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United States v. Aaron

decided.: June 20, 1951.

UNITED STATES
v.
AARON ET AL.



Author: Chase

Before SWAN, CHASE and FRANK, Circuit Judges.

CHASE, Circuit Judge.

During the years 1941 and 1942, appellant Aaron and his stepson, appellant Freidus, were in partnership with their wives doing business in the city of New York under the firm name of Aaron Machinery Company. The partnership business, which was conducted by the appellants, was that of buying and selling second-hand machinery which was in great demand at that time, and the purchases and sales were extensive. Adequate books of account were kept but it was proved, without dispute, that not all of the receipts from sales were entered in them. Ordinarily, consecutively numbered invoices were sent to purchasers and the payments received entered in the books to be used in the computation of taxes due the government. But whenever the appellants saw fit to depart from this practice an unnumbered invoice was used to cover a sale, and when this was done the payments received were not entered upon the partnership books or deposited in the active banking account of the partnership. Instead, they were deposited in three other banks in each of which an account was carried in the name of the partnership. Records of these accounts were in charge of an employee maintained at the address where the partnership had formerly had its principal office and place of business, but no record of them was kept at the current principal office of the partnership. It was shown that during the two years above mentioned sales approximating $282,942 were not carried into the partnership books but were by the appellants diverted to these secret bank accounts and eventually withdrawn by the partners untaxed. By so doing the appellants, so the government contended, attempted to defeat and evade taxes due the United States from themselves and their wives.

The defense was that the distribution of these secret deposits to the partners resulted in no taxable income because the proceeds were used for deductible business expenses of two kinds.

One was the repayment to the partners of $105,000 which they had advanced to the partnership and for which it was indebted to them at the beginning of the two-year period here involved; the other was the purchase of machinery which could be obtained only for cash. In further explanation of this method of conducting part of the business the appellants, both of whom testified in their defense, undertook to prove that they so acted under the advice of their accountant to avoid tax problems which might otherwise arise, though the accountant, called as a witness for the government, denied that.

The sufficiency of the evidence to support the verdict is unquestioned, but the appellants rely for reversal upon what they say are three trial errors. The one most earnestly pressed is the misconduct of the trial judge, and the others are an attempt by the prosecutor to introduce an inadmissible exhibit during the cross-examination of a witness for the defense and the reception of the testimony of a witness for the government as to something which could not have been within her actual knowledge.

The conduct of the judge which the appellants insist is reversible error was what is said to have been his unjustifiable interruption of counsel's examination of witnesses and his interrogation of them too frequently and at too great length, the greatest strees being placed upon his so while each of the appellants was testifying. This, coupled with his display of skepticism as to their veracity and on one occasion his actual expression of his disbelief of the testimony of a defense witness, is said to add up to reversible error.

It would serve no purpose now to repeat in substance the numerous admonitions which appellate judges have written for the guidance of trial judges on this subject. If reference to some of them isn't enough it is difficult to comprehend how a multiplication of words in like vein would help. See United States v. Marzano, 2 Cir., 149 F.2d 923, 926; United States v. Minuse, 2 Cir., 114 F.2d 36; Gomila v. United States, 5 Cir., 146 F.2d 372, 374; Williams v. United States, 9 Cir., 93 F.2d 685; Adler v. United States, 5 Cir., 182 F. 464. As these cases well show, there have been times when judges have so overstepped the bounds of judicial propriety that reversals on that account have followed conviction. On the other hand it seems equally needless now to deal, except by reference to some of the cases, with the right, indeed the duty in the exercise of a wise and just discretion, of trial judges to act in the interrogation of witnesses and otherwise to the end that trials will not be mere contests in forensic skill between opposing attorneys, but that the truth shall emerge so far as possible and be given its full legal significance in the judgment. Quercia v. United States, 289 U.S. 466, 53 S. Ct. 698, 77 L. Ed. 1321; Glasser v. United States, 315 U.S. 60, 62 S. Ct. 457, 86 L. Ed. 680; Simon v. United States, 4 Cir., 123 F.2d 80, 83; Kettenbach v. United States, 9 Cir., 202 F. 377, 385. Nor is an apparently needlessly great number of questions asked by the judge error per se. Each instance of the questioning on review of the conduct of the trial judge will present its own problems, and in their solution the overriding consideration should be whether the judge saw to it that in the end the jury had before it all, and only, the admissible evidence produced, and that it was given to understand that it was free to find the facts as in its collective judgment the evidence showed them to be.

Judged by that standard we think the trial judge did not fall into error. Much of the fault found with him concerns what did not occur within the presence or knowledge of the jury. That which did needs no additional comment except to note that after the questioning by the court of one of the appellants' witnesses, Rosen, the judge remarked "I do not believe this testimony at all." Thereupon the appellants' trial attorney stepped to the bench and moved for a mistrial, though not within the hearing of the jury. This motion was denied as were other motions, each made outside the hearing of the jury, whereby the issue of the conduct of the judge was raised. Appellants' attorneys were throughout the trial understandably reluctant to object before the jury. When this motion was made the judge was not requested to, and did not, tell the jury at once that his opinion so expressed should be disregarded. But in his charge, which was, however, not delivered until seventeen days later, he did do so and advised the jury as follows:

"In our system of jurisprudence, there is a complete line of demarkation between the duties of the judge, on the one hand, and those of the jury, on the other. It is my function to set forth the rules of law which govern the case. * * *

"On the other hand, you are the sole and exclusive judges of the facts and the exclusive judges of the credibility of the witnesses.

"I will refer later to the meaning of 'credibility of witnesses.' If, during the course of the trial, I made any statements that may have indicated to you that I have an opinion as to the ultimate facts in this case, you are to disregard them. They are not binding on you, because, as I have stated, you are the exclusive judges of the facts and the credibility of the witnesses.

"On one occasion I did make a comment with respect to the testimony of the witness Louis Rosen. You are to disregard that comment made by me because, as I have indicated to you, you members of the jury are the exclusive judges of the facts and are the sole judges of the credibility of the witnesses who have appeared before you and, in the last analysis, the responsibility is yours to decide those facts and to render your verdict accordingly.

"During the trial I have addressed questions to some of the witnesses and have made statements to counsel. Such questions as were asked by me were for the purpose of eliciting facts to aid you in your deliberations. If any of you have formed any impression that I accentuated certain facts elicited, you must put that completely out of your minds. All facts were elicited for the purpose only of aiding you in your deliberations and were ...


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