203 F.

2d 652

BEATY
v.
UNITED STATES.
No. 6546.

United States Court of Appeals Fourth Circuit.

Argued March 16, 1953.
Decided April 7, 1953.

C. W. Higgins, Winston-Salem, N. C., W. M. Nicholson, Charlotte, N. C.

and R. Gregg Cherry, Gastonia, N. C., for appellant.
Thomas A. Uzzell, Jr., U. S. Atty., Asheville, N. C., for appellee.
Before PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.
PARKER, Chief Judge.

This is an appeal from a conviction and sentence under an indictment charging

income tax evasion in violation of the provisions of section 145(b) of Title 26
of the United States Code. Reversal is asked on the ground that the defendant
was not arraigned, that verdict of acquittal should have been directed on the
evidence, that there was error in the admission and rejection of testimony, that
the United States Attorney asked improper questions, and that the trial judge
improperly instructed the jury as to the result of an inquiry conducted in its
absence, improperly commented on the duty of defendant to keep correct
records and improperly urged the jurors to agree. We find no merit in any of the
grounds urged. Certainly there is nothing in any of them of such a prejudicial
nature that it would justify the granting of a new trial.

The first ground urged is that the court proceeded with the trial without a
formal arraignment and without a plea to the bill of indictment. This contention
seems to be based upon the fact that the arraignment and plea do not appear in
the stenographer's notes of the trial. The District judge has specifically found,
however, that plea of not guilty was duly entered by defendant upon his
arraignment in open court, that such plea was entered by the clerk upon his

original record and was referred to by the judge in his charge to the jury. We
are bound by this finding; but, even if this were not so, it is well settled that
arraignment and plea were waived by going to trial. Garland v. State of
Washington, 232 U.S. 642, 34 S.Ct. 456, 58 L.Ed. 772; Rulovitch v. United
States, 3 Cir., 286 F. 315; Williams v. United States, 6 Cir., 3 F.2d 933; King v.
United States, 6 Cir., 25 F.2d 242.
3

Equally without merit is the contention that the evidence was not sufficient to
take the case to the jury. In the tax years 1945, 1946 and 1947, defendant was
engaged in the taxicab business in the city of Charlotte, North Carolina. He
rented a number of taxicabs to drivers at a rental of $10 per day each except on
Saturdays and Sundays when the rental was $12 per day each. At the end of
each day the drivers were supposed to pay the rental due by them. The rental
paid by each was placed in an envelope marked with the number of the taxicab
and was checked against yellow check sheets showing the taxicabs in operation
and the envelope was then dropped through a slot into a large iron safe. The
yellow check sheets were destroyed. From the safe the envelopes containing
the rental money were subsequently taken and opened and the contents were
supposed to be entered upon defendant's books and deposited in bank. The
entries in the books show receipts from the operation of taxicabs of just about
enough to cover the costs of operating the business; but they also show
operation of the taxicabs for less than a third of the time, whereas the
government introduced evidence of the drivers that they were in operation for
the greater part of the time and that the rental received therefrom was
necessarily a much greater sum than shown by the books. The income tax
returns corresponded with the books. An expert witness testified on the basis of
the testimony given by these drivers that the rental received by defendant was
an amount for each year in excess of the amount shown on the books and
reported by defendant and that a computation of income tax due thereon was
considerably in excess of the amount reported. It was significant that the entries
in the books of receipt of taxicab rental over long periods of time appeared to
have been made at the same time and in the same handwriting and that the
amounts were uniformly $10 or $12 per day whereas the testimony was that
varying amounts were received from time to time. There was also testimony to
the effect that defendant had received as rental of buildings and from the sale of
cars more than he reported in his tax returns.

The testimony to which we have referred would have been sufficient of itself to
take the case to the jury, but it was fortified by other evidence tending to show
fraudulent concealment. One Brown, a railroad police officer, testified to
having gone late at night to defendant's filling station, after the station had been
closed, and having found the defendant sitting before a table on which there

was a large sum of money and beside an open iron safe in which there was also
a large sum, engaged in counting the money and with a pistol and shot gun at
hand to guard it. The officer testified that he asked defendant why he did not
deposit the money in the bank and that defendant replied that he did not wish to
pay $20 a hundred on it, the clear inference being that he did not deposit it
because he wished to avoid income tax. There was testimony also that
sometime later a laborer working on defendant's premises dug up a large sum of
money, which defendant admitted on the trial was his and which amounted
according to his admission to $7,000 or $8,000, although there was evidence
that the amount was largely in excess of this. The laborer made off with the
money, but defendant complained to the local police and it was eventually
recovered. On cross examination defendant refused to say how he had spent it.
The evidence as to his having the large sum in the night time and saying that he
did not wish to pay $20 a hundred on it, came to light when the money was dug
up by the laborer and complaint with regard to its loss was made to the police.
The defendant claimed that the buried money had been accumulated by him
over a long period before the tax years in question, and he denied making the
statement about wishing to avoid paying $20 a hundred; but the questions thus
raised were for the decision of the jury. Certainly this with the other evidence
to which we have adverted made the case one for the jury's determination.
5

Defendant complains because the taxicab drivers called as witnesses by the

prosecution were allowed to refresh their memories, as to the periods during
which they were operating defendant's cabs, by referring to affidavits which
they had made and which had been prepared by treasury representatives. These
affidavits had been based upon municipal records showing the initial and final
dates of the operation of the cabs and the recollection of the witnesses as to the
portion of the time within which the cabs had been operated within this period.
The matter was one resting very largely in the sound discretion of the trial
judge, Buckley v. United States, 6 Cir., 33 F.2d 713, 717; 58 Am.Jur. p. 325;
note 125 A.L.R. p. 24; and certainly there was no abuse of discretion in
permitting the witnesses to refresh their memories by referring to affidavits
which they had made and which, as to the dates involved, were based upon
records otherwise in evidence. As to the regularity with which the cabs were
operated during the period, it does not appear that there was any need of
refreshing of memories as to this and that the witnesses testified with regard
thereto from independent recollection.

Objection was made to the ruling of the court in permitting the witness Cline,
an expert accountant, who had sat in court and heard the testimony of the
witnesses, to testify as to the difference in defendant's income tax which would
have resulted from a correct reporting of the income disclosed by this

testimony. We think that this was clearly proper since the jury was left free to
accept or reject the testimony upon which the testimony of the expert was based
and with it that testimony. United States v. Johnson, 319 U.S. 503, 519, 63
S.Ct. 1233, 1241, 87 L.Ed. 1546. In reversing the Court of Appeals in the case
cited, the Supreme Court said:
7

"The court below held that the admission of the testimony of an expert witness
regarding Johnson's income and expenditures during the disputed period
invaded the jury's province. The witness gave computations based on
substantially the entire evidence in the record as to Johnson's income. The
Circuit Court of Appeals held that while undoubtedly `a proper hypothetical
question could have been framed and propounded', in fact the witness was not
giving answers on the basis of any assumption of hypothesis but as testimony
on the `controverted issue' in the case. 7 Cir., 123 F.2d 111 at page 128. We do
not so read the meaning of this testimony. No issue was withdrawn from the
jury. The correctness or credibility of no materials underlying the expert's
answers was even remotely foreclosed by the expert's testimony or withdrawn
from proper independent determination by the jury. The judge's charge was so
clear and correct that no objection was made, though, of course, there were
exceptions to the refusal to grant the usual requests for charges that were either
redundant or unduly particularized items of testimony. The worth of our jury
system is constantly and properly extolled, but an argument such as that which
we are rejecting tacitly assumes that juries are too stupid to see the drift of
evidence. The jury in this case could not possibly have been misled into the
notion that they must accept the calculations of the government expert any
more than that they were bound by the calculations made by the defense's
expert based on the defendants' assumptions of the case. So long as proper
guidance by a trial court leaves the jury free to exercise its untrammeled
judgment upon the worth and weight of testimony, and nothing is done to
impair its freedom to bring in its verdict and not someone else's, we ought not
be too finicky or fearful in allowing some discretion to trial judges in the
conduct of a trial and in the appropriate submission of evidence within the
general framework of familiar exclusionary rules."

Another objection pressed upon us was that the court permitted evidence of a
statement to Chief of Police Littlejohn made by the witness Brown as to his
having discovered the defendant in the filling station with the large sum of
money before him and of defendant's having said to him that he did not deposit
the money in the bank because he did not want to pay $20 a hundred on it. The
defendant, however, denied making the statement to Brown and attempt was
made on cross examination to impeach Brown's credibility. Brown's statement
to Littlejohn made ante litem motam was competent, we think, for the purpose

of corroborating Brown's testimony and was admitted solely for that purpose.
See Goins v. United States, 4 Cir., 99 F.2d 147, 150; Dowdy v. United States, 4
Cir., 46 F.2d 417, 424; Boykin v. United States, 5 Cir., 11 F.2d 484, 486; Di
Carlo v. United States, 2 Cir., 6 F.2d 364, 366; note 140 A.L.R. 21, 154. Prior
statements are not like ordinary hearsay. The one who made them is before the
jury and is subject to cross examination about them, and the jury is perfectly
well able to judge whether they do or do not corroborate him. To what extent
they should be admitted for purposes of corroboration is a matter resting
largely in the discretion of the trial judge and we do not think that the
admission of the evidence here constituted an abuse of discretion or furnishes
any ground for awarding a new trial.
9

Other objections to the admission or rejection of testimony require but brief

notice. Testimony offered to the effect that some of defendant's cabs were idle
for a part of the time might properly have been admitted, but it was not
inconsistent with the prosecution's testimony and could not have affected the
result, as there was no dispute as to some of the cabs being idle from time to
time. The same is true of the testimony as to the rule with respect to the
depreciation on cabs followed by the taxing authorities and of the testimony
that those who prepared the tax returns for defendant had prepared the returns
for others and were considered competent. Testimony that the yellow check
sheets were the original entries of receipts from operation of the cabs and that
they had been destroyed was in accord with the facts otherwise established in
the case and for all practical purposes admitted. There were other objections to
the admission and rejection of testimony which, like these, related to minor
matters, could not have affected the result and do not merit discussion.

10

Defendant complains because the United States Attorney examined him at

length with respect to his being guilty of other crimes and as to matters tending
to discredit him. The defendant, however, did not make timely objection to this
cross examination and without objection answered the questions, denying the
matters of impeachment inquired about. No attempt was made by the
prosecution to contradict him with respect to these answers. A motion was
made to strike out that part of the cross examination, but its denial could not
have harmed defendant since nothing was brought out that tended to impeach
him. He could not sit by and allow questions to be asked and answer them and
afterwards claim error with respect to their being asked. The extent to which an
accused who has taken the stand in his own behalf may be cross examined as to
collateral matters for the purpose of impeachment is a matter resting very
largely in the discretion of the trial judge. United States v. Lawinski, 7 Cir., 195
F.2d 1, 7-8. The rule ordinarily to be followed was laid down by Judge
McDermott, speaking for the Tenth Circuit in Coulston v. United States, 10

Cir., 51 F.2d 178, in a passage quoted with approval by this court in Simon v.
United States, 4 Cir., 123 F.2d 80, 85, 86, as follows:
11

"If the defendant takes the witness stand, a different rule comes into play. He
steps out of his character as a defendant, for the moment, and takes on the role
of a witness, and as such becomes subject to cross-examination in the same
manner and to the same extent as any other witness. * * * In criminal cases,
there may therefore be differences arising from variations in the common law
in the different jurisdictions at the time of their admission into the Union. It
may however be said that, subject to possible variants so arising, it is well
settled in criminal cases in the federal courts that cross-examination must be
confined to the subjects of the direct examination (citing cases); that the
credibility of a defendant who has testified may be impeached in the same
manner and to the same extent as any other witness, and no further (citing
cases); questions asked on cross-examination for the purposes of impeachment
should be confined to acts or conduct which reflect upon his integrity or
truthfulness, or so `pertain to his personal turpitude, such as to indicate such
moral depravity or degeneracy on his part as would likely render him insensible
to the obligations of an oath to speak the truth' (citing case); when such a
question is asked and answered, the inquiry is ended; the government is bound
by the answer in that it may not, on rebuttal, offer countervailing proof (citing
cases). To this latter rule, there is one exception: In criminal cases a witness
may be asked, for purposes of impeachment, whether he has been convicted of
a felony, infamous crime, petit larceny, or a crime involving moral turpitude,
and on rebuttal the record of such conviction is admissible. (Citing cases). A
witness may not be asked if he has been accused or arrested for a crime, for the
sufficient reason that it calls for hearsay evidence, and because accusation
carries no implication of guilt."

12

During the trial counsel for defendant charged before the jury that witnesses for
the government were being coerced and intimidated into testifying against him.
The trial judge promptly inquired into the matter in the absence of the jury and
found that there was no basis for the charge. When the jury returned to the box
he advised them of the result of the investigation. Defendant objected to this
but there is nothing in the objection. The natural effect of the charge made by
defendant's counsel was to prejudice the prosecution's case. When inquiry
developed that there was no basis for the charge, it was proper that the jury be
so advised. The trial judge did what he could to absolve defendant's counsel of
blame in the matter by stating that the testimony of the witnesses examined in
the absence of the jury did not support the information which counsel had
received.

13

Defendant took no exception to the judge's charge and does not now complain
of anything contained therein. He does complain, however, of a statement made
by the judge during the taking of testimony. Counsel for defendant had stated
that all that the law required was that the taxpayer turn his books and records
over to a competent man. The court said, "The law requires much more than
that. It first requires them to keep accurate books for every cent he takes in and
every disbursement he makes, and then turn these records over to the income
tax accountant." It is argued that the effect of this was to withdraw from the
jury the question of intent. We do not so construe the language of the judge,
even if our attention be confined to what was said at this point. When we read
his charge given at the conclusion of the trial, however, there can be no doubt
as to the jury's having been charged correctly on the necessity for finding
criminal intent and as to its duty to acquit the defendant unless it found that he
"willingly and knowingly" attempted to evade payment of tax. The court said:

14

"Gentlemen of the jury, you will notice in this statute which I read to you that
the word `wilful' is used, and in some instances the word `knowingly' is set out.
This is a criminal case; this is not a civil case; and that word `wilfully' has a part
in and plays a part of the particular controversy. It is a word that obviously
would have to be legally defined to you, and about as good a definition of the
word `wilfully' that I know is this: Wilful or wilfully means doing an act
purposely and deliberately, indicating a purpose to do it without authority and
in violation of law. It will be necessary, before you could convict this
defendant, that you would be satisfied of his guilt beyond a reasonable doubt,
and that is to say that he wilfully attempted to evade and defeat the tax imposed
by the law which I read and that he did that and you are satisfied from the
evidence and beyond a reasonable doubt. If he evaded the tax, that there was no
effort on his part of wilfully or knowingly evading the tax, he could not be
guilty, because it would be necessary for you to find that he wilfully and
knowingly attempted to evade this particular tax."

15

At another place in his charge, the judge said:

16

"The burden that is on the Government, gentlemen, is to prove that the

defendant owed an income tax for the year 1945, '46 and '47, and that income
tax must be shown from the evidence and beyond a reasonable doubt to be an
amount over and above the amount that was returned and on which a tax was
paid, and in addition thereto the Government must, before you can return a
verdict of guilty in this particular case, satisfy you from the evidence and
beyond a reasonable doubt that the defendant wilfully and knowingly attempted
to evade his income tax and payment thereof which he was due to the

Government under the income which he had made for that particular calendar
year, and for these three calendar years as charged in the three counts in the bill
of indictment. In that the crime is denounced by this statute which I have read
to you and which is from 145, subsection B, is of wilfully attempting to defeat
or evade the tax, and that is only complete when a taxpayer wilfully and
knowingly files a false and fraudulent return with intent to defeat or evade any
part of the tax due the United States. That is the crime that is denounced. I read
to you again: `This crime denounced by this statute of wilfully attempting to
defeat or evade the taxes is complete only when the taxpayer wilfully and
knowingly files a false and fraudulent return with intent to defeat or evade any
part of the tax due the United States'. And that must be found before you can
return a verdict of guilty from the evidence and beyond a reasonable doubt, and
that that burden is cast upon the Government."
17

At the conclusion of the charge, the judge asked whether either side desired
further instructions and said he would consider requests even though not in
writing. Counsel for defendant replied that there was no request for further
instruction on the part of defendant.

18

Defendant complains because of a statement made by the court to the jury

when it reported late on Friday evening of the trial that it had not reached an
agreement at that time. We have examined the statement carefully and find
nothing in it of which anyone could justly complain. The jury was placed in
charge of officers who were directed to care for them and look out for their
comfort and was told to give further consideration to the case the following
morning. There is nothing in what the court said from which it could be
inferred that he intended to hold the jury together for an undue length of time or
otherwise force an agreement.

19

We have examined the record and find that the trial was fairly conducted by the
experienced trial judge who presided. The issues involved were comparatively
simple issues of fact and the jury was correctly instructed as to the law
applicable in the premises. Defendant, who was represented by able counsel,
took the stand in his own behalf and was allowed to develop his defense fully.
The jury has found him guilty of the offense charged, and we find nothing in
the record which would justify us in disturbing the verdict.

20

Affirmed.