United States v. Stoehr, No. 10564.

CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)
Writing for the CourtKALODNER and STALEY, Circuit , and STEWART
Citation196 F.2d 276
PartiesUNITED STATES v. STOEHR.
Decision Date25 April 1952
Docket NumberNo. 10564.

196 F.2d 276 (1952)

UNITED STATES
v.
STOEHR.

No. 10564.

United States Court of Appeals, Third Circuit.

Argued January 24, 1952.

Decided April 25, 1952.


196 F.2d 277
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196 F.2d 278
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196 F.2d 279
Charles J. Margiotti, Pittsburgh, Pa. (Margiotti & Casey, Pittsburgh, on the brief), for appellant

Arthur A. Maguire, U. S. Atty., Scranton, Pa. (Joseph P. Brennan, Asst. U. S. Atty., Scranton, Pa., on the brief), for appellee.

Before KALODNER and STALEY, Circuit Judges, and STEWART, District Judge.

STALEY, Circuit Judge.

Defendant was indicted for wilfully and knowingly attempting to evade a large part of his income taxes for the years 1943, 1944, and 1945, in violation of Section 145(b) of the Internal Revenue Code, 26 U.S.C. § 145(b). After a trial consuming 17 court days, the jury returned a verdict of guilty on all three counts, and defendant has appealed from the judgment and sentence.

During the period covered by the indictment, defendant was the sole owner and proprietor of a large, retail household furnishings store in Scranton, Pa. His former office manager, August W. Tross, was the key government witness. Tross testified in detail regarding the scheme for evasion of taxes evolved by defendant and himself. At the end of 1943 or early in 1944, Tross submitted to defendant a profit and loss statement for the year 1943 and, with it, an estimate of the amount of income taxes due. The defendant then decided the amount of taxes he wanted to pay and directed Tross to work out the mechanics of the plan whereby net income could be conveniently "reduced." The plan was not an unusual one: inventory and sales were understated, purchases were overstated, and certain living expenses of defendant were disguised as business expenses. Defendant's original books of entry were apparently at all times accurate, but false entries were made by Tross on ledger cards which were accessible only to defendant and Tross. False financial statements were prepared by Tross on the basis of the false entries and these statements were turned over to Griffiths, a certified public accountant, who prepared defendant's returns. As a result of these manipulations, defendant paid $39,261 in income and victory taxes for the year 1943 instead of $193,547, the actual amount owed. Substantially the same procedure was followed the next two years. For the year 1944, $87,073 in taxes were evaded and for the year 1945, $93,133. At no time during the period covered by the indictment did Griffiths make an independent audit.

Defendant, testifying on his own behalf, asserted that he had never given Tross instructions to falsify his income and that he had no knowledge whatsoever of Tross' manipulations which had conferred upon him such substantial financial benefits. Bookkeeping was Tross' province and on him defendant had placed complete reliance, we are told. Defendant testified that although he signed his income tax returns, he had never analyzed them, having depended entirely on Tross. But defendant admitted that he was the active head of his business and that he devoted all his energies to it. When asked on cross-examination what reason Tross had for conceiving and carrying out such a plan, defendant's only answer was "I don't know."

Defendant sold his business in March 1946. Early in 1947 Griffiths, about to prepare defendant's income tax return for the year 1946, made repeated unsuccessful attempts to secure a balance sheet and a reconciliation of capital account from defendant and from Tross, who continued to keep defendant's books. Becoming suspicious, Griffiths demanded that defendant and Tross meet with him. Several meetings followed, and finally the books were handed over. Griffiths testified that defendant, upon being confronted with the accusation that the 1944 figures were false, admitted his scheme and offered to pay any fee to keep the matter quiet. The next morning

196 F.2d 280
Griffiths reported the matter to a representative of the Bureau of Internal Revenue in Scranton

There was clearly abundant evidence to support the verdict of the jury. It is defendant's contention, however, that prejudicial errors during the course of the trial necessitate the grant of a new trial.

First, defendant asserts that the trial court committed reversible error in restricting the recross-examination of Tross and the cross-examination of Griffiths. Tross was on the stand for 4 ½ days. During that time he was cross-examined more than extensively and all avenues were thoroughly explored.1 The restrictions to which defendant objects all occurred near the close of recross-examination. Cross-examination is, of course, a matter of right. Alford v. United States, 1931, 282 U.S. 687, 691-694, 51 S.Ct. 218, 75 L.Ed. 624. The bounds of proper cross-examination, however, must necessarily be within the sound discretion of the trial court. United States v. German-American Vocational League, 3 Cir., 1946, 153 F.2d 860, 865, certiorari denied 329 U.S. 760, 67 S.Ct. 114, 91 L.Ed. 655. This rule can be applied with even greater force to recross-examination. Where new evidence is opened up on redirect examination, the opposing party must be given the right of cross-examination on the new matter, but the privilege of recross-examination as to matters not covered on redirect examination lies within the trial court's discretion. See 6 Wigmore on Evidence § 1897; Faulk v. State, 1933, 47 Ga.App. 804, 171 S.E. 570, 571.

The first restriction of recross-examination of Tross to which defendant objects involved questions relative to attempts made by defendant at a meeting allegedly held April 16, 1947, to have Tross submit to Griffiths the balance sheet, reconciliation of capital account, and other information requested by Griffiths. The events of April 1947, which finally led to the discovery by Griffiths that false financial statements had been submitted to him, were brought out by the prosecution on direct examination, and defense counsel thoroughly cross-examined Tross on this subject. On redirect examination, the matter was not reopened. Whether defense counsel was to be granted the privilege of reopening the subject on recross-examination was a matter within the trial court's discretion, and we do not think it should be disturbed. Moreover, it should be noted that the ruling of the court specifically applied only to two questions asked to which objections were sustained. The ruling was not one excluding a line of questions. See United States v. 3.544 Acres of Land, 3 Cir., 1945, 147 F.2d 596, 601. The trial judge stated that if counsel wanted to develop any particular fact to which government counsel made objection, he would make a specific ruling. But defense counsel did not pursue the matter.

A second restriction on the recross-examination of Tross to which our attention is called occurred when Tross was asked whether he had engaged in manipulating the income tax returns of defendant's predecessors prior to 1939. The record reveals that prior to 1939, the date on which defendant purchased his business, Tross had been in the employ of defendant's predecessors. On direct examination, Tross was interrogated only about the years covered by the indictment (1943, 1944, and 1945). On redirect examination, the prosecution was allowed to question Tross about manipulations between 1939 and 1943.2 In his offer of proof, defense counsel stated that his purpose in developing this evidence was to show that Tross had engaged in manipulating figures for his previous employer without the knowledge of that employer and for the purpose of refuting the inference that Tross had learned to manipulate figures at the request of defendant. In view of the testimony on redirect examination, the court was well within its discretion in sustaining the objection to this question. Even

196 F.2d 281
if it were asked on cross-examination, it might well have been excluded as collateral and as a matter of defense. See Moyer v. Aetna Life Insurance Co., 3 Cir., 1942, 126 F.2d 141. We fail to see that knowledge as to where and when Tross learned the art of manipulation could have shed any light on the issue before the jury.3

On the cross-examination of Griffiths, the trial court sustained objections to questions designed to elicit whether the witness was acquainted with the policy of the Treasury Department as to voluntary disclosure of fraud and whether, on the evening of April 22, Griffiths had advised defendant that he could make a voluntary disclosure and escape criminal prosecution. Defendant, on appeal, contends that this restriction was a serious one in that the excluded line of questioning was designed to test the credibility of witness Griffiths. Defendant's argument assumes that Griffiths deserted his client by not advising him about the Treasury policy and by reporting him to the Bureau of Internal Revenue immediately. From this premise, defendant argues that the jury was entitled to consider whether Griffiths was prejudiced in his testimony because he was attempting to justify his conduct. We fail to see how this line of questioning would have shed any more than infinitesimal light on the credibility of Griffiths. Even if we assume that Griffiths deserted his client, a debatable assumption, it is highly speculative whether...

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95 practice notes
  • Walczak v. State, No. 32
    • United States
    • Court of Appeals of Maryland
    • September 1, 1983
    ...States v. Taylor, 305 F.2d 183, 187 (4th Cir.1962), cert. denied, 371 U.S. 894, 83 S.Ct. 193, 9 L.Ed.2d 126, United States v. Stoehr, 196 F.2d 276, 284 (3d Cir.1952)." See United States v. Mo. Valley Const. Co., 741 F.2d 1542, 1547-1548 (8th Cir.1984); United States v. Green, 735 F.2d ......
  • United States v. Kenny, No. 71-1886 to 71-1890.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • May 22, 1972
    ...The privilege of recross examination a fortiori ". . . lies within the trial court's discretion." United States v. Stoehr, 196 F.2d 276, 280 (3rd Cir.), cert. denied, 344 U.S. 826, 73 S.Ct. 28, 97 L.Ed. 643 We have considered each other reference to alleged improper cross examinat......
  • United States v. 15.3 ACRES OF LAND, ETC., Civ. A. No. 5051.
    • United States
    • United States District Courts. 3th Circuit. United States District Court of Middle District of Pennsylvania
    • August 15, 1957
    ...1939, 106 F.2d 693, at page 705; United States v. Stoehr, D.C.M.D.Pa.1951, 100 F.Supp. 143, at pages 154, 159, affirmed 3 Cir., 1952, 196 F.2d 276, 33 A.L.R.2d 836. In most instances the matter was cleared up by later testimony and the rule of law applied by the commission. At the conclusio......
  • United States v. Culver, Cr. No. 26195.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Maryland)
    • October 3, 1963
    ...cert. den. 350 U.S. 912, 76 S.Ct. 196, 100 L.Ed. 800; United States v. Stoehr, M. D.Pa., 100 F.Supp. 143, 162 (1951), aff'd 3 Cir., 196 F.2d 276, 33 A.L.R.2d 836, cert. den. 344 U.S. 826, 73 S.Ct. 28, 97 L.Ed. 643; Gariepy v. United States, 6 Cir., 189 F.2d 459, 464 (1951); United States v.......
  • Request a trial to view additional results
95 cases
  • Walczak v. State, No. 32
    • United States
    • Court of Appeals of Maryland
    • September 1, 1983
    ...States v. Taylor, 305 F.2d 183, 187 (4th Cir.1962), cert. denied, 371 U.S. 894, 83 S.Ct. 193, 9 L.Ed.2d 126, United States v. Stoehr, 196 F.2d 276, 284 (3d Cir.1952)." See United States v. Mo. Valley Const. Co., 741 F.2d 1542, 1547-1548 (8th Cir.1984); United States v. Green, 735 F.2d ......
  • United States v. Kenny, No. 71-1886 to 71-1890.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • May 22, 1972
    ...The privilege of recross examination a fortiori ". . . lies within the trial court's discretion." United States v. Stoehr, 196 F.2d 276, 280 (3rd Cir.), cert. denied, 344 U.S. 826, 73 S.Ct. 28, 97 L.Ed. 643 We have considered each other reference to alleged improper cross examinat......
  • United States v. 15.3 ACRES OF LAND, ETC., Civ. A. No. 5051.
    • United States
    • United States District Courts. 3th Circuit. United States District Court of Middle District of Pennsylvania
    • August 15, 1957
    ...1939, 106 F.2d 693, at page 705; United States v. Stoehr, D.C.M.D.Pa.1951, 100 F.Supp. 143, at pages 154, 159, affirmed 3 Cir., 1952, 196 F.2d 276, 33 A.L.R.2d 836. In most instances the matter was cleared up by later testimony and the rule of law applied by the commission. At the conclusio......
  • United States v. Culver, Cr. No. 26195.
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Maryland)
    • October 3, 1963
    ...cert. den. 350 U.S. 912, 76 S.Ct. 196, 100 L.Ed. 800; United States v. Stoehr, M. D.Pa., 100 F.Supp. 143, 162 (1951), aff'd 3 Cir., 196 F.2d 276, 33 A.L.R.2d 836, cert. den. 344 U.S. 826, 73 S.Ct. 28, 97 L.Ed. 643; Gariepy v. United States, 6 Cir., 189 F.2d 459, 464 (1951); United States v.......
  • Request a trial to view additional results

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