*3
DENMAN, Circuit Judge.
apparent
argument
here
evidence,
that certain
we find re-
quired
support conviction, may
not have
produced by
been
appellee,
because it
necessary
not have seemed
in
view
assumption
an erroneous
of the lower court
regarding the admissibility of certain books
of account. The facts are involved and
cover
accounting
transactions and
establishing
development
and
large
widely spread
organization,
business
We,
during twenty months of its existence.
therefore, have undertaken
the labor
extended consideration
evidence and
which,
guidance
trial,
law
the new
here,
appears
from the record
justice
requires.
Appellants were indicted under section
(18
of the United States Criminal Code
338)
having
USCA
§
devised a scheme
sundry persons and,
to defraud
purpose
scheme,
executing
causing
placed
letter in
the United States
Phcenix,
letter,
Post Office
Ariz. The
April
mailed
as an in-
claimed
scheme,
cident to the
was innocuous in it-
plan charged
self. The
an elaborate
was
involving
persons
one
a number of
other
organ-
than the
included the
the sale
ization
of shares
stock
corporation,
of an Arizona
“The Clarence
Stores, Inc.,”
Saunders
formed to establish
Arizona,
a chain store
business
peculiar system
by Clar-
under a
licensed
Saunders,
falsely
ence
represented
which stock was
greater
be of
than the
value
position
corporation
war-
financial
charged
further
that the
ranted.
It was
appellants, in furtherance
the sale of the
falsely
stock, fraudulently
rep-
intended
represent
did
business
resent
that the
corporation
being
un-
conducted
Saunders,
guiding hand of Clarence
der the
Second,
give
guidance.
no such
would
that Saunders
appellants knew
whereas
pur-
representation
such
offered of
management
in the-
guiding
had no
hand
gro-
profitable
chasers of the
cery-business,
conduct
supervision of the business.
it was conducted
whereas
changed
times
corporation several
apрellants.
loss
known to
hereinafter called
name and is
claims that
in
First.
Company. There
a demurrer
appellants represented
guidance
describing
ground
dictment
prospec-
to a
Clarence Saunders
a letter
been
such an artifice to defraud
Mortgage
purchaser
Bond &
tive
from the
alleged, one consist
reality
two offenses
corporation they
Corporation,
controlled.
misrepre
of the stock
ing of the sale
concerning
*4
language
The
indictment
value,
other
of its
sentation
guidance
“That
the business
is:
after
of the assets
conversion
fraudulent
Stores, Inc., was
said Clarence Saunders
being
also
The demurrer
was sold.
the stock
hand’
indefiriiteness,
‘Guiding
conducted under
un
vagueness,
claimed
Saunders;
However,
in of
when
truth
Clarence
charges.
certainty in the
fact,
single in
as the defendants then and
as a
scheme
describes the
dictment
knew,
hand
had no
prospective well
Clarence Saunders
defrauding of the
one for
stockholders,
management
supervision
one
or
it states
in the
and the fact
corporation.”
guid-
which business
said
the scheme
more incidents of
portion
the letter is
follows:
in them ance
separate crimes
might constitute
guiding hands
mails to
Clarence Saunders’
selves,
“With
apart from the use
different stores to
scheme,
it in over the
be established
not convert
promote
does
name,
only say
thing
one
215 under his
we can
section
separate offenses under
to two
is,
you
yeárs
a
find
Mc and that within few
will
Code.
Criminal
of the United States
outstanding
14 F. Clarence Saunders Stores the
(C. C. A.)
States
Lendon v. United
n
13;
food distribution stores in the world.”
12,
States
v. United
(2d)
Sunderland
207;
202, 205,
Worth
A.)
(2d)
19 F.
(C. C.
This letter with its statement
A.) 64
(C. C.
F.
ington v. United States
“to
estab-
guiding hand
the stores
be”
over
938;
936,
(C.
v. United States
(2d)
Scheib
12, 1930,
August
four
lished was dated
75,
(2d)
14A.)
F.
77.
C.
alleged
after the crime
to be
months
by
ample
mailing
of the indictment
charged
committed
letter on
with
The scheme
9,
April
1930. At most it is a
apprise
of what
defendants
particularity
they
representation not
This
that Clarence Saunders
on the trial.
have to meet
would
States,
guiding,
guide,
but that he
285 had been
would
Hagner v. United
is sufficient.
861;
stores.
L. Ed.
established
52 Ct.
76
future
S.
U. S.
(C.
9th)
A.
States
C.
v. United
Wheeler
F.(2d)
support the
far
To
verdict as
as it rests
assignments of error
218. The
fraud,
alleged
required
on this
we would be
demurrers are not
overruling
in the
warranting
rational inference
to find a
well taken.
beyond
believing
reasonable
jury in
doubt
in-
proof
appellants mailed the
appellants’
letter contained
de-
(a) April
in further-
letter of
dictment
ceitful assertion
Clarence Saunders’
purchasers
to defraud
of a scheme
ance
(b) that
its
guidance;,
knew
circumstantial;
entirely
stock was
that,
false, the state-
falsity;
(c)
if
say,
scheme would have to
such a
tnat is
alleged
ment made four months after
from
beyond reasonable doubt
be inferred
the crime evidenced a
commission
occurring long
in nature
acts circumstantial
time the indict-
scheme
defraud at the
incorporation
the Stores Com-
after
ment letter was mailed.
October,
no evi-
There was
pany in
(a) Concerning the absence Clarence
oral state-
dence,
writing
either
guiding hand in the business
express
intent to Saunders’
appellants, of
ments of
defraud.
testimony offered
groceries,
selling the
prosecution’s evidence
.in
maintain its burden
into two clas-
could be divided
regard
this
Company,
proof
as follows: The Stores
First,
proof offered to show a
sifications:
described,
pros-
manner hereafter
obtained
in a
by representing
to defraud
scheme
from
or concession
Clarence
license
pective purchasers of stock that Clarence a
provided for the establish-
guiding Saunders which
did have a
Saunders would and
of not
business,
and New Mexico
ment in Arizona
hand in connection
twenty-five
prior
than
stores
gave less
asserted that
whereas was
Saunders
Janu-
merchandising
operation;
in-
following
and store
1, 1931, which license
ary
reg-
structions as to the standard rules and
portions:
pertinent
govern
ulations
that shall
establish-
equip-
store
standard
“To install such
ment,
operation
maintenance
operated
to be
store
each
in detail
ment
stores,
as to
other
and instructions
аll
required
be
agreement
this
under
standard
regulations
rules and
which are
purchased
to be
the same
licensor
contemplated by
agreement.”
prices
shall be
standard
Licensor at
except
shipment,
time of
in effect at the
peculiarly
Here we have a
licensed set
shall in-
the Licensor
items which
those
retailing
groceries
fixtures used in
by the
purchased elsewhere
struct
instructions as to the detail of the mer
Licensee.
compli
chandising.
It is obvious that the
placed in each store
“To have
ance
the Stores
with the in
position
be di-
particular way and
as shall
structions of the
concession or li
above
Licensor,
large sign of the
rected
cense would warrant the statement that it
designated by as shall be
dimensions
guiding
was conducted under the
hand of
Licensor,
appear
shall
the trade-
on which
support
Clarence
To
burden
Saunders.
Saunders, Sole Owner of
name ‘Clarence
guidance,
that there was no such
*5
Name,’
My
prescribed by the Licensor.
as
proseсution
the
offered
evidence to show
no
* * *
substantially
the
business was not
con
required by
in
authority ducted
the manner
the
“The Licensor shall have
in
representatives
any structions
license. It
through any of
of the
is testified that
its
operated
personally
Clarence
did not
inspect any store
hereun-
Saunders
in
time to
stores,
merchandise,
spect
der,
but
including
and shall
it would still be his
its
guidance
authority
inspect
through the
to
store fixtures and in
have the further
following
of the Licensee and ob-
the instructions. A. E. Sand
audit the records
ers,
appellants,
information and re-
under indictment with the
tain therefrom such
evidence,
turned
ports may seem desirable to the Licensor.
state’s
and testified that
as
instructions referred
in the license were
to
pay
promptly, accord-
“To
the Licensor
him,
received
some
were car
sale,
ing
its
for merchandise
to
terms of
all
out
others
to
ried
not. As
those that
equipment
by it to
store
sold
and/or
out,
prosecution
* *
were not
*
carried
of
to
Licensee from time
time.
testimony
fered
to their character or
specifications for each store
“Plans and
carry
as to whether the failure
them out
to
building;
changes
all
instructions as to
amounted
a substantial failure to
to
con
required
remodeling
in
that shall be
in
duct the business
accordance with the
instance; design
each
for
color scheme
requirements of the instruction. In crim
front;
put
design
on each store
for
to be
character,
inal case of this
the burden of
shall be inscribed on
trade-name that
prison
proof required
men
to send
to
can
show windows and on the walls of the
guess by
on mere
be sustained
building;
a detailed list with
standard
jury as whether the instructions not fol
to
description of all fixtures that shall be re-
impor
in
lowed were matters
sufficient
store,
quired
price
for each
and a
of each
following
to
tance make
admitted
item
Licensee;
Licensor
sell
at which the
will
it to
remaining
not a
instructions
conduct
plan showing
posi-
a floor
guidance of
business under the
Clarence
of,
tion
and instructions for the installa-
Sаunders.
fixture; arrangement
tion of each store
merchandise;
proof
plan
display
(b)
appellants’
for
Absence
of all
knowledge
guiding
advertising copy
terms of the li-
standard
that shall be used
opening
cense had
been followed
the Stores
announcement
the first
Assume, however,
established;
Company.
that the in-
advertising
store that shall be
copy
were not followed and that
and instructions as to its use in
structions
was,
stores;
effect, entirely
operation
in
describing
a list
business
free from
guidance.
the merchandise assortment that
Clarence Saunders’
The fair and
shall be
department
store;
summary
appel-
of the facts in
handled
each
of a
in- exhaustive
guide
claims
is no
purchasing
formation as a
of lants’ brief
that there
evidence
merchandise,
appellants
any
how
assemble and
record that the
had
to
dis-
tribute;
charging
instructions as to the
information
them with the knowl-
means and
guidance was not
accounting, edge
methods that shall be used in
that such
followed
grocery
keeping
administration of the
busi-
necessary
all
records in
kers,
challenged
attempt by
there is no
This
ness.
statement
prosecution’s
summary
proof
maintain a
burden
that it was
the limited
any
and in
way
of the voluminous
of its
violation of
ethics
brief
business
upon
sought
contrary
any
to show
provisions
which
of the Ari-
intricate facts
contrary,
zona
On
There
nothing
scheme.
fraudulent
law.
Brandt, during base an inference
government’s
project
witness
that the
was ab
twenty
initio
question
the account-
a stock selling
cheat. Over
period
most
Company,
established,
that stores were in
testified
fact
and there is
ant for
nothing
testimony
with the
to do
no reason
doubt the
E.
A.
Greenbaums
Sanders,
prosecution’s witness,
con-
management
the business
“I
forma- was
Appellants’
per
statement
sold
a thousand
cent
the Clar-
cern.
of the ence
conduct
Saunders
I thought
Stores.
the busi-
tion of
grocery
business,
successful,
ness
going
contained in the follow-
and as far
prose-
unchallenged
I
summary,
thought
in the
as knew the
ing
Greenbaums
so.”
here,
supported
brief
and is
cution’s
considеration
Clarence Saunders
here
relevant
These facts are
record.
for the concession
payment
was the
of one-
proved
that,
are not
while
show
to have had actual
cent,
per
half
gross
sales of the
knowledge
the ex-
$2,000
chain and
in cash. No
was of-
guidance,
prosecu-
tent
Saunders’
fered and it is not contended that the con-
maintain
burden
also has failed to
tion
sideration was excessive.
E.A.
Sanders
n any
by showing.
participancy
such
option
had an
“Cash-Way” gro-
on several
management of
business
cery
Tucson,
stores in
Ariz. On October
constructively charge them
would
18, 1928,he
corporation
formed an Arizona
knowledge.
Stores, Inc.,
called the Clarence Saunders
*6
Sanders,
appellants
A. E.
for
the Stores
of
opinion.
The
this
His
business,
twenty years
grocery
applied
Corporation
in the
then
the
to
Wiggly
the
South- Commissioner
president
Piggly
-permit
of
of
the
then
Arizona for
Arizona, necessary
stock; 151,000
grocery stores in
to
par
chain
sell its
western
no
1928,
September,
project to
a
common shares
to A. E. Sanders for
discussed
trans-
to
grocery chain
that state un-
fer
it of the
option,
a
concession
establish
1,500
preferred
system merchandising
capital stock,
per
der
of
devised
a
with 8
cent,
dividends,
to
Appellants were
be
cumulative
per
$100
Saunders.
at
Clarence
share,
50,000
of
par
an issue
stock to inves-
shares of no
common
brokers
company.
very
per
Corporation
$1
had a
at
share.
Saunders
tors
Commis-
reputation
granted
permit.
for his es- sioner
and favorable
wide
systems.
grocery
chain
A.
of
tablishment
prosecution
offered
to
no evidence
Sanders,
September 28, 1928,
on
obtained
E.
permit
improperly
show that
was
pro-
Clarence Saunders a license or conces-
from
attempt
made
cured. It
no
to show the val-
operate
of
to
a chain
less than
sion
of
ue
the concession in
days
of
boom
twenty-five stores in Arizona and New
Testimony
offered
its
value
fair
Mexico.
is a
inference from the
September,
years
acqui-
two
after its
proofs
that one
year
depression
sition and
after the
had
appellants
present
was
when
license was begun,
is
relevant to a
determination
Saunders,
appel-
procured from
and that
acquired.
course,
when
its worth
Of
its
pro-
prospective brokers knew the
lants as
be
agreed
value cannot
determined
gro-.
license under which the
visions
Saunders,
to
consideration
Clarence
con-
eery
to be conducted.
business was
sisting largely of
per
of 1
one-half
cent,
great ap
sales;
there was
gross
fall
In the
a then indeter-
prosperity,
superficial,
parent,
quantity.
if
and we
any
minable
Nor is there
evi-
fact
notice
that at that
judicial
take
dence adduced
price
what would be a fair
year
collapse,
time,
the business
option
Cash-Way
before
prominent business authorities and
many
compelled
stores. We
therefore
to as-
validity
economists believed
extraordi
permit
learned
sume
from the-
permanent
condition to be
prosperous
authority
nary
controlling
state
stock sales and
151,000
far
ly
par
So
as concerns A.
established.
E.
that
subsequently
common shares
Sanders,
twenty years’ expe
his
with
issued to A. E. Sanders were
rience,
time,
opening a new chain
property
to deal with
his
as he
In
chose.
appellants becoming
any
his
improprie-
aS concerns
bro-
absence
evidence of
ap-
compensated by
tract for services
be
of it to
gave some
that he
ty, the fact
law
commissions
the Arizona
for their
allowed
premium or retainer
pellants as a
performed
made
at arm’s
criticised.
cannot
brokers
services as
length
Company.
from the Stores
charge that
does not
The indictment
presidency
A. E.
Sanders
election
In
face of this
there
de-
purposed to
Company was
nothing
of the Stores
warrant
the inference that
Clar-
believing he was
one into
any
appellants
employed
ceive
converted
any proof
Nor was
company,
ence Saunders.
managers
brokers to
con
not the
It is
any
deceived.
one was so
structively
charged
or otherwise
with
Qarence
of a
person
taking
an unknown
case
knowledge of the extent to which
by a
possessed
one
name identical
guidance
through
Saunders’
instruc
man
business
favorably known
widely and
prose
tions was or was not
followed.
buyers.
investors
using
to deceive
it
proof
cution has not
sustained its burden
in 1928
A.
Sanders
appellants and
E.
When
had reason
believe
procuring
formers’
discussed
guiding
Clarence
had no
hand
Saunders
chain,
lat-
a new
business,
finances for
even if it had been sustained
very
experience in that
years’
twenty
ter’s
the absence of such guidance.
as to
sep-
not to have had
not shown
trade
(c)
prose-
What we have said about the
enterprise.
proposed
asset value
arate
cution’s failure to sustain
burden as to
business
competitive
in such a
Success
falsity
guid-
of the claim of Saunders’
dependent
largely
grocery trade
retail
to any knowledge
appel-
ance and as
expe-
A. E. Sanders’
management, and
concerning any
lants
failure
the com-
in another
services
included
rience
pany to
makes
unnecessary
follow it
pecul-
He was
chain.
Saunders
Clarence
August
consider whether the letter of
Clar-
guidance of
iarly fitted
follow
established,
erring
ref
to stores “to be”
the bur-
With
instructions.
ence Saunders’
by appellants,
is evidence
the scheme
prosecution,
on the
fraud
den
charged
indictment,
pur-
to defraud
any one was
to show
the failure
by falsely
guidance,
claiming
chasers
of Clarence
confusion
fact deceived
which scheme existed
months earlier
four
significant.
E. Sanders
A.
Saunders with
alleged
when the crime was
to be consum-
speak of the
*7
by the latter
signed
Letters
mated.
disclaiming
person,
third
thus
former in the
The prosecution having
Second.
failed
any
to
negativing
scheme
any identity and
charge
its
to sustain
burden on the
of false
to
defraud.
name
use
representations concerning Clarence Saun-
agents
sales
became the
appellants
The
guidance
ques-
enterprise,
ders’
of the
Company,
first
at
for the Stores
stock
remains,
supported by proof of
tion
itWas
Bros.,
later
selling as Greenbaum
by appellants
oí
charges
a scheme
Corporation,
Mortgage
through
Bond &
falsely
represent
profitable
pros-
to
by them.
formed
corporation
an Arizona
perous
the business?
condition of
them
letters sent out
of the
None
charge
The evidence offered on this
was
or ad-
to assert
purports
name
company’s
representing
letters
as follows:
capacity over
managerial
appellants’
mit
grocery business.
your
will find that
“You
investment
Stores will be one of
Clarence Saunders
testified
witnesses
government’s
profitable ever
the most
made.”
separate from
had
office
appellants
an
that
build-
a different
Stores
your
“Through
preferred
you are
stock
separate
of account
books
kept
ing;
year
your
percent
receiving 8
a
invest-
transactions;
none of them
that
thеir stock
proceeds
from the
of the
ment
stores
board of directors
of the
a member
was
your
“I believe
common
warehouses.”
that
company was
Company; that
eventually surprise you by
will
stock
A. E. San-
by its
board and
own
controlled
per
you
share
re-
large annual income
will
Company’s grocery
ders;
the Stores
that
long period
years.”
from over a
ceive
any
way managed
not in
was
business
doing
stores in Arizona are
“Your
any di-
Greenbaums,
they have
nor did
away
gamble
Do
business.
not
enormous
company’sbooks
over the
or control
rection
in them.”
interest
your
account,
the entries
nor
with
connection
present
of business at
has
no
volume
There was
“The
and records.
in such books
expect
satisfactory, and we
that
brokerage
very
con- been
that the
show
year
millions of
into several
books
will run
underlying
account
Null’s testi
mony
truly
dollars.”
kept
truly
and in fact
loss,
showed a
appearing both from the
any
beyond
business is
“Our volume of
hooks of
entry, certain of which
anticipated,
each
figure
had
with
we
that
produced,
and m the summaries
You,
showing
month
substantial increase.
ledger
in evidence. The
doubt,
Clarence.Saunders
are aware that
therefore, were
offered or
admissible
owned,
home
home
Stores in Arizona are
as evidencing in themselves a fraud or a
capital.
operated,
operated by
Arizona
”
fraudulent
u
scheme.
O
being
“
is now
sold
r
common stock
Undoubtedly the mere summaries of
share,
being justified
per
at
this raise
$7.50
showing
books
a loss would be admis
satisfactory
very
condition
sible in evidence were
(a)
it shown either
really
company,
has
exceeded our
appellants
that the
participated
had
in their
expectations.”
keeping, or (b)
appellants’ position
that
to attribute
There is evidence sufficient
anged
employed by
from brokers
repre-
responsibility for
these
ch Stores Company
principals
whom
sentations ’
corporation
,
,
,
agent
keeping
.
representations
So far
assert
accounts of its
grocery
business.
еnormous,
pros
in a'
business was
Concerning any
ap
contention
condition,
investment,
perous
an advisable
pellants
any
were at
time converted from
future, etc.,
ap
great
it is
would have
employed brokers, engaged
stock,
selling
parent
they might
rapidly
all be true in
to dominant
participating managers
twenty-five
stores and
establishing
new
itself,
grocery
already
business
have
we
them,
if in this
building up
even
trade
pointed out
testimony
prosecu
developing period
aggregate
business
contrary.
tion’s witness
Its
witness
stores showed a loss.
is com
all
affirmatively
Brandt
appel
testified
experience that a new retail
mon business
only
nothing
had
do with the
any
re
merchandising business
business
lants
keeping
Compa
of the books of the Stores
many
lying
customers
run
ny, but also that
nothing
do
being
loss
business
satisfac
while the
management
with the
of its
busi
prosecution
did not
torily established.
ness. what has
regard
been shown in this
attempt
proof
to sustain
burden of
under the first
app
classification of the
begin
as outlined in t-he
statements
as well herе.
lies
ning
paragraph,
of this
disconnected from
any
profit,
operating
claim of an
were false-
required
We
therefore
to determine
or fraudulent.
admissibility
expert
testimony,
showing
operations,
a loss in
refer-
on this issue relied sole-
competency
ence
as evidence against
*8
ly
representations
on
aggregate
the
the
that
strangers
grocery
business whose
many
already
business of the
stores
reflect,
transactions the books
earning
profits,
such
and
dividends
that
properly
paid
had been
earned and
there-
paramount
In this connection
is
it
of
expert
testimony
from.
offered the
of
importance
note that
this
to
is
a case
not
accountant Null and certain
the
of
single
a
or
where
few transactions are to
Company
opin-
s books
account. Null s
of
explored
part
company’s
be
in but a
clearly supports
prosecution
ion
the
s con-
records. Since the
ledg
summaries of the
tention
the combined business of all
that
chargable
er are nоt
as admissions of the
stores
op-
was conducted at an
appellants
prove
because of the failure to
erating
appellants
loss at the time
advised any relationship
agency
of
for them of the
prospective purchasers
produced
profit,
it
corporation,
all the books of the
showing
arising
Concerning
admissibility
of Null’s
transactions
many
prove
be examined to
testimony, based on the several books of ac-
must
stores
aggregate
of loss m their
fact
rendered
count
available
his cross-ex-
ultimate
business.
amination, it is
be
to
noted that
prosecution
of
claim
long
the books
It has
that
now
been
in
established
our
kept pursuant
were
agreement
an
to
or
guilty
law
a man
be found
and
appellants
scheme of
imprisoned by proof
repre
to have them
of such false
falsely
profit.
contrary,
sentations,
upon
show a
On the
expert
based
accountants’
prosecution claimed
opinion testimony
at all times that
concerning
corporate
company,
which
and its warehouses from which
question,
in
of the business
records
available,
may never
the vari-
its merchandise was delivered to
but
be
records must
Arizona,
him.
and
against
ous stores scattered
in
over
evidence
be introduced
through
many
of
which the
extent
the stores themselves
and vast
The intricacies
on
retail
enterprises,
in detailed
sales. The
reflected
carried
corporate
of
appellants objected
testimony
some-
to
accounting, embodied
this
extensive
ground
on
involving
expert
oft-
of
conclusions
in
scores
times
items,
only
part,
any,
lend
if
of the books of
of thousands of
hundreds
en
permanent
upon
entry,
in
or
original
of fraud
first
to
concealment
themselves
based,
in-
of-
criminal
who with
conclusions were
those
statements
brought
in cor-
or
into the court-
procure new investors
fered in evidence
tent seek to
placed
of tri-
or
within
necessities
room
porate
From the
shares.
of
causes,
primary
appellants
reliance
of
fоr Null’s cross-exam-
reach
als
such
expert
prosecutor
is on his
witness.
ination.
him,
laymen
juries of
are unable
Without
agency of
proved
In
the absence
through
the mass
detail
to follow
corporation
appellants,
it fol
widely
transactions
extended business
lows,
recognized by
from
rule
this
court
oath,
acquit in
obliged,
their
to
would be
on
Case,
before
the Osborne
nearly
profit or loss as
cases
all
where
charge involving
can be convicted
company’s records
the ulti-
shown
attempted
misrepresentations,
to
fraudulent
guilt.
determining
mate fact
expert
opinion or conclu
be established
hand,
intricacy
account,
whose
On
other
such
to
based
books of
sions
relation,
figures,
or
massed
one
an
keeping they
and extent
detailed
had no
man, place
produced in
or
against
accused
evidence
evidence
an
other of
books
Experts
perilous position.
him in
differ
must be
available to the accused
made
accounting;
they
original
not un
or
on theories of
to
the items
shown
contain
advocacy
which,
entry,
functions
sum
permanent
known
assume the
when
first
marized,
statement;
analysis
misrepresentation.
or
prove
instead of detached
they always free
error and
nor are
from
prose-
produced by
only
books
well
figuring
mistake of fact and
as
as
summary
support Expert Null’s
cution to
theory.
implies no
on the
This
reflection
period ending De-
showing the loss for the
case,
expert
factor
in this
but the human
(1)
book
cember
are:
experts’
requires
testimony
disbursements;
(2)
two
record
cash and
permitted
bring
into the case
shall
records;
receipt
(3)
books
cash
statements of their
as
books
conclusions
journal;,
(4)
general ledger.
purpose
not available
cross-ex
any testimony
all the
record
bare
experts
amining
such conclusions. pertinent
entry or
original
first
items
generally,
particu
Courts
court
entry
permanent
contained in these
lar,
lay
pro
have
down
been careful
ordinary
in evidence.
In
books offered
requirements nеcessary to minimize
tective
jour-
bookkeeping
ledger and
business
arising
risk
accused
perma-
nal are mere summaries
other
experts.
opinions
opinion
In
records;
the cash and disbursement
nent
Rudkin,
Judge
has
rule
court
stated the
receipt
may may
books
cash
books
be,
where books of account are offered
permanent
record the
first
against
party charge
one not a
*9
here,
entries, where,
the
sales were
keeping,
able with an
that:
interest
their
twenty separate
some
stores.
made
lay
“In order
the foundation for
ad
to
the
permanent
the
en-
likelihood is that
first
mission
of such evidence must bo shown
carrying
made
each
tries would be
at
store
* * *
that
entries
the
.the
[in
books]
Daily
own individual business.
re-
on its
original
per
were either
entries or the first
ports
of sales were made
each store
transactions,”.
manent entries
the
Os
office,
whether these
to
central
hut
re-
the
(C. A.)
F.(2d)
borne v.
States
United
C.
permanent
ports
copies
from first
en-
246, 248,
certiorari denied 274 U. S.
appear.
tries
stores does
at the
47 S. Ct.
tion is are not whether the evidence error showed a questioning mailing him from further be- letter the de- cluded indictment
125
business;
they
regular
consid
course of
agents to warrant
their
fendants
copied
evi
on file in
were
from
returns
In addition
jury.
by
eration
merely
mails,
let
of
Washington.
have
a record
through
“We
receipt
dence
years,
corporations, showing
filing, by
and was
name
ter bears
Phoenix,
place
income
transcribe from
their net
which we
from
posted
apparently
return,”
signed
with
he
He testified that he
said.
letter was
business.
signature
by
purported
handwriting
tell
on the cards
by the
could
company’s name
secretary
out,
Loveland,
made
but did not
who was
them
admitted
of M.
mailing
knowledge
of his
know
own
whether
Greenbaums.
agent of the
correctly
circumstantial
from
return.
shown
were
transcribed
may be
letter
a
employee
of an
signature
having arisen on the vоir dire
only. A
Some doubt
evidence
letterhead, together with
authorized
company’s
Davidson was
plus the
.whether
by some
mailed
letter was
information contained on the
make the
proof that
respect. Cochran
one,
public,
adjourned
in this
cards
the matter was
un-
sufficient
193,
F.(2d)
41A.)
(C.
day,
C.
time
following
States
til
at which
v. United
A.) C.
States (C.
205;
v. United
Havener
witness
court armed with a
returned
200;
196,
United
v.
Levinson
F.(2d)
telegram purporting to have been sent
49
569;
567,
A.)
F.(2d)
5
(C.
agent
Department
C.
of Internal Rev-
States
41
9th)
A.
(C. C.
States
Stephens
Washington,
telegram
v. United
au-
enue
which
in
447; McIntyre
States
v. United
testify in
F.(2d)
“to
this case
thorized Davidson
769;
United
Cohen v.
A.)
F.(2d)
(C.
49
tax
C.
with reference to income
return
F.(2d)
50
(C. A.)
years
C.
(sic) Company
States
States
1929
demanding a
by appellants as
Sanders,
president
cases cited
1930.” A. E.
erstwhile
do, at
instance
in this
chain,
conclusion
grocery
different
of the ill-fated
took the stand
hold that
no more than
strongest,
any
might
their
in
privilege he
have
and waived
receipt
through
mails
proof of
objections
omnibus
on the
the matter. Over
signer
charge the
sufficient
аppellants,
part of the
the cards
ad-
were
incriminating
letter
mailing of the
jury.
and read to the
mitted
evidence
evi
any
further circumstantial
absence
duly assigned
Appellants have
error.
Free
usage or letterheads.
dence such as
ruling on this
proper
assign
A
F.(2d)
A.) 20
(C. C.
v. United States
man
748,
first,
requires,
consideration of a
ment
a
assign
in this
is no merit
750. There
income
return as evidence
full
tax
of error.
ment
company.
A return is a
true state
the Stores Com-
As
further
a
taxpayer
some one
statement
en-
during
loss
pany
operating at a
behalf,
hearsay
only
re
on his
hence
rep-
period
alleged false
tire
which
An
as an admission.
ceivable
evidence
made,
government in-
were
resentations
against
evidence
him who
admission is
income tax state-
in evidence two
troduced
circumstances,
or,
it,
proper
under the
made
In-
files of the office of the
ments
coconspirator, or
against
principal,
co-
Department for
District
ternal Revenue
tax re
The fact that income
adventurer.
They
entries
Arizona.
“public
(Rev.
records”
turns are
Act
§§
in the nature
years
1929 and
257, 1115,
55
26 USCA
USCA §
§
[26
memoranda, showing that returns
of local
greater
note])
lend them a
evi
cannot
question,
years in
been filed for the
had
they intrinsically
dentiary
pos
than
value
purporting
pertinent
to indicate
respect
taxpayer’s return dif
a
sess. In
On the first
facts under such returns.
showing
an assessment book
facts
fers from
items.
two material
One
these there are
public
of a
of
gleaned from the observation
$125,-
gross
income
indicates
regular
duty,
which
course
ficial
588.45,
$150,271.53,
loss of
and mark
proved by
may be
the book alone un
facts
year
no
tax for the
showing that
income
exception
“public
record”
der the
question
paid. A similar card
had been
hearsay
Taylor’s
Ronkendorff v.
Les
rule.
$306,054.-
gross
for 1930 shows a
income
see, 4
produce thus make the law of in the evidence committed their in- in pertinent magically troduction as admissions. vanishes. come tax returns in error equally serious committed An There can be no official doubt that inex- reception of these cards was kept office, by persons public records in plicable rule. best evidence violation required which records by kept are to be either the cards purported returns from which The office, statute or nature subject to sections made were taken were prove admissible occurring transactions 1115, 1926, pro- 257, vides, part: which Revenue Act duties, in the course of officiаl within the (26 in 1024 USCA USCA § [26 personal record observation of official upon which note]) 55 and “Returns § ing transactions, any without further by the Commis- been determined tax has guarantee Thomas, accuracy. their Salte v. * * * public records. sioner shall constitute 188, 189; 3 Bos. P. Ronken & inspection open to the a return is Whenever Taylor’s 349, Lessee, 360, dorff v. 4 Pet. 7 shall, copy any person a certified thereof 882; Gunn, L. Ed. Evanston v. 99 U. S. person upon request, to such be furnished 660, 665, 306; 25 L. Ed. White v. United prescribed regulations under rules and States, 100, 102, 38, 164 U. S. 17 S. Ct. 41 approval of with the the Commissioner 365; Ed. L. (C. Heike v. United States C. Secretary.” 83, 94; 192 A.) F. Demeter United v. 74, pursu- Treasury Regülation adopted States, App. 208, 188, 62 D. 66 F.(2d) C. provides (section above statute ant 189; United States v. Pe Mid-Continent * * * return original .“The income 422): Corporation (C. A.) troleum F.(2d) C. 67 thereof, may by the copy be furnished or a 37, 44. attorney to a United States Commissioner Assuming cards introduced in before a as evidence United States use public evidence in cause were records any court, grand litigation or in in jury cases, meaning within the above is interested United States where the conclusion does cure violations of ” * ** result. hearsay and best evidence rules dis provides: “Copies 661 28 USCA § Giving import cussed them the above. full records, any papers, or other docu- public merely record rule is to con any departments of the executive ments in figures on clude that the the card ac * * * shall be admitted in evidence curately from an transcribe'd income tax thereof, originals equally with the when Washington. light return in It throws no duly under seal of authenticated such return, original who signed hence department.” original makes return less inadmis hearsay. public sible The nature of these carefully thus statutes have procedure by out hearsay transcrip cards vitiate original re lined the tion, hearsay but it vitiate cannot what copies may be their certified made turns or is The fact that a record is transcribed. in evidence. Failure to follow the available public nothing adds what is recorded. same a clear violation the best evi Mohawk Condensеd Milk Co. United v. (C. dence Corliss v. United States C. rule. 682, (Ct. Cl.) F.(2d) States 48 685. In this 455, F.(2d) A.) 457. This court has twice 7 unnecessary of the matter view it to de provided method indicated is the whether the cide cards would have been one when an income tax proper return is contained admissible dicating references in prosecution. evidence in a criminal material original who made out the returns. (C. A.) Gibson v. United States C. 31 F. case, necessary would be Were to scription 19, 866, (2d) certiorari denied 279 S. 49 U. inquire inspection whether and tran 481, 1004; 73 L. Ed. Ct. v. S. Lewis Unit return an offi regular A.) (C. F.(2d) ed C. 38 States 413. district, cer of Arizona has also procedure received the sanc duty, recording course of a tion of the Seventh Circuit a mail fraud personal within the transaction observation Lewy (C. case. v. United States C. A.) 29 official, recording within the mean 62 A. R. F.(2d) L. certiorari rule laid ing down the Su denied U. S. 49 S. Ct. 73 L. preme cited Court cases above. Ed. 993. government, seeks to avoid the ef- be said the best ‘Nor can it evidence authority by fect of this mass of rule, applied as- to tax returns in mail fraud sertiоn the cards States, supra, offered in United Corliss v. cases records,” “public hence, and that if or overthrown the secón- be relaxed document, v. CO. et al. INS. HARRIS TRAVELERS of a the contents dary evidence of inadmissible, happens consist No. otherwise Thomas, supra. Salte v. public records. Appeals, *14 Circuit Court of Fifth Circuit. er- hardly be contended can 5, 1935. Dec. prejudicial. thus committed was ror to cross-ex- opportunity Defendants who person neither the unknown amine person nor the original return made the entries there- purported transcribed who ob- means They without from. thereof copy return or a tain off- facts might shown they have by which import damaging setting qualifying have well jury cards. financial unsound- belief based its cards Company on these of the Stores ness the aura alone, dignified as After accompanied them. officialdom nature and technical highly involved evidence, a brief Null’s Accountant' essential fact of an statement clear pro- cards as these government’s case jury been to the once must have vided conclusive. refreshing and both
Reversed. Rehearing. Petition for
On
PER CURIAM. suggesting petition in error inquiry relative opinion forecloses all falsity representations as to Saunders’ the so-called Clarence hand.” That “guiding company from the “concession” Saunders’ president he and of which of his name transferred was proved by corporation application purchase permit for a commission shares, granting certain license shares, and permit, the issuance áppearance the license an asset Company accounts —all shown in the Stores ap- and other
by documents urges Appellee’s that the con- pellee. brief $151,000 an asset at valued as cession Company’s balance sheet is “val- the Stores ueless,” not an asset. The not that appellee to show that was on the burden all, part, conforming in even pursuant given or advice requirements of which this concession did president not constitute Saun- he was We held this burden not guidance. ders’ evidence offered. This sustained evidence, prevent other and fuller does be, question on this in a new if such trial.
Petition denied.