United States v. Rutkin
189 F.2d 431
3rd Cir.
1951
Check Treatment

*2 McLAUGHLIN, and Before STALEY HASTIE, Judges. Circuit McLAUGHLIN, Judge. Circuit Appellant wilfully was convicted of attempting defeat and evade and income victory taxes.1 He claims error charge; trial court in refusing grant for judgment his motion of ac- quittal ; and in connection with certain testimony. defense Admittedly sum appellant by charged Reinfeld. one It was payment that the was made as the result Appellant extortion. contended it was in final settlement of his asserted Company interest in Vintners and reportable therefore not income corporation already paid capital gains money. tax on Reinfeld, principal wit- Government ness, testified during prohibition country, era this he and engaged five other men were “High seas called venture”. This was operation a bootlegging which, as de- attempts willfully was founded on Section 1. The who indictment manner Code, imposed 145(b) Internal Revenue evade or defeat tax this 145(b), chapter payment thereof, shall, § which reads: or the ed. U.S.C.1946 pay tax, penalties provided by and or over in addition to “Failure to collect Any law, felony per guilty attempt and, evade tax. to defeat be con chapter thereof, required under this viction be col fined not son more than than pay for, any willfully $10,000, imprisoned lect, over and tax for not account more both, together years, chapter, imposed who five with the truthfully prosecution.” account for costs to collect fails tax, any person pay over such

á33 “* * * right, title boat out of scribed, putting “a consisted percent out- beyond in and to the issued and 12-mile limit different six stock, preferred only standing capital whiskey. shares people come We buy 1, 1936, common, foreign registration.” as of October it to boats with sold *3 Co., a York enterprise Inc., In Browne Vintners continued until 1932. New The represents any all and appellant group. corporation, Ac- came into the capital in the said appellant con- of shares of stock cording did not to Reinfeld Inc., that am en- just be Browne Vintners I money, tribute “He wanted to Co. this, testified partner a him to.” As to Reinfeld and took in.” Asked titled we “Well, said, saying that delivered it him that doing, reason so Rutkin to for Reinfeld “ * * * in full ac- get we were that we some he was out afraid will making cording gave interference and trouble.” he claims he was Later and recognize as the reason “Because we were afraid and I decided to the claims repeated, pay of him” “If we didn’t take him out full.” In Reinfeld and in, probably appellant him we encoun- job would obtained a for with Browne $15,000 year. stayed tered some trouble.” Vintners at a Rutkin 'eight During in this from six months. Reinfeld Rutkin that testified was period, it, Reinfeld narrates Rut- profits. receive A month's few 3% kin was in trouble in Boston Reinfeld Reinfeld, later, said one of the other paid lawyer help named Kessler $2500 organization members he “said was him helping or for him. Rutkin lost his quit going argu- because he some had job because of Boston incident. About ments with Rutkin and he is afraid”. year gave later saw him Reinfeld person quit gave his 3% $2,000 $3,000 help him him out. share to group, Rutkin. In 1930 another ap- Reinfeld said that in 1941 he gave consisting Zwillman, Joseph of Abner $10,000 pellant representations Joseph Stacher, Davis, Harry Davis purchase the latter that he wished to purchased two others, of the enter- 50% Rutkin tavern. came back in a week or prise. liquidated The undertaking was days money ten more and at that time 1933 and there was an accounting “as him $10,000 Reinfeld accused of losing the partner to what each had.” Reinfeld track. race “And that was our only stated that not nothing coming says trouble”, first Reinfeld. There was $35,000 to Rutkin but that he was over- argument an and Reinfeld told Rutkin that drawn. He went on to in Octo- he not going give him another ber the members original cent; he was finished. venture, exception Rutkin, with the organized the Browne Company. Vintners Reinfeld testified that in late October In 1940 this was sold to Sea- Distillers early November Rutkin came to grams, Ltd. for seven and a half million his office at Browne Vintners started dollars. Reinfeld’s him, is to the off saying my “Where is ? * * * effect that Rutkin never had well, You all you done all made money, Vintners. In Reinfeld a lot of what about ?”me Reinfeld stated Rutkin $60,000 asked him answered, he “What you states do want saying that he company you had old from me now that threw all 6% and that he still had away? in Browne money got I your money.” haven’t 6% Vintners. testified Reinfeld that he an- Rutkin insisted that give Reinfeld him swered, “Jim, got money.” haven’t $100,000 pay his debts. There was an that, said Reinfeld nevertheless, gave argument he and Reinfeld said that Rutkin him the because he liked him and threatened him. Asked tell about this in because Rutkin had convinced him said, “Well, detail Reinfeld he had his “He going to be a success.” pocket At that hand in his (indicating) and said time signed Rutkin which, document would kill me he if did give among things, stated sold, days.” in three Then, said signed and Reinfeld, transferred to Reinfeld all Rutkin “run out”. Reinfeld group can- meet ‘Zwillman’s and settle some dis- incident

stated that because of the puted money them. Rutkin had and matters with appointment that he celled some dispute present discouraged group. with that disgusted that he “was disposed group quietly with the everything.” with business and $358,000. pay agreeing to Zwillman again couple A of weeks later Kessler, Then referred to at- the above pushed office, came in to Reinfeld’s' torney, present who and who was also secretary aside, latter’s and told dispute, handled the settlement asked money that “That if him that I don’t that he about Rutkin. Reinfeld states me.” At going he is kill asked what was Rutkin’s claim and $150,000. up to Rutkin’s demand went *4 replied Kessler that and Rutkin Reinfeld happened asked, “What Reinfeld was then been told long had friends a while and anything?” time, He to about this if “give money him some and Reinfeld to answered, “Well, I took sick.” through get with it”. Reinfeld and Rutkin to A two later Rutkin came week or went into another room. Reinfeld states room saw York hotel Reinfeld’s New and Rutkin, first, that at half á million wanted he re- him there. said doesn’t Reinfeld finally and he would take dollars said that but that it was member what Rutkin said $250,000. explains agreeing Reinfeld to leaving, Rutkin was As “nothing bad”. saying, get this “I wanted rid then, him to door and Reinfeld followed anyway get my him and this off mind be- “opened the that Rutkin Reinfeld states long enough. carried it I a cause I was He out. turned door and to walk started Reinfeld, agreed”. man his sick so I ‘you saying put a on me gun around and brother-in-law, person, and a obtained third money’ At give me that ”. get well and for both the settlement Zwillman money $200,000. He figure that his was Rutkin from safe and cash for two you.” $200,000 I said, “Get me will kill deposit $250,000 boxes thereafter and later, specific being Sometime no date given Rutkin. Reinfeld said that the was when fixed, at a time Reinfeld states he money Rutkin paid was because Rutkin’s well, just getting testimony was is conduct which above course of described telephoned him, told him he that Rutkin had threatened kill he Reinfeld if apologize. Rutkin sick and started first, give $100,000, latter him then did not telephone though he sounded over $200,000, up $500,000 $150,000 and then says that he crying. Reinfeld felt $250,000 compromise was a and that agreed go about and badly this paid actually figure. The cash was over .to go He to see him. Rutkin’s hotel May 11, exchange 1943 Rutkin for that him that He states Rutkin told hotel. general release from him favor Rein- slept up he been not since had to see he had feld, brothers, the latter’s Browne Vintners that Rutkin said further Reinfeld Co., Inc., and others. been crazy must have some- that he very he felt Reinfeld thing. stated Appellant’s point first concerns said, forget “Let’s sorry Rutkin and for part when the District thing.” Rutkin told him that whole instructed “If $4,000 room rent and some he owed money and was was extorted as the - money. things and asked threat, then it taxable result of income $5,000 and obtained went out Reinfeld duty reporting was under the and Rutkin Then, says brought back to him. urged tax.” the Court “ * * * Reinfeld, he me' if told to define the word “extortion” failed “ * * * $5,000, only him another how could reversible error me all will think of that. he much thereby duty failed in its $5,000 about him another gave So I the material all elements of that afternoon.” o’clock 5 or 6 offense.” Appellant supporting cites as proposi- month, at the home of his Within States, tion, Screws v. United 325 again. brother-in-law, saw Rutkin 1495; expected 65 S.Ct 89 L.Ed. Unit- story is that Reinfeld’s 315; Cir., question ed sum in been em Noble, States v. F.2d had 13; Cir., bezzled Max, the defendant who had been United States Levy, 153 F.2d convicted of that offense in a state States v. court. point employer Those not in all held decisions are times the em particular employee-taxpayer problem. bezzling Extortion was liable to re appellant the offense for turn full amount he had wrongfully merely the meth- right, indicted and tried. It was title in taken. All allegedly employed Rutkin to obtain terest od rested with the em explicit ployer. The Court that a and Reinfeld held taxable payment gain 22(a) Section that his under the Internal in de- Revenue Code2 “was of extortion” and is conditioned (1) result tailing just presence the facts to claim of alleged show Appellant’s gain; (2) meant the use term. of that absence of a definite story $250,000 to close obligation repay that he unconditional or return received “High venture” out his share in the seas otherwise would constitute gain. which he carried over into contended had Company, also Vintners As to the condition, Reinfeld, first *5 jury. The evidence rec- in and before the according record, never denied the slightest fails reason for to reveal the ord presence right by of a claim of Rutkin to inferring possibly that the could have money. had, some He previ some time language misunderstood the clear ously, taken a release from Rutkin precisely which outlined the con- alleged latter’s share in Browne Vintners tradictory versions circumstances gave $60,000. when he According him the money under Rutkin received the evidence, figure $250,000 was, effect, believed, upon and their if the basic itselfj compromise of Rutkin’s de later issue, question namely, guilt at or in- mands. Rutkin at various times asked for nocence of the defendant under the indict- amounts ranging $100,000 different from States, Cf. Graham v.

ment. United D.C. a million half dollars but what he 87, Cir., 187 seeking, according testimony, to his called, “my money”. he He had ex Appellant then advances to what is his pressly that his asserted interest in the argument on phase appeal. main this “High seas venture” had carried over into quoted that the asserts above sentence He gave Browne Vintners. And he general because, is error under from release favor of Reinfeld and Browne as circumstances there outlined Vintners at the time he given $250,000 Court, the received Rutkin was $250,000. money So he receive the taxable and was no necessity with a “semblance of a bona fide claim of receipt its showing Rutkin’s income tax right” as the embezzler had not in Com Supreme report. opinion The Court missioner of Internal Wilcox, Revenue v. of Internal Commissioner Revenue v. Wil supra, page 408, 327 U.S. at 66 S.Ct. at cox, 546, 404, 327 U.S. 66 S.Ct. 90 L.Ed. page (Emphasis supplied). upholding theory. is offered as this 752 decision held is That that embezzled Wilcox decision upon founded opinion not constitute taxable income to of Mr. does the the Brandéis Justice it In American Oil embezzler. Wilcox conceded North Consolidated v. Bur- 22(a) pertinent part businesses, commerce, sales, or or 2. The Section deal- ings person- Code, property, the Internal whether real or Revenue U.S.C.A. 22(a), al, growing ownership is as follows: out of the § or use property; of or in such “§ 22. income Gross also “(a) rent, dividends, interest, securities, definition. ‘Gross income’ from General profits, gains, and income de- or the transaction includes business carried compensa- gains salaries, wages, gain profit, profits from or on for or or rived or * * * personal and income service source tion derived what- from (Emphasis supplied.) paid, ever.” kind and form whatever in whatever professions, vocations, trades, from 424, 417, Therefore, net, page 286 U.S. at S.Ct. under test, the Wilcox nar- n 1197, page 613 at L.Ed. which row as that might possibly test seem taxpayer earnings conditions, holds: “If a receives this time under current claim under a and without re- there was evidence from disposition, $250,000 striction to its he has re- as could find that was taxable required to income which re- income -to ceived Rutkin and should have been so turn, reported though may even be claimed opinion, still him. As Wilcox money, pages 408-409, that he is not entitled to retain the 66 S.Ct. at though adjudged points out, even still be may question, rather, “The equivalent.” restore The re- liable to its whether the taxpayer received a fact Supreme opinion in gain, cent profit statutory That the benefit. have been Lewis, taxpayer’s may States 71 S.Ct. repre- 340 U.S. motive 523, speaking holding in the above hensible receipt illegal mode of has Consolidated, said, North American bearing application Oil no of Section * * * “Nothing permits an language 22(a). ex- In each instance the tax- ception taxpayer is merely ‘mis- ability is determined the circumstanc- validity his claim.” taken’ as to surrounding receipt es and holding of money”. (Emphasis supplied.) Regarding second condition indicat- necessary opinion the Wilcox ed by One other thought prior leaving namely, pres- gain, defeat a taxable majority opinion Wilcox decision. obligation ence of a definite unconditional there states that the embezzler had if used repay return the Rutkin to “ * * * the embezzled and ob- slightest Reinfeld, there is not the hint profits profits tained might therefrom such ever had or record *6 regardless have been taxable of the illegal- Reinfeld, obligation. agreeing after such ity opinion involved.” The on goes $250,000 Rutkin, did cause 409, 327 U.S. at page page 66 S.Ct. at be to him and turned over took that sum employer 549: “Or had his condoned or Reinfeld, general him release. from forgiven any part ap- of the unlawful funds, participated in what owner propriation taxpayer might have been by misappropriation designates as their subject liability to tax to that But extent. Obviously, aas own conscious acts. present neither situation is pro- transaction, at Rutkin result of that ceeding explore and we pos- need not claim of title possessed a colorable 4 however, Here, sibilities.” entirely aside since money. has never This to the fulfilling facts from the both Wilcox con- unmistakably has challenged. Reinfeld plain there ditions exists inference of prop- be Rutkin’s $250,000 to considered forgiveness condonation of all of the undisputed left Rutkin has erty. He appropriation. This unlawful alone, under years eight it for the last possession suggestion having the above and in mind statute of limita- permitted the and all circumstances involved in this right he might whatever expire on tions3 enough appeal, is to defeat the contention money. Cf. Akers reclaim have had as, appellant’s a matter of law conduct 718, Cir., certiorari Scofield, 5 167 charged did not constitute an as 47, 93 indictable 823, L.Ed. 69 S.Ct. U.S. 335 denied 24945, GCM See CB 1946-2 p. offense. 27. any legitimate gaged in business. The 2:24-1. 3. N.J.S.A. Appeals was of Tax affirmed in Board Inter- Humphreys v. Commissioner including $10,000 taxable income 31.2(3340, Revenue, is the 125 7 nal payments protection received from instant facts to the decision closest dry $50,000 ransom cleaners and supports the view here and seen we representatives him from received tes- expressed. In that suit Supreme kidnapped leader. The labor taxpayer was timony show that certiorari, 637, denied 63 gangster Court 317 U.S. regarded and as generally 28, S.Ct. 87 L.Ed. 513. en- not been he had and that racketeer by appellant s attor- omission $250,000 is inadvertent taxability of the exception. con- We will neys to note such plain mean complete accord merits. argument reads its 22(a) sider ing the statute. Section profits, “gains, income gross includes the first difficulty as to There is no * * * derived from income constituted request. That sentence of the on for business carried any transaction of together theory. It, sole defense Rutkin’s gain in profit, profits gains or contention, was with the Government’s whatever” come derived source “But follows: charged by the Court as (Emphasis supplied.) Prior payment then we come to admitted above “any business” in the amendment $250,000. says As Mr. “any (cid:127)clause lawful business”. read claim in settlement was a final points Burton out in his Wilcox Justice Vintners, and is so—and if that page dissent, 327 U.S. 66 S.Ct. government does not contend that page 550, “The demon 1916 amendment capital gains would tax was not —he profits gains, intent strated to include an report But obliged income. not be business income from unlawful no, Says ‘that was the result Reinfeld well lawful as from business.” me got He out of extortion. dissent, noteworthy that in that same family’, my threatening me appears S.Ct. fol where those instances threats told lowing: gained taxpayer] “If he had [the made.” possession original funds extor tion, fraud, practices, usurious those correctly charging, In so out- gains be taxable to him under the would lined theories the Government defense general language (Emphasis 22(a).” § had case on which the entire trial supplied.) been based. sentence of remaining request palpably improper. The de- Appellant also contends the Court’s alleged, fense not so had never and does request refusal defense Rutkin, allege moment, down to this request error. The “29. reversible reads: though legally $250,000, entitled capital It is that the gains admitted tax on to kill in order to ob- threatened *7 all the sale of Vintners that he actually tain it and thus ob- had and, paid, therefore, stock was if That idea tained it. had not been ad- money which Rutkin received came to him vanced, slightest or in the manner intimat- Vint- as result of his in Browne ed, until it was for the first suggested time stock, taxable, was not he was ners it request in There pretense no that is report to obligation under no it in his in- any by there was mention of it either the be 1943, come tax return for and he must attorneys defense or Government in acquitted. you Rutkin Even if believe made arguments opening closing jury. to Reinfeld these threats threats is not one word concerning There it in the produced money, money if the was in voluminous record other than as outlined payment of Rutldn’s interest in the Browne in request sentence of second 29. Rut- stock, acquitted.” Vintners should be whole defense kin’s was he was en- charge greater some amount $250,- Trial refused to titled to than language of requested than 000 as share and other Browne Vintners and exception reluctantly accepted charged. No the that as he had had such sum charge defense to Court’s refusal settlement his claim at request appears urging. It presented course, on the Reinfeld’s true, 29 as rec- is taken, exceptions produced ord. the Government At the had evi- attorneys may mistakenly dence to show defense had Rein- forced exception noted threat to kill that an been feld under assumed had request charge rightfully 29 not his. that, to the Court’s refusal to is also true Rutkin, he may have resulted in according This was peaceably paid as submitted. Nitto, 858, 5. See Estate 866-867. 13 T.C. part it. It doesn’t of that witness of a

$250,000 by satisfaction Reinfeld in instance, mean, you he lied one no evi- if believe is But there claim worth more. you necessarily believe that he rightful must Rutkin obtained dence that apply instances, you Reinfeld. lied all threatening to kill must testimony your every test bit of the one which That issue and is new the fact that a witness lied before us. truth. So the indictment never under tried necessarily respect doesn’t, say, defense, part a vital of one as It creates a new way but himself, through de- mean that he all Rutkin, lied (the threats) which in deter- you consider something trial below. nied under oath give to credibility you will mining sentence Appellant, the second testimony; person’s the rest of that jury request, sought have the appeared goes every witness had never an decide the case on issue which you.” before request part been That before it. excepted attorney as fol- The defense Unit rightfully Battle refused. Cf. v. take an ex- lows : then I desire to “Now 38, 422, States, S.Ct. 36, ed ception charge part to that Honor’s States, 670; 187 U.S. Bird v. United L.Ed. said, you believe the witness “If 100; 132, 42, Bako 47 L.Ed. 23 S.Ct. you disregard testi- lied, may all of his States, 4Cir., tich mony.” charged then further Court Stores, Inc., In Kleibor v. Colonial as follows: “Counsel has said to attempt made 159 F.2d you you I told if believe the me that attorney take by plaintiff’s disconnected respect you might dis- witness lied in testimony plaintiff Kleibor bits testimony. I had regard of his What all request construct a from them you he lied in mind is that find that if presented to the would have accept reject testimony you may theory of the accident involved jury a true, you be false ac- believe to repudiated expressly on the which had cept reject the true and false if plaintiff. The refusal stand witness please impression, cor- upheld ap request was charge the to that extent.” rect it saying 159 F.2d peal, with the exception taken No further marshal some cannot “Counsel 896: is, charge. Appellant insists that statements, the exclusion of Kleibor’s original effect, the as the instruction. same story which others, construct is_ There is incorrect. distinct dif- This but one from Kleibor’s only different By between the the correc- ference two. remarks, he un which, same by these withdrew from the tive the Court possibility now rejected the equivocally original authority it in the given suggested.” reject instruction to all of a *8 ex- point involves his Appellant’s next believed witness who it “had lied in charge part of the Court’s ception to that respect”. charge precisely The second told testi- been some “There has stated: even in those jury that circumstances- given by wit- mony about evidence here accept reject testimony body that could in other trials or in other courts or nesses testimony- of the as it believed such witness trial, such testi- to antecedent proceedings be true or to false. I believe that sworn. having been mony appellant argument the merits of the On ‘yes, he told a said, the witnesses one of the Court, charging, maintains that so dictionary or of no But I know lie.’ white one, misapplied the false in false in all' perjury would make classification no Rutkin;. doctrine; erroneously singled out lie; whether I don’t care white a destroyed competency his a witness. as help a friend committed perjury was defense to the Rutkin’s indictment help was- you a friend if not, because $250,000' him given yourself? you Who that do to do perjury, partnership payment of his you wit- if believe But knows? explanations- While Browne Vintners. his any respect, then lied in trial ness interest in of the extent his testimony venture- reject all of the free you are Evidence, varied, he And see on testify on both direct and Commentaries did Jones v. Schneider and 2nd Section 2473. cross examination that Zwillman Cf. E'd. Cir., States, 456-457. F.2d partners into Stacher came the concern as in 1930 did on examination cross what the Court Nor do we think that percentage about his 13%% from said, quoted, erroneous above Later on after the Zwillman. advent of it prejudicial comment or view questioned con- cross examination he was destroyed competency a wit- appellant’s as given testimony previously cerning he had a The incident involve ness.6 liquor hearing a under oath at license contested testimony hotly on conflict of a New York he had not been where he said Ry. question Virginia of fact as in Co. associated in business Zwillman or with Armentrout, cited any enterprise. him Con- with at all in appellant. simply Rut- It arose said, white fronted with this he “I told a flatly opposed state- kin had made two over On admission the lie there.” his own which were on a material ments under oath were not mere contradic- two statements point. Rutkin, himself, his New selected He in one other. tions. had lied testimony lie” he York the lie—“white as York, according him, he had In New stressing called it. There was no unfair protect liquor “a lied to friend’s license.” quite episode. of the The Trial opposed diametrically tes- At this trial charge but properly referred part of the defense timony was material as one, statement of the false in false proof partner as establish him a rule in all rule he did not confine that $250,- right a Browne Vintners with said, goes He the defendant. “That and, con- 900 in settlement of his interest you.” appeared every before witness acquitted sequently, to be of the strongly charging presumption of in- After the indictment. through- nocence reasonable doubt charge reiterating out the mind, With that trial situation of the judge facts and sole error in the correc substantial we find no credibility witnesses, the towards charge. upon tive A conscious falsehood specifically said re- end point involved. Even if material a appellant: as a garding “James minor some trial the lie had concerned justice bar defendant at this entitled is agree be item we would inclined to protection that the every gives law him. Wigmore “In nature Professor point you out tried to them upon character, a person would lie a who protections None of these stress them. likely to perhaps be point .collateral presumption from him. The may be taken than who dares liar one more determined way with him goes of innocence all the point; rate material it only through the trial down to the last call to the former no less a distrust there is moment of deliberations and can be Evidence, Wigmore than latter.” only guilty verdict of taken telling In Section 1014. Ed. 3rd you the government “ believe that should * * * you that he lied if find beyond proven guilt a reasonable may accept reject you protection real and it is doubt. true, accept be false or you believe very be something that must careful *9 you and if reject the false have true pointed out Everything of. I have impression, please correct it to “ liberty safeguards his it is bound- * * * extent.”, the Court duty keep in en mind.” *** [telling] jury the what merely the event, they Appellant claims not what also Trial may in do they * * improperly impugned testimony the do, Judge Wig- not must do must important for the defense witnesses Evidence, 3rd Section 1008. Ed. more on credibility jury1 leaving the in his earlier fact The jury appel Unit Judge Freedman v. free from error. Cf. had told the Trial States, Cir., strong 274 F. 603. in the outcome ed lant again, but, unmistakably the case ááO

the following Harry incident.' Davis and question.. strike the Considering the cir- his brother, Joseph, both of whom had cumstances, there was nothing improper in been members “High Judge’s seas” combine the language. charge, In the and the Vintners, later Browne Judge, careful, were de- understandable detail, in- fense Harry witnesses. after jury testified structed the problem that “the of de- Jo- seph and on cross examination was asked termining the truth conflict evi- whether, liquor while he inwas busi- dence was yours. solely and peculiarly ness Capital after 1940 under the name province And it is a not be may Spirits, Wines trespassed he had “a re- by license anybody, not question objected court, voked”. The to with not defense, counsel for the not request that it be stricken. prosecution. counsel for the You have “Well, said: frankly impressed I right am degree credibility brother, you witness or his and I will will the testimony record; not strike it from the I think that has been given here. You using he subterfuge I don’t saying to consider way testimony which the remember. particular ques- As far as the given yourselves ask whether or concerned, tion is see don’t the materiali- not persons believe that giving ty, that is the only reason I will strike testimony told it manner of (cid:127) it.” . straightforward, truth-telling person.” (Emphasis supplied). addition, In Exception was taken to the Court’s state- Trial instructed the ref- ment and the Court “I stating said: am erence rulings to his trial as followsr * * * my opinion of this witness. From “During -the course of the trial the court his remarks on the stand.” rulings has made rulings certain but those Our own examination are in no way you, to affect because I was of these witnesses reveals them have passing questions of law. I was not palpably evasive in their answers re- any way attempting in to indicate what garding their “investment” and its results my any particular matter, belief was about ' operations. Both of mentioned because, you, you as I have told are the they them could not remember stated that judges sole facts.” they how much had invested or much how We are satisfied is no that there they had realized. After several such an- substantial ap merit to this contention of Joseph swers the Court had cautioned pellant. As was said in Daniels Gold v. prior under oath. A testifying he was little Cir., berg, 173F.2d 917: “But to the Court to which ex- statement judge precluded a federal trial is not taken, Harry ception was had said he explicitly to a saying that he disbe whether he couldn’t remember witness, provided lieves a the judge also arrangement had entered at the brother states that the determination of the facts Im- as Zwillman and same time Stacher. jury.” is for the See also United States v. thereafter, mediately answer Curzio, 354, 357; 170 F.2d at the same query Court’s said was Chiarella, Cir., States Following that he that he did said time. put how much he had into not remember Company”, how “so-called Reinfeld Lastly, objected to as how it, out much he re- got much argumentative, prejudicial one-sided and h> year from any one it. ceived exceptions the defendant. No such charge. Indeed, ample immediately taken episode justifi reveals conclusion, after its Judge’s attorney statement of the Trial the' cation for defendant stated to the Court reaction to these witnesses :(cid:127) personal follows *10 your knows, “As Honor testimony. Court, The in the we have been here their practically two advising the de for full It statement, was weeks. has excepted to duration, a trial of some course of ex I think of this in the some thir attorney fense request or fourteen pages teen hundred on the testi- of his decision plaining opportunity There evidence mony. I this sufficient want to take just appel express the case warrant gratification it to have Government’s opportunity in the man- lant’s under the indictment. try this case conviction tried, Judge correctly The to direct Trial ner which it was refused for fair a is judgment acquittal. Those factual1 we have been The trial which accorded. exceptions passed I just taken to sues submitted to and jury take. substance of course had the without error I arising. During judgment of conviction your the course trial I think fairly Honor and District will be affirmed. has treated both sides There have when impartially. been times we full effect the alertness Judge have felt the HASTIE, (dissenting). Circuit your mind, I am Honor’s but sure it I dissent. applied equally Attorney to the District theory prosecution, It was myself. I think the most unusual evidence, government’s borne out thing long, in a trial that lasted this while force, Rutkin, by threats and show of objections have been Honor pay money, compelled Reinfeld to well them, overruling,

has ruled on sometimes knowing that but nothing couching was due objections, sustaining sometimes I think menacing his several demands various it is safe to there are not half a' dozen general claim sums in terms of asserted objections up in the record to the faith to further distributive bad some exceptions charge. to the In fact I can share on account of his one time interest only three, recall two or and I think that enterprise. in a certain business The trial is an situation. unusual In all trials have court instructed the that the fruits participated been in and I have in one or such villainy would constitute taxable in- two, things happening. I don’t recall such approves legal come. This court now is a It tribute to the manner in which the However, disapproval conclusion. I think trial (Emphasis sup- has been conducted.” required reasoning the Su- plied.) preme Court in Commissioner of Internal Wilcox, 1946, 404, Revenue v. 327 U.S. point circumstances Under the could 546, 66 S.Ct. 90 L.Ed. 752. be, be, and should ruled at once ad- versely appellant. However, again in The Court in the reasoned case Wilcox serious, order to avoid possibility subsequently Lewis, United States v. though unchallenged, error, 592, we have ex- S.Ct. required amined the report the above com- an embezzler is not plaint misappropriation gain mind. We find that as taxable con- equitable cise, legal he asserts no “bona fide comprehensive and fair. The Trial point claim” to it. The additional is made did tell the are “You definite, case that “a Wilcox un- deciding bigger scoundrel, who is the Rein- ** qualified obligation repay or return” the feld or Rutkin This occurred acquisition prevents wrongful it from be- impressing upon while the Court was gain”. ing page 408, taxable 327 U.S. at jury that the case before it was not that 549. To me 66 S.Ct. this reason- against advising of Reinfeld Rutkin and applicable ing equally seems to ransom just Also, what the body issue was. or, kidnapper case, typical example taking objected sophisticated more take of the extor- language, Judge, going District patently spurious makes a tionist who claim evidence, refer over to it as “this frightening paying his victim while into stinking restrained recital” —a statement of is not both know owed. brazen lawlessness trial tes- timony Judge’s language, of these cases is revealed. In none obtained complained of, in the instances under bona fide was called retained claim of necessarily events In none of them does the right. wrong- described. unjust acquire appellant. defeasible title was not doer even

ái2 true

proceeds wrongdoing. of his discovery embezzlement is attempt by the law-

usually by an followed recapture owner to

ful fear which while, extortion,

stolen possession the owner surrender

causes attempting to prevents him from often But these differences

reclaim his own. nor the title neither the owner’s

affect bad faith.

wrongdoer’s

Finally, me Rutkin’s al- it seems

leged to some additional claim of help govern-

compensation does Indeed, the

ment’s contention of case. proof that Rutkin

prosecution its nothing was owed

well aware may have said whatever Rutkin

leaves obligation sig- without about an unsatisfied

nificance. assigned by that the reasons

It follows placing embezzled Supreme Court for gain- category taxable outside funds reference to equally forceful

are alleged and government as the extortion here, and that prove undertook been reversed.

judgment should STATES. UNITED

CANDELL

No. Appeals Court of States Tenth Circuit.

May 11,1951.

Rehearing June Denied