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Tinkoff v. United States

October 16, 1936


Appeal from the District Court of the United States for the Northern District of Illinois, Eastern Division; Patrick J. Stone, Judge.

Author: Lindley

Before ALSCHULER, Circuit Judge, and LINDLEY and BALTZELL, District Judges.

LINDLEY, District Judge.

Appellant appeals from a conviction on an indictment returned June 14, 1932, charging him and one Newman with willful attempt to defeat and evade income taxes for the year 1928 due from Newman and two companies controlled by him. Newman pleaded guilty, and appellant was tried alone. He is a former revenue agent, a certified public accountant and a lawyer.

It appears that on December 6, 1934, after his appeal had been allowed and was pending, appellant was, against his protest, taken to the penitentiary at Leavenworth, there to serve the sentence of 18 months' imprisonment which the court had imposed, and that he remained there until December 2, 1935, when he was temporarily released by order of the United States Circuit Court of Appeals of the Tenth Circuit. It seems a petition for habeas corpus had been filed in the Kansas District Court, which court denied the relief, and, on appeal to the Circuit Court of Appeals, that court, holding that it was improper to commit him to the penitentiary against his will while his appeal from the judgment was pending, ordered him to be released for a limited time in order that he might in this court prosecute his appeal or other proceeding, which appears more fully from the report of that case in Tinkoff v. Zerbst (C.C.A.) 80 F.2d 464. This court having reinstated his appeal, which it had theretofore dismissed, extended the period of the release fixed by the court in the tenth Circuit, and under such extension appellant is still at liberty on bond.

On June 15, 1934, appellant was found guilty on both counts of the indictment. On July 3d an order was entered fixing the time for filing bill of exceptions at 30 days. On July 24th the court continued till July 30th a motion for new trial. On the latter date the court overruled the motion for new trial and entered judgment of conviction, and on July 31st the court again fixed, as the time for filing bill of exceptions, September 3, 1934. On August 17th the court extended its stay of execution upon the sentence to October 15th. On August 31st defendant moved for an extension of time within which to file bill of exceptions and for a new trial, and same was continued until October 15th, and again on the latter date to November 3d. On October 26th defendant moved for allowance of an appeal. On October 30, 1934, upon appellant's motion, the court entered an order allowing the appeal and directed that it be entered nunc pro tunc as of July 31, 1934. On November 6th the stay of execution was further extended until November 30th, and motion for extension of time to file bill of exceptions was continued until November 30th. On November 30, 1934, the court denied appellant's second motion for new trial and fixed the appeal bond at $15,000. On December 1st the court entered an order extending the time for filing bill of exceptions to December 22d. On December 20th Mack, Wikoff & Ross, and Orville R. Seiter moved for leave to enter their appearance as additional counsel for appellant. Said motion was allowed. Counsel thereupon moved to extend further the time for filing bill of exceptions. This motion was denied. Defendant then moved for an order granting an appeal. This the court denied, obviously because a prior appeal had been perfected. The affidavit of Seiter recited that he was one of the attorneys for defendant at the time of the trial and participated therein; that appellant had been taken to the penitentiary upon commitment; that, because of the voluminous character of the record, additional time was required within which to file a bill of exceptions. Apparently, the court had in mind that the judgment of conviction had been entered in July, that the time expiring since that date was then ripening into 6 months and that further delay was not necessary, and that, had diligence been observed by appellant, he would not have needed to make the request.

On February 2, 1935, at a term succeeding that at which the last of the orders heretofore mentioned was entered, defendant obtained an extension of time for filing bill of exceptions. Thereafter upon motion this court dismissed the appeal, Tinkoff v. United States, 77 F.2d 1016, holding that, there being no bill of exceptions on file, there was nothing to review.

Later, the court, at the earnest solicitation of the appellant, vacated the order of dismissal and reinstated the appeal, and the government now contends that a bill of exceptions since prepared and filed is not properly a part of the record; that the trial court was without jurisdiction to approve any bill of exception subsequent to the December term, 1934; that, upon the perfecting of the appeal, the trial court lost jurisdiction of the cause entirely except for the purpose of entering within that term such orders as were necessary for the filing of bills of exception; and that, the only motion made at the December term, 1934, for extending of time to file bill of exceptions having been denied, the orders of the District Court at subsequent terms are a nullity.

Let us examine first the question of whether appellant was diligent in presenting his second motion for new trial. After his original motion for new trial had been denied on July 30th, one month later, he made an oral motion based on alleged newly discovered evidence. Appellant admits that the newly discovered testimony relied upon came to his attention on July 31st, and it appears in the affidavit of his wife, filed in support of the motion, that on July 31st she obtained the information relied upon as constituting newly discovered evidence. Despite this knowledge in July, the facts were not sworn to until November 28th, almost 4 months later, or filed with the court, until November 30th. Appellant says that the trial judge was out of the district a large portion of this period, but that fact does not excuse his delay in bringing to the attention of the District Court the facts relied upon as constituting newly discovered evidence brought to his attention in July and not presented to the court until 4 months later. Only one conclusion can be drawn, and that is that defendant was courting delay in disposition of his second motion for new trial. Diligence is the all-important factor justifying extension of grace by the court. Knowlton v. Seneca Engineering Co. (D.C.) 36 F.2d 394. In Moss v. Equitable Life Insurance Co. of Iowa, 71 F.2d 795, 796 (C.C.A. 8), the court properly said: "While it is well settled that a motion for a new trial in a law case, made with reasonable promptness after the entry of judgment, will toll the beginning of the statutory time within which an appeal can be taken, the benefits of this rule should not be extended to those who fail to act with reasonable diligence."

So here appellant, seeking relief, may not have extended to him the benefit of that to which he might have been entitled had he acted with reasonable diligence. When the defendant's motion for new trial was overruled on July 30th, if, on the following day, he became aware of what he considered vital newly discovered evidence, he owed a duty to present the same to the court with diligence. Failing to do so, he must be held to have abandoned the same. Consequently the rightfully final order from which an appeal could be taken was that of July 31, 1934.

Irrespective of this conclusion, however, we are confronted with a further and even more serious situation. Judgment of conviction was entered on July 30th. On October 27th appellant prayed an appeal but procured an order of the court fixing nunc pro tunc the time of prayer for and allowance of appeal as July 31, 1934. Whether we accept the earlier date of July 31st or the later one of October 27th is not of vital importance in this connection.

The effect of perfecting an appeal is to remove jurisdiction of the cause from the trial court. That tribunal has no power thereafter to enter any order with respect to the case other than such as has to do with bills of exception or preparation of the record. It has no jurisdiction after an appeal has been granted to act upon a motion for new trial, to reduce sentence, or otherwise modify or invalidate the judgment appealed from. It may at the same term properly vacate the order allowing the appeal, but, in the absence of such order of vacation, jurisdiction to deal with the judgment passes from the District Court to the Court of Appeals. The lodgment of a writ of error, the filing of notice of appeal, and the order allowing the appeal, all remove jurisdiction to the upper court. United States v. Habib et al. (C.C.A.) 72 F.2d 271; Levinson v. United States (C.C.A.) 32 F.2d 449; United States v. Radice (C.C.A.) 40 F.2d 445; United States v. Mayer, 235 U.S. 55, 35 S. Ct. 16, 59 L. Ed. 129; Rogers v. Watson (C.C.A.) 46 F.2d 753; Mayer v. Hickey (C.C.A.) 67 F.2d 489; Midland Terminal R. Co. v. Warinner, 294 F. 185 (C.C.A. 8); Spirou v. United States, 24 F.2d 796 (C.C.A. 2). It follows that, after the entry of the order allowing the appeal, the District Court had no jurisdiction to pass upon any motion to vacate the judgment or for new trial and that any order entered thereafter in that respect is a complete nullity.

The District Court, however, may enter at the same term appropriate orders for the filing of bills of exception. From the history recited, it is apparent that several extensions for filing bills of exception were granted, the last expiring on December 22d, well nigh 6 months after the appeal had first been noted. Obviously the District Court was justified in believing that diligence had not been observed, and therefore on December 7th entered an order denying any further extension. No bill of exceptions properly could be approved by the District Court except one filed within the limit of December 22d or within such time as might be extended by any further order entered at that term. No such order was entered and the term expired in January, 1935. After its expiration, at the ensuing February term, 1935, the District Court again entered an order fixing the time for filing bill of exceptions. This order we consider an entire nullity, in view of the fact that the term at which the court might have fixed a time had expired. Such was the view of this court when it dismissed the appeal. Consequently the bill of exceptions presented subsequent to December 22, 1934, is a nullity.

Appellant contends, however, that the motion submitted on December 7th, by counsel who then entered their appearance for him, was not presented with his authority; that he was then confined in the penitentiary; that, in view of his imprisonment, the time for filing his bill of exceptions was thereby automatically extended; and that the effect of the order of December 7th was to deny him his legal rights. It appears, however, that counsel who entered their appearance for appellant filed an affidavit in which it was stated that one of them had appeared in the trial as associate counsel for appellant. The record discloses such counsel's participation at the trial. The attorneys were officers of the court, and there is nothing in the record to disclose any limitation upon the authority of appellant's attorneys other than his own affidavit that he did not authorize this representation. We find as a fact that counsel had authority to represent appellant in making the motion for extension of time for bill of exceptions, which was denied. Appellant says that, had he been present, he could have presented the matter himself. Probably true, but all the facts that he relied upon as material -- his confinement, the voluminous character of the record, the difficulty of assembling the same, -- were presented to the court, who was properly justified, as we have seen, in refusing further extension of time for the preparation of bill of exceptions as to a judgment, then almost 6 months old, beyond the date of December 22d. The court's discretion was wisely exercised. Defendant was not handicapped or injured. To have acted otherwise, it seems to us, would have been an abuse of discretion in favor of the appellant, encouraging dilatory tactics at the expense of diligence. We conclude, therefore, that the bill of exceptions now on file is one which we are powerless to receive and to consider.

However, in view of the circumstances of this case and the earnest plea of appellant, we are not satisfied to ground our decision upon the defendant's lack of diligence, his failure to comply with the law in perfecting his appeal, or his long delay in taking any steps to protect his rights, all indicative clearly of a desire to delay the process and the functions of the court. Rather we have preferred to study the record and to consider the cause upon its merits as if there were a valid bill of exceptions on file.

Appellant contends that the demurrer to his indictment was improperly overruled. The first count charged that appellant was employed by one Newman and by Newman corporations to aid, counsel, advise, and assist the taxpayers in the preparation and presentation of their income tax returns and that appellant, jointly with Newman, willfully attempted to defeat and evade a large portion of the tax, $130,767.96, representing the consolidated net income for 1928 of two Newman corporations, by preparing and filing a tax return of only $11,895.22. The second count charges a similar attempt to defeat and evade an income tax of $87,706.87 for Newman, individually, for the year 1928, by preparing and filing a return showing no tax due and payable. Each count is based upon section 146 (b) of the Revenue Act of 1928 (26 U.S.C.A. § 145 and note), which provides, in part, that any person who willfully attempts in any manner to evade or defeat any tax shall be guilty of a felony. Each count follows the language of the statute in a form which has been sustained by the courts. United States v. Troy, 293 U.S. 58, 55 S. Ct. 23, 79 L. Ed. 197, Capone v. United States, 56 F.2d 927 (C.C.A. 7), certiorari denied 286 U.S. 553, 52 S. Ct. 503, 76 L. Ed. 1288; Emmich v. United States, 298 F. 5 (C.C.A. 6), certiorari denied 266 U.S. 608, 45 S. Ct. 93, 69 L. Ed. 465; Gleckman v. United States, 80 F.2d 394 (C.C.A. 8), certiorari denied February 10, 1936, 297 U.S. 709, 56 S. Ct. 501, 80 L. Ed. 996.

Section 1114 (c) of the Revenue Act of 1926 (44 Stat. 116, 26 U.S.C.A. § 1693 (b) (1), makes it a criminal offense willfully to aid or assist in the presentation of a false income tax return, and appellant insists that a conviction on the present charge under section 146 (b) is no bar to a further prosecution on section 1114 (c) of the Revenue Act of 1926. Appellant and Newman were jointly charged as principals with attempting to evade the corporation tax and the individual tax of Newman. The counts charged that appellant was employed to prepare and make such returns. He was under no duty to make a return as an officer or otherwise, but contracted with Newman to handle these tax matters. Had the charge against him been a failure to make a return or to pay the tax, it might have been reasonably necessary to allege and show a duty in that respect upon his part, but, when he is charged with willful effort to defeat the tax by presenting a false return, no allegation of duty upon the part of appellant is necessary.As the Supreme Court remarks, there is evidently no legislative purpose to exempt from punishment one who actively endeavors to defeat a tax, whatever his relationship to the taxpayer may be. United States v. Troy, supra; Levy v. United States, 271 F. 942 (C.C.A. 3).

Nor is it any defect that the tax attempted to be evaded was that of another. The statute is so framed as to make liable any person who attempts willfully and unlawfully to evade the tax of himself or of any other person. Capone v. United States, 51 F.2d 609, 76 A.L.R. 1534 (C.C.A. 7), certiorari denied 284 U.S. 669, 52 S. Ct. 44, 76 L. Ed. 566; United States v. Smith (D.C.) 13 F.2d 923; United States v. Miro, 60 F.2d 58 (C.C.A. 2). Appellant may not have been an ordinary employee of the corporation. He probably was an independent contractor, but no ...

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