Before DUFFY, SCHNACKENBERG and SWYGERT, Circuit Judges.
Defendant, Clark L. Fry, was indicted in ten counts and convicted on five of nine counts charging him with using the mails or other means of transportation in interstate commerce in the employment of a scheme to defraud in the offer and sale of securities as proscribed by Section 17(a) (1) of the Securities Act of 1933, 15 U.S.C.A. § 77q(a) (1), and on one count charging him with using the mails to deliver an unregistered security as proscribed by Section 5(a) (2) of the Securities Act of 1933, 15 U.S.C.A. § 77e(a) (2). The trial was before a jury. Defendant was sentenced to a total of five years imprisonment and fined $5,000.
Defendant appeals on the grounds that (1) he failed to receive a fair trial because of the conduct of the trial court and (2) the trial court improperly excluded evidence relating to defendant's defense of good faith.
Defendant testified that he is a mechanic and carpenter by trade; that he has had three years of formal education; that he has been an inventor since 1909; and that he has invented over one hundred items and has obtained four United States patents.
At the time of his trial, defendant was working on five inventions or processes which are germane to the indictment: (1) a steam gonerating process which would form energy by the use of heat producing alloys; (2) a protective paint for wood capable of making the wood impervious to fire and vermin; (3) a non-slip lock nut; (4) roll away furniture; and (5) a water retaining fertilizer.
Count 1 of the indictment sets forth 23 false and fraudulent representations alleged to have been made by defendant. Some of these representations are statements that certain railroads and other companies had purchased or offered to purchase or were interested in obtaining defendant's inventions; other representations concern the return defendant told the investors they could expect when the inventions were sold. None of the false representations charged in the indictment concerns the merit or workability of defendant's devices.
Among the allegedly false and fraudulent representations testified to by investors in defendant's devices are representations that the Baltimore & Ohio Railroad Company would lease rights to defendant's steam generating machine; that it was going to use defendant's lock nut on its trains; and that it had tested defendant's protective paint and wanted to use the paint on its boxcars, wooden trestles, and railroad ties. Investors in defendant's devices further testified that defendant represented that General Electric Company had offered several million dollars for the steam generating machine; that Montgomery Ward & Company had purchased lawn furniture made by defendant; that the Chicago & North Western Railway Company was interested in using the steam generator and protective paint; and that Wisconsin Power & Light Company was interested in defendant's steam generator.
Officials of the Chicago & North Western Railway, General Electric, and Wisconsin Power & Light testified that these companies had no dealings with defendant and did not know him. The furniture buyer for Montgomery Ward & Company testified his company had never purchased furniture from defendant. The vice president of the Baltimore & Ohio Railroad testified to the effect that his company had some preliminary dealings with defendant but never had any arrangement or understanding with defendant for the use of his steam generator, lock nut or protective paint; on the contrary, the vice president testified the Baltimore & Ohio had tested the protective paint and found it was unsatisfactory and had decided that defendant had made to little progress on his steam generating machine to warrant his receiving further assistance from the Baltimore & Ohio.
Defendant denied making any representations to investors concerning the Wisconsin Power & Light Company, the Chicago & North Western Railway Company, Montgomery Ward & Company, or General Electric Company. As to the Baltimore & Ohio Railroad Company, defendant testified in substance that he acted in good faith and made no representations to investors which were inconsistent with his dealings with officials of the company.
Defendant contends that the trial court intruded into the trial to such an extent that he was denied a fair and impartial trial; that the court's questions ridiculed defendant and his witnesses and demonstrated the court's belief in defendant's guilt; and that the court aided the prosecution on numerous occasions by interposing objections, by directing the reading of exhibits, and by laying the foundation for the testimony of government witnesses after defense counsel had objected to the testimony on the ground of improper foundation.
The judge conducting a jury trial in a federal court is more than a "mere moderator"; he is "the governor of the trial for the purpose of assuring its proper conduct." Quercia v. United States, 289 U.S. 466, 469, 53 S. Ct. 698, 77 L. Ed. 1321. He has the prerogative, and at times the duty, of eliciting facts he deems necessary to the clear presentation of the issues. To this end he may examine witnesses who testify and even call witnesses on his own motion. United States v. Brandt, 2 Cir., 196 F.2d 653.
In eliciting facts, however, and in attempting to expedite the trial in the aid of truth and furtherance of justice, the judge must be careful to preserve an attitude of impartiality and to guard against giving the jury an impression that the court believes the defendant is guilty. Gomila v. United States, 5 Cir., 146 F.2d 372; United States v. Carmel, 7 Cir., 267 F.2d 345.
If the trial court undertakes the burden of examining witnesses and conducts the examination in a manner hostile to or derisive of defendant's cause, the impression on the jury is likely to be that the court believes the defendant guilty. This, of course, would not be fair to defendant, "for he is entitled to the benefit of the presumption of innocence by both the judge and jury until his guilt is proved. If the jury is inadvertly led to ...