Herzog v. United States, 14611.

• Decision Date: 11 October 1955
• Docket Number: No. 14611.,14611.
• Citation: 226 F.2d 561
• Parties: J. A. HERZOG, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

226 F.2d 561 (1955)

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

No. 14611.

United States Court of Appeals Ninth Circuit.

October 11, 1955.

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

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

Before MATHEWS and CHAMBERS, Circuit Judges, and BYRNE, District Judge.

BYRNE, District Judge.

Appellant J. A. Herzog operated a Pontiac agency dealing in both new and used cars. His principal business appears to have been the wholesaling of used cars to other used car dealers. Most of Herzog's car sales were handled through two employees, Douglass and Cline, who received the money from the sales and purportedly turned it over to Herzog or his office manager.

In March of 1954 Herzog was indicted on three counts charging wilful attempted income tax evasion.¹ He was found not guilty on counts one and two relating to 1947 taxes, and guilty on count three relating to 1948 taxes. On this appeal, appellant does not contend that the evidence in the record is insufficient to support the guilty verdict. What he does contend is that his rights were substantially prejudiced by (a) rulings excluding certain evidence offered by him, (b) failure to give certain requested instructions, and (c) denial of his request for examination of the grand jury testimony of certain witnesses.

One of the issues of fact in the case was whether side payments in excess of invoice prices were made to Herzog by the persons who purchased used cars from him. Appellant offered in evidence bi-monthly issues of the Kelley Blue Book, a trade journal that sets out estimated car prices, and a summary prepared by an accountant showing a comparison of the Blue Book price of each car, with the invoice price as shown on appellant's records and the total price (including side payments of cash) allegedly paid by the used car dealers. Appellant's asserted purpose in offering this evidence was to establish the market value of the cars and to impeach the testimony of the used car dealers by showing that the prices they claimed they paid for the cars were in excess of the market value.

There was evidence that during the period in question automobiles were scarce and that dealers paid whatever was necessary to obtain them. It is clear that the trial judge considered the Blue Books as untrustworthy in that they did not reflect the true market value and during a colloquy with counsel stated, "The evidence was that nobody paid much attention to the Blue Book during that period of time." However, even if it be said that the Blue Books did accurately reflect actual market values, they were properly excluded as they would not tend to prove or disprove any issue in the case. It is true that where market price is crucial, the state of the market may be proven by quotations or reports in trade journals. Wolcher v. United States, 9 Cir., 1952, 200 F.2d 493. Here market price is collateral to the main issue of whether or not Herzog's invoices correctly reflected the prices paid. Herzog and the car dealers did not disagree in any material way as to the market value of automobiles. Herzog said he received the prices listed on his books; the dealers testified that they had paid more than the amount listed on those books. Market value was not in issue.

Assuming that by some process of mental gymnastics it could be said that the Blue Books established the actual prices paid by the car dealers to appellant, the exclusion of the evidence would not be prejudicial. The Blue Book prices, although lower than the prices claimed to have been paid by the car dealers, were higher than the prices listed on appellant's books. The most that could be said would be that appellant understated his income in a lesser amount than that charged in the indictment. The Government is not required to show the exact amount of income tax evasion and if a smaller amount than that charged in the indictment is shown, a defendant may nevertheless be found guilty. United States v. Schenck, 2 Cir., 1942, 126 F.2d 702.

Appellant argues that the Blue Book evidence tended to impeach the car dealer witnesses; that if they really paid as much as they claimed, they could not have expected to make any profit in view of the lower market value of the cars as shown by the Blue Books, and it just is not like car dealers to pay more than the market price for cars. This argument overlooks the fact that the Blue Book prices were higher than the prices the appellant testified he received. If there were any merit to the argument it would apply with equal force to the testimony of the appellant as it would appear to be just as unreasonable for a seller to accept less than market value as it would be for a buyer to pay more than market value.

Neal McNeil, a used car customer of appellant during 1946 and 1947, testified to transactions occurring during that period, including a conversation with appellant in which appellant told him he was going to show only a portion of his selling price on the invoice and wished to collect the balance in cash. McNeil further testified that he conformed to this procedure in purchasing cars from appellant and paid him or his employees by check for the invoice price plus an additional amount in cash. On cross examination McNeil was asked if he had been involved in difficulties with the O. P. A. during the summer of 1946. He replied in the negative. Subsequently the appellant sought to introduce into evidence a certain journal entry appearing in McNeil's books reciting the disbursement of $2200.00 as "attorney fees etc. in connection with threatened O. P. A. suit * * *" This evidence was proffered for the purpose of impeachment and was excluded. The trial court's ruling was correct. McNeil's O. P. A. difficulties, if any, were not an issue in this case. The purpose of evidence is to prove or disprove some issue in the cause on trial. If proffered evidence does not tend to do either of these things, it has no place in the trial and is either immaterial or collateral to the inquiry. A witness cannot be impeached where the subject matter of his testimony is either immaterial or collateral to the issues in the cause in which the testimony is given. Arine v. United States, 9 Cir., 10 F.2d 778; Shanahan v. Southern Pacific Co., 9 Cir., 188 F.2d 564.

The government produced evidence that 18 new "house" or "executive" cars were transferred into appellant's personal ownership and subsequently when resold the income was not recorded on the books of the agency nor reflected in appellant's tax returns. The appellant then offered evidence to show that there were 13 other "house" or "executive" automobiles registered in his name and when resold the sales were recorded on the books. This evidence was properly excluded as immaterial A defendant cannot establish his innocence of crime by showing that he did not commit similar crimes on other occasions. Cf. United States v. Dennis, 2 Cir., 183 F.2d 201, 232. For the same reason evidence was properly excluded which was offered for the purpose of showing that there were some sales as to which no evidence of side money had been presented.

The appellant complains that the court erred in refusing to give requested instructions concerning bias or interest of witnesses. A trial court is not obliged to give an instruction in the language requested but may use words of its own selection. Nye & Nissen v. United States, 9 Cir., 168 F.2d 846, affirmed 336 U.S. 613, 69 S.Ct. 766, 93 L.Ed. 919; Wright v. United States, 8 Cir., 175 F.2d 384; Petro v. United States, 6 Cir., 210 F.2d 49. The court instructed the jury that a witness is presumed to speak the truth; that this presumption may be rebutted * * * "by the manner in which he testifies * * * (by demeanor) * * * (by contradiction) * * * by his relationship to the Government on the one hand and to the defense on the other hand." (Emphasis added). This was a clear and accurate instruction that the jury, in evaluating the testimony of witnesses, should consider possible bias or interest. The appellant's claim of prejudice is without merit.

During the course of the trial, counsel for appellant requested that a transcript of the grand jury testimony of witnesses Douglass and Cline be made available for counsel's inspection. The trial court denied appellant's request remarking, "You have to make some showing that it would be impeaching, otherwise it is a fishing expedition * * *" Appellant assigns this ruling as error and cites as authority for his contention, Gordon v. United States, 344 U.S. 414, 73 S.Ct. 369, 97 L. Ed. 447; United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129; Shelton v. United States, 5 Cir., 205 F.2d 806; United States v. Cohen, 2 Cir., 145 F.2d 82; United States v. Krulewitch, 2 Cir., 145 F.2d 76, 156 A.L.R. 337; United States v. Alper, 2 Cir., 156 F.2d 222.

Other than the Alper case, the cases cited by appellant all deal with statements given by a witness to Government agents rather than testimony before a grand jury. None of the cases suggests that grand jury testimony or statements in Government reports should be turned over to the defendant to inspect for possible impeachment material without some prior showing that statements contradictory to the witness's testimony at trial are contained therein. In the Gordon case the Supreme Court reversed a conviction because of the denial of a motion to inspect pretrial statements of Government witnesses. After noting that the holdings of their opinion were confined to the limited and definite category of documents dealt with in that case, the Court stated 344 U.S. 414, 73 S.Ct. 373: "By proper cross-examination, defense counsel laid a foundation for...