Brownson v. United States

• Decision Date: 29 June 1929
• Docket Number: No. 8202.,8202.
• Citation: 32 F.2d 844
• Parties: BROWNSON v. UNITED STATES.
• Court: U.S. Court of Appeals — Eighth Circuit

32 F.2d 844 (1929)

BROWNSON v. UNITED STATES.

No. 8202.

Circuit Court of Appeals, Eighth Circuit.

April 24, 1929.

Rehearing Denied June 29, 1929.

Leland Hazard, of Kansas City, Mo. (David R. Derge and P. E. Reeder, both of Kansas City, Mo., R. H. Overbaugh, of New York City, and Winger, Reeder, Barker, Gumbiner & Hazard, of Kansas City, Mo., on the brief), for appellant.

William L. Vandeventer, Asst. U. S. Atty., of Kansas City, Mo., and John R. Wheeler, Sp. Atty., Bureau of Internal Revenue, of Washington, D. C. (Roscoe C. Patterson, U. S. Atty., of Kansas City, Mo., on the brief), for the United States.

Before VAN VALKENBURGH and BOOTH, Circuit Judges, and MUNGER, District Judge.

BOOTH, Circuit Judge.

The facts involved in the present appeal are few and undisputed. During an investigation and hearing being held in Kansas City, Mo., in January, 1928, by the Commissioner of Internal Revenue, through his agent, relative to the tax liability of Frank De Mayo and Bessie De Mayo, his wife, for the years 1924-1926 inclusive, a summons signed by said agent was served upon appellant requiring him to appear and testify in said matter, and to bring with him any and all books, papers, and documents in his possession showing transactions for, with, or on behalf of said Frank De Mayo and Bessie De Mayo, and especially any papers, receipts, or documents pertaining to the receipt by telegraph of $500 by Frank De Mayo from Denver, Colo., on or about February 16, 1926. Appellant was the city superintendent of the Western Union Telegraph Company at Kansas City, Mo. He appeared at the time and place specified, but did not produce the documents requested. This failure to obey the summons was thereafter reported to the United States District Court for the Western District of Missouri by the United States District Attorney in a petition which prayed that a writ of attachment be issued to bring the appellant before the court for such action as might be deemed proper. An order of attachment was issued. Appellant appeared before the court, a hearing was had, and an order was made requiring appellant to appear before the Internal Revenue Agent and to produce the documents requested. Owing to certain inadvertent omissions in the order, a later order was issued February 23, 1928. This order, after reciting the facts, contained the following: "It is therefore, ordered by the Court that the said G. W. Brownson forthwith appear before the said Harry D. Beach and produce all records of the Western Union Telegraph Company showing the receipt of Five Hundred ($500.00) Dollars by Frank De Mayo, which was wired to him by way of the Western Union Telegraph Company from Denver, Colorado, on or about February 16, 1926, and that he stand committed in the common jail of Jackson County, Missouri, at Kansas City, unless and until he complies with the foregoing order of this court, to which order and commitment the said G. W. Brownson excepts." The present appeal was taken from this order.

At the outset the question of jurisdiction, though not raised by counsel, yet suggests itself by reason of the form of the order appealed from. Viewed as an order of commitment for contempt its finality may well be doubted. Its character might be called conditional, alternative, or anticipatory nisi. Such orders are generally held not appealable. 13 C. J. § 156, pp. 99, 100; Jones' Adm'r v. Craig, 127 U. S. 213, 8 S. Ct. 1175, 32 L. Ed. 147; City of Paducah v. East Tenn., etc., Co., 229 U. S. 476, 33 S. Ct. 816, 57 L. Ed. 1286. And this is especially true if the order involves possible punishment for contempt. Semrow v. Semrow, 26 Minn. 9, 46 N. W. 446; Brinkley v. Brinkley, 47 N. Y. 40; Sherwood v. Sherwood, 32 Conn. 1; Cherry v. Cherry, 253 Mass. 172, 148 N. E. 570; Eure v. Tayler, 126 Miss. 155, 88 So. 514.

The order under discussion is, however, dual in its nature. It first unconditionally orders the witness to appear and testify and to produce certain papers; it secondly commits the witness to jail conditionally. We think that for the purpose of determining appealability the first part of the order, which is complete in itself, should alone be considered. That such an order is appealable we think is established. Perlman v. United States, 247 U. S. 7, 38 S. Ct. 417, 62 L. Ed. 950; Ellis v. Interstate Commerce Commission, 237 U. S. 434, 442, 35 S. Ct. 645 (59 L. Ed. 1036); United States v. First National Bank of Mobile (D. C.) 295 F. 142, affirmed 267 U. S. 576, 45 S. Ct. 231, 69 L. Ed. 796. In the case last cited the Supreme Court entertained an appeal from an order of the District Court directing a witness to appear and testify and to produce books and papers in a case very similar to the case at bar. The affirmance of the order necessarily involved a holding that the order was appealable.

We turn to the merits. The statutory provisions under which authority is claimed by appellee for the proceedings in the present case are as follows:

Section 1247, title 26, U. S. C. (26 USCA § 1247). "Examination of books, papers, and records; taking testimony. — The Commissioner of Internal Revenue, for the purpose of ascertaining the correctness of any return or for the purpose of making a return where none has been made is hereby authorized, by any revenue agent or inspector designated by him for that purpose, to examine any books, papers, records, or memoranda bearing upon the matters required to be included in the return, and may require the attendance of the person rendering the return or of any officer or employee of such person, or the attendance of any other person having knowledge in the premises, and may take his testimony with reference to the matter required by law to be included in such return, with power to administer oaths to such person or persons."

This provision first appeared in section 1305 of the Revenue Act of 1918 (40 Stat. 1142). It was re-enacted as section 1308 in the Revenue Act of 1921 (42 Stat. 310), as section 1004 of the Revenue Act of 1924 (43 Stat. 340), as section 1104 of the Revenue Act of 1926 (44 Stat. 113), and again as section 618 of the Revenue Act of 1928 (45 Stat. 878).

Section 2617, 26 USCA. "Jurisdiction of Courts — (a) If any person is summoned under the internal-revenue laws to appear, to testify, or to produce books, papers, or other data, the district court of the United States for the district in which such person resides shall have jurisdiction by appropriate process to compel such attendance, testimony, or production of books, papers, or other data."

The equivalent of this provision appeared in section 1318 of the Revenue Act of 1918 (40 Stat. 1148). It again appeared in section 1310 of the Revenue Act of 1921 (42 Stat. 310); and again as section 1025(a) in the Revenue Act of 1924 (43 Stat. 348). It also appears as section 1122(a) in the Revenue Act of 1926 (44 Stat. 121); and as section 617(a) in the Revenue Act of 1928 (45 Stat. 877).

Other relevant provisions of the statutes will be referred to later.

It is the contention of appellant that the statutes above quoted do not expressly authorize the Commissioner of Internal Revenue to require the production of the books and papers of any person except the one whose tax liability is being investigated; that if Congress had intended to give the Commissioner such authority it would have used explicit language to that effect. It is contended further that where such authority has been given as to other cognate matters, explicit language has been used. Section 94, title 26, U. S. C. (26 USCA § 94), is cited. That section contains the following provision:

"And if any person, on being notified or required as aforesaid, shall refuse or neglect to render such list or return within the time required as aforesaid, or whenever any person who is required to deliver a monthly or other return of objects subject to tax fails to do so at the time required, or delivers any return which, in the opinion of the collector, is erroneous, false, or fraudulent, or contains any undervaluation or understatement, or refuses to allow any regularly authorized Government officer to examine the books of such person, firm, or corporation, it shall be lawful for the collector to summon such person, or any other person having possession, custody, or care of books of account containing entries relating to the business of such person or any other person he may deem proper, to appear before him and produce such books at a time and place named in the summons, and to give testimony or answer interrogatories, under oath, respecting any objects or income liable to tax or the returns thereof."

That provision was originally contained in section 3173, Revised Statutes, and related to matters somewhat different from that now under discussion. However, the provision has latterly been expressly made applicable to matters such as the present one.

By section 1244, title 26, U. S. C. (26 USCA § 1244), it is provided: "All administrative, special, or stamp provisions of law, including the law relating to the assessment of taxes, so far as applicable, are hereby extended to and made a part of this Act." This same provision appears in the Revenue Acts of 1918, § 1305 (40 Stat. 1142); 1921, § 1300 (42 Stat. 308); 1924, § 1000 (43 Stat. 339); and 1926, § 1100 (44 Stat. 111).

It is further contended by appellant that section 94, title 26, U. S. C. (R. S. § 3173), above quoted, does not itself authorize the government official, in investigating the return of a specified person, to require a third person to produce his own books. We are unable to agree with these several contentions of counsel for appellant.

The history of the law of evidence lends no support to such contentions. For more than 300 years it has been a maxim that the public has a right to every man's evidence. Privileges of exemption are exceptions to the rule. Wigmore on Evidence, §§ 2190-2193. See Blair v. United States, 250 U. S. 273, 39 S....