Benetti v. United States

• Citation: 97 F.2d 263
• Decision Date: 26 May 1938
• Docket Number: No. 8549.,8549.
• Parties: BENETTI v. UNITED STATES.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

97 F.2d 263 (1938)

BENETTI v. UNITED STATES.

No. 8549.

Circuit Court of Appeals, Ninth Circuit.

May 26, 1938.

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Platt & Sinai, of Reno, Nev., for appellant.

James W. Morris, Asst. Atty. Gen., Sewall Key, William H. Boyd, M. Leo Looney, Jr., and Earl C. Crouter, Sp. Assts. to Atty. Gen., E. P. Carville, U. S. Atty., of Reno, Nev., and Thomas O. Craven, of Carson City, Nev.

Before GARRECHT, HANEY, and STEPHENS, Circuit Judges.

GARRECHT, Circuit Judge.

Appellant was indicted on three counts for unlawfully, wilfully, knowingly and feloniously attempting to defeat and evade a large part of the tax due upon his net income for each of the calendar years 1929, 1930 and 1931, in violation of Section 146 of the Revenue Act of 1928, 45 Stat. 791, 835 26 U.S.C.A. § 145.

The evidence shows that sometime in the summer of 1933, two agents of the Treasury Department were assigned to investigate and verify the appellant's income tax returns in order to determine his true income tax liability. The agents had reliable information that appellant was engaged in the illicit manufacture and sale of liquor and had made large sums of money therefrom. To determine if this information was correct and with the purpose of determining appellant's income, the agents made examination of all available records. They also investigated his bank accounts and the county records to check mortgages appearing in the name of appellant. Among the records examined was a copy of an indictment for a violation of the National Prohibition Act, 27 U.S.C.A. § 1 et seq., together with an inventory of liquor which had been seized by the Government. After these preliminary investigations, the agents visited the appellant at his home in Sparks, Nevada, and told him that they were there to examine him in relation to his tax returns and made request for information to assist them in determining his true income.

Appellant expressed a willingness to co-operate; he told the agents that he had kept some records, but that after he had made out his income tax returns through Deputy Revenue Collector Cooper, these records had been destroyed because he thought it was not necessary to retain them.

Both appellant and his wife made statements under oath before the revenue agents. After they were sworn and before they answered any questions, the revenue agent made the following statement to appellant:

"At this time, Mr. Benetti, it becomes my duty to advise you that under the Constitution you are not required to incriminate yourself, and to inform you that anything you say or documents you produce at this hearing can be used against you in any proceeding which may hereafter be undertaken by the Government. Do you fully understand?"

Mr. Benetti answered: "Yes."

Further, the Revenue Agent stated: "It is the understanding that your answers to the questions propounded to you will be entirely voluntarily, is that correct?"

Mr. Benetti again answered: "Yes."

In the course of this examination appellant admitted that he had been unlawfully engaged in the manufacture and sale of liquor from which he had made large profits. To reduce his income tax thereon he furnished statements of his expenses in connection with that business and of his sales. In the course of his deposition he also stated that his "still" had been seized by the Government, together with a considerable quantity of liquor. At the end of the deposition and just above his signature where appellant subscribed to the oath appears the following: "I have carefully read the foregoing transcript of my testimony, pages one to thirty three inclusive, and state that it is a true and correct transcript and that the answers to the questions propounded therein are free and voluntary on my part."

The government agents testified that from the various sources of information they found that for the calendar year 1929, appellant had an unreported net income of $88,202.28; for the calendar year 1930, an unreported net income of $41,596.88; for the calendar year 1931, an unreported net income of $21,542.91, and that no tax had ever been paid on any of these amounts.

In addition to his admission that he had failed to report his true income in his returns for the years in question, he filed a protest to the report of the agents in which he admitted income far greater than he had reported.

At the trial appellant took the stand on his own behalf and when asked to explain this great difference between the net income he had reported, and the net income he actually had earned, he testified that in making out his income tax returns for the years in question, he had been assisted by Mr. E. J. Cooper, a Deputy Collector of Internal Revenue, who had advised appellant that he need not make any return on the income derived from an unlawful business.

The jury returned a verdict of guilty as charged on all of the counts, judgment and sentence were pronounced by the court, from which this appeal.

Although most of the argument on the appeal is devoted to the discussion of the legal implications and effect of an alleged unlawful search and seizure which occurred in connection with a violation of the National Prohibition Act by appellant, no evidence of any proceedings in that matter was offered in evidence, and none appears in the record. There is nothing here but the mere statements of counsel.

In this connection appellant assigns error based upon the failure of the court to instruct the jury to return a verdict of acquittal upon the ground that the evidence disclosed that defendant's constitutional rights had been violated in having been forced to incriminate himself. The summary of this assignment as printed in the brief is as follows:

"On August 3, 1932, the above named defendant, in a different and separate criminal prosecution by the Government, was indicted on three counts for an alleged violation of Sec. 37, F.C.C. 18 U.S.C.A. § 88, of the National Prohibition Act. The indictment was returned in the same Court as the instant case and all proceedings therein were heard and determined by the same presiding United States District Judge. The indictment was quashed, defendant dismissed, the evidence suppressed and the property seized and ordered returned to the defendant, through appropriate motions and petitions made therefor, upon the ground that the search of defendant's premises without a search warrant was unlawful and `that it was clear to the Court that the Constitutional rights of the defendant, Angelo Benetti, were invaded.'"

On the grounds stated and before the Government had finished presenting its case, a motion was made for a directed verdict of acquittal. It was renewed when the government closed its case; at that time the court announced that the motion would be denied for the present and that it would be given further consideration. Appellant then took the stand and evidence was presented on his behalf. The motion was not renewed at the end of all the evidence. His failure to renew the motion for an instructed verdict would seem to bring the case within the rule that, having proceeded with the introduction of evidence, prior motions were waived and could only have been saved by renewing the application for a directed verdict at the end of all the testimony, which was not done. Goldberg v. United States, 5 Cir., 297 F. 98; Sacramento Suburban Fruit Lands Co. v. Melin, 9 Cir., 36 F. 2d 907; McAdams v. United States, 8 Cir., 74 F.2d 37; Mutual Life Ins. Co. of New York v. Wells Fargo Bank & Union Trust Co., 9 Cir., 86 F.2d 585. Further, there is no evidence presented in this case that in some other case against appellant, there had occurred an unlawful search and seizure of property, or that this evidence had been suppressed and ordered returned; all this rests entirely on the mere statements of counsel.

It is a mistake to assume that the court must take judicial notice of these matters even if they could be discovered among the records of the District Court. In any event there is no proof of any of these facts in the record here before us. A District Court is not required to take judicial notice of prior litigation in the same court and generally proof thereof must be produced. Morse v. Lewis, 4 Cir., 54 F.2d 1027, 1029. To prepare a record upon which a review can be had, concerning matters involved in some prior litigation, it is necessary that evidence of the material parts of proceedings in the former case be offered and embodied therein. This court heretofore has held that it will not take judicial knowledge of prior litigation unless proof thereof appears in the record. National Surety Co. v. United States, 9 Cir., 29 F.2d 92, 97.

Appellant's position here seems to be to assume that in some proceeding which could be found in the files of the trial court an unlawful search and seizure of defendant's property had taken place; that said files, which were not produced, would disclose that upon the trial of appellant on a charge of violating the National Prohibition Act in which this evidence, unlawfully seized, was offered, the trial court on being advised had suppressed the same and the prosecution had failed; that because of such proceedings, the appellant became immune from ever being proceeded against for any violation of law whatever which was in any manner connected with or grew out of, any unlawful dealings in liquor, and that in this case particularly he could not be prosecuted for unlawfully evading payment of the tax upon his income which he derived from the illegal sale of liquor.

As supporting his position, appellant cites Counselman v. Hitchcock, 142 U.S. 547, 12 S.Ct. 195, 35 L.Ed. 1110; Silverthorne Lumber Co. v. United States, 251 U.S. 385, 40 S.Ct. 182, 64 L.Ed. 319, 24 A. L.R. 1426; Gouled v. United States, 255 U.S. 298, 41 S.Ct. 261, 65 L.Ed. 647. These authorities do not support any such extreme contention as is here made. In these cases it was sought to make use...