United States v. Brandom

• Decision Date: 12 March 1973
• Docket Number: No. 71-1499.,71-1499.
• Citation: 479 F.2d 830
• Parties: UNITED STATES of America, Appellee, v. Smith F. BRANDOM, Jr., Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

479 F.2d 830 (1973)

UNITED STATES of America, Appellee, v. Smith F. BRANDOM, Jr., Appellant.

No. 71-1499.

United States Court of Appeals, Eighth Circuit.

Submitted September 11, 1972.

Decided March 12, 1973.

Rehearing Denied July 23, 1973.

David W. Russell, Kansas City, Mo., for appellant.

Anthony P. Nugent, Jr., Asst. U. S. Atty., Kansas City, Mo., for appellee.

Before MATTHES, Chief Judge, and LAY and HEANEY, Circuit Judges.

HEANEY, Circuit Judge.

The principal question¹ on appeal is whether the trial judge impermissibly commented on the evidence in his charge to the jury, thus, in effect, directing a verdict. We hold that it did so, and reverse the defendant's conviction.

The defendant was convicted on Counts I, II, III and XI of the indictment which charged him with violating the mail fraud statute, 18 U.S.C. § 1341.² The evidence showed that the defendant operated the Midwest Mutual Casualty Company and its management company, Gibraltar Management Corporation. The essence of the charge was that the defendant had fraudulently misrepresented the financial status of the insurance company so that it could continue doing business for the defendant's benefit, despite its failure to maintain the assets required by state law. The first three counts charged that the defendant had mailed fraudulent financial reports to the State of Missouri Division of Insurance. Count XI charged that he had caused the Division of Insurance to mail fraudulent information concerning the financial status of the company to an individual who had made inquiries.

The trial judge correctly instructed the jury that the following essential elements of the offense must be established:

"First, the defendant\'s act or acts of having devised and having intended to devise a scheme or artifice to defraud and to obtain money and property from Gibraltar Management Corporation, and Midwest Mutual Casualty Company and its policyholders and claimants by means of the false and fraudulent pretenses, representations and promises as submitted to you in this charge; and

"Second, the defendant\'s act or acts of using or causing the use of the mails as submitted to you; and

"Third, the defendant\'s wilful and knowing doing of said act or acts with intent to execute the scheme or artifice to defraud, as submitted to you."

However, at the close of his instructions, the court made the following comments to the jury with respect to the defendant's intent to defraud and execute the scheme to defraud:

"Let\'s take the cross-checks which occurred at the end of each month in respect to the particular statements which are involved in Counts One, Two, Three and Eleven. It seems to me that this evidence shows beyond a reasonable doubt that under an arrangement which was dictated by the defendant, and recorded by the witness Doris Howard, about drawing a check on Gibraltar account at the end of the month payable to Midwest, and holding it up until a check was thrown back from Midwest to Gibraltar on the first of the month, or the first business day following the close of the last month, that this arrangement was designed to and did misrepresent the financial condition of Midwest Casualty Company on the books of the company and on the statements submitted to the Insurance Department.

"In the first place, I read you the paragraph in the management contract which provided that the management fees would not be due and payable to Gibraltar from the premiums written during the month until sometime on or before the 15th day of the month following that in which the business was written. And you have heard the evidence which, in my judgment is clear, and shows beyond a reasonable doubt that Gibraltar was in fact in violation of that contract drawing premiums before they were due on estimates in amounts which were quite substantially higher than when they became due. And this would adversely affect the financial position of Midwest if it were honestly reported in the financial statement.

"And to show you why I believe the evidence establishes this beyond a reasonable doubt, I am going to refer to the fact that the arrangement, as shown by the document in evidence that Mrs. Howard identified with her manuscript on it that she was told this procedure by the defendant, to follow it, there was a specific direction that the Gibraltar check which was drawn on the 31st and which was supposed to put back this overdraw and for which there was no money in the bank, was not to be deposited until the first when Midwest had given it back another check which created a new overdraw on the management fees and for which Midwest had money in the bank.

"The net result of this transaction is that Midwest was itself paying back, restoring to Gibraltar, the overdraw which it pretended to have paid off by drawing a check and dating it on the 31st of the month and then holding it up and not depositing it in the bank.

"A good way to test that in your mind is to just assume that Midwest had drawn a check on the 31st, since the end of the month is said to be a normal accounting period, and was so used by Gibraltar for the amount that it drew on the first. It would have reduced Midwest\'s cash balance by that amount on the 31st. So in this way, a check which was never deposited, which was not intended to be deposited on the 31st of a month, was misrepresented in the statements as cash, a deposit in transit, when as a matter of fact it had not been deposited under the understanding and was not deposited until the first of the month. And I am sure that the evidence shows this beyond a reasonable doubt." (Emphasis added.)

The trial court may express its opinion on the guilt of the accused only where all facts are admitted by the accused and only a question of law remains. United States v. Murdock, 290 U.S. 389, 54 S.Ct. 223, 78 L.Ed. 381 (1933); Billeci v. United States, 87 U.S.App.D.C. 274, 184 F.2d 394 (1950). See, United States v. Spica, 413 F.2d 129, 133 (8th Cir. 1969). Where the question of intent to commit the offense charged is disputed, an expression of opinion on the guilt of the accused is reversible error. United States v. Murdock, supra; United States v. Musgrave, 444 F.2d 755, 763 (5th Cir. 1971); United States v. Smith, 399 F.2d 896, 899 (6th Cir. 1968).

In the present case, the trial judge instructed the jury that the evidence showed "beyond a reasonable doubt" that the defendant had "dictated" an arrangement which "was designed to and did misrepresent the financial condition of Midwest Casualty Company on the books of the company and on the statements submitted to the Insurance Department." This statement made it clear to the jury that, in the trial judge's opinion, the government had produced proof beyond a reasonable doubt of two of the three essential elements of the offense—that the defendant had acted with specific intent to defraud, and that he had, with intent to execute his scheme to defraud, submitted reports to the Division of Insurance. Yet, the issue of intent was disputed by the defendant in cross-examination, through defense witnesses and in his argument to the jury. In our view, the trial judge's comments were equivalent to a partial directed verdict and expression of guilt.

The government urges, however, that in this case, the trial judge's comments are not reversible under Murdock because the trial judge did not actually use the term "guilt" in stating its opinion.³ We find this distinction to be without merit. Where the essential element of intent is in dispute, the defendant is just as effectively prejudiced whether the court states, as in Murdock, that the defendant is "guilty," or if it states, as here, that the government has established the disputed element of intent beyond a reasonable doubt. See, McBride v. United States, 314 F.2d 75 (10th Cir. 1963); Bennett v. United States, 252 F.2d 97, 99 (10th Cir. 1958); Davis v. United States, 227 F.2d 568 (10th Cir. 1955). Cf., United States v. Ornstein, 355 F.2d 222, 224 (6th Cir. 1966).

In McBride v. United States, supra, the defendant was also charged with mail fraud. He argued that there was no intent to defraud. At the close of that trial, the judge also commented on the evidence. He did not state that he believed the defendant to be "guilty," but made it clear that he believed that fraudulent intent had been established.⁴ The Court of Appeals reversed, relying on United States v. Murdock, supra, and stated:

"* * * The comments must * * * be taken as a statement of the court that the accused was guilty, and this was not warranted under the circumstances. * * *"

McBride v. United States, supra, 314 F.2d at 77.

While we believe that the trial judge's statement of opinion with regard to the element of intent constitutes reversible error under United States v. Murdock, supra, we believe his other comments provide additional reasons for reversing this case.⁵ As Judge Stephenson recently said:

"* * * The trial court commands the attention and respect of the jury.

Great care must be exercised so as to avoid the appearance of advocacy for a particular party. * * *"

Scruggs v. United States, 450 F.2d 359, 363 (8th Cir. 1971), cert. denied, Chambers v. United States, 405 U.S. 1071, 92 S.Ct. 1521, 31 L.Ed.2d 804 (1972). Accord, United States v. Dunmore, 446 F.2d 1214, 1218 (8th Cir. 1971), cert. denied, 404 U.S. 1041, 92 S.Ct. 726, 30 L.Ed.2d 734 (1972).

The Supreme Court has recognized:

"* * * The influence of the trial judge on the jury `is necessarily and properly of great weight\' and `his lightest word or intimation is received with deference, and may prove controlling\'. * * *"

Quercia v. United States, 289 U.S. 466, 470, 53 S.Ct. 698, 699, 77 L.Ed. 1321 (1933).

In Weare v. United States, 1 F.2d 617, 618 (8th Cir. 1924), rev'd, 276 U.S. 599, 48 S.Ct. 321, 72 L.Ed. 724 (1928), we stated:

"The instructions, however, should not be argumentative. The court cannot direct a verdict of guilty in criminal ca

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