McClanahan v. United States, 18665.

• Decision Date: 10 August 1961
• Docket Number: No. 18665.,18665.
• Citation: 292 F.2d 630
• Parties: F. L. McCLANAHAN, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

292 F.2d 630 (1961)

F. L. McCLANAHAN, Appellant, v. UNITED STATES of America, Appellee.

No. 18665.

United States Court of Appeals Fifth Circuit.

July 7, 1961.

Rehearing Denied August 10, 1961.

William P. Fonville, Alan D. Feld, Goldberg, Fonville, Gump & Strauss, Dallas, Tex., for appellant.

W. B. West, III, U. S. Atty., Fort Worth, Tex., William N. Hamilton, Asst. U. S. Atty., Dallas, Tex., Robert S. Travis, Asst. U. S. Atty., Fort Worth, Tex., for appellee.

Before TUTTLE, Chief Judge, and CAMERON and JONES, Circuit Judges.

TUTTLE, Chief Judge.

This is the second appeal from a conviction of appellant of the charge of wilfully attempting to evade and defeat a part of the income tax owing by him for the fiscal year ending March 31, 1951, in violation of Section 145(b), Internal Revenue Code of 1939, 26 U.S. C.A. § 145(b).

The first three grounds of appeal criticize parts of the trial court's charge to the jury; the next four attack the sufficiency of the evidence to warrant submission of the case to the jury and/or to sustain its verdict; two other grounds of appeal deal with the admission of evidence of an earlier omission of gambling income from appellant's income tax returns; the remaining three grounds are based on a criticism of parts of the oral argument of government counsel to the jury.

It was the government's contention, amply supported by proof, that the appellant had made gambling winnings of approximately $50,000, none of which was shown on his income tax return and which appellant had taken considerable effort to conceal.

Appellant, while conceding that he had such winnings, contended that he had suffered gambling losses of more than the amount of his winnings and that he was, therefore, under no duty to report the winnings. The government concedes that only the excess of gambling winnings over gambling losses represents taxable income. It does not concede, however, that there was no affirmative duty for the taxpayer to report his winnings as income and then claim his losses as deductions.

We dispose, first, of the grounds touching on the sufficiency of the evidence. In the first appearance of a case involving McClanahan's conviction for a 1951 income tax violation we held that the evidence was sufficient to sustain a verdict of guilt. McClanahan v. United States, 5 Cir., 272 F.2d 663. The affirmative evidence presented on the present trial made an equally strong case against the taxpayer. Appellant complains that the government did not pursue certain leads in an effort to substantiate his claim that he sustained large gambling losses at the racetracks and at a half dozen or so different gambling establishments at Las Vegas, Nevada. The simple answer to this contention is that the government was under no duty to run down these leads even if they had been specific enough to make such investigation feasible. The burden of showing the losses was on the defendant, once he admitted the existence of the winnings.

The appellant appears to draw from our earlier decision following his first conviction that there was no duty of appellant to report his gambling winnings unless they exceeded his losses. We find no basis for such view. This Court has long since held that gambling winnings of the type here involved are includable in gross income and that gambling losses, to the extent permitted by statute, are deductions, Humphrey v. Commissioner, 5 Cir., 162 F.2d 853. They are so denominated in Section 23 (h) of the 1939 Internal Revenue Code, 26 U.S.C.A. § 23(h). Under the requirements of the gross income tax section of the Code, Section 22, 26 U.S. C.A. § 22, therefore, there is a duty for a taxpayer to report his winnings. He may then, if he wishes to take advantage of the statutory provision, claim his gambling losses as deductions.¹ Thus, where it was conceded that there were unreported gambling winnings, the government was under no burden to prove that there were no unclaimed deductions in order to carry its burden of proof here.

We next consider the challenge to the court's jury charge. The criticism here is that the trial judge inadvertently used the word "apparent" when he intended to say "important" in a part of his charge. The transcript of the charge, as contained in the record, includes the following sentence: "In determining the guilt of the defendant the wilfullness of the act becomes apparent." At the conclusion of the court's charge the following colloquy occurred:

"Mr. Fonville: * * * In reading the charge the Court said, in determining the guilt of the defendant, as I understood it, `The willfulness of the act becomes apparent\', I either misunderstood the Court or the Court probably said `apparent\' instead of `important.\' Mine is in shorthand. I will try to find the part of the charge in which it appears.

"The Court: Is it in the requested charge?

"Mr. Fonville: No, it is in the main charge.

"The Court: Repeat it.

"Mr. Fonville: The sentence begins, `In determining the guilt of the defendant\'.

"The Court: All right.

"Mr. Fonville: It is not too far down in the charge, I would say about three or four pages.

"The Court: Yes, I have it, and it reads `In determining the guilt of the defendant the willfulness of the act becomes important.\'

"Mr. Fonville: As I got it the Court said `apparent\' rather than important.

"The Court: Well, it is written `important\', and I think I said it that way."

That is where the matter was left.

We agree with appellant that we must treat the matter on the assumption that the charge said "apparent" rather than "important." The United States does not take a contrary position. What it does say, though, and we think correctly, is that here there was no clear request by counsel that the court correct the charge. Counsel clearly left the court with the impression that he was satisfied with the judge's belief that he had used the right word. Counsel thus waived any criticism that might have been available to him if he had made it clear to the court that he disagreed with the judge's understanding.

Moreover, while the word "apparent" would not be correct in the challenged sentence, we think the subsequent parts of the charge adequately protected the accused. Appellant contends that the sentence, including the word "apparent," amounted to an expression by the court of its opinion that wilfulness had been proved. Assuming that contention to be correct, we do not think this would be prejudicial error. It has been frequently stated that a trial judge may express his opinion of the facts if it is made clear to the jury that they are the triers of the facts and that they are not bound by his opinion, Lott v. United States, 5 Cir., 230 F.2d 915, 918, certiorari denied, 351 U.S. 953, 76 S.Ct. 848, 100 L.Ed. 1477, rehearing denied 352 U.S. 860, 77 S.Ct. 25, 1 L.Ed.2d 70; Kansas City Star Co. v. United States, 8 Cir., 240 F.2d 643, 644, certiorari denied 354 U.S. 923, 77 S.Ct. 1381, 1 L.Ed.2d 1438.

Here the court repeatedly told the jury that before they could find a verdict of guilty they would have to find a wilful intent. The court also instructed the jury:

"Another thing for you to bear in mind is that this charge should be taken as a whole and do not `hang your hat\' as it were, upon one point or peg without giving due consideration to all the evidence before you and all of the provisions of the charge. And if during the trial, or from this charge, you have gathered any impression as to how the Court feels about the case or the nature of the verdict that should be rendered, you will disregard that also, because the Court is the judge of the law only and you as jurors are judges of the facts."

We think no reversible error occurred for the inadvertent use of the word "apparent" by the court.

The next complaint about the charge is aimed at the following language:

"So now, if you find from the evidence and believe beyond a reasonable doubt that the defendant did, about the time stated in the indictment, file a tax return, as alleged, in which he did willfully and knowingly attempt to conceal the amount of his income and evade the payment of taxes thereon for the fiscal year ended March 31, 1951, as required by law, then, in that event, you may find the defendant guilty.

"In this case, if it appears that the defendant filed an income tax report setting forth a portion of his income, and if you find and believe from the evidence beyond a reasonable doubt that the defendant collected other sums of money and knowingly and willfully failed to include the same in the income tax reported and that his failure or refusal to so include these items was done with the intent of defeating in part the payment of the taxes due by him to the government, this failure to mention such sums would amount to concealment within the law.

"An income taxpayer is due to pay income tax on winnings that he may have from gambling just as on income from other sources. However, if in gambling he loses money he may deduct his gambling losses from his gambling winnings, but he may not deduct his gambling losses from the legitimate income on which he would otherwise pay tax."

Appellant's objection to this charge was:

"Now, the defendant objects to that portion of the Court\'s charge wherein the Court instructs the jury in this case (if) it appears that the defendant filed an income tax return setting forth a portion of his income and if you find and believe from the evidence, beyond a reasonable doubt that the defendant collected other sums of money and willfully and knowingly failed to include same in his income report, for the reason that that is not a correct statement of the law, and you authorized the jury in this case to find the defendant guilty by reason of having collected some gambling winnings, even though the losses exceed the winnings, because the Court says if he collected the other sums of money and knowingly and willfully failed to include the same in the income report;

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