Blodgett v. United States

• Decision Date: 14 April 1947
• Docket Number: No. 13345.,13345.
• Parties: BLODGETT v. UNITED STATES.
• Court: U.S. Court of Appeals — Eighth Circuit

161 F.2d 47 (1947)

BLODGETT v. UNITED STATES.

No. 13345.

Circuit Court of Appeals, Eighth Circuit.

April 14, 1947.

COPYRIGHT MATERIAL OMITTED

Richard P. Shanahan, of Kansas City, Mo., for appellant.

Sam M. Wear, U. S. Atty., and Earl A. Grimes, Asst. U. S. Atty., both of Kansas City, Mo., and David A. Thompson, Asst. U. S. Atty., of Richmond, Mo., for appellee.

Before STONE, THOMAS, and JOHNSEN, Circuit Judges.

STONE, Circuit Judge.

This is an appeal from conviction and sentence of a bankrupt on each of two counts of an indictment. The first count charged a false schedule of property because of omission therefrom of four Vehling banquet cabinets and of three parcels of real estate designated as "The Home Wood Terrace subdivision," "the St. Clair County, Missouri property," and "the Hickory County, Missouri Property." The second count charged fraudulent concealment of this same omitted property and also of "one 1938 Oldsmobile Coach automobile." The sentences were identical and to be served concurrently.

The broad defensive position of appellant at the trial was that he owned none of this property at the times covered in the indictment. The errors urged here have to do with the admission or the exclusion of evidence, a portion of the charge to the jury, abuse of discretion in denial of new trial, and insufficiency of the evidence to sustain conviction. The complaints as to admission of evidence concern the Homewood Terrace property and certain deeds to other lands not covered by the indictment. The exclusion of evidence concerns a judgment in the so-called Clark suit which had to do with the Hickory County property. The point as to the charge to the jury relates to the Oldsmobile automobile.

Home Wood Terrace. As described in the indictment, this property was a "subdivision of 22.5 acres situated in Buchanan County, Missouri, of the value of $3000.00, legally described as follows: Home Wood Terrace, a subdivision of 22.5 acres in the Southwest (¼) quarter of Section eleven (11), Township fifty-seven (57), N., Range thirty-five (35), W. Buchanan County, Missouri, Except Lot 13 in Block 6, and Lot 2 in Block 8." The evidence showed warranty deeds conveying this property to appellant "and Mae E. Blodgett, his wife," dated June 14, 1928; from them to B. T. Joyce, dated September 15, 1930; and B. T. Joyce to M. E. Nelson and Claudia V. Nelson his wife, dated January 4, 1932. It was the contention of the Government that Joyce and the Nelsons were not bona fide grantees but were figureheads holding the property for appellant.

After considerable evidence seeking to establish this contention had been introduced by the Government, objection for appellant was made that the property was at no time owned by appellant but was owned by him and his wife "as an estate by the entirety" and, as such, was not subject to the debts of appellant alone and, therefore, was not an asset required to be scheduled in the bankruptcy. This objection was overruled and considerable evidence concerning this property was subsequently introduced. At the close of the Government testimony, appellant was denied an instruction requested on the same grounds.

At the close of all evidence and just before arguments, the Court stated:

"Gentlemen of the Jury, the matter the Court will discuss with you now will be gone into later by the Court in the Court's Charge to you after the arguments, but the evidence which has been submitted with respect to the transfers of Home Wood Terrace, that is, the property that is located on 38th and Mitchell Avenue, or on the Belt Highway, will be withdrawn from the consideration of the jury, so that in arriving at any verdict you may arrive at, you will not take into consideration any transfers with respect to that property and the reason is that the property was originally taken in the name of Mr. and Mrs. Blodgett — it was an estate by the entirety and the defendant had the right under the law, so far as this proceeding is concerned, to do whatever he pleased with that property and it was not subject to any debts of the defendant Blodgett, so during the arguments of counsel you may have that question in mind but the Court will go into it later in the Charge to the Jury."

In his charge, the Court stated:

"The Court stated to you before the arguments began that in arriving at your verdict in this case you would not take into consideration the evidence with respect to Home Wood Terrace, the property located in Buchanan County. It is the law, Gentlemen, that where a man and wife take title in their joint names that property cannot be subjected to the debts of either of the parties. It might be subjected to the debts of both of them, but not to the debts of one of them. So in this case, this property having been taken in the name of the defendant and his wife in 1928, they had the legal right to transfer it, to give it away, or to do whatever they chose to do with it so far as the debts and obligations of this defendant are concerned. So under the circumstances, this transfer would not render the defendant guilty of any crime."

In connection with the charge, the Court gave a requested instruction as follows:

"The defendant cannot be charged with making a false oath concerning or with concealing from his creditors the real estate described in the indictment as Home Wood Terrace. Any act or thing done by the defendant and his wife in conveying said Homewood Terrace cannot be considered by the jury as any evidence of guilt upon the part of the defendant in connection with any of the charges in either count of the indictment."

Appellant contends here that he never had any interest in this land except under the deed from Adams which conveyed it to him and his wife in entirety; that, under the laws of Missouri, an estate in entirety is not subject to individual debts and, therefore, could not be an asset of the bankruptcy estate; and that the action of the Court in withdrawing the evidence as to this land could not and did not remove the prejudice caused by the introduction of the evidence.

Appellee contends that the evidence was admissible and should not have been withdrawn; that, at most, the situation was merely that of an unsuccessful attempt to establish one of the charges in an indictment; that, if error, it is not open here because appellant took no exception or objection to the method of the Court in withdrawing the evidence; that, if error, the action of the Court in withdrawing the matter from the jury cured the error.

There is no dispute that the title acquired from Adams vested an entirety in appellant and his wife and that the land so held was not an asset in this bankruptcy.¹

If the subsequent deeds by appellant and wife to Joyce and by Joyce to the Nelsons were bona fide, there would, of course, be no title of any kind in appellant to pass into the bankrupt estate. If these deeds were fraudulent and mere shams, the usual result would be to leave the land subject to the joint but not several debts of appellant and his wife as the real owners by the entirety.

Appellee recognizes that these results would remove the land from necessity of scheduling in this bankruptcy. Its contention that the evidence was admissible is based on the position that appellant and his wife conveyed to Joyce with the purpose of transferring title to Joyce, as a figurehead, for appellant alone and that the deed from Joyce to the Nelsons was but another similar step. Appellee indicates evidence which it deems supports its contention. Because there are other reasons for sustaining the action of the trial court as to this issue, we think it unnecessary to determine this contention of appellee. We may state, however, that we have examined this matter far enough to observe that this contention is quite serious.

Whether or not this evidence was admissible in proof of the indictment charges that this property had been improperly omitted from the schedule and had been concealed, the evidence would have been admissible for another and more narrow purpose. As to this property, the evidence was sufficient for submission on the point of a fraudulent purpose to defeat creditors by conveyances to figureheads. The circumstance that the title in entirety made such conveyances unnecessary to protect this property against creditors of appellant is not material as to this purpose since it is quite evident that appellant had no knowledge of the protection afforded by this kind of title. The crux of the fact controversy as to each of the other four properties covered by the indictment was the intention with which the several conveyances or encumbrances there involved had been made. The effort of the Government was, in each instance, to show an intention to defeat creditors thereby. Evidence as to a like wrongful intention as to this property would have been pertinent had the Court properly limited its effect to its bearing on purpose or intent. The trial court has "a measure of discretion in allowing testimony which discloses the purpose, knowledge, or design of a particular person." Glasser v. United States, 315 U.S. 60, 81, 62 S.Ct. 457, 470, 86 L.Ed. 680.² This rule has been applied in cases of prosecution for fraud by bankrupts in connection with their property.³ It would have been no abuse of discretion had the trial court admitted this evidence under a clear limitation of its effect to the purpose or intent which appellant had as to conveyances involving the other items in the indictment. By the entire withdrawal of this evidence by the Court, appellant secured more than his right. We do not state this particular matter as a ground for sustaining the action of the Court but it has direct bearing upon the propriety of the action the Court did take.

As hereinbefore quoted, the action taken by the Court was to direct the jury, before argument, that the Home Wood Terrace property was withdrawn from consideration; the charge was to the...