Mickler v. Fahs, 16223.

• Decision Date: 22 April 1957
• Docket Number: No. 16223.,16223.
• Citation: 243 F.2d 515
• Parties: C. M. MICKLER and Ethel G. Mickler, Appellants, v. John L. FAHS, former Collector of Internal Revenue, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

243 F.2d 515 (1957)

C. M. MICKLER and Ethel G. Mickler, Appellants, v. John L. FAHS, former Collector of Internal Revenue, Appellee.

No. 16223.

United States Court of Appeals Fifth Circuit.

April 22, 1957.

William H. Maness, Jacksonville, Fla., Ragland, Kurz, Maness & Toole, Jacksonville, Fla., for appellants.

Walter Akerman, Jr., Atty., Dept. of Justice, Washington, D. C., Charles K. Rice, Asst. Atty. Gen., Lee A. Jackson, Robert N. Anderson, Dept. of Justice, Washington, D. C., Edith House, Asst. U. S. Atty., Jacksonville, Fla., James L. Guilmartin, U. S. Atty., Miami, Fla., for appellee.

Before TUTTLE, JONES and BROWN, Circuit Judges.

JONES, Circuit Judge.

The appellants, C. M. Mickler and Ethel G. Mickler, have sued a former Collector of Internal Revenue to recover income tax deficiencies, fraud penalties and interest. The years involved are 1938 through 1947. During these years and for a good while before, Mickler had been operating a retail furniture store in Jacksonville, Florida. The deficiencies were determined by the net worth and expenditures method and based upon unreported income. The Revenue Agent made net worth computations from 1925 through the years involved. The appellants made payment in accordance with the assessments and sued to recover. The only substantial fact issue was as to the net worth of the appellants at the beginning of the period. They claimed to have had accumulations prior to the tax period in excess of $100,000 for which they had not been given credit by the Revenue Agents and the Commissioner of Internal Revenue in their computations. The taxpayers testified as to the keeping of large amounts of cash in a safe at their home and that the expenditures in excess of net income were made from these cash funds.

Early in the trial Mickler had testified as a witness on his own behalf. He was asked, on cross-examination by Government counsel:

"Mr. Mickler, I am going to ask you if you are the same C. M. Mickler who was indicted on September 28, 1949, for income tax evasion for the years 1943, 1944 and 1945, and who entered a plea of nolo contendere to that charge and was convicted and sentenced to pay a fine of $5,000.00 for each of those years".

There was an objection made which was sustained. A motion was made for a mistrial on the ground that the mere asking of the question created prejudice which could not be overcome by any judicial admonition to disregard. The court refused to declare a mistrial and, with a design of not magnifying the incident, gave the jury the following carefully phrased instruction:

"Gentlemen of the Jury and Miss Volkhardt, there is one matter I want to go back to a minute. You will recall that yesterday afternoon, about the middle of the afternoon while the plaintiff, Mr. Mickler, was on the stand, the question was put to him by Mr. Roberts the defendant\'s attorney I won\'t repeat the question — I want to refer to it sufficiently just to bring it to your attention — the question as to whether he was convicted and paid a fine in a matter in this Court some time ago — convicted of some offense and paid a fine. There was an objection by the plaintiffs\' attorney to that question, I reserved ruling on the question and didn\'t permit the witness and the plaintiff, Mr. Mickler, to answer the question at that time, I sustain the plaintiff Mickler\'s objection, made through his attorney, to that question. He will not be required to answer it. You are instructed not to draw any inferences in any way whatever from the putting of the question; don\'t consider anything stated in the question as a fact, or as a possible fact, as being proved or as part of the evidence in this case in any fashion. The question and all implications and inferences that may arise from it are entirely stricken from your consideration. You will please be governed by that in your consideration of the case. Just put that aside."

The Government does not make any contention that the question was proper. We have no doubt but that it was improper. A plea of nolo contendere is a mere statement of unwillingness to contest and no more. It is not receivable in another proceeding as evidence of guilt. McCormick on Evidence, 512, § 242, n. 32; Wigmore on Evidence, Vol. IV, p. 58, § 1066; Berlin v. United States, 3 Cir., 14 F.2d 497; United States v. Lair, 8 Cir., 195 F. 47; Twin Ports Oil Co. v. Pure Oil Co., D. C.Minn., 26 F.Supp. 366; United States v. Plymouth Coupe, D.C.W.D.Pa., 88 F. Supp. 93; United States v. Standard Ultramarine & Color Co., D.C.S.D.N.Y., 137 F.Supp. 167. In Commissioner of Internal Revenue v. Kilpatrick, 5 Cir., 227 F.2d 240, we affirmed a decision of the Tax Court which, for the purpose of impeachment had admitted evidence of nolo contendere pleas of the taxpayer for tax evasion. But the Tax Court expressly refrained from deciding whether such plea would be admissible as evidence on the fraud issue and expressly stated that it was not considering the plea in connection with that issue. The receipt of such evidence was admissible under the District of Columbia law which was adopted for the government of the Tax Court. Here the trial was before a jury. The same reasons which make the evidence of a plea of nolo contendere inadmissible as an admission will exclude it in a jury trial when offered for the purposes of impeachment. If proof of the commission of a crime may be admitted such proof is not met by the offer of proof of a nolo plea. Such a plea is, as we have seen, an admission of guilt only in the case where it is made. Cf. Wigmore on Evidence, Vol. III, p. 538, et seq., §§ 980, 980a.

The appellee says that the instruction of the Court that the jury should disregard the question cured any error in the asking of it. The question itself could have had no effect but to impress upon the jury that Mickler had admitted criminal tax fraud with respect to three of the years involved. The...