Blim v. United States

• Decision Date: 26 February 1934
• Docket Number: No. 5083.,5083.
• Parties: BLIM v. UNITED STATES.
• Court: U.S. Court of Appeals — Seventh Circuit

68 F.2d 484 (1934)

BLIM v. UNITED STATES.

No. 5083.

Circuit Court of Appeals, Seventh Circuit.

January 20, 1934.

Rehearing Denied February 26, 1934.

Edward J. Hess and John Elliott Byrne, both of Chicago, Ill., for appellant.

Leslie A. Salter, of Chicago, Ill., for the United States.

Before ALSCHULER, SPARKS, and FITZHENRY, Circuit Judges.

FITZHENRY, Circuit Judge.

This is an appeal from a judgment and sentence of the District Court, on October 3, 1933, for contempt of court, upon a finding that appellant, while a witness before the grand jury, had failed to testify truthfully, and by said failure had obstructed and was obstructing justice in the court. Appellant was sentenced to imprisonment in the county jail for a period of three months, with the privilege of purging himself of said contempt within ten days by fully, freely, and truthfully testifying.

On July 31, 1933, the grand jury for the Northern district of Illinois, Eastern division, was investigating "whether one William H. Malone had committed certain violations of the Internal Revenue and Income Tax Laws of the United States within three years last past," etc. Appellant was called as a witness and testified fully. The grand jury for the July term did not complete its investigation and was ordered by the court to continue. On September 25th the grand jury returned a presentment to the court, charging "that the answers which said witness made to the questions propounded to him were evasive, false and misleading, with a deliberate and wilful intent to withhold the true facts within his knowledge and to hinder, block and delay the inquiry of this grand jury and to obstruct the due process of the Federal court and the administration of justice, as will more fully appear from the transcript of his testimony before this grand jury, which is hereto attached, made a part hereof and marked Exhibit `A.'"

The witness was called before the court on September 26, 1933, and ordered to appear again before the grand jury and make full, true, and complete answers to the matters concerning which he had heretofore been questioned, and particularly to make full, true, and complete answers to the following questions:

"(1) With respect to a fee check from Huff & Cook for $12,500 on October 18, 1927:

"Now what was the purpose of drawing out $7,500 in cash, Mr. Blim?

"And what did you do with it?

"You deny that you turned that $7,500 over to Mr. Malone?"

Appellant, in obedience to the order of the court, again appeared before the grand jury and gave practically the same testimony he gave on July 31st, when he told the grand jury that he did withdraw from his bank account $7,500, but did not pay it to Malone. He again explained what he had done with the $7,500 and why he withdrew it. He was meticulously cross-examined with reference to his use of the currency. The grand jury concluded that the answers were false, and returned a second presentment on September 27th, to which was attached Exhibit A, being a transcript of his evidence given in compliance with the order of the court.

Appellant was called before the court and required to plead. He pleaded not guilty to the second presentment, but, undoubtedly upon the theory that he had complied with the order of the court made upon its consideration of the first presentment, he stood mute as to it, and the court entered a plea of not guilty for him. Then, on motion of appellant, the hearing was continued until the next day. The evidence contained in the two Exhibits A was to the following effect:

William H. Malone owned or controlled the American-Mexican Refining Company, a corporation dealing in fuel and road oils, etc. For a period of eight years prior to May 1, 1927, appellant had been in his employ and acted as secretary-treasurer of the corporation, at a salary of $6,500 per annum. Malone was a member of the state board of equalization, and also of its successor, the Illinois tax commission. In addition to his services as secretary-treasurer of the corporation, Blim advised Malone on many legal matters which came up, on questions involving assessments, and acted in the capacity of a confidential secretary. Blim checked assessments and did the general overseeing of agents, clerks, and books of both the state board of equalization and the tax commission, so that none of the assessments would be changed. There was a disposition on the part of some of the members of the board, as well as, later, some of the members of the commission, to kill assessments as favors to personal friends and political associates. Files had been found missing, etc. Appellant established a permanent record of all assessments and kept a personal record, for Malone, of everything the commission did, so there would be no tendency to tamper with the records. He received no salary for that work, as he considered his salary from the corporation covered all his time.

Appellant is a lawyer. He was permitted to and did practice some during his employment by Malone. He had nothing to do with Malone's financial affairs, except in connection with real estate transactions at times. On May 1, 1927, he left Malone's employ at the instance of the law firm of Huff & Cook and re-engaged in the practice of his profession. He was led to take this action at the instance of Mr. Cook, who told him, if he could save the Surface Lines something on its taxes, he (Cook) could get the business, and asked Blim to look over the situation to see if he thought they could render valuable services to the Surface Lines. Blim investigated the assessments and reported he believed it would be possible to save the Surface Lines at least a million dollars in its assessments. Huff & Cook procured the business and Blim became associated with the firm in that work.

A lawsuit involving appellant's client was tried before Judge Arnold in the circuit court of Cook county. It took several days. After hearing the evidence, Judge Arnold took the case under advisement and made a finding in favor of appellant's client, resulting in a substantial reduction in the assessment of the property.

On October 18, 1927, the fee was collected by Huff & Cook and a check for $12,500, representing his share, delivered to Blim. The check was deposited in the Home Bank & Trust Company. After waiting a few days for the check to clear, on October 20th Blim cashed his own check for $7,500. He was asked why he withdrew that amount of currency and whether or not he gave it to Malone. He answered clearly and positively that he did not give it to Malone, and then followed the cross-examination as to what he did with it.

The gist of his explanation was that a child was born to his wife October 15, 1927, at St. Ann's Hospital on the west side of Chicago; that she had an unusually severe experience; that at some prior time he and his wife had been discussing the coming of the child and he was much worried because his financial status was not good, but that his wife had said, "Well, I know the good Lord will provide, and I am not going to worry"; that during her experience in the hospital this fee was collected, and on October 20 he drew out the $7,500 and took it to the hospital and gave it to his wife in order to give her a feeling of security; that she laughed at him, told him he was foolish, and should not have done it and to take the money back and take care of it; that he took the money back, put it in the vault at his office, and that it was spent from time to time buying oriental rugs, remodeling and redecorating the home inside, making extensive repairs of various kinds, and purchasing supplies; that the family spent liberally during the Christmas season of 1927 — he bought a diamond pendant for his wife, furnished money to buy Christmas presents for the five children, and the older ones gave presents to each other; that in all he spent in remodeling and refitting his home between $8,000 and $10,000; and that some of the money which he had placed in the vault was later redeposited in the bank and some put in a safety deposit vault, designated by the witness.

In the course of the examination it developed that when Blim's own income tax return was being checked up he explained this whole story to the revenue agent who investigated it, and who took a written statement from him. In the grand jury room, when asked to tell what he did with the $7,500, he told the examining attorney that he had explained all that to him and he would rather not testify before the grand jury as to his family affairs; whereupon he was instructed to tell his story to the grand jury. He said he did not want to tell it because it sounded sentimental and foolish, but, upon the insistence of the Assistant United States Attorney, Blim told the story again to the grand jury. The grand jury did not believe the story; hence the first presentment.

On September 27th, in obedience to the order of the court, Blim appeared again before the grand jury. Upon this examination he went more into detail than in the first examination with reference to what had been done with the $7,500 in question. He gave the names of the people from whom he bought rugs and material and their addresses in Chicago. He told who the other persons in the office were who might have access to the vault where the money was kept, and how one of the merchants had closed his place of business on Milwaukee avenue and moved to a new address, giving it to the grand jury. Where he could not speak positively as to detailed expenditures, he said if they would give him a little time he would collect the exact information and furnish it; but no time was given. He gave the name and address of a company on Fullerton avenue through whom he had procured the services of the decorators to redecorate his house.

From this recital of facts it will appear that Blim told his story at least four different times. If it was false in any part, it could have been readily checked up, and...