Matthews v. United States

• Decision Date: 09 December 1954
• Docket Number: No. 15086.,15086.
• Citation: 217 F.2d 409
• Parties: James MATTHEWS v. UNITED STATES of America.
• Court: U.S. Court of Appeals — Fifth Circuit

217 F.2d 409 (1954)

James MATTHEWS v. UNITED STATES of America.

No. 15086.

United States Court of Appeals Fifth Circuit.

December 9, 1954.

S. B. Wallace, Griffin, Ga., for appellant.

Floyd M. Buford, Asst. U. S. Atty., Frank O. Evans, U. S. Atty., Joseph H. Davis, Asst. U. S. Atty., Macon, Ga., for appellee.

Before HUTCHESON, Chief Judge, and RIVES and TUTTLE, Circuit Judges.

TUTTLE, Circuit Judge.

James Matthews was indicted and tried on five counts, charging, first, that he had in his possession, custody and under his control a still and distilling apparatus; second, that he carried on the business of a distiller without having given bond; third, that he carried on the business of a distiller with intent to defraud; fourth, that he worked in a distillery; and fifth, that he carried and delivered raw material, to-wit, three 55-gallon drums of kerosene to a distillery for the production of spirituous liquors. He was convicted on the first four counts, and the fifth count was nol prossed.

Defendant introduced no evidence in his own behalf. He objected to the introduction of certain documentary evidence by the government, and moved for a directed verdict of acquittal. The trial court's adverse rulings on these matters form the basis of his appeal here.

The evidence on which this conviction was based was circumstantial and it was meager. Whether it was sufficient to have authorized the court to submit the case to the jury, if it was all admissible, need not be decided, since we find that the court committed prejudicial error in admitting, over defendant's objection, the so-called "sugar reports."

The government proved that when the arresting officers raided the still in question a 1949 Dodge truck with 1953 Georgia license Number A/H11314, was about twenty yards from the distillery, backed up to 336 gallons of non-tax paid whiskey.

When appellant was arrested between 50 and 100 yards from the still site, he did not have on a hat. A hat was found five yards from the Dodge truck. Appellant's only statement at the place and time of arrest was that it was his hat.

On the 1949 Dodge truck, parked in the distillery yard, there were forty cases of one-gallon glass jugs and three 55-gallon oil drums. The distillery consisted of two 150-gallon steamers, two 220-gallon stills, one 60-gallon still, one doubler, one radiator condenser, a pressure tank, a set of gas burners, eighteen 220-gallon fermenters, and 1980 gallons of mash.

A kerosene and gasoline mixture was used in firing the illicit distillery. The radiator condenser found at the still was an automobile radiator with connections welded on to it; it was a fairly new radiator. When the illicit distillery was raided all persons there ran.

Mr. Thomas Felton Thompson, of the Buford Feed and Grain Company, 809 Bankhead Avenue, Atlanta, Georgia, testified that on August 4, 1953, he sold 3600 pounds of sugar to one James Walker, which he delivered to a vehicle bearing 1953 Georgia license number A/H 11314, this being the same license number as that on the vehicle later seen at the still. He further testified that on August 10, 1953, he sold 3600 pounds of sugar to one James Walker and delivered same to a ton and a half truck, bearing 1953 Georgia license number A/H11314. Mr. Thompson further testified that at the time of these sales, 3600 pounds of sugar cost $327.60 and that each of the three transactions was a cash sale. He testified that he was not present at the time of these two sales, but he then testified that he personally had delivered a 3600 pound order to the same truck to one James Walker on August 17th. He declared that at the time of this sale defendant was standing at the side of the truck, but that he neither did nor said anything.

The government also introduced in evidence over defendant's objection three reports made by the Buford Company to the Alcohol Tax Unit of the Internal Revenue Service showing the details of these three sales.

1. The government's proof in this case was weak and entirely circumstantial, and while there was more here than mere presence and flight, as in the case of Vick v. United States, 216 F.2d 228, decided by this Court October 29, 1954, in view of the opportunity more fully to develop the case which a new trial will furnish, we find it unnecessary to decide whether it was or was not insufficient. The trouble is that some of the evidence ought not to have gone to the jury, and the fact that it did must be held to be prejudicial error. While it is not necessary for us to speculate as to what effect the illegal evidence had on the deliberations of the jury, it is nevertheless appropriate to point out that a case in which the government has barely proved enough to sustain a verdict offers a good backdrop against which to examine the importance of adhering to rules of evidence which might otherwise annoy those who are impatient with the law's technicalities.

2. The sales slip taken from the person of the accused after arrest was not inadmissible for the reasons assigned on the trial. United States v. Heitner, 2 Cir., 149 F.2d 105. Its admissibility over objection as to relevancy, if such objection had been properly made, is doubtful. The purchases referred to on the sales slip were in no way tied into the operation of the still or of its construction; any deduction by the jury drawn from the fact that Matthews had purchased an unspecified number of drums and an automobile radiator and a shovel and a hoe would of necessity be based on pure speculation; however, appellant's counsel did not object to the admission of the sales slip on the ground of relevancy, and this question is therefore not before us for decision.

3. As to the admission of the so-called "sugar reports" the situation is different.

The government had its witness, an Internal Revenue employee, identify three separate sheets of typewritten entries on a form entitled "Return Under Section 2811, I.R.C. (Alcohol and Tobacco Tax)". This form was printed, and carried the notation in the upper left hand corner "Form 169, U. S. Treasury Department Internal Revenue Service (Revised Oct. 1953)." The form had six columns headed respectively as follows: "Date Sold or Shipped," "Quantity (Lb., cwt., or gal.)," "Kind of Substance (Brand)," "Name and Address of Person or Firm to Whom Sold or Delivered," "Auto Tag No.; R. R. Car No.," "Driver's Name and Address; No. of Permit; Date it Expires." At the bottom of each page appeared the following language:

"This return, required by formal demand letter issued pursuant to section 2811, I.R.C. 26 U.S.C.A. § 2811, is a correct and complete report for this period of all dispositions, including sales of substances named in the demand letter."

The defendant's name did not appear anywhere on these returns. Upon their having been identified by the government's witness, counsel sought to elicit information as to their contents, particularly to show that there were three sales made to one James Walker by the Buford Feed and Grain Co. Defendant's counsel objected on several grounds, including the objection that this evidence was hearsay.¹

The court withheld its ruling and thereupon permitted the witness to testify as to the contents of these sugar reports which had been received by him in the mail, and which were the sole basis of his testimony as to three 3600 pound sales to one James Walker.

The District Attorney subsequently put Mr. Thompson on the stand and he testified as to three sales to James Walker, but stated that he was not present at two of them. He also testified that on the occasion handled by him the defendant was standing in the vicinity of the truck, but that he neither spoke nor acted in connection with the transaction, and that the man who called himself James Walker paid for the 3600 pounds of sugar.

In this posture of affairs defense counsel renewed his objection, stating: "We want to renew our objection on this." Subsequently the government tendered in evidence the three "sugar reports" and defendant's counsel again objected. The court admitted them as to the defendant Matthews and not as to the other defendants in the case.

4. The relevancy of the sugar reports and the testimony as to sales to Walker may have been established satisfactorily in view of the association of the defendant with the truck at the two separate places; i. e. in Chamblee at the Buford Feed and Grain Co., and later at the site of the still. But there can be no justification for the admission of the oral testimony from the reports and of the reports themselves over the objection that they were hearsay.

The only basis for arguing for the admissibility of these reports as an exception to the rule prohibiting the admission of hearsay evidence would be that it is within the exception that finds expression in § 1732, Title 28, U.S.C., sometimes known as the Federal Business Records Act² or the one that is contained in § 1733,² which we shall refer to as the official records statute.

That the oral testimony and reports were hearsay — extra judicial testimonial assertions that certain sales of sugar were made — is apparent. The first question is whether the Federal Business Records Act, expressing an exception to the hearsay rule, is broad enough to include these reports.

The record discloses the true nature of these reports. They were required to be made by certain dealers in sugar, malt, yeast and other articles normally used in the manufacture of alcoholic beverages, 26 U.S.C. § 2811. It then becomes necessary to determine whether these reports were "made in regular course of any business."

Certainly these reports were not made by the Buford Feed and Grain Co. in furtherance of its business in the buying and selling of merchandise. If they were, then it may be conceded that a construction of the Federal statute making them admissible is not an unwarranted extension of the old and familiar shopbook or book-of-account exception...