author: SPRECHER, Circuit Judge. STEVENS, Circuit Judge

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Michael Anthony SINACOLA, Defendant-Appellant.
    No. 72-1760.
    United States Court of Appeals, Seventh Circuit.
    Argued Feb. 28, 1973.
    Decided April 3, 1973.
    Rehearing Denied April 24, 1973.
    Albert H. Beaver, Roger D. Klaus, Chicago, Ill., for defendant-appellant.
    James R. Thompson, U. S. Atty., William T. Huyck, Glynna W. Freeman, Asst. U. S. Attys., Chicago, Ill., for plaintiff-appellee.
    Before SWYGERT, Chief Judge, and STEVENS and SPRECHER, Circuit Judges.
   SPRECHER, Circuit Judge.

The main point argued in this appeal is whether a theft or embezzlement of interstate goods occurred prior or subsequent to the defendant’s surrender of his possession of the goods.

Defendant Michael Anthony Sinacola was sentenced after a jury trial to six months in prison and two and one-half years probation for violation of 18 U.S. C. § 659.

According to the testimony of Roy Thurman Wagner, the owner of a company which bought submersible sump pumps and sold them to contractors to install in homes, defendant, an employee of Associated Truck Lines, Incorporated, regularly delivered to Wagner’s company pumps which Wagner purchased from Piqua Machine & Mfg. Co., in Piqua, Ohio. On November 13, 1970, Wagner ordered what amounted to 239 cartons of pumps and 8 cartons of repair parts from Piqua with a total value of about $18,000 for delivery about November 23. On the latter date, defendant came to see Wagner and asked why he hadn’t delivered any pumps to Wagner lately. Wagner explained that the 247 cartons were presumably leaving Piqua that very day. Defendant then suggested “why don’t we see if we can get this one free.” When Wagner asked how, defendant replied that “we can get them at the truck dock, delivered to you with no freight bill . . . .”

After more conversation, Wagner testified that “I finally agreed that he would steal the pumps at the dock and I would accept the pumps,” with the proceeds to be “split 50-50.”

The 247 cartons of pumps were delivered by Piqua to the Chicago freight docks of Associated Truck Lines by means of an Associated truck trailer which arrived from Dayton, Ohio, on November 27, 1970. The trailer was unloaded and its contents distributed among several of Associated’s docks for ultimate delivery to the various consignees. The 247 cartons consigned to Wagner were delivered to dock 60, assigned to defendant, and loaded on trailer 622, also assigned to defendant.

Defendant arrived at the Associated terminal before the normal starting time of 8:00 o’clock in the morning and at 8:20 he left the terminal with trailer 622. About 9:00 o’clock, defendant drove his truck'into the Wagner Company garage. Defendant told Wagner that “Santa Claus had come early and nobody had saw [sic] him and he didn’t have to take the freight bill.” The pumps were unloaded by Wagner and the defendant, during which time defendant said that he would be entitled to $9,000 and could he get $4,000 in cash right away. Wagner told him that he could only raise the cash by selling the pumps. The conversation at that time also emphasized that the scheme involved “no invoices” and defendant told Wagner that there would be no freight bills. The unloading was completed by 9:30 and defendant eventually returned to the Associated terminal, reaching there at 10:40 in the morning.

Wagner then moved most of the pumps to a garage he had rented for the purpose across the alley from his home. At about 3:00 o’clock that afternoon, defendant telephoned Wagner and told him to call Associated and complain about not receiving the pumps, which Wagner proceeded to do on both November 30 and December 1. On December 4, an FBI agent visited Wagner and the pumps were subsequently recovered from Wagner by the FBI.

Defendant’s primary contention is as follows:

“Whether the defendant, Michael Sinacola, be viewed as an employee, agent or bailee, it is apparent that there was no unlawful possession or taking of his employer’s goods until that time when the co-defendant, Roy Wagner, took the first illegal act — notifying Associated Truck Lines that he had not received the pumps, and this act occurred after defendant, Michael Sinacola, had relinquished possession, thus making it impossible as a matter of law for him to be guilty of the offense of possession of stolen property.”

Government Exhibit 2 is a copy of the “way-bill,” which was prepared in the regular and ordinary course of Associated’s business, as testified to by Associated’s Chicago manager. A copy of the way-bill is required to be signed by the consignee as a receipt acknowledging delivery to the consignee of the goods shown on the way-bill, in this case 247 cartons of power pumps and service parts. The crux and genius of defendant’s scheme in this case was to get the pumps out of Associated’s terminal without defendant taking the “freight bill” or “invoice” and without Wagner signing the way-bill when he received the merchandise.

In United States v. Fusco, 398 F.2d 32 (7th Cir. 1968), Malone was a truck driver for Mobil Oil Corporation. In 1967, he was scheduled to deliver 8500 gallons of gasoline to a Hyde Park gasoline station. He delivered all but 470 gallons which he then delivered to Fusco’s station and sold to him for $40.00. Malone then cranked receipts from his truck’s automatic meter for 8500 gallons and turned them in to Mobil as evidencing delivery of 8500 gallons to Hyde Park. Both Fusco and Malone were charged with violations of 18 U.S.C. § 659.

The conviction of Fusco was reversed by this Court on the ground that he was a receiver of stolen goods rather than a thief since the theft occurred at the Hyde Park station and not later at Fusco’s station. This Court said at 398 F. 2d 35:

“In this case, Malone purposely left the delivery tickets in the meter after he acquired dominion over the 470 gallons of gas with a view to disposing of them later, thus evidence of his ‘intent to convert [these gallons] to his own use and of the completion of the crime’ at the Hyde Park station.”

In the present case, defendant purposely left the way-bill at the Associated terminal (“Santa Claus had come early . and he didn’t have to take the freight bill”) after he acquired dominion over the 247 cartons of pumps with a view to disposing of them later through Wagner.

In United States v. De Normand, 149 F.2d 622 (2d Cir.), cert. denied, 326 U. S. 756, 66 S.Ct. 89, 90 L.Ed. 454 (1945), the defendants were hijackers charged with violations of 18 U.S.C. § 409, the predecessor of § 659. The driver of one of the trucks involved parked it in the street when he went for coffee. When he returned the defendants took him back to his terminal at gunpoint and placed him bound and gagged in an empty truck. They then left the terminal and headed back toward the original parked truck but were arrested before they reached it. The truck remained sealed and none of its contents had been removed or even touched. The court rejected the contention that the statute had not been violated “because there was no asportation of the truck or any of its contents.” In affirming defendants’ convictions, Judge Swan said at page 624 that “[t]he unlawful ‘taking’ of constructive possession should serve to complete the offense

Likewise in United States v. Padilla, 374 F.2d 782 (2d Cir. 1967), a helper on a truck was able to slip some merchandise out of a carton in his truck without breaking the sealed carton. He concealed two pairs of slacks removed from the carton in the front cab of the truck. His conviction under 18 U.S.C. § 659 was affirmed, the court saying at page 785:

“Here Padilla actually reduced the slacks to his physical possession, exercised dominion over them with intent to convert them to his own use and hid them for later disposition.”

In the present case, when defendant left the terminal without the way-bill he acquired constructive possession (as opposed to the custody he would have exercised as an honest employee) over the 247 cartons; he exercised dominion over them with intent to convert them to his own use; and he violated 18 U.S.C. § 659.

United States v. Belcher, 448 F.2d 494 (7th Cir. 1971), is very similar to this case. Belcher was a truck driver for Hires Trucking Company. Claffy was a loader of freight for Acme Fast Freight. One day Claffy inadvertently loaded some merchandise on Belcher’s truck. When Claffy later inquired about the merchandise, Belcher told him that he had sold it. Thereafter, Claffy frequently threw items not intended for Hires Trucking Company or its consignees onto Belcher’s truck and Belcher paid Claffy from $20 to $100 for each such load. Through police surveillance, Claffy was observed loading unauthorized merchandise on Belcher’s truck and as he was about to drive away, Belcher was stopped and the police officers searched his truck. Belcher said, “How did this stuff get on my truck? That is not my freight. I don’t know how it got there.” A jury found Belcher guilty of violations of 18 U.S.C. § 659 for theft of merchandise for which he did not have freight bills. On appeal one of Belcher’s contentions was want of proof of asportation. This Court said in affirming his conviction, at 448 F.2d 499 : i

“There was sufficient proof from which the jury could have concluded that defendant wilfully caused the acts to be done by Claffy. If Claffy were charged with the acts here in dispute, it is clear the asportation argument would be without merit.”

The proposed new federal criminal code includes in the term “theft” embezzlement as well (Final Report, § 1731) and codifies the concept of theft as follows (§ 1732):

“A person is guilty of theft if he:
(a) knowingly takes or exercises unauthorized control over, or makes an unauthorized transfer of an interest in, the property of another with intent to deprive the owner thereof;
“(b) knowingly obtains the property of another by deception or by threat with intent to deprive the owner thereof, or intentionally deprives another of his property by deception or by threat; or
“(c) knowingly receives, retains or disposes of property of another which has been stolen, with intent to deprive the owner thereof.”

Under all of these authorities the theft or embezzlement occurred here when the defendant left the terminal without the necessary shipping documents and with the intent to steal the merchandise. This act was no different than if defendant or Wagner broke into the Associated terminal the night before and stole the Wagner goods, intending to charge Associated with their loss. Nor is it of any more consequence that defendant conceivably could have returned to retrieve the shipping documents than it would be for defendant or Wagner to break into the terminal on the succeeding night to return the goods.

Furthermore, even if it could be assumed that the theft did not occur at the time of departure from the terminal, it most certainly occurred during the thirty to forty minutes that defendant and Wagner jointly unloaded the 247 cartons with intent to steal them by failure to receipt the way-bill. During that period the two of them had joint possession of the stolen goods.

The district court properly instructed the jury in regard to defendant’s theory that if the theft in fact occurred when Wagner telephoned Associated on two succeeding days following the delivery by defendant, then defendant would not have had possession of stolen goods. The court instructed the jury as follows:

“Whether the property was stolen is a question of fact to be determined by the jury from all of the evidence you have heard.
“If you find from all of the evidence that the sump pumps involved here were not stolen until or after the time at which Roy Wagner received and accepted the pumps and later denied receiving them, then you cannot convict the defendant of the crime charged.”

Defendant has also argued that some of the government’s exhibits were admitted without proper foundation and ■ that consequently the government failed to prove the interstate character of the shipment of the 247 cartons.

§ 659 provides in part:

“To establish the interstate or foreign commerce character of any shipment in any prosecution under this section the waybill or other shipping document . . . shall be prima facie evidence of the place from which and to which such shipment was made.”

Steve Generis, the Chicago manager of Associated Truck Lines, Incorporated, testified that Government Exhibit 2, the way-bill showing shipment of 247 cartons of sump pumps and service parts from Dayton, Ohio to Chicago, Illinois, was prepared and maintained by his company in the regular and ordinary course of its business. In addition, the testimony of several witnesses established the interstate character of the stolen merchandise. Under these circumstances we need not decide whether the foundation for the introduction of cumulative evidence of the interstate character of the goods, such as the sump pump manufacturer’s invoice and bill of lading (Government Exs. 1 and 3) was adequately laid by the testimony of the recipients of those documents (Wagner and Associated) instead of by a representative of the sump pump manufacturer.

We have considered defendant’s other arguments and find them to be without merit. The judgment of conviction is affirmed.

Affirmed.

STEVENS, Circuit Judge

(dissenting).

Sinaeola had physical possession of the goods for a limited period on November 27, 1970. They were loaded on trailer 622 by other employees of the carrier; he hauled them to their assigned destination; and he completed their delivery by helping the consignee unload the trailer. Had he opened a carton, caused someone else to place loot on his trailer, acquired constructive possession of another truck by kidnapping its driver, or departed for an unauthorized delivery point, for the purpose of converting goods to his own use, a statutory theft would certainly have occurred. But the times when, and the places where, Sinacola had possession of the goods described in the indictment were without exception authorized by the shipper, the carrier, and the consignee. However evil his subjective intent, I am therefore persuaded that no theft occurred before the goods were delivered to the consignee.

Conceivably the confusing evidence relating to the missing shipping documents would support the conclusion that Sinacola “stole” the goods when he drove away from the terminal. I assume conduct, plainly at odds with normal procedure, coupled with an intent to convert, might be a theft within § 659. As the case was argued and submitted, however, the jury was not required to find that any unauthorized overt act was performed by defendant before he completed his delivery of the goods to the consignee. In short, the conviction may rest on nothing more than authorized conduct accompanied by wrongful intent. In my opinion this is not enough.

      . The pertinent part reads: “Whoever has in his possession any such goods or chattels [which constitute an interstate shipment of property], knowing the same to have been embezzled or stolen . . . [s]hall in each case be fined not more than $5,000 or imprisoned not more than ton years or both [if the goods exceed $100 in value].”

      . The facts that Wagner already was or shortly would become the owner of the goods and that defendant was on his way to deliver the goods to AVagner is immaterial under the circumstances of this case. “Property in the hands of a bailee may be stolen by the general owner; as for instance, where it is taken with intent to charge the bailee with its value.” Mill, Criminal Law § 110 at 347 (1934). “A man may be guilty of a felony, in stealing his own goods from a pawnbroker, with whom he had pledged them, or from any one to whom he had entrusted them, with intent to charge said bailee their value.” Blackstone, Commentaries on the Law 848 (Gavit ed. 1941).

      . AVe are not confronted here with the problem of United States v. Fusco, 398 F. 2d 32 (7th Cir. 1968), where the theft occurred prior to the receipt of the goods by the ultimate recipient (such as Wagner here), thus making the ultimate recipient guilty as a receiver of stolen goods instead of as a thief. Here Wagner pleaded guilty to violations of 18 U.S.C. § 659, was placed on probation for two years and fined $3,000, and did not appeal.

      . This theory of the timing of the theft might have been more tenable than the terminal-departure theory had not the defendant been the mastermind of the whole scheme.

      . United States v. DeNormand, 149 F.2d 622, 624 (2d Cir. 1945) (“By that act they deprived the carrier of power to exercise control or dominion over the truck and acquired such power for themselves; thus, whatever possession the carrier or its employee had was transferred to them.”).

      . United States v. Padilla, 374 F.2d 782, 787-788 (2d Cir. 1967) (“[T]he evidence clearly showed that Padilla took physical possession of the slacks, exercised dominion over them to the exclusion of the owner. .. . ”).

      . United States v. Belcher, 448 F.2d 494, 499 (7th Cir. 1971) (“There was sufficient proof from which the jury could have concluded that defendant wilfully caused the acts to be done by Claffy.”).

      . United States v. Fusco, 398 F.2d 32 (7th Cir. 1968) (When the driver curtailed delivery of the full order at the Hyde Park station and left for Fusco’s place of business, he “took possession for his own purposes at the Hyde Park station.” Presumably the driver’s illegal intent existed from the moment he left the Hammond terminal, but the theft did not occur until he committed an overt act inconsistent with his authorized mission. I do not believe a driver’s possession can be both lawful and unlawful at the same time).

      . Helping to unload the trailer would seem to be within Sinacola’s authority to make delivery to the consignee. He had neither the right nor the duty to obtain a signed receipt until that was done.

      . The legal question of whether, and if so when, a theft occurred is unusually sophisticated because the consignee was both the owner of the goods and Sinacola’s co-conspirator. Sinacola never did anything to deprive the owner of his right to possession. Nevertheless, in collusion with the owner, Sinacola theoretically could steal the goods from Associated, which was both his employer and the owner’s carrier-bailee. While Sinacola had physical control of the goods, he either held lawful possession on behalf of the carrier or unlawful possession on behalf of his co-conspirator. I do not believe his possession could be both lawful and unlawful at the same time; in my opinion an overt act of “appropriation” inconsistent with his lawful status was required to consummate the theft. The instructions to the jury failed to define this critical factual issue.
      The jury was instructed as follows:
      “The Government must prove that these sump pumps had been stolen and unlawfully taken from an interstate shipment of freight. With regard to that, merchandise is considered stolen and unlawfully taken, if it has been appropriated from its lawful owner or possessor with the intent to deprive the owner or possessor of the rights and benefits of ownership or possession.
      * * * * *
      ■ “If you find from all of the evidence that the sump pumps involved here were not stolen until or after the time at which Roy Wagner received and accepted the pumps and later denied receiving them, then you cannot convict the defendant of the crime charged.” Tr. 9, 11.
      The defendant had requested a more careful instruction:
      “Knowing possession of stolen property is dependent upon defendant’s dominion and control over the stolen property, and this dominion and control, to amount to unlawful possession, must be such that it exceeds defendant’s lawful control and custody in the ordinary course of business.” Defendant’s Requested Instruction No. F.
      “If you find from all the evidence that the pumps were placed on a trailer driven by the defendant in the normal course of the business of Associated Truck Lines, and delivered to the consignee, Roy Wagner, in the normal course of the business of Associated Truck Lines, then you must find that the pumps were not stolen before or during the time in which the defendant is alleged to have had possession.” Defendant’s Requested Instruction No. J.


source: Caselaw Access Project

author: WISDOM, Circuit Judge:

license: Public Domain

text:
    UNITED STATES of America, Petitioner-Appellee, v. Danny Otha ARMSTRONG et al., Defendants, Michelle Sobel Perlman, Respondent-Appellant.
    No. 73-1488
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    April 6, 1973.

      Phillip D. Hardberger, San Antonio, Tex., Charles W. Tessmer, Ronald L. Goranson, Dallas, Tex., for respondent-appellant.
    William S. Sessions, U. S. Atty., James W. Kerr, Jr., Asst. U. S. Atty., San Antonio, Tex., for petitioner-appellee.
    Before WISDOM, AINSWORTH and CLARK, Circuit Judges.

       Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York, et al., 5 Cir. 1970, 431 F.2d 409, Part I.

   WISDOM, Circuit Judge:

The appellant, Mrs. Michelle Sobel Perlman, was incarcerated after being held in civil contempt by a federal district court for refusal to answer questions before a grand jury under 28 U.S.C. § 1826. She appeals from the judgment of civil contempt. We remand the case for a further hearing.

Brian Perlman, husband of Michelle Perlman, was indicted by the federal grand jury for the Del Rio Division of the Western District of Texas on June 6, 1972, together with several codefendants. The indictment charged Brian Perlman and his codefendants with a variety of narcotics violations under 21 U.S.C. §§ 841(a)(1), 846, 960(a)(1), and 963. The federal district court set trial for October 16, 1972. The government then severed the cases of Brian Perlman and one codefendant, and postponed their trial pending the extradition of another defendant from Canada.

While Brian Perlman’s trial was pending, the government on February 13, 1973 obtained an order requiring Mrs. Michelle Perlman to testify before the grand jury in connection with an investigation of suspected violations of 21 U.S.C. §§ 841(a)(1), 846, 960(a)(1), and 963. The court subsequently entered an order granting Mrs. Perlman use immunity pursuant to 18 U.S.C. § 6003.

Mrs. Perlman filed a motion to quash the appearance, invoking the marital privilege and asking to limit the testimony to matters not occurring in Mexico or Texas. The court held a hearing on February 20, 1973, to determine the extent to which the marital privilege would curtail Mrs. Perlman’s testimony. The government agreed that Mrs. Perlman could not be made to testify against her husband, but requested the court to order her to testify against the other defendants. The court then severed Brian Perlman’s case from the other defendants and ordered Mrs. Perlman to testify before the grand jury, with the limitation that she was not to testify to any matters concerning her husband. The court further ordered the grand jury not to divulge any of her testimony. Mrs. Perlman’s attorney informed the court that she would rely on the marital privilege as grounds to refuse to supply any information except her name, address, and date of her marriage.

Mrs. Perlman was called before the grand jury later that same day. After her grand jury appearance the court held a hearing, where in response to the court’s questions Mrs. Perlman acknowledged that she had appeared before the grand jury and had refused to answer any questions. The court then held her in contempt, committed her to the custody of the marshal, and set bond at $150,000.

The following day, February 21, the court held another hearing. Mrs. Perl-man again admitted that she had not answered any of the questions put to her before the grand jury. When the court inquired whether any of these questions related to the activities of her husband, she replied: “His name wasn’t mentioned, but I feel that it is connected.” After Mrs. Perlman and her attorney stated that she would continue to refuse to testify, the court held her in contempt and remanded her to custody without bail until such time as she should purge her contempt by testifying.

Mrs. Perlman raises four points on this appeal. She contends that (1) the district court should have given her Miranda warnings before questioning her about her failure to testify; (2) the marital privilege prevents her from giving any testimony about the case, since her husband is a defendant; (3) the order granting use immunity was insufficient to protect her against possible prosecution by the governments of Texas and Mexico; (4) there was insufficient evidence to show that she was in contempt.

There is no merit to Mrs. Perl-man’s first three points. Her reliance on Miranda is totally inapposite. We are not concerned here with a station-house interrogation. The trial court questioned Mrs. Perlman in open court, on the record, in the course of a judicial proceeding. Her attorney was present. Miranda warnings were not required here, just as they are not required when any other witness or defendant is questioned in open court.

The marital privilege does not extend so far as to bar Mrs. Perlman from giving testimony about her husband’s codefendants which does not implicate her husband. The basic purpose of the rule that one spouse is incompetent to testify against the other spouse is to preserve family peace by preventing husband and wife- from becoming adversaries in a criminal proceeding. Hawkins v. United States, 1958, 358 U.S. 74, 79 S.Ct. 136, 3 L.Ed.2d 125. Brian Perlman’s codefendants thus fall outside the scope of this rule. Mrs. Perlman could be called as a witness at their trials. See United States v. Fields, 3 Cir. 1972, 458 F.2d 1194; O’Brien v. United States, 8 Cir., 1924, 299 F. 568. Similarly, she cannot refuse to testify before the grand jury about their activities. Her husband capnot be harmed by her testimony, since síie is not to testify as to matters implicating him, and since his trial has been severed. 3 Wharton’s Criminal Evidence § 777, at 113-14 (12th ed. 1955).

Mrs. Perlman’s testimony before the grand jury could not increase her risk of being prosecuted by another jurisdiction. The State of Texas would be barred from making use of any testimony obtained under a federal grant of immunity. Murphy v. Waterfront Commission, 1964, 378 U.S. 52, 84 S.Ct. 1594, 12 L.Ed.2d 678. Further, the secrecy of the grand jury proceedings is a sufficient safeguard against any danger of foreign prosecution. In re Tierney, 5 Cir. 1972, 465 F.2d 806.

We agree, however, with Mrs. Perlman’s contention that there was insufficient evidence to support a finding of contempt. Mrs. Perlman’s admissions to the district court established only that she had refused to answer any of the questions put to her before the grand jury. There was no evidence before the district court to indicate that any of those questions related to matters about which Mrs. Perlman had been ordered to testify. Indeed, Mrs. Perlman expressed her opinion that the questions implicated her husband. The trial court apparently did not question the government attorney or any of the grand jurors, all of whom were present in court at the February 20 hearing, as to the nature of the questions asked Mrs. Perl-man. Nor was the transcript of the grand jury proceedings before the district court; the government has made this transcript available for the first time to this Court on appeal. Moreover, we cannot agree with the government’s suggestion that the statements of Mrs. Perlman and her attorney that she would refuse to answer any and all questions established contempt in violation of the statute, where there was no evidence that she actually refused to answer questions which did not implicate her husband.

We express no opinion as to whether the transcript of the grand jury proceedings establishes that Mrs. Perlman was in contempt. The case is remanded to the district court for a hearing to reconsider the finding of contempt in light of the grand jury transcript and any other relevant testimony as to the events occurring before the grand jury.

      . The Court: Mrs. Sobel, did you appear before the grand jury.
      Mrs. Perlman : Yes, sir.
      The Court: Did you give testimony?
      Mrs. Perlman : No, sir.

      . The following interchange took place among the court, Mrs. Perlman and her attorney:
      The Court: Mrs. Perlman, did you appear before the grand jury yesterday? Mrs. Perlman : Yes, sir.
      The Court: And did the U. S. Attorney tell you that you were not to answer any questions about your husband or any of his activities? Were you given that warning?
      Mrs. Perlman: Yes, sir.

        The Court: And were you asked certain questions?
      Mrs. Perlman: Yes.
      The Court: Now, during the period of time that you were asked these questions, where was your lawyer?
      Mrs. Perlman: He was outside the room.
      The Court: In other words, he was available though for you to consult with? Did you ever feel the need to consult with him about any of the answers to the questions you were asked? Mrs. Perlman: I consulted with him twice.
      The Court: You went out of the room and consulted with him twice. All right. And did you refuse to answer all questions that you were asked by the grand jury?
      Mrs. Perlman : Yes, sir.
      The Court: Were any questions asked of you about the activities of your husband in connection with any part of this alleged grand jury indictment? Mrs. Perlman: His name wasn’t mentioned, but I feel that it is connected.
      The Court: All right, just tell us how you feel it was connected?
      Mr. Hardberger: I hate to interrupt, hut I think for her to adequately explain that answer to the Court would be a violation of the husband and wife— The Court: You are asking her not to answer, is that right? You are instructing her not to answer?
      Mr. Hardberger: Yes, Your Honor, but with respect to the Court, and I would like to explain to the Court why I’m saying that. Because if she—
      The Court: Are you advising her not to answer these questions that the grand jury propounded to her, after having given her use immunity and under the instructions that this Court has given her to answer?
      Mr. Hardberger: Yes, Your Honor, I am

      . The extent of this privilege in the federal courts is a matter of federal law. Fed. R. Crim.Pro. 26. Thus the two Texas cases relied on by Mrs. Perlman, Dobbs v. State, 1908, 54 Tex.Cr.R. 579, 113 S. W. 921, and Dungan v. State, 1898, 39 Tex.Cr.B. 115, 45 S.W. 19, are not controlling here.

      . The hearing need not comply with the full procedural requirements of Rule 42, Fed.R.Crim.Pro. Shillitani v. United States, 1966, 384 U.S. 364, 86 S.Ct. 1531, 16 L.Ed.2d 622; In re October 1969 Grand Jury, 7 Cir. 1970, 435 F.2d 350; In re Giancana, 7 Cir. 1965, 352 F.2d 921.


author: FEINBERG, Circuit Judge:

text:
    Anthony FALLETTA, Plaintiff-Appellant-Appellee, v. COSTA ARMATORI, S.p.A. GENOA, Defendant and Third-Party Plaintiff-Appellant-Appellee, v. UNIVERSAL TERMINAL & STEVEDORING CORP., Third-Party Defendant-Appellant-Appellee.
    Nos. 597, 598 and 599, Dockets 72-1946, 72-2634 and 72-2035.
    United States Court of Appeals, Second Circuit.
    Argued March 22, 1973.
    Decided April 5, 1973.

      Edward D. Lory, Brooklyn, N. Y. (Paul A. Gritz, Brooklyn, N. Y., on the brief), for plaintiff-appellant-appellee.
    Michael D. Martocci, New York City (Yamada & Martocci, New York City, on the brief), for defendant and third party plaintiff-appellant-appellee.
    Albert S. Commette, New York City (Brown, Quencer & Commette, New York City, on the brief), for third party defendant-appellant-appellee.
    Before SMITH, FEINBERG and MANSFIELD, Circuit Judges.
   FEINBERG, Circuit Judge:

We have here a familiar longshoreman-shipowner-stevedore legal battle ; what is somewhat unusual, however, is that all three parties appeal from the judgment of the trial court. After a non-jury trial in the United States District Court for the Southern District of New York, Judge Lawrence W. Pierce held, first, that defendant Costa Arma•tori S.p.A. Genoa, owner and operator of the vessel Paola Costa, was liable to plaintiff Anthony Falletta on theories of unseaworthiness and negligence; that plaintiff had been contributorily negligent to the extent of ten per cent in causing the accident, reducing his award to approximately $5,855; and finally, that as a result of plaintiff’s contributory negligence, his employer, Universal Terminal & Stevedoring Corp., was required to indemnify the shipowner. As indicated, none of the parties is happy with this result.

Plaintiff-longshoreman was • injured while cargo was being unloaded from the ship. He was struck in the head just above the right eye by a free-swinging “burton boom lazy guy” — in Judge Pierce’s less esoteric term, a steel wire. The impact knocked plaintiff down and he injured his shoulder. Plaintiff was left with a scar over his eye and, as the judge found, “a permanent partial loss of use of the right arm.”

On appeal, both plaintiff and his stevedore employer claim that the judge erred in holding plaintiff contributorily negligent. The stevedore has an even greater interest than plaintiff in establishing that proposition. The finding of contributory negligence cost plaintiff only $650 (reducing by ten per cent his damages of approximately $6,500). But in the shipowner’s action against the stevedore, based upon the latter’s breach of warranty of workmanlike service, plaintiff’s contributory negligence became the sole basis for holding his employer, the stevedore, liable for the full amount of plaintiff’s recovery ($5,855), as well as for such incidental items as counsel fees. By contrast, while not denying its own negligence, the shipowner claims that the finding that plaintiff was only ten per cent contributorily negligent was clearly erroneous. How much more would have been correct the shipowner does not squarely say, except to assert that plaintiff’s “own negligence substantially contributed to the cause of the accident.”

The judge held plaintiff contributorily negligent because he was working in a dangerous place without paying sufficient attention to what was going on elsewhere on the deck. Plaintiff had been instructed by his hatch boss to remove certain hatch covers preparatory to unloading that hatch, and was in the process of doing so when the accident occurred. In addition, when plaintiff started his work, the ship’s crew had not yet started the unrigging operation that led to the accident. Therefore, up to that point plaintiff was not negligent; all appear to agree on that. But, according to the judge, when plaintiff

observed the crew enter the area and begin to work as usual, i. e., to unrig, he knew or should have known of the danger to his safety and he was therefore under an obligation to stand clear of the danger zone.

The difficulty with this theory is that a number of longshoremen were working on the hatch in full view of the ship’s crew when the latter began to disengage the jumbo boom and negligently unshackled the burton boom lazy guy. If plaintiff could see the deck crew some distance away, as the judge emphasized, they obviously could see him. The judge assumed as much and also concluded that the crew members “should have warned plaintiff prior to commencing the concededly potentially dangerous unrigging operation.” Under the circumstances here, plaintiff could not properly be regarded as negligent. As we noted under somewhat different circumstances in Sheehan v. Moore-McCormack Lines, Inc., 441 F.2d 360, 363 (2d Cir. 1971):

. . the longshoremen had a right reasonably to assume that ... a warning would be given and they were under no obligation to anticipate that there would be a failure to fulfill that duty.

Judge Pierce felt that Sheehan was distinguishable because in that case responsible officers of the ship were in the area supervising the activities of the crew and longshoremen, while plaintiff here could not “reasonably entrust his safety entirely to anyone in particular.” But on these facts we do not regard that distinction as an adequate reason for ignoring the principle of Sheehan. Plaintiff here could justifiably rely on non-negligent unrigging by the ship’s crew. Cf. International Terminal Operating Co. v. N. V. Nederl. Amerik Stoomv. Maats., 393 U. S. 74, 89 S.Ct. 53, 21 L.Ed.2d 58 (1968) (per curiam). The shipowner calls our attention to Cannady v. S. S. Carlin Fassio, 1966 A.M.C. 2434 (D.N.J.), aff’d per curiam, 358 F.2d 304 (3d Cir. 1966), but there the known, visible, overhead risk of harm to the plaintiff was much greater. We hold that the district court’s conclusion of contributory negligence, to which the “clearly erroneous” standard of appellate review does not apply, see J. Gerber & Co. v. S. S. Sabine Howaldt, 437 F.2d 580, 594 (2d Cir. 1971); Mamiye Bros. v. Barber Steamship Lines, Inc., 360 F.2d 774, 776-778 (2d Cir.), cert. denied, 385 U.S. 835, 87 S.Ct. 80, 17 L.Ed.2d 70 (1966), cannot stand on this record.

The judgments for plaintiff against the shipowner and for the shipowner against the stevedore are reversed with instructions to enter a new judgment for plaintiff and a judgment for third-party defendant stevedore in accordance with this opinion.

      . This triangular controversy should soon be a thing of the past by virtue of the Longshoremen’s and Harbor Workers’ Compensation Act Amendments. P.L. 92-576, § 18, 86 Stat. 1251 (1972). The amendments increased workmen’s compensation benefits available to an injured longshoreman from his employer, elimnated a longshoreman’s recovery against the shipowner for unseaworthiness although continuing to allow it for negligence, and eliminated stevedore indemnity to the shipowner for such damages. See U.S.Code Cong. & Adm.News, pp. 4702, 4704-4705 (1972).

      . The stevedore also argues that the shipowner was not entitled to indemnity in any event because its crew was guilty of “conduct sufficient to preclude recovery” relying, e. g., on Weyerhaeuser S.S. Co. v. Nacirema Operating Co., 355 U.S. 563, 567, 78 S.Ct. 438, 2 L.Ed.2d 491 (1958), and Bertino v. Polish Ocean Line, 402 F.2d 863, 866 (2d Cir. 1966).

      . On this view of the case, it is unnecessary to deal with the stevedore’s remaining argument. See note 2 supra.


author: PELL, Circuit Judge.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Jordan M. SCHER, Defendant-Appellant.
    No. 72-1321.
    United States Court of Appeals, Seventh Circuit.
    Argued Nov. 1, 1972.
    Decided March 30, 1973.
    Rehearing Denied April 26, 1972.
    George D. Crowley, Warren R. Fuller, Richard L. Manning, Chicago, Ill., for defendant-appellant.
    James R. Thompson, U. S. Atty., William T. Huyck, Glynna W. Freeman, Asst. U. S. Attys., Chicago, Ill., for plaintiff-appellee.
    Before SWYGERT, Chief Judge, CASTLE, Senior Circuit Judge, and PELL, Circuit Judge.
   PELL, Circuit Judge.

Defendant Jordan M. Seher, M.D., a psychiatrist practicing in Chicago, was charged in a three-count indictment with willfully and knowingly attempting to defeat and evade payment of a portion of his federal income taxes due for 1964, 1965, and 1966, in violation of 26 U.S.C. § 7201. After a bench trial, Dr. Scher was found guilty on all counts and received a sentence of three years’ probation, the first 90 days to be served in a jail-type institution.

Scher concedes that there were understatements in each of the indictment years resulting from the cashing of patients’ fee checks. The sole issue on this appeal is whether the evidence was sufficient to establish that the defendant had the requisite criminal intent.

As an appellate court, we cannot, of course, decide anew the defendant’s guilt or innocence. See Kotteakos v. United States, 328 U.S. 750, 763, 66 S.Ct. 1239, 90 L.Ed. 1557 (1946). Rather, our task in this case is to determine if a rational trier of fact could have found beyond a reasonable doubt that Dr. Scher violated 26 U.S.C. § 7201. In so doing, we must view the evidence and all reasonable inferences therefrom in the light most favorable to the Government. See Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942).

I

Scher’s certified public accountant for the years in question, Frank Baker, relied on the doctor’s bank deposits to compute the gross income from his medical practice. During those years, Scher had only one checking account. From the defendant’s office files or from his employees, Baker obtained the monthly bank statements. He then totalled the deposits made during the calendar year. Next he deducted certain items, such as patients’ returned (NSF) checks, from the annual deposits total. Because Dr. Scher was paid primarily by check, if these checks were not cashed but were deposited in the bank account, that account over a year’s time would reflect the defendant’s gross income from his medical practice for that year.

Beginning in 1963, however, Dr. Scher, or one of his employees at his direction, cashed some of the incoming checks at two currency exchanges near the doctor’s office. According to deposits journals that the defendant’s staff maintained, checks were cashed at least sixteen times during the three-year period covered by the indictment. Each transaction involved from one to twenty-one checks and from $1024.80 to $4019.72. Dr. Scher personally endorsed the checks to be cashed. After each transaction, the proceeds were given to the defendant, who placed them in a private safe in his office.

The accounting method adopted by Baker differed from that used by his predecessor, Erwin Waxier, who had prepared Dr. Scher’s returns for the calendar years 1960 through 1962. In addition to reviewing the defendant’s bank statements and cancelled checks, Waxier analyzed a receipts journal containing the names of the patients billed, the amounts received, and the dates of receipt and a disbursements journal, both of which were kept in Scher’s office. Waxier would then compare the total amount of the receipts as recorded in the receipts journal, which, inter alia, listed all checks received, whether deposited or cashed, with the total amount of the deposits indicated on the bank statements. For the years that Waxier prepared the returns, the total bank deposits agreed with the total entries in the receipts journals. However, during these years, Scher was depositing in his bank account substantially all the patient fee checks he received.

At trial, Baker stated that he had never discussed with Scher the method by which he computed Scher’s income. Exclusive reliance on the “bank deposits method” of determining income supposedly had been his own idea. Waxier also testified that when he had worked for Scher he had not explained to him how he calculated the income.

Scher contends that this and other testimony disproves the validity of the trial judge’s finding of willfulness. The maintenance of accurate records by Scher’s employees and the defendant’s openness in cashing the checks allegedly were inconsistent with a willful intent to evade taxes. Apparently Scher attributes the understatement of his income in 1964, 1965, and 1966 to poor communication between Baker and himself and to the accountant’s “sloppiness” or incompetence. Defendant relies on United States v. Pechenik, 236 F.2d 844 (3d Cir. 1956), in which the Third Circuit overturned the conviction of a corporation president for willful evasion because the record failed to reveal probative evidence linking the defendant with the corporation’s erroneous accounts books and tax returns.

Although both Pechenik and the present case involve charges of individual criminal liability for tax evasion, there could well be underlying differences between the situation of a corporation officer who perforce must depend upon bookkeepers, auditors, and accountants for the preparation of books relating to financial matters not under his personal dominion and the situation of a person dealing with his own individual income all of which was derived from personal services rendered by him.

II

We first note that “a taxpayer cannot shift the responsibility for admitted deficiencies to the accountants who prepared his returns if the taxpayer withholds vital information from his accountants, or takes positive áction designed to mislead them.” Bender v. Commissioner of Internal Revenue, 256 F.2d 771, 774 (7th Cir. 1958). That Scher did not conceal his check cashing from his employees does not foreclose the conclusion that he was consciously reticent about telling his accountant about the practice. Baker, unlike his predecessor, visited Scher’s office only a day or two each year, in February or March.

Second, because the parties stipulated to many of the facts, the credibility of the witnesses, especially Baker and Scher, is important here. We must rely heavily on the evaluation of the trier of fact as to the credibility of the witnesses. The district court judge obviously found Baker a less than credible witness. Baker himself conceded that he simply could not remember “each and every conversation since I have been engaged with [the doctor] over nine years ago.” Further, even the “cold” record suggests that the accountant had been evasive, irritable, and somewhat inconsistent at trial. The judge also found Dr. Scher to be an unpersuasive witness.

The defendant correctly points out that a finding of guilty cannot be predicated solely upon disbelief of witnesses’ testimony. See United States v. Pechenik, supra. However, we do not therefore conclude that such disbelief is irrelevant to our review. Cf. Judge Learned Hand’s statement that

“the carriage, behavior, bearing, manner and appearance of a witness — in short, his ‘demeanor’ — is a part of the evidence. . . . [W]e have again and again declared, and have rested our affirmance of findings of fact of a judge, or of a jury, on the hypothesis that this part of the evidence may have turned the scale. Moreover, such evidence may satisfy the tribunal, not only that the witness’ testimony is not true, but that the truth is the opposite of his story . . . .” Dyer v. MacDougall, 201 F.2d 265, 268-269 (2d Cir. 1952) (footnote omitted).

We also disagree that the trial judge relied on no positive evidence. “It is clear that the Government need, not adduce direct proof of intent. It may be inferred from the defendant’s acts. . The same applies to knowledge that additional amounts were due, and a jury may return a verdict of guilt under this section, [26] U.S.C. § 7201, based upon circumstantial evidence alone.” United States v. Spinelli, 443 F.2d 2, 3 (9th Cir. 1971). See also W. La Fave & A. Scott, Handbook on Criminal Law §28, esp. at 203 (1972).

Baker testified at trial that he had had no discussion with the defendant as to what books and records Scher kept. Yet Baker stated that, during the years in question, he had examined the disbursements journals, and he admitted that he had known of the existence of books listing checks received, although he claimed he had never seen them, had made no inquiries about them, and had not known who in the office maintained them. Waxier regularly had requested from defendant’s employees — and had removed from Scher’s office for study —both the receipts journals and the disbursements journals.

One reason Baker gave'for his failure to consult the journals was his wish to avoid disturbing the defendant’s confidential relationship with his patients by knowing their names. Although he denied at trial that Scher had ever cautioned him about doctor-patient confidentiality, he had earlier testified before the grand jury that he had discussed that topic with Scher and that Scher had not wanted him to have that information. In his trial testimony, the defendant denied that he had told Baker not to look at any documents that had patients’ names on them.

Dr. Scher knew that all his receipts had been entered in office books. Indeed, his staff gave him the volumes when completed. Although he testified that he had never instructed his employees not to give the records to his accountant, when Baker failed to ask him for records, he did not offer him the receipts journals (or even the deposits journals) or order an employee to show them to Baker. Furthermore, he never mentioned to Baker that he or others at his direction had cashed thousands of dollars worth of checks. This information not having been communicated and the accountant having failed to examine the books initially on his own, his knowledge of the true status of his client’s income never departed from its Cimmerian refuge, a situation susceptible of easy and quick remedying by the imparting of the withheld information.

Baker testified that each year he spent a day or two in the defendant’s office gathering data for the tax returns and that he had brief discussions with Scher two or three times on each of those days. On the worksheets Baker developed for 1965 and 1966, the gross income figure had been listed “per deposits.” The accountant declared, however, that he had not shown Scher these worksheets. Instead, Baker would ask the defendant about particular items and would tell him the gross figures he had calculated. From the defendant’s records, the Government determined that in 1964 checks totalling approximately $16,500 had been cashed, that in 1965, the sum had been about $12,300, and that in 1966 the total had been $8400. Thus, there was a substantial discrepancy between the gross income that Baker quoted to the defendant and the total fees Scher had actually received. Although the defendant had not kept his own personal account of the check cashing totals, he testified that, at least as to 1964, he had known thqt he had cashed thousands of dollars worth of checks. The trial judge obviously considered Scher’s failure to notice and comment on these discrepancies a circumstance suggesting that the defendant had been less than open with his accountant. Scher apparently also gave Baker no positive information in response to Baker’s asking if he knew of “any other items which would probably be recorded in the income tax return.”

In 1966, a revenue agent interviewed Scher and Baker regarding Scher’s 1964 return. He inquired whether “receipts [were] received entirely by check and [were] deposited in total in one checking account by taxpayer’s secretary.” The record is unclear as to who answered the query, Baker or the defendant, but an affirmative answer was given and both were present. In 1968, a special agent of the IRS interviewed the defendant and his accountant. He read aloud part of the audit report made by the revenue agent in 1966, including the statement: “Receipts are received almost entirely by check and deposit [ed] in total into one checking account by the taxpayer’s secretary.” [Emphasis added.]

The special agent then asked Scher “had that same practice followed in 1963 as well as 1964?” and the defendant stated it had. The agent then explained that the Government had learned that some checks from patients had been negotiated at a currency exchange and that the agent wished to determine whether they had been reported as income. Once Scher understood that the agent was speaking about checks cashed in 1964, he accused his former wife of forging endorsements on patients’ checks and of cashing them in 1963 and 1964. He did not mention the checks that he had had cashed, which, as indicated, represented a substantial amount of money. Further, Scher specifically denied cashing any checks in 1963 or 1964 at a certain currency exchange, which exchange, the trial evidence showed, had been used for Scher’s check cashing activities. At trial, Scher could remember, little of this conversation he had had with the special agent in 1968.

It is to be noted that this damaging testimony as to Seher’s proclivity for “covering-up” was not put in for impeachment purposes. Scher had not yet testified, and the misstatements had their own independent probative value.

Dr. Scher denied at trial that his cashing of the checks at the currency exchanges and placing the proceeds in a private safe was for the purpose of evading his tax obligations. He explained his hoarding of thousands of dollars by detailing personal and professional problems he had had at the time. The money allegedly gave him a sense of security. He also claimed that, in addition to his other problems, he had had financial difficulties. Accountant Waxier, he thought, had left his employ because he had been too slow in paying him his fees. According to the defendant, the cash hoard remained unused until 1968, when he invested some of it in stocks.

From the above evidence, the trier of fact could reasonably have inferred that Dr. Scher was deliberately withholding necessary information from his accountant and that he was attempting to use the resulting inadequate communications with Baker to his advantage. From the circumstances presented, some of which by themselves seemed innocent, the judge was justified in finding a damning pattern. The Government’s case satisfied the requirement of Spies v. United States, 317 U.S. 492, 499, 63 S.Ct. 364, 368, 87 L.Ed. 418 (1943), that a “willful and positive attempt to evade tax” means more than a “[w]illful but passive neglect of the statutory duty.” Defendant admitted that he was experiencing financial problems. The employment of an accountant using a different method of computing income from that followed by his predecessor was indeed fortuitous for Dr. Scher, who had begun to cash cheeks in substantial amounts. The district judge could reasonably have found it highly questionable that Baker, a CPA with over thirty years’ experience, would, without any knowledge of his new client’s practices, adopt the “bank deposits method” of calculating that client’s income. But the ultimate responsibility returns to Scher’s concealment. The inconsistencies in Baker’s testimony and the knowledge he displayed of Seher’s procedures, e. g., that the defendant was paid primarily by check, support the inference that Baker had been led to believe that the method he adopted accurately reflected Dr. Scher’s gross income.

The trial judge also properly noted that the defendant was not completely isolated from the preparation of his income tax returns. Baker did discuss tax matters with him each year. It was within the province of the trier of fact to disbelieve that these discussions concerned deductions and expenses only and that the defendant could have failed to be aware of the great discrepancies between the amount of fees he actually received in a year and the gross income figure that his accountant cited to him.

Finally, the defendant's evasiveness and misstatements when interviewed by the special agent of the IRS in 1968 strongly suggest conscious wrongdoing. And, as the trier of fact commented, the defendant’s explanation of why he cashed the checks rather than depositing them in a bank — where he could have earned interest, which, presumably, would have enhanced the sense of security large sums gave him — and his ultimate use of his tax-free hoard bolster the inference that defendant was willfully attempting to evade his income taxes. Although it is true, as we noted in footnote 1 of this opinion, that there were errors in the questioned income tax returns which redounded to Scher’s favor, this is a matter of argument only, and we cannot say that it is sufficient to do away with the willful intent to evade as found by the trier of fact.

Having considered the totality of the circumstances and the inferences that one could reasonably draw from them, we hold that the evidence was sufficient to suppbrt the district court’s verdict. Accordingly, the judgment of conviction is affirmed.

Affirmed.

      . The indictment alleged that Dr. Scher had underpaid $1,949.57 in income taxes in 1964, $3,800.52 in 1965, and $2,719.45 in 1966.
      Taxable Income Tax Due Indictment Indictment
      Year Per Return Per Return Taxable Income Tax Due
      1964 $ 9,031.45 $1,925.06 $14,546.73 $3,874.63
      1965 8,317.39 1,682.43 18,776.42 5,482.95
      1966 11,206.64 2,576.13 18,279.06 5,295.58
      These figures do not reflect the total amount of gross income not reported as the returns also failed to include some allowable deductions and there was some double reporting of income. Our inquiry is directed to the matter of willful intent as to the omission of income, although, of course, we do not ignore in deciding this ease the fact that not all of the taxpayer’s derelictions were in his own favor.

      . 26 U.S.C. § 7201 (1971) reads:
      “Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $10,000, or imprisoned not more than 5 years, or both, together with the costs of prosecution.”