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United States v. Baird

decided: August 4, 1969.

UNITED STATES OF AMERICA, APPELLEE,
v.
EARL S. BAIRD, DEFENDANT-APPELLANT



Moore, Smith and Anderson, Circuit Judges.

Author: Anderson

ANDERSON, Circuit Judge:

On March 13, 1966 the appellant, Earl S. Baird, was charged in a five-count information with violations of 26 U.S.C. ยง 7203 for wilful failure to file income tax returns, within the required time, for the years 1959 to 1963, inclusive. The jury returned verdicts of guilty on all counts; and on November 15, 1968, he was sentenced to three months imprisonment on each count, the sentences to be served concurrently, and he was also fined $1,000 on each count. The appellant is presently enlarged on bail pending this appeal.

Baird did not dispute the allegation that he failed to file the returns. Rather, his defense at trial was based on (1) a denial that the failure was "wilful" and (2) a claim that, during the years in question, he lacked the capacity either to appreciate the wrongfulness of his conduct or to conform his conduct to the requirements of the law by reason of a mental disease or defect.

The Government's evidence showed that the appellant actively and successfully carried on his business during the years of his failure to file returns. From 1954 through 1963 he was a partner and floor broker with the New York City securities firm of Baird & Company. He generally received the second largest distributive share of partnership income, ranging from a low of $27,480.62 in 1957 to $86,646.53 in 1959. This income was supplemented by his trading in the market on his own account through which in 1961 he made as much at $60,668, giving him a gross income for that year of $121,943.58.

On the wilfulness issue, the defense sought to show that Baird was an ill man who innocently assumed that his tax returns were being prepared for him by someone else. Testimony was offered to show that the stock brokerage firm of Brady, Baird & Garvin of which the appellant had been a partner and floor broker on the American Stock Exchange from 1944 to 1954, made it a practice to have its auditor prepare the federal income tax returns of the partners. David G. Baird, senior partner of Baird & Company and older brother of appellant, Earl S. Baird, testified that he noticed that his brother's health was declining in the early 1950's and convinced the appellant to join Baird & Company in 1954 where he could be under David Baird's care. He said the appellant acted as a "special messenger" at the firm, and his work "did not require a great deal of imagination or freedom of action on his part." David Baird also testified that he observed a deterioration in appellant's physical condition and working habits in 1957, including severe headaches and loss of vision, as well as nervousness, irritability and uncertainty; and that in March, 1957, in the presence of appellant, he instructed William Brome, one of the partners in the firm, "* * * to relieve my brother of every possible detail, to take care of his taxes the same as he took care of mine * * * to take care and prepare his taxes as he prepared mine, to do everything that he could to relieve Earl of any detail work or responsibilities as far as humanly possible."

The defense also presented evidence to show that the appellant was hospitalized during July and August 1958, first at New York Eye and Ear Infirmary and then at St. Vincent's Hospital because of visual difficulties he was experiencing. On August 2, 1958, the appellant was discharged from St. Vincent's Hospital with a discharge diagnosis of optic neuritis. Dr. Mortimer R. Cholst, an ophthalmologist, testifying on the basis of his examination of the appellant in the fall of 1964 and the St. Vincent's Hospital and New York Eye and Ear Infirmary records, concluded that the appellant was suffering from a generalized, slow, progressive circulatory disease which began in 1957 and continued through 1964.

The defense relied primarily on two expert witnesses in its presentation of the criminal responsibility defense based on the standard enunciated in United States v. Freeman, 357 F.2d 606 (2 Cir. 1966). Dr. Peter G. Denker, a psychiatrist, gave his opinion, based on one examination which he made on October 26, 1964 (seven days after appellant filed eight delinquent tax returns, following an interrogation of Baird by the Internal Revenue Service), and which consisted of conversations with the appellant and his brother, David Baird, that the appellant had a "reactive depression."*fn1 In response to a long hypothetical question based upon the St. Vincent's Hospital and the New York Eye and Ear Infirmary records, plus an assumption of the facts claimed to have been proved by the defense case, Dr. Denker stated: "I think he was suffering from a combination of circulatory impairment in his brain with cerebral atrophy, reactive depression." He added:

"He could do messenger work. He could follow instructions, I presume, from whoever his superior or associates might be. But if it came to individual judgments, responsibilities, I think he would be making errors."

Dr. Denker's conclusion was that the appellant lacked substantial capacity to appreciate the wrongfulness of his conduct and to conform his conduct to the requirements of the income tax laws.

Dr. Denker was also permitted to testify to numerous out-of-court statements made by the appellant during the psychiatric examination. Although the truth or falsity of these self-serving, hearsay declarations was relevant but not generally admissible on the "wilfulness" issue, they were admitted under the exception to the hearsay rule that it was not for the truth of what the doctors said the appellant said or what Mr. David Baird told the doctors but as a description of the material on which the doctors based their opinions.*fn2 For example, Dr. Denker testified that the appellant "made no significant attempt to explain his lack of filing income tax returns, tending to shrug the question off, and saying, 'I took it for granted that all these were being taken care of.'"*fn3

This theory -- that the out-of-court statements were admitted only to establish the foundation for the expert's opinion, not for their truth or falsity -- makes the assumption, as a convenient legal fiction,*fn4 that the jury is able to ignore the fact that the expert's report of what the accused said and what David Baird said*fn5 actually put before the jurors the accused's own story in defense without his taking the witness stand.

The defense presented the opinions and conclusions of a second psychiatrist, Dr. Morris Herman, whose testimony also related to numerous self-serving out-of-court statements made by the appellant, which were admitted on the ground that they were part of the basis for Dr. Herman's opinion that the appellant was not criminally responsible.*fn6

At a pre-trial conference on September 16, 1968, two days before trial, Government counsel had informed the court that he had reason to believe that Dr. Denker would testify as a defense expert on the question of criminal responsibility. On the following day the Government moved to have the defendant psychiatrically examined by Dr. David Abrahamsen, an alienist, to determine appellant's criminal responsibility during the period 1956 to 1964. Defense counsel represented that he did not at that time know whether or not there would be an insanity defense and opposed the application as premature. The court below ruled: "In the face of a statement by respondent counsel that he himself does not know now whether on not insanity will be raised as a defense, I think it is far more prudent to deny your application."

On the third day of trial without any prior notice by defense counsel, Dr. Denker was called to testify on the criminal responsibility issue, as described above. At the close of Dr. Denker's direct examination, the Government renewed its motion to have appellant examined by Dr. Abrahamsen. Over defense counsel's objection, the application was granted.

The trial court also ordered the appellant "to cooperate fully with the examining psychiatrist and to answer each and every question put to him by the psychiatrist," adding "there is no privilege on the part of this defendant to decline to answer any question put to him by this examining psychiatrist," but Judge Wyatt was most emphatic in stating that he would limit the Government psychiatrist's testimony to the issue of criminal responsibility and would not permit the expert to repeat anything said to him by the defendant which bore on the issue of the defendant's guilt or innocence of the offenses charged. He said to counsel:

"Failure to file the tax returns when required is conceded and is not at issue. The issue as to guilt or innocence, aside from that of mental disease or defect, is solely whether the failure to file was wilful, that is, a conscious, deliberate and intentional failure, as opposed to an unconscious, inadvertent, or negligence [sic] failure.

"If any question is put to the doctor by the government as to what the defendant told the doctor and if an objection for the defendant is made to such a question, I will sustain the objection if the question relates to whether defendant's failure to file was wilful or not, and I will overrule the objection if the question does not relate to this issue. Drawing the line indicated may be extremely difficult, but I will attempt to do it."

Like Doctors Denker and Herman, Dr. Abrahamsen testified to statements made by the appellant during the psychiatric interview as the basis for his opinion that appellant was not suffering from a mental disease or defect.*fn7 But the trial judge was quick to prevent any testimony by Dr. Abrahamsen which directly concerned appellant's income taxes, even though both defense psychiatrists had been permitted to bolster the defense version of what had occurred. The following exchange took place:

"He [appellant] mentioned his tax difficulties about which he talked but I don't know whether I can say anything about that there.

"The Court: Don't tell us anything, Doctor, that he may have told you about his failure to file a tax return, just don't tell us anything about ...


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