United States v. Robert E. West, 666 F.2d 16, 2d Cir. (1981)
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2d 16
7 Fed. R. Evid. Serv. 1506
UNITED STATES of America, Appellee,
v.
Robert E. WEST, Appellant.
No. 806, Docket 80-1405.
United States Court of Appeals,
Second Circuit.
Argued March 5, 1981.
Decided April 7, 1981.
Jerome F. O'Neill, Burlington, Vt. (William B. Gray, U. S. Atty., and
Karen McAndrew, Asst. U. S. Atty., Burlington, Vt., on the brief), for
appellee.
Frank G. Mahady, Norwich, Vt. (Mahady, Johnson, Dunne, Hershenson &
Scott, Norwich, Vt., on the brief), for appellant.
Before KAUFMAN and TIMBERS, Circuit Judges, and WARD, District
Judge.*
TIMBERS, Circuit Judge:
Appellant Robert West was convicted after a two day jury trial in the District of
Vermont, Albert W. Coffrin, District Judge, on one count of knowingly making
false statements to the Farmers Production Credit Association (FPCA) in South
Burlington, Vermont, with the intention of influencing that organization, in
violation of 18 U.S.C. 1014 (1976); on one count of falsifying and concealing
a material fact in a matter within the jurisdiction of the Farm Credit
Administration, in violation of 18 U.S.C. 1001 (1976); and on one count of
using a document he knew to contain false statements in a matter before the
Farm Credit Administration, in violation of 18 U.S.C. 1001.
The gravamen of the offenses with which appellant was charged was that in
1975 he tendered to the FPCA a notarized mortgage deed, a promissory note
and a loan agreement which purported to bear the signature of Judith West,
appellant's then wife, but on which appellant in fact had signed Mrs. West's
name.
3
On appeal appellant claims that the district court erred (1) in refusing to charge
the jury that the government was required to prove beyond a reasonable doubt
that appellant lacked authority to sign Mrs. West's name on the document; and
(2) in refusing to admit in evidence a divorce settlement agreement between
appellant and Mrs. West.1 Since we hold that appellant's claim of authorization
constituted a valid affirmative defense which, once raised, the government was
required to disprove beyond a reasonable doubt and that the district court erred
in failing to instruct the jury on authorization, we reverse appellant's conviction
on all counts and remand the case for a new trial.
I.
4
Appellant and his wife owned real estate in Manchester, Vermont. They
acquired it in 1969. The property included a "run down" old house. Between
1969 and 1972, appellant obtained a series of unsecured demand loans from the
FPCA for repairs on the property. The loans were extended with the
understanding that once appellant had made the repairs he would obtain long
term financing from the Federal Land Bank or a commercial source. In 1975,
after appellant was unable to obtain long term financing from another source,
FPCA officials asked appellant to give the agency a mortgage on the property
as security for a promissory note in the amount of the outstanding loan balance.
On October 28, 1975, appellant tendered to the FPCA a mortgage deed, two
promissory notes and a loan agreement. The mortgage deed, the loan
agreement and one of the promissory notes purported to be signed by
appellant's wife, Judith. In fact, appellant himself had signed her name. At the
time appellant signed his wife's name, Mr. and Mrs. West were living apart.
They subsequently were divorced.
At the trial, appellant admitted that he had signed his wife's name on the
documents in question. His sole defense was that Judith had authorized him to
sign her name on financial documents, or alternatively, that he reasonably
believed he was authorized to sign for her.
Appellant offered in evidence at the trial a stipulation of settlement signed by
appellant and Judith on December 2, 1975 in connection with their divorce.
Article VI of the agreement read: "Plaintiff (appellant herein) shall terminate
his right to sign any obligations on behalf of defendant (Judith West) at any
financial institution, or otherwise, with regard to any future obligation." In
support of his offer, appellant urged that the stipulation was relevant to the
question of whether he in fact was authorized to sign Judith's name on the
documents in question. Indeed, the stipulation appears to have been the only
evidence, except appellant's testimony, which was probative on the question of
authority. The district court refused to admit the settlement agreement on the
ground that it was hearsay and did not fall within any exception to the hearsay
rule.
8
Appellant made a timely request, relying upon United States v. Gilbreath, 452
F.2d 992 (5 Cir. 1971), that the district court instruct the jury that, in order to
convict appellant, the government was required to overcome a presumption that
appellant was authorized to sign Mrs. West's name. In the alternative, appellant
urged that, because he believed he was authorized to sign his wife's name,
appellant had not "knowingly or wilfully" submitted false documents. The
district court, however, did not mention "authorization" in its charge to the jury,
either as an affirmative defense or as an element of the government's required
proof.
II.
9
The two provisions of the statute under which appellant was prosecuted
prohibit knowingly making false statements, or using any false writing or
document which contains a false statement, in any matter within the jurisdiction
of any department or agency of the United States, 18 U.S.C. 1001 (1976), and
knowingly making any false statement for the purpose of influencing any of the
specified government owned or insured financial institutions which grant loans
to homeowners and farmers, 18 U.S.C. 1014 (1976).
10
Under either provision of the statute, a defendant may be convicted of making a
false statement only if the government proves beyond a reasonable doubt that
the defendant either knew the statement was false, United States v. Marchisio,
344 F.2d 653, 666 (2 Cir. 1965) ( 1001); United States v. Erskine, 588 F.2d
721, 722 (9 Cir. 1978) ( 1014), or acted with a conscious purpose to avoid
learning the truth. United States v. Egenberg, 441 F.2d 441, 444 (2 Cir.), cert.
denied, 404 U.S. 994 (1971) ( 1001); United States v. Hanlon, 548 F.2d 1096,
1101 (2 Cir. 1977) ( 1014).
11
In a prosecution under 1014 charging the submission of a false signature, the
prosecution is not required to prove lack of authorization as part of its prima
facie case. United States v. Carr, 582 F.2d 242, 245-46 (2 Cir. 1978). While no
court appears to have ruled expressly whether lack of authorization is an
element of 1001, we hold that the government does not bear the initial burden
of proving lack of authority under 1001 any more than under 1014. As we
indicated in United States v. Carr, supra, that element is not explicitly
incorporated in the statute and its exclusion from the government's initial
required proof is consistent with our traditional reluctance to require the
government "to adduce positive evidence to support a negative averment the
truth of which is fairly indicated by established circumstances and which, if
untrue, could readily be disproved by the production of documents or other
evidence probably within the defendant's possession or control." Id. at 245,
quoting Rossi v. United States, 289 U.S. 89, 91-92 (1933).
12
Appellant's assertion, however, that he was authorized, or reasonably believed
that he was authorized, to sign his wife's name on the documents he submitted
to the FPCA did constitute an affirmative defense which tended to negate the
government's charge that he "knowingly" submitted false documents. United
States v. Carr, supra, 582 F.2d at 246; see United States v. Cleary, 565 F.2d 43,
46 (2 Cir. 1977), cert. denied, 435 U.S. 915 (1978). This is so because if
appellant reasonably believed that he was authorized by Mrs. West to place her
signature on financial documents and that the signature would bind Mrs. West
to the obligations under the mortgage, the loan agreement and the promissory
notes, then appellant did not have the specific intent to submit false documents
necessary to constitute a violation of either 1001 or 1014. See United States
v. Lewis, 592 F.2d 1282, 1286 (5 Cir. 1979) (in forgery prosecution under 18
U.S.C. 495, good faith is a complete defense to charge involving intent to
defraud).
13
Once appellant produced some evidence of such authority, the burden was on
the government of proving beyond a reasonable doubt that appellant lacked
authorization in order to sustain its burden of proving that appellant had the
requisite intent. United States v. Carr, supra, 583 F.2d at 246; cf. In re Winship,
397 U.S. 358, 361-64 (1970); United States v. Swiderski, 539 F.2d 854, 857 (2
Cir. 1976) (once defendant produces evidence of entrapment, burden shifts to
the government to prove predisposition beyond a reasonable doubt); United
States v. Currier, 405 F.2d 1039, 1042 (2 Cir.), cert. denied, 395 U.S. 914
(1969) (once defendant produces "some evidence" of insanity, the government
must prove sanity beyond a reasonable doubt).
14
The district court's instructions to the jury did not mention the authorization
question, either as a defense or in the context of the court's explanation of the
requirement of knowledge. While the court correctly did instruct the jury that it
should not convict appellant if it found that he submitted false documents
"because of accident, mistake or other innocent reason", that language was
insufficient to inform the jury adequately regarding appellant's defense and the
government's burden of proof.2
15
Since appellant satisfied the requirement that he raise the issue of authority, the
court should have informed the jury that the government had the burden of
proving lack of authority beyond a reasonable doubt. See United States v.
Berger, 433 F.2d 680, 684 (2 Cir. 1970), cert. denied, 401 U.S. 962 (1971)
(entrapment defense); Issac v. United States, 284 F.2d 168, 170 (D.C.Cir.1960)
(insanity defense). Appellant was entitled to have a properly instructed jury
consider his defense that he was authorized to sign Judith's name to the
documents in question. Since the jury was not so instructed, we reverse the
judgment of conviction on all counts and remand the case for a new trial.
III.
16
In view of our holding above that appellant is entitled to a new trial because of
the inadequacy of the jury instructions, we need not dwell at length on
appellant's evidentiary claim of error. We do hold, however, that the stipulation
of settlement, executed less than two months after the events which gave rise to
this indictment, was admissible as non-hearsay evidence to show appellant's
state of mind, i.e., that he believed that he had authority to sign Judith's name to
financial documents. United States v. Bobo, 586 F.2d 355, 371 (5 Cir. 1978),
cert. denied, 440 U.S. 976 (1979); United States v. Wilkes, 451 F.2d 938 (2 Cir.
1971); see Weinstein and Berger, 4 Weinstein's Evidence P 801(c)(01) (1979).
17
As indicated above, appellant's state of mind, including his reasonable belief
that he had authority, was relevant to the question of whether he "knowingly"
submitted false documents. The fact that soon after he signed the documents
which are the subject of the criminal prosecution appellant entered into an
agreement purportedly terminating his authority to sign Judith's name is
relevant to the question of whether, at the time he signed the documents here
involved, he believed that he was authorized. See Edwards and Hanley v. Wells
Fargo Secur. Clearance Corp., 458 F.Supp. 1110, 1118, n.2 (S.D.N.Y.1978),
rev'd on other grounds, 602 F.2d 478 (2 Cir. 1979), cert. denied, 444 U.S. 1045
(1980). The stipulation of settlement, if offered, would be admissible as nonhearsay evidence, not to prove the truth of the matter asserted, but to show what
appellant believed.
18
If we had not reversed appellant's conviction and remanded for a new trial
because of the inadequate jury instructions, we would be reluctant to reverse on
this ground alone, for it does not appear that appellant made it clear at the trial
that he was offering the stipulation of settlement for the purpose stated above.
Huff v. White Motor Corp., 609 F.2d 286, 290 n.2 (7 Cir. 1979). What we have
said here is for the guidance of the court and counsel at the new trial on
remand.3
19
Appellant's conviction is reversed and the case is remanded for a new trial
consistent with this opinion.
20
Reversed and remanded.
Hon. Robert J. Ward, United States District Judge, Southern District of New
York, sitting by designation
Appellant also asserted in his brief that the district court erred in refusing to
grant appellant's motion for a directed verdict of acquittal at the close of the
government's case. At oral argument, however, this claim of error was
withdrawn
With respect to the "knowingly" and "wilfully" requirements of 1001, the
court instructed the jury:
"The second element that must be proven by the Government beyond a
reasonable doubt is that the defendant acted knowingly and wilfully. An act is
done "knowingly" if done voluntarily and intentionally, and not because of
mistake or accident or other innocent reason. Intent is the purpose or aim or
state of mind with which a person acts. An act is done " wilfully" if done
voluntarily and intentionally and with the specific intent to do something the
law forbids; that is to say with bad purpose either to disobey or disregard the
law."
With respect to the corresponding requirements of 1014, the court instructed
the jury:
"The fourth and final element of the offense charged in Count 1 which the
Government must prove beyond a reasonable doubt is that the defendant
knowingly made a false statement or report. An act is done "knowingly" if done
voluntarily and intentionally, and not because of a mistake or accident or other
innocent reason. The word "knowingly" is added to insure that no one would be
convicted who made a statement or report which was false because of mistake,
accident or other innocent reason."
We also agree with the district court that the stipulation of settlement might
have been admitted during Judith West's testimony as evidence of a prior
inconsistent statement. F.R.E. 613(b). Appellant, however, failed to lay the
proper foundation for its admission on this ground at trial
