HAGGARD v. UNITED STATES, 369 F.2d 968 (8th Cir. 1966)

Nos. 18333, 18354.United States Court of Appeals, Eighth Circuit.
December 20, 1966.

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Kenneth K. Simon, Kansas City, Mo., Robert G. Duncan, Kansas City, Mo., for appellant Lee Alley.

J. Arnot Hill, Kansas City, Mo., for appellant Rex M. Haggard.

Clifford M. Spottsville, Asst. U.S. Atty., Kansas City, Mo., F. Russell Millin, U.S. Atty., Kansas City, Mo., for appellee.

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Before MATTHES and LAY, Circuit Judges, and REGAN, District Judge.

LAY, Circuit Judge.

Appellants Alley and Haggard appeal convictions under Tit. 18, §§ 371, 656, 1005 and 2. The indictment was in fourteen counts charging appellants Haggard and Alley along with Peggy Maxine Martin, Lloyd Waymond Sewell, Louis A. Werner and Harold Barnes. Appellant Haggard was Vice President of Empire State Bank, Kansas City, Missouri. Offenses charged concerned losses of the bank, insured by Federal Deposit Insurance Corp., allegedly all manipulated by appellant Haggard through fictitious loans from October 1963 to November 1964.

Both appellants were found guilty. Haggard was given a sentence for five years on all counts to run concurrently under Tit. 18, § 4208(b). Appellant Alley was sentenced for five years on Counts I, II, IV and VI to run concurrently.

Defendant Barnes was found guilty under four counts. The trial court suspended an imposition of sentence and placed him on probation for three years. Defendants Martin and Sewell (husband and wife at time of trial) were found guilty, Martin on two counts, Sewell on one count. Their sentence was suspended and both placed on probation for three years. They do not appeal. Defendant Werner was charged with Haggard under Counts XIII and XIV. These counts were severed for separate trial after commencement of trial.

Appellant Haggard complains Counts (II and III), (IV and V) and (VI and VII) arise out of three separate transactions and do not constitute six separate offenses. Appellant overlooks his conviction was also on six other counts not contested. Haggard’s sentence on each of the twelve counts was five years to ru concurrently. Under these circumstances, as long as a conviction was proper upon at least one count, it will support the judgment. Barenblatt v. United States, 360 U.S. 109, 79 S.Ct. 1081, 3 L.Ed.2d 1115; Atkinson v. United States, 8 Cir., 344 F.2d 97. This is the only ground of error raised by appellant Haggard.

We have examined the complete record. Haggard’s guilt on each count is difficult to dispute. His series of false entries on the ledger cards were made possible by his position of trust. Without the false entries, the concealment, the actual transfer of bank funds by cashier checks on fictitious notes, none of the losses could have taken place. We find no error as to appellant Haggard and affirm his conviction.

Appellant Alley raises more serious grounds: (1) misjoinder of parties defendant under Rule 8(b) Fed.R.Crim.P., and (2) abuse of discretion of the lower court in denying appellant’s motion to sever, upon use of the confession of co-conspirator Barnes. A summary analysis of the indictment is necessary:[1]

Count I (conspiracy § 371) — Haggard, Alley, Barnes May 15, 1963 to November 23, 1964.[2]

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Count II (embezzlement § 656) — Haggard — Dec. 5, 1963 (aiding and abetting § 2) — Alley
Count III[3] (false entry § 1005) — Haggard — Dec. 5, 1963
Count IV (embezzlement § 656) — Haggard — Dec. 31, 1963 (aiding and abetting § 2) — Alley
Count V[4] (false entry § 1005) — Haggard — Jan. 3, 1964
Count VI (embezzlement § 656) — Haggard — May 18, 1964 (aiding and abetting § 2) — Alley
Count VII[5] (false entry § 1005) — Haggard — May 19, 1964
Count VIII[6] (false entry § 1005) — Haggard — Feb. 11, 1964 (aiding and abetting § 2) — Barnes
Count IX (false entry § 1005) — Haggard — March 31, 1964 (aiding and abetting § 2) — Barnes
Count X (false entry § 1005) — Haggard — April 15, 1964 (aiding and abetting § 2) — Barnes
Count XI[7] (false entry § 1005) — Haggard — Oct. 16, 1963 (aiding and abetting § 2) — Martin and Sewell
Count XII (false entry § 1005) — Haggard — Dec. 10, 1963 (aiding and abetting § 2) — Martin
Count XIII (embezzlement § 656) — Haggard — Sept. 14, 1964 (aiding and abetting § 2) — Werner
Count XIV (false entry § 1005) — Haggard — Sept. 24, 1964 (aiding and abetting § 2) — Werner

The court severed Counts XIII and XIV concerning Haggard and Werner.[8]

Appellant properly challenges misjoinder under Rule 8(b) by a motion to sever. See Finnegan v. United States, 8 Cir., 204 F.2d 105, at 109. A motion

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based upon misjoinder under Rule 8(b) does not, as the government assumes, rest upon the discretion of the trial court as does a motion to sever under Rule 14 for “prejudicial joinder”. If multiple defendants are misjoined, the trial court has no discretion, since misjoinder is prejudicial per se. Metheany v. United States, 9 Cir., 365 F.2d 90; Ingram v. United States, 4 Cir., 272 F.2d 567; Ward v. United States, 110 U.S.App.D.C. 136, 289 F.2d 877; King v. United States, 1 Cir., 355 F.2d 700; United States v. Spector, 7 Cir., 326 F.2d 345. See also Coco v. United States, 8 Cir., 289 F.2d 33.[9]

Rule 8(b) of the Fed.R.Crim.P. permits the joinder of multiple defendants in the same indictment if they are alleged to have “participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses.” Broad interpretation of Rule 8(b) is undoubtedly encouraged in the interests of more efficient administration of criminal trials.[10] This in no way detracts from the rights of individuals to avoid prejudicial joinder. The trial court can always entertain a motion to sever under Rule 14 to determine prejudice to individual defendants.[11] Opper v. United States, 348 U.S. 84 at 95, 75 S.Ct. 158, 99 L.Ed. 101; Slocum v. United States, 8 Cir., 325 F.2d 465. In Kivette v. United States, 5 Cir., 230 F.2d 749, under Rule 8(b) it becomes clear that “participation” by a defendant in a single transaction does not require actual conduct constituting a crime. Such an interpretation logically follows from the express language of Rule 8(b) which does not require joinder of each defendant on each count, yet insists upon “participation.” Nor do we think that “participation” in “the same series” requires “participation” in each transaction of the series. See Wiley v. United States, 4 Cir., 277 F.2d 820. The language of Rule 8(b) assumes certain evidence may be admitted against one defendant not necessarily applicable to another. Daley v. United States, 231 F.2d 123, 125 (1 Cir., 1956). However, appellant urges the indictment is deficient in failing to allege a common scheme or plan involving Alley with Martin or Sewell or Werner.[12]

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The question we must determine is whether appellant “participated * * * in the same series” with the offenses of Haggard in October of 1963 (aided and abetted by Martin and Sewell) and December of 1963 (aided and abetted by Martin alone).

The indictment demonstrates (a) a common participant throughout all counts, (b) a similar scheme to defraud the same bank in all counts, (c) identical transactions in each instance,[13] (d) all offenses occurred within the defined period of time alleged in the conspiracy count of Alley et al., (e) defendants are alleged to be “aiders and abettors” to the common participant.[14] Under these circumstances one can imply a “clear discernible pattern of action” involving Haggard and his accomplices in the “same series of transactions.” United States v. Rosenfield, 7 Cir., 235 F.2d 544; Kleven v. United States, 8 Cir., 240 F.2d 270; Roth v. United States, 10 Cir., 339 F.2d 863; Wiley v. United States, 4 Cir., supra; United States v. Gilbar Pharmacy, Inc., (S.D.N.Y.) 221 F. Supp. 160 (1963).

Joinder must be viewed on a case by case basis. If the indictment invites “joint proof”[15] such as here, e.g. partial payment of one loan with another, or infers a common pattern of action, prima facie joinder is shown. The jury should be able to see how each piece fits together even though strangers “aid and abet” the common thief at successive stages of the overall fraud. See Rakes v. United States, 4 Cir., 169 F.2d 739.[16] The trial judge can make this decision without jeopardy. Upon a determination of prejudice he can always order severance under Rule 14 if proof fails to support proper joinder. Schaffer v.

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United States, 362 U.S. 511, 80 S.Ct. 945, 4 L.Ed.2d 921; Golliher v. United States, 8 Cir., 362 F.2d 594. And, of course, such an order is reviewable here. When the prima facie common pattern of action (of the indictment) breaks down to proof only of isolated similar transactions, then the trial court should become “particularly sensitive” to prejudicial misjoinder. 362 U.S. at 516, 80 S.Ct. 945.[17]

Since we find proper joinder under Rule 8, the motion to sever must be directed to the trial court’s discretion. We do not feel the appellant Alley was in any way prejudiced by the joinder of Counts XI and XII. As we have stated, appellant Alley was involved in the other ten counts, but charged in only four. We find no error in the trial court’s denial to sever. The judge supervised the taking of notes by the jury during the trial and required the government to marshall the evidence as to each defendant. The variations in the proof, of course, related to the different notes and mortgages involved. The instructions meticulously separated the counts and the evidence as to each of the defendants.

Appellant also claims prejudicial joinder by reason of the admission of co-defendant Barnes’ confession. The admission of a co-defendant’s statement, with proper cautionary instructions, will not require reversal with directions to sever, except in extreme cases. Delli Paoli v. United States, 352 U.S. 232, 77 S.Ct. 294, 1 L.Ed.2d 278;[18] Fisher v. United States, 8 Cir., 324 F.2d 775, cert. den. 377 U.S. 999, 84 S.Ct. 1935, 12 L.Ed. 2d 1049; Golliher v. United States, 8 Cir., 362 F.2d 594; Mee v. United States, 8 Cir., 316 F.2d 467, cert. den. 377 U.S. 997, 84 S.Ct. 1923, 12 L.Ed.2d 1049, reh. den. 379 U.S. 873, 85 S.Ct. 20, 13 L.Ed. 2d 80; Costello v. United States, 8 Cir., 255 F.2d 389, cert. den. 358 U.S. 830, 79 S.Ct. 51, 3 L.Ed.2d 69, reh. den. 358 U.S. 901, 79 S.Ct. 220, 3 L.Ed.2d 152; Kansas City Star Co. v. United States, 8 Cir., 240 F.2d 643. This approach has been criticized on the theory it is difficult to avoid prejudice with only a cautionary instruction. See Bozza v. United States, 2 Cir., 365 F.2d 206, where the court holds despite cautionary instructions the government must either sever or avoid use of such a confession where more than one defendant is being tried.[19] Such a decision does point up the necessity of the trial court viewing quite strictly the use of coconspirators’ confessions in multiple joinder situations. In the present case the trial court did give a cautionary instruction limiting Barnes’ statement to the defendant Barnes. However, in addition, Alley’s participation in the offenses committed by Barnes is shown by independent evidence. There was no “prejudicial spillover effect” on appellant. The confession barely corroborated what the government had already established.

Appellant Alley was not prejudiced in any respect.

Judgment is affirmed.

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