Herzog v. United States

• Citation: 235 F.2d 664
• Decision Date: 08 October 1956
• Docket Number: No. 14611.,14611.
• Parties: J. A. HERZOG, Appellant, v. UNITED STATES of America, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

235 F.2d 664 (1956)

J. A. HERZOG, Appellant, v. UNITED STATES of America, Appellee.

No. 14611.

United States Court of Appeals Ninth Circuit.

May 29, 1956.

Dissenting Opinion June 1, 1956.

Supplemental Dissenting Opinion June 23, 1956.

Writ of Certiorari Denied October 8, 1956.

Phillips, Avakian & Johnston, Spurgeon Avakian, J. Richard Johnston, Oakland, Cal., Frederick Bernays Wiener, Washington, D. C., for appellant.

Lloyd H. Burke, U. S. Atty., Robert H. Schnacke, John Lockley, Richard H. Foster, Asst. U. S. Attys., San Francisco, Cal., for appellee.

Before DENMAN, Chief Judge, and STEPHENS, HEALY, BONE, ORR, POPE, LEMMON, FEE, and CHAMBERS, Circuit Judges.

Writ of Certiorari Denied October 8, 1956. See 77 S.Ct. 54.

HEALY, Circuit Judge.

Appellant was indicted on three counts charging willful attempted evasion of federal income taxes. Two counts related to 1947 taxes and the third concerned those of 1948. The accused was acquitted on the first two counts and convicted on the third. On appeal the judgment of conviction was affirmed, 9 Cir., 226 F.2d 561.

Appellant petitioned for a rehearing and his petition was in part granted, limited to questions pertinent to the conflict or apparent conflict between the decision rendered on the appeal and the decision of this court in Bloch v. United States, 221 F.2d 786. On all other points the petition for rehearing was denied. On motion of the court hearing the appeal herein, and pursuant to our Rule 23, the rehearing was ordered to be had en banc, limited as above indicated. The court en banc thereupon heard argument on behalf of the appellant and on behalf of the United States on the issues as so limited.

The primary question for our resolution is whether the power of the court under Rule 52(b) of the Rules of Criminal Procedure, 18 U.S.C.A., is limited or circumscribed by the provision of Rule 30 stating: "No party may assign as error any portion of the charge or omission therefrom unless he objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the grounds of his objection." Rule 52(b) reads: "Plain Error. Plain errors or defects affecting substantial rights may be noticed although they were not brought to the attention of the court."

Like the present case, Bloch, supra, involved charges of income tax evasion. In each case an instruction had been given essaying to define the term "willfully" as used in the statute. That given here is shown in footnote ¹ below, and that in Bloch is quoted in footnote ². In neither case did the defendant object to the instruction as required by Rule 30. Upon the appeal in Bloch 221 F.2d 788 the court on its own initiative determined that the willfullness instruction constituted prejudicial error "`in this case.'" It found error also in another instruction reading as follows: "`The presumption is that a person intends the natural consequences of his acts, and the natural inference would be if a person consciously, knowingly and intentionally did not set up his income, and thereby the government was cheated or defrauded of taxes, that he intended to defeat the tax.'" This instruction was thought, on the authority of Morissette v. United States, 342 U.S. 246, 273, 72 S.Ct. 240, 96 L.Ed. 288, not to be a correct statement of the law in a prosecution for income tax evasion. No comparable instruction was given in the present case. (Apart from these two instructions in Bloch, there appears to have been misconduct of counsel which might of itself have warranted the reversal. See opinion on denial of the government's petition for rehearing, 9 Cir., 223 F.2d 297, where the court noted the government's confession of error because of the misconduct.)

In the cause presently before us the question of the validity of the instruction was first injected by counsel in the course of oral argument on the appeal; and in a supplemental brief filed later the attention of the court was directed to the Bloch decision. The court held that the provision of Rule 30, quoted above, forecloses the courts from noticing on appeal errors or omissions in instructions where objection thereto was not made below. See the opinion, 226 F.2d at page 567 et seq.

Criminal Rule 30 by its terms precludes a party from assigning as error the giving of an instruction to which he has not objected on the trial. Rule 52(b), appearing under the caption "General Provisions," is not directed to the party, but is a grant of authority to the court itself. These rules are not conflicting. Rather, they complement each other. Rule 52(b) was doubtless designed to take care of unusual or extraordinary situations where, to prevent a miscarriage of justice or to preserve the integrity of judicial proceedings, the courts are broadly empowered to notice error of their own motion.³ The Rule is in the nature of an anchor to windward. It is a species of safety provision the precise scope of which was left undefined. Its application to any given situation must in the final analysis be left to the good sense and experience of the judges.

Subsequent to the adoption of the criminal rules many of the circuits have noticed asserted error in instructions not objected to below. See cases cited in the footnote.⁴ In doing so the courts have not been unmindful of Rule 30. Thus in Lazarov v. United States, 6 Cir., decided as late as July 1955, Judge McAllister, writing the opinion, remarked that "of course, an appellate court will consider an error in the charge which is seriously prejudicial or amounts to a grave miscarriage of justice even though no objection was made in the trial". And see the extensive and scholarly discussion of the subject by the Seventh Circuit in United States v. Vasen.

This court has not gone overboard in its application of Rule 52(b) to situations such as here presented, and it does not propose to do so now. In the great bulk of the cases in which counsel have sought to have us consider claims of error in instructions not objected to at the trial we have declined to do so. More than once we have stressed the salutary nature of Rule 30 and the vitally important part it plays in the administration of justice. Thus in Enriquez v. United States, 9 Cir., 188 F.2d 313, at page 316, we remarked that Rule 30 "is not designed as a mere trap for the unwary. Painstaking compliance with its requirements, although not an easy matter for the lawyer, is of the very essence of the orderly administration of criminal justice." But, in common with the generality of the circuits, we recognize that the Rule does not debar us from noticing of our own motion error in instructions thought to have resulted in a miscarriage of justice.

The point remaining to be considered by the court en banc is whether under the circumstances here present the error, if any, in giving the willfullness instruction was of so serious a nature as to warrant the disregard of Rule 30. That question is "pertinent" to the matters on which the limited rehearing was granted, and decision of it is essential to the disposition of the rehearing.

It appears that in income tax evasion cases many of the trial courts have fallen into the practice of defining the term "willfullness" in language much the same as that employed in the instruction here and in Bloch. Doubtless these instructions stem from verbiage found in United States v. Murdock, 290 U.S. 389, where, at page 394, 54 S.Ct. 223, 78 L. Ed. 381, the Court recited with seeming approval a variety of definitions given the word in judicial decisions. The recital in Murdock, however, would hardly seem a safe guide to follow in the formulation of instructions in all income tax evasion cases.

In determining whether the giving or the failure to give an instruction warrants a reversal, the courts are not to consider the instruction in isolation. They are obliged to examine the charge as a whole in light of the factual situation disclosed by the record. Such is the course followed even in the normal criminal case, where the accused has preserved his right of review by timely and appropriate objection on the trial. Leaving out of account the charge under attack, the instructions given here stated the issues fully and fairly. A few excerpts will suffice to disclose their general tenor. Immediately prior to giving the "willfullness" charge the judge said: "Now, the Government in this case has to show and convince you beyond a reasonable doubt before the defendant may be convicted that the defendant had income for the years 1947 and 1948, which was taxable, and that he intentionally and deliberately failed to report that income in his income tax return, and that he did so for the purpose, the deliberate purpose, of cheating or defrauding the United States out of taxes. That is the burden of proof that rests upon the government under this statute." Immediately following the instruction complained of the court stated: "If it appears that the defendant in this case filed an income tax return for the years 1947 or 1948, and you are convinced beyond a reasonable doubt that that was a false and fraudulent income tax return, and that it was filed with the wilful purpose of defrauding the United States of taxes, then the filing of the income tax return itself is a completed offense under the statute."

We turn briefly to the pertinent evidence in the case. Appellant operated a Pontiac agency, dealing in both new and used cars. His principal business was the sale of used cars at wholesale to used car dealers. During the period in question used cars were in great demand and hard to come by. In making these sales, according to witnesses for the government, appellant exacted "side" payments in cash from the dealers in addition to the price appearing on the invoices or sales orders. These cash "side" payments were not reflected on appellant's books, and concededly the amounts thereof were not reported in his income tax...