certiorari denied 1957, 355 U.S. 819, 78 S.Ct. 25, 2 L.Ed. 2d 35.
Revenue Agent Segal apprised appellant that his 1947 and 1948 returns were under investigation on May 3, 1950 (N.T. 658).
"Q. * * * Have you heard that he was under indictment in what is known as the Hurst Estate? A. No. No.
"Q. If you had heard that, would it modify your judgment some as to his law-abiding citizenship? A. No.
"Mr. Fogwell: Could we see your honor at side bar for just a minute?
"The court: Surely. (Discussion at side bar, out of the hearing of the jury as follows:)
"Mr. McBride: I want to move for the withdrawal of a juror and the declaration of a mistrial because of the question that was asked of this last witness.
"The Court: Overruled." (N.T. 1573-1574.)
"In the final analysis judgment in each case must be influenced by conviction resulting from examination of the proceedings in their entirety, tempered but not governed in any rigid sense of stare decisis by what has been done in similar situations. * * * Necessarily the character of the proceeding, what is at stake upon its outcome, and the relation of the error asserted to casting the balance for decision on the case as a whole, are material factors in judgment.
* * * * *
"* * * It is guilt in law, established by the judgment of laymen. And the question is, not were they right in their judgment, regardless of the error or its effect upon the verdict. It is rather what effect the error had or reasonably may be taken to have had upon the jury's decision. * * *
* * * * *
"If, when all is said and done, the conviction is sure that the error did not influence the jury, or had but very slight effect, the verdict and the judgment should stand, except perhaps where the departure is from a constitutional norm or a specific command of Congress. Citing cases. But if one cannot say, with fair assurance, after pondering all that happened without stripping the erroneous action from the whole, that the judgment was not substantially swayed by the error, it is impossible to conclude that substantial rights were not affected. The inquiry cannot be merely whether there was enough to support the result, apart from the phase affected by the error. It is rather, even so, whether the error itself had substantial influence. If so, or if one is left in grave doubt, the conviction cannot stand."
See also Federal Rules of Criminal Procedure 52(a), 18 U.S.C.A.
"The prosecution's question about defendant's indictment in the Hurst estate stands on somewhat better footing than do the questions we have so far discussed. The defendant was under indictment in the District Court for the Eastern District of Pennsylvania in connection with the Hurst estate (Criminal Nos. 18,730 and 18,731). In the record there is a statement by counsel for defendant that indictment was `an income tax indictment' (N.T. 1574); in fact the indictment charged an attempt to evade the estate tax and conspiracy. Thus, that question did involve an actual event and one which might result in comment about defendant. But the question as put by the prosecution revealed nothing regarding the offense with which defendant was charged; hence the question would appear to be improper under the Gaunt case, supra. However, even if this question was proper, defendant was no less prejudiced by the other two questions."
For the history and disposition of the Hurst estate see United States v. Alker, 3 Cir., 1958, 255 F.2d 851.
"The government has the burden of proving to you beyond a reasonable doubt that the fee paid to the defendant by Mrs. Freihofer was received by the defendant in a particular year, or in specific years involved herein, before you may consider the same as reportable income for such year or years by the defendant. * *" (N.T. 1703-1704.)
"First the prosecution must prove beyond a reasonable doubt that for each of the years the defendant had a net income in excess of the amount shown in his return. * * *" (N.T. 1692.)
"With respect to any of these years you must be convinced beyond a reasonable doubt that the defendant did not have any loss but instead had a substantial amount of net income. * * *" (N.T. 1693).
"The evidence in this case discloses that Mr. Alker's income tax returns involved herein were prepared under the cash method or on a cash basis, that is, on the basis of actual receipts and disbursements. Under this method of making returns, only income collected each year is taxable." (N.T. 1715.)
See also Note 66, supra; note 68, supra, last paragraph of the text.
"If you filed a return for a prior year, what was the latest year?
"To which Collector's office was it sent?
"To which Collector's office did you pay amount claimed in item 8(B), above?
"§ 218. Res Gestae and Acts a part of the Issue; Inseparable Crimes. There is, however, an additional class of cases in which the misconduct of a defendant may be received, irrespective of any bearing on character, and yet not as evidential of one of the above matters (design, motive or the like), or as relevant to any particular subsidiary proposition. That class includes other criminal acts which are an inseparable part of the whole deed."
"Mr. McBride: * * *
"It is quite true that when Your Honor selected Dr. Grier Miller to examine Mr. Alker, I personally stated that I was absolutely satisfied that Your Honor had picked one of the very best men Your Honor could pick, and that I would abide by the results but in saying that I did not understand that whatever Dr. Miller said — that is, if his opinion was less than conclusive — we would assume it would be something that it was not." (N.T. 6-7).
"The Court: I wanted to make the same record that we have been making, if I may. It is that the defendant is not personally present in court and that in accordance with the present state of the record, the absence is voluntary and that the trial will proceed; that is a correct statement?
"Bradley: Correct, yes sir, as we have used the word voluntary." (N.T. 429).