U.S. v. Gray, s. 74-2282

• Citation: 507 F.2d 1013
• Decision Date: 07 February 1975
• Docket Number: 74-2283,Nos. 74-2282,s. 74-2282
• Parties: 75-1 USTC P 9231 UNITED STATES of America, Plaintiff-Appellee, v. Robert GRAY, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 1013

507 F.2d 1013

75-1 USTC P 9231

UNITED STATES of America, Plaintiff-Appellee, v. Robert GRAY, Defendant-Appellant.

Nos. 74-2282, 74-2283.

United States Court of Appeals, Fifth Circuit.

Feb. 7, 1975, Rehearing Denied March 3, 1975.

Sydney B. Nelson, Shreveport, La., for defendant-appellant.

L. Edwin Greer, Asst. U.S. Atty., Donald E. Walter, U.S. Atty., Joseph S. Cage, Jr., Asst. U.S. Atty., Shreveport, La., for plaintiff-appellee.

Appeals from the United States District Court for the Western District of Louisiana.

Before RIVES, WISDOM and COLEMAN, Circuit Judges.

RIVES, Circuit Judge:

After a six-day trial by jury, Robert Gray was convicted of income tax evasion in violation of 26 U.S.C. 7201 and of filing a false and fraudulent income tax return in violation of 26 U.S.C. 7206(1). The calendar years 1967 and 1968 constitute the period covered. Two judgments of conviction were entered with sentences totaling six months' imprisonment to serve, five years on probation, and a requirement that, within twenty-four months, he pay taxes due with penalties and interest.

On appeal, Gray makes no claim of insufficiency of the evidence to support the jury's verdict, but contends that in the course of his trial the district court committed reversible errors. We find no reversible error and hence affirm.

THE FACTS

Gray had some school training as an accountant. He had been employed as bookkeeper for a construction company, then for nine years as comptroller of an independent oil drilling company. In 1966 he had formed a self-owned corporation, Tennky Petroleum Company. He testified that, 'I drilled twelve or fifteen wells myself' (App. 427). He also testified to 'quite a bit' of activity in the stock market. In 1968 his purchases and sales had amounted to $206,747.72 (App. 485).

For the calendar year 1967 he reported the taxable income of himself and his wife as $9,499.19, a figure less than half of their true taxable income. For 1968 he reported taxable income of $14,125.16, when it was actually nearly four times that amount. The discrepancies were accounted for by items of income not reported and deductions reported to which he was not entitled. He admitted making profits in the stock market which he forgot to report (App. 580, 581). He admitted also that in 1968 he had received from Southwest Production Company a salary totaling $9,750.00 which he forgot to report (App. 507). That $9,750.00 was paid by thirteen checks for $750.00 each. At Gray's request Southwestern made those checks payable to his corporation, Tennky Petroleum Company. Gray testified that he picked up a check twice a month, deposited it to the Tennky account and then wrote a check to himself 'presumably the same day' and deposited that check to his personal account. He reported as income from Southwest only the amount received on its W-2 tax form (App. 512). Tennky in turn issued no 1099 tax form in the name of Robert Gray (App. 513).

'Q. Nothing at all went to the Government to indicate Robert Gray received $9,750.00, did it?

'A. That is correct.' (R. 513.)

Gray testified that he filed an amended return on September 2, 1969, and paid the tax due on the $9,750.00, but he could not recall whether the Examining Agent had discussed that with him prior to his filing the amended return. He testified further on cross-examination:

'Q. You are saying you do not recall today whether Agent Farrar had discussed these omitted checks with you prior to filing that amended return?

'A. No, sir, I don't.

'Q. You said you did hear Agent Caldwell say you admitted that to him?

'A. That is correct. I don't remember admitting it to him. I remember him testifying about it.

'Q. Your interview with him was January 8, 1970, wasn't it?

'A. Somewhere in there.' (R. 516.)

It was after the foregoing part of the cross-examination of Gray that counsel for the government received permission to approach the bench.

'(Whereupon there was a discussion at the bench between the Court and counsel out of the hearing of the jury).

'MR. GREER (Government Counsel): Your Honor, I intend to introduce evidence and cross examine the defendant on additional items of income which he received and did not report on his tax returns for the years 1967 and 1968. These are both relevant and admissible inasmuch as it is very much a part of this trial. These are similar acts and they are the identical crime for which the defendant is on trial here today.

'THE COURT: Mr. Nelson objects, I suppose, because they are not alleged in the indictments. Since they are similar crimes the ruling is they are admissible to show intent.' (R. 523.) Mr. Nelson, counsel for Gray, did indeed most strenuously object but the court adhered to its ruling with the caveat: 'I will have to charge the jury this is admissible only to show criminal intent. In other words, if they are not to convict him on this as a separate crime mentioned in the indictment, but they are allowed to consider it.' (R. 525.)

The court did adequately so instruct the jury. Nonetheless, the ensuing vigorous cross-examination was, in all probability, extremely prejudicial to the defendant Gray. The result of the trial really turned on criminal intent vel non.

Restriction on Number of Character Witnesses

At the beginning of the trial the government submitted to the court a brief containing the following paragraph:

'The Government anticipates that the defendant will offer the testimony of character witnesses in his behalf. Courts in the past have been faced with the problem of where to draw the line on limiting the number of character witnesses. A limitation of character witnesses to three (3) has most frequently been found appropriate and has been approved by the Courts of Appeal. See United States v. Squella-Avendano (478) F.2d (433) (C.A.5th, April 13, 1973); United States v. Jacobs, 451 F.2d 530 (C.A.5th, 1971), certiorari denied, 405 U.S. 955 (92 S.Ct. 1170, 31 L.Ed.2d 231). The limitation of character witnesses is, of course, in the Court's discretion.'

After Gray's third character witness had testified, a colloquy between Gray's counsel and the court occurred.

,'MR. NELSON: If it please the Court, we have several other character witnesses--

'THE COURT: It has been the unvarying rule of this Court long before my time and upheld by the Fifth Circuit Court of Appeals that character witnesses are limited to three. We apply that rule here.

'MR. NELSON: For the record, because the character and reputation is of such importance in the type of crime charged here, we respectfully object to the Court's ruling.' (R. 403.)

On appeal, Gray insists that the district court applied no discretion but arbitrarily used a fixed and unvarying rule. Since the leading case on 'character evidence,' Michelson v. United States, 1948, 335 U.S. 469, 69 S.Ct. 213, 93 L.Ed. 168, it has been well settled that trial courts are vested 'with discretion to limit the number of such witnesses and control cross-examination.' 335 U.S. at 480, 69 S.Ct. at 220. See also 6 Wigmore on Evidence, 3d ed. 1908(2), pp. 580, 581; 2 Wright Federal Practice & Procedure, Criminal 409. However, this Court has not upheld any 'unvarying rule' and we agree with the annotation in 17 A.L.R.3d 327, at 335, that,

'The number of witnesses allowed to testify should not be arbitrary or unreasonably restrictive, and prejudicial error in those respects will entitle the injured party to relief. A general rule of limitation applicable to all cases without regard to the particular circumstances has been held to exclude discretion and to be, therefore, unreasonable and unlawful.'

Professor Wigmore calls attention that the limitation of the number of witnesses applies not only to reputation or character but may be enforced 'upon any point whatever.' 6 Wigmore on Evidence, 3d ed. 1908(3), p. 581. Especially pertinent to this case are Professor Wigmore's further remarks:

'It is sometimes required that the trial Court (with or without the parties' motion) announce before any witnesses on the point are offered, that a limitation of the witnesses upon the particular fact will be enforced, and a failure to do this is said to prevent the enforcement of any limitation; on the theory that, unless the party is thus advised of the intended limit, he may be obliged to omit his most valuable witnesses through not having known of the necessity of choosing the best of the lot at his disposal. This requirement has a plausible fairness in it, and is usually proper when feasible. But it is not always feasible, because the judge may not know of the party's intention as to number of witnesses; and it is not always proper for the judge to commit himself to such a fixed limit before hearing any of the witnesses. The trial Court's discretion should be left to determine whether such a prior notice was feasible and desirable under the circumstances.'

At pp. 585, 586. We think it clear that the district judge meant no more than to recognize such a long-standing practice which should 'apply here'; that in fact he exercised a sound and reasonable discretion in this particular case.

Permitting a Revenue Agent to Testify as a Summary Witness and Introducing a Summary Chart or Schedule of his Calculations

In his opening statement to the jury, counsel for the government called attention to the necessity of introducing many documents and corporate records, and further said:

'The law recognizes in this case no juror can be expected to retain all this information and put it in the proper slot. For that reason, the government is entitled to bring in an expert to testify in the case. The law permits the expert to listen to the testimony, examine the documents and testify to his expert opinion as to what these documents mean and what tax, if any, should have been paid by the defendant.

'You, as jurors, are entitled to give that expert's opinion the weight you believe it deserves. What I am saying is for...