Clancy v. United States – Oral Argument – January 10, 1961 (Part 1)

Media for Clancy v. United States

Audio Transcription for Oral Argument – January 10, 1961 (Part 2) in Clancy v. United States

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Earl Warren:

— et al., Petitioners, versus United States.

Mr. Waller, you may proceed with your argument.

Paul P. Waller, Jr.:

Mr. Chief Justice and may it please the Court.

Thomas Clancy, James Prindable and Donald Kastner were found guilty in the Eastern District of Illinois, willfully attempting to evade and defeat a tax imposed — tax in violation of Section 7201 of the Internal Revenue Code.

The tax that would — of which they were found guilty of evading was the 10% excise tax imposed upon wagers received by persons who were engaged in the business in accepting wagers and they were all — and Prindable and Clancy were also found guilty of willfully making false statements to Internal Revenue agents in violation of Section 1001 of Title 26.

And petitioner Kastner was found not guilty of that charge.

And all three were found guilty of conspiring to evade all of the substantive charges of the indictment.

Now, the issues before this Court, as we see it, are whether the private books in the records of persons who are engaged in the wagering business may be seized and may be used in evidence against them to prove their guilt.

We say that we contend that this is a violation of their constitutional rights under the Fourth Amendment and under the Fifth Amendment that the seizure under the Fourth Amendment was unreasonable and that their introduction into evidence to prove their guilt constituted a violation of their rights under the Fifth Amendment of compelling them to give testimony against themselves.

The second point is whether or not the statements prepared by Internal Revenue agents relevant to the subject matter of their testimony are required to be produced under the requirements of the Jencks Act after the witnesses — after the agent witnesses have so — have testified.

A new issue has been brought into the case since it is before this Court that is in regard to the latter question.

The Government —

Felix Frankfurter:

Regard to what?

In regard to what?

Paul P. Waller, Jr.:

The latter question.

Felix Frankfurter:

The latter question.

Paul P. Waller, Jr.:

Yes, sir.

The Government in their brief now contends that we received signed verbatim carbon copies of the reports of the Internal Revenue agents.

The record, of course, does not bare this out.

And in order to meet this injection, this new issue that has been injected, Mr. O’Connell and — and myself have filed — have lodged our affidavits with the clerk of this Court denying that we ever received or saw these statements until they appeared as part of the appendix in the Government’s brief.

John M. Harlan II:

Did you get the stenographic notes?

Paul P. Waller, Jr.:

There weren’t any stenographic notes, sir.

John M. Harlan II:

The longhand notes?

Paul P. Waller, Jr.:

There were some longhand notes of Mr. Mochel that were produced and there were some longhand notes of Agent Hudak.

These notes of Mr. Mochel were produced and they were examined by Mr. O’Connell.

But —

William J. Brennan, Jr.:

(Inaudible)

Paul P. Waller, Jr.:

Signed —

William J. Brennan, Jr.:

(Inaudible)

Paul P. Waller, Jr.:

Signed —

William J. Brennan, Jr.:

(Inaudible)

Paul P. Waller, Jr.:

Yes, Your Honor.

William J. Brennan, Jr.:

(Inaudible)

Paul P. Waller, Jr.:

Yes, Your Honor.

William J. Brennan, Jr.:

(Inaudible)

Paul P. Waller, Jr.:

Your Honor, it isn’t in the record.

William J. Brennan, Jr.:

(Inaudible)

Paul P. Waller, Jr.:

The record if I may — If I may read from the record at this point —

William J. Brennan, Jr.:

(Inaudible)

Paul P. Waller, Jr.:

Yes, Your Honor.

Felix Frankfurter:

Are these — are these documents in existence?

Paul P. Waller, Jr.:

I have never seen them, sir.

William J. Brennan, Jr.:

But were they printed in the record?

Paul P. Waller, Jr.:

Well, I’ve — I’ve never seen the original documents.

Neither of us have.

There’s suppose to be —

William J. Brennan, Jr.:

(Inaudible)

Paul P. Waller, Jr.:

Yes, Your Honor.

Felix Frankfurter:

When did you file this affidavit?

Paul P. Waller, Jr.:

It was filed few days ago.

Felix Frankfurter:

Thus, the Government taking any note of that?

Paul P. Waller, Jr.:

I’m not sure.

Felix Frankfurter:

Just — just as — I’m asking a few questions of fact.

Has — has there been any response in any extra note form by the Government to your denial of their statement?

Paul P. Waller, Jr.:

Not to —

Felix Frankfurter:

Alright.

Paul P. Waller, Jr.:

— to my knowledge (Voice Overlap) —

Felix Frankfurter:

The answer is no.

Paul P. Waller, Jr.:

No, Your Honor.

Felix Frankfurter:

Alright.

Paul P. Waller, Jr.:

Yes, Your Honor.

Hugo L. Black:

Did you try to face the law?

Paul P. Waller, Jr.:

Mr. O’Connell and I.

Yes, Your Honor.

Hugo L. Black:

(Inaudible)

Paul P. Waller, Jr.:

No, sir.

Mr. O’Connell took the lead in the trial of the case.

And I was present during all the time.

Felix Frankfurter:

Let me ask you this.

Assume the Government is — assume the facts are or the — the Government is right and what it if, what difference does it make to your case into your view, does it — is it a serious matter to — to what you contend on the second —

Paul P. Waller, Jr.:

Well — well —

Felix Frankfurter:

— point?

Paul P. Waller, Jr.:

— there would be still another statement that would not — that was not produced and that was the statement of Agent Minton.

Felix Frankfurter:

But as to this, it would be — it would meet your point?

Paul P. Waller, Jr.:

Well —

Felix Frankfurter:

My — the purpose of my question is there seems to be a conflict of — of fact on this and I want to know whether the conflict of fact which ought to be capable of being cleared up.

I want to know if this conflict of fact goes to the merits of — of contention of yours or doesn’t.

Paul P. Waller, Jr.:

Well, I —

Felix Frankfurter:

If it doesn’t, then we don’t care.

I think I don’t care.

If it does, then I think it would clear it up.

Paul P. Waller, Jr.:

Yes, Your Honor, it — it does go to it —

Felix Frankfurter:

Alright.

Paul P. Waller, Jr.:

— because of the fact that that is the second point.

There were three questions presented to this — to this Court in our petition for certiorari and that was one of the three questions present.

William J. Brennan, Jr.:

Oh, the Government concedes that there was error both in the —

Paul P. Waller, Jr.:

Yes, Your Honor.

William J. Brennan, Jr.:

— District Court and the Court of Appeals —

Paul P. Waller, Jr.:

Yes, Your Honor.

William J. Brennan, Jr.:

— and the holdings that you were not entitled in the statements.

Paul P. Waller, Jr.:

Yes, Your Honor.

William J. Brennan, Jr.:

And their defense now is, in fact, you got carbon copies of it and they want an opportunity to prove that you did it, is that it, signed in carbon?

Paul P. Waller, Jr.:

They said we received signed verbatim carbon copies of it and they’re tempting to inject something into the record which does not appear.

William J. Brennan, Jr.:

Well, if you did in fact receive it, your third point was out of it.

Paul P. Waller, Jr.:

No, sir, because there would still be another one because there’s still another agent involved, Agent Minton whose statement we demanded and it was refused.

So consequently, even if they were true, there is still another point.

There would have either report —

William J. Brennan, Jr.:

Well, is there any concession by the Government that that statement that there was error by the lower court to not saying it wouldn’t entitle to that statement?

Paul P. Waller, Jr.:

Yes, Your Honor.

They say it was error but they say it was harmless error because of the fact that Agent Minton was present at the time the search took place and there was Agent Kienzler was also present and actually, they executed the search warrant and they say that because we fail to also ask for the statement of Agent Kienzler that it was harmless error for — for the court below to refuse to — to order the production of Agent Minton’s report.

Felix Frankfurter:

Anyhow, that — that answer if you read it towards a different legal justification, then the fact that you in fact that carbon copy to what you want.

Paul P. Waller, Jr.:

Yes, Your Honor.

Felix Frankfurter:

So that the fact is that this controversy about the carbon copy is — is relevant and can be decisive perhaps as to so much as to what you can relate, as to one it relates to.

Paul P. Waller, Jr.:

Yes, Your Honor.

Felix Frankfurter:

Who tried this case below?

I don’t — I mean before — what — judge of the case rather.

Paul P. Waller, Jr.:

Judge Juergens.

Felix Frankfurter:

Judge?

Paul P. Waller, Jr.:

Juergens, in the Eastern District of Illinois.

Charles E. Whittaker:

Does your affidavit deny that you receive a signed — a signed copies or that you received carbons or in any form?

Paul P. Waller, Jr.:

We deny exactly the contention made by the Government that we received signed verbatim carbon copies of the reports of the agents.

They specifically alleged this.

We specifically and categorically deny it.

Earl Warren:

So, what is the fact?

Did you — did you get copies of these, let us say but without the signatures?

Paul P. Waller, Jr.:

No, Your Honor, we never saw —

Earl Warren:

You —

Paul P. Waller, Jr.:

Not that they —

Earl Warren:

— you never saw the documents —

Paul P. Waller, Jr.:

No, Your Honor.

Earl Warren:

— that purported to be that.

Paul P. Waller, Jr.:

No, Your Honor.

Earl Warren:

So that’s the answer.

Paul P. Waller, Jr.:

Yes, sir.

Earl Warren:

Yes.

John F. O’connell:

(Inaudible)

Earl Warren:

Oh, please, just one counsel at a time.

Hugo L. Black:

I still don’t quite understand.

Are you simply saying that there was error because you didn’t get the original document in the form that was to them, although they did give you verbatim copies?

Paul P. Waller, Jr.:

No, Your Honor, we did not get verbatim copies.

That’s our contention.

We did not receive them.

Felix Frankfurter:

The Government said you got some physical documents and you denied that you ever saw them?

Paul P. Waller, Jr.:

Yes, Your Honor, that’s the issue we have made here.

Now —

William J. Brennan, Jr.:

Incidentally, I — I guess I gather correctly that the Government’s making this representation on the basis of something that the final counsel for the Government, I suppose, you — you — here in Washington, is that right?

Paul P. Waller, Jr.:

Not —

William J. Brennan, Jr.:

Is that might —

John F. O’connell:

Not to mention, Justice, as I will explain, we are making this on the basis of what was told to us by the United States Attorney.

William J. Brennan, Jr.:

That’s what I thought.

He’s not here.

John F. O’connell:

No.

Paul P. Waller, Jr.:

And if I may say and as we have said in our brief, the United States Attorney did not try this case and he was solemn in the courtroom during the course of the trial.

The Assistant United States Attorney who tried the case was Robert McNally.

We included his name, his address and his telephone number in our reply brief so that it would be available for any independent investigation.

Hugo L. Black:

When did you file your affidavit?

Paul P. Waller, Jr.:

Sir?

Hugo L. Black:

When did you file your affidavit?

Paul P. Waller, Jr.:

We filed our affidavit sometime last week, Mr. Justice Clark.

Hugo L. Black:

Last week?

Paul P. Waller, Jr.:

Yes, Your Honor.

Some time last week.

When we filed our reply briefs, they were filed about the same time because we copied the affidavits into the reply briefs and they were sent out about the same time a day or two apart.

But I don’t know exactly what day they were received or some day last week, probably Thursday — Wednesday or Thursday or perhaps Friday of last week.

Hugo L. Black:

(Inaudible) Mr. McNally.

What’s the name of (Voice Overlap) —

Paul P. Waller, Jr.:

McNally?

Did we send a copy?

No, Your Honor, we did not.

Felix Frankfurter:

You file — you served the Department here, did you?

Paul P. Waller, Jr.:

Yes, Your Honor.

We sent them not only — we sent them duplicate original affidavits along with the copies of our reply brief in which they were printed in — exactly.

Now, on this question of — the first question concerning the — if I may go into the question concerning the seizure of the property.

The property is contained here in — is contained physically — is contained in the courtroom here inconsistently exhibits which are located in this box which we have here below the desk.

And the exhibits which we have — have present on the table here.

And the search about which we complained occurred on May the 6th of 1957.

For approximately four years prior to that time, the petitioners and Prindable had been engaged in the business of accepting wagers.

And for each of these years, in which they were so engaged, they filed their application for registration wagering and they paid the $50 occupational tax due thereon.

These special applications and registrations were actually introduced by the Government in the trial of this case and are physically present here today.

For these years, the registration was not only filed by them but the tax was also paid.

We have in our reply brief, at page 13, had a photostatic copy of the last registration reproduced.

And that is for the fiscal year commencing on July the 1st of 1956 and concluding on June the 30th of 1957, the fiscal year during which this rate occurred.

And if I may direct the attention of the Court to this part of our appendix, it shows that the registration was signed by Thomas D. Clancy and that the registration included the names of Donald Kastner, one of the petitioners here, James Prindable and Thomas Clancy doing businesses in North Sales Company.

In answer to question two, which they were requested to give their business address, they typed in the words “at Large – 2401 Ridge Avenue, East St. Louis, Illinois”.

In paragraph 5 —

John M. Harlan II:

Is that — was — is that crossed out or is it —

Paul P. Waller, Jr.:

Your Honor, that was crossed out subsequent to the time that it was filed by the petitioners.

The accountant who prepared this in behalf of the petitioners who testified at the trial, he identified this original and said that at the time that it was filed by him that this was not crossed out.

He also testified that it was never returned to him for correction.

Although Joseph Heckelbech, Chief of the Collection District in the Springfield District, said that if the return was not in the proper form, that the stamp would not have been issued.

Paul P. Waller, Jr.:

The stamp was issued.

The stamp was introduced into evidence and it was issued in the name of all three and it’s physically present here in this Court as Exhibit 2 of the defense.

In addition to that, in question 5A, they were asked to list each location in which they did business.

And they supplied the information “at Large”.

We submit that that was the manner in which they registered.

The stamp on the face of the return, special tax return and application for registry, indicates that it was received in the office of the District Director of Internal Revenue at Springfield, Illinois on June the 29th of 1956 along with the remittance which was a $50 occupational tax.

And also, if I —

William O. Douglas:

Was the search warrant issued on the basis that this was a falsely (Inaudible) or what?

Paul P. Waller, Jr.:

No, Your Honor, the search warrant was actually issued on — to search for and seize certain property located at a particular address which was alleged to have been used as the means of committing two crimes of failing and willfully attempting to evade and — the fee of $50 occupational tax and willfully failing to prepare and file an application for registry-wagering for the year 1956, 1957.

William O. Douglas:

Well, that’s a (Inaudible)

This is the — this is the one that (Inaudible) you say?

Paul P. Waller, Jr.:

Yes, Your Honor.

Yes, Your Honor and this was introduced —

William O. Douglas:

So then — then my question then was the search warrant — the search warrant issued defensively whether this was fraudulent or into plea.

Paul P. Waller, Jr.:

No, Your Honor, it was issued to seize certain property in a — at a designated location.

It was issued to seize property located —

William O. Douglas:

Concerning — concerning this — (Inaudible)

Paul P. Waller, Jr.:

No, Your Honor.

William O. Douglas:

No relationship.

Paul P. Waller, Jr.:

No, Your Honor.

Well, there was that — the relation to this respect, we say that there was bad faith on the part of the — some of the Internal Revenue agents because they stated in their affidavits to the issuing judge that they had examined the application of James Prindable and —

William O. Douglas:

This application.

Paul P. Waller, Jr.:

Yes, Your Honor.

And that he gave his business address as 2401 Ridge Avenue.

They withheld from the issuing judge the fact that Prindable was a partner of the North Sales Company and that he had registered under at large application and that he had also listed Charles Kastner as an employee receiving wagers on behalf of the North Sales Company.

That information was not given to the trial judge at the time the application was made for the search warrant.

John M. Harlan II:

If more than one — more than one establishment is being used by North Sales, do they have to pay a registration fee for each establishment or just —

Paul P. Waller, Jr.:

No, Your Honor.

That — that is specifically exempt.

I think — I believe it’s Section 4901 in our reply brief.

Paul P. Waller, Jr.:

Here it is.

In our reply brief, 4901, Title 26, Section 4901.

It says — no, excuse me —

4903.

Paul P. Waller, Jr.:

— 4903.

490 — Title 26, 4903, it’s on page 17 of our reply brief.

It says, “The payment of the special tax imposed, other than the tax imposed by Section 4411, shall not exempt from an additional tax, special tax the person carrying on a trade or business in any other place than that stated in the register kept in the office of the official.”

Consequently, there was one tax paid regardless of how many locations they have.

The — it was an occupational tax.

It was issued on persons engaged in the business of receiving wagers.

And as in this case where there were three persons receiving wagers on behalf of the North Sales Company and as partners, all three of them paid one $50 occupational tax.

And they were — that’s all they were liable for.

Now, each person accepting wagers in their behalf, this — this Kastner, this employee also paid an additional tax and I believe that is what is indicated in the application where there is an “okay” alongside his name where they were required to list the name.

We — we don’t know.

That is what we are suspicious.

At any rate, these people were in business.

For four — about four years, they filed these applications for registration.

And on December the 13th of 1956, during the same fiscal year, their — their books were — they — an interview was conducted between Clancy and Internal Revenue Agents Mochel and Buescher.

And at that time he told them that the North Sales Company had no principal place of business.

He had no — and he said that the address used on the tax return was his residence address, 2401 Ridge Avenue.

No objection was made by them.

They get — anytime tell him that he couldn’t do business in that manner that they should cease and desist from that practice.

But they — they gave them — they issued the stamp pursuant to this same type of application, these at large registrations.

On the following day, these same agents interviewed the other two partners.

Now, subse — they — these — these two interviews took place after the books of the partnership were audited.

And after he’s took, they interviewed them, they audited the books in connection with the payment of the 10% wagering tax and then they conducted these interviews in connection with this registration.

They asked him where they — how they operated and so forth.

Now, subsequent to this audit and subsequent to these interviews, the petitioners received a letter from the District Director of Internal Revenue at Springfield, Illinois informing them that as a result of the recent examination that their returns would be accepted as final and that covered the period January of 1955 to December of 1956.

Then apparently in somewhere around March the 20th, we don’t know the exact date, but from the affidavits of the search warrant, they were to conclude that somewhere in March of 1957, just a several months after this interview, these Internal Revenue agents began watching premises known as 2300 State Street.

Now, this was a four-unit building.

Paul P. Waller, Jr.:

We are concerned with the westerly one-half which consisted of a tavern on the first floor and an apartment upstairs.

Now, in the affidavit for the search warrants, the Agent Johnson made the principle affidavit in which he incorporated by reference affidavits of seven other Internal Revenue agents.

And they concerned themselves principally without going into a great deal of detail, principally with activities concerning the acceptance and the placing of wagers on the first floor premises.

Now, somewhere around the 12th of April, one of the Internal Revenue agents saw Jim or Kim, apparently the reference is to Prindable, entered the side door of the tavern, go behind the bar and then go through a door that led upstairs.

This was on the 12th of April of 1957 and he said that the man at that time was carrying a bag, similar to the bags furnished by banks to carry money.

Then the next connection that we have would be upstairs second floor premises, concerns the fact that on May the 1st there were numerous agents but — Internal Revenue agents both inside and outside this tavern and at about nine minutes after seven or five, if I remember correctly, Charles Kastner, the man who was listed on this return as being an employee of the North Sales Company arrived and went into the side door of the tavern.

Now, a few minutes later, Internal Revenue agents found him, followed him in.

There’s nothing contained in the affidavit as to where he went and what happened to Kastner.

But about eight or nine minutes later, James Prindable, the partner of the North Sales Company came and entered the same door.

And by that time, there was an agent, an Internal Revenue agent inside that he saw him go behind the bar and he saw him go through this door in the northeast corner that led upstairs.

That was principally upon the information, the connection of — of these two people whom the Internal Revenue agents alleged in their affidavits to be well-known book makers and whose registrations, they say they examined the following day on May the 2nd of 1957 that they applied for a search warrant for the second floor.

There were two search warrants applied for by Agent Johnson, one for the first floor, for the tavern and a second one for the second floor premises, the apartment.

The search warrant was issued and I say to you and we say that that thing was shown by the Internal Revenue agents because the — the full and complete facts were not presented to the issuing judge, the fact that this at large application have been filed by Prindable and the fact that Kastner had been listed on the return as an employee accepting wagers on behalf of the partnership.

If that fact have been — have been given to the Court and the Court acting as a reasonably prudent man, but it come to the conclusion only that this was one of the places or this was a place at which the North Sales Company was accepting wagers on those particular days.

With that information, the judge was not given the benefit of that information before the warrant was issued.

And we say that if they had known this fact, the only possibility would be — even if — well, I think Mr. O’Connell — excuse me, I won’t go into that, Mr. O’Connell, I believe, would cover that point in his portion of the argument.

But then this — the search warrant was issued to any special agent, Special Agent George Kienzler then took the search warrant.

He went to 2300A State Street to the apartment.

When he arrived at the apartment armed with a search warrant, he was confronted by Donald Kastner, one of the partners of the North Sales Company.

And he asked Kastner what he was doing here and Kastner said he was waiting for one or more telephone calls and that it was North Sales Company.

And he asked him if he had a stamp and he said, “Well, the North Sales Company has a stamp but I don’t have it but Tom takes of it,” in reference to Tom Clancy and — and of course, for a partnership, if there are more than one name, there are more — the stamp is issued to a partnership, all names were placed on a one stamp and consequently, there is only one stamp and each partner does not get an individual stamp nor he doesn’t pay any individual tax.

So, conceivably, all three partners couldn’t have the same stamp at the same time.

John M. Harlan II:

Is there any suggestion of what was going on at this — at the premises that were searched was run by some outfit other than North Sales with which Prindable (Inaudible) were connected?

Paul P. Waller, Jr.:

Your Honor, it was an apartment.

It was an apartment in which Henry Zittel, Sr. resided.

It’s a five-room apartment.

And these people operated and the record shows quite clearly that they operated at many places.

Many places and they went from place to place.

I — I think it is quite obvious that if an individual engage in a wagering business complies with all of the requirements of the wagering act and he indicates a place in which he is going to do business, he will be very properly met by the local authorities.

Consequently, these people filed at large applications and by the testimony of the Govern — of two of the Government’s witnesses, there was nothing wrong in conducting business in this manner.

Paul P. Waller, Jr.:

They paid the tax.

They registered and these people also, if I might add, filed monthly reports of the amount of wagers received and they paid a 10% tax on the amount of — of wager so reported.

These returns for the fiscal year 1956 and 1957 were introduced into evidence and the trial of this case by the Government and are physically present here in — in the Court.

Charles E. Whittaker:

(Inaudible)

Paul P. Waller, Jr.:

They claimed that the one for the month of March was incorrect, Your Honor.

We had some disagreement about that because on our theory of the case, the original acceptor of the debt is liable for the tax and if he lays off a portion of this to someone else, he, nonetheless, is responsible for the payment of the complete tax unless he meets certain requirements which none of these people did.

And in our opinion, dim as now, these were layoffs and the initial acceptor was responsible for the payment of the tax.

So then, if I might say, this search warrant was then issued and it was authorized the seizure of the books, records, memoranda, tickets, pads, tablets and papers recording receipts of money and so forth and all of which are designed or intended to use and which have been used in the conduct of a wagering business, have been used in carrying on some wagering business.

“And as a means of committing divers criminal offences,” and I’m reading now from the search warrant, first, — not as first, it’s not in here, “of willfully attempting to evade and defeat a tax imposed by the internal revenue laws of the United States and the payment thereof, to wit, the special tax of $50 a year to be paid by each person engaged in the business of accepting wagers and willfully failing to prepare and file with the District Director of Internal Revenue at Springfield, Illinois the Special Tax Return and Application for Registry-Wagering (Form 11-C)”.

We submit that exhibits — the exhibit contained on page 12 of our appendix which was also Exhibit 14 and the trial of this cause indicates, that’s a special Form 11-C, this indicates in itself that neither of these two crimes alleged in the search warrant had in fact nor could possibly have been committed by the petitioners or the partners.

William J. Brennan, Jr.:

(Inaudible)

Paul P. Waller, Jr.:

Sir, it’s on page 13 of our reply brief.

William J. Brennan, Jr.:

Of this — this document?

Paul P. Waller, Jr.:

Yes, Your Honor, because that — the search warrant charges a failure to file this and the failure to pay the tax.

The return indicates it was received in the office of the District Director of Internal Revenue and was accompanied by the remittance.

It indicates that neither of these crimes were in fact committed.

Now then, this agent, Agent Kienzler went to these premises.

And although he must have been satisfied with the explanation by Kastner that this was the operation of North Sales Company because no arrest were made.

Consequently, any seizure of property here must be authorized solely on the basis of the search warrant and cannot be authorized as incidental to any arrest because no arrest was actually made on the premises.

It was a five-room apartment.

George Kienzler had the search warrant, he executed it.

He was accompanied by Agent Minton and apart to Kienzler’s own testimony by two or three other agents, Internal Revenue agents.

Nonetheless, they spent three hours searching this place.

As a result, they seized the private books and records of these petitioners.

For March and April and the first four days of May recording the receipts, recording the bets by the individual days showing the amount that was placed by a person making direct bets and in our opinion, persons also making layoff bets.

Hugo L. Black:

March, April and May of what year?

Paul P. Waller, Jr.:

1957, Your Honor.

Hugo L. Black:

1957.

Paul P. Waller, Jr.:

Yes, Your Honor.

Hugo L. Black:

Well, you have just referred to the report of 1956.

Paul P. Waller, Jr.:

Well, that’s for fiscal year commencing July the 1st of 1956 and concluding on June the 30th of 1957.

That’s fiscal year, Your Honor.

But this was — this record — this record was during that fiscal year that they were in March and April and the first four days of May.

Hugo L. Black:

Would you mind pointing to the particular place in the record — particular part of the search warrant which you say is repudiated in showing to be false by this proposal?

Paul P. Waller, Jr.:

Yes, Your Honor, I’d be very happy to.

The crime is alleged in the search warrant on page 20, Your Honor.

Hugo L. Black:

Page 20 of what?

Paul P. Waller, Jr.:

Of our transcript to my record.

Hugo L. Black:

This transcript.

Paul P. Waller, Jr.:

Yes, Your Honor, page 20.

Alleges the — that certain property was used to commit two crimes.

The crimes alleged to have been committed are shown on page 20 down about two thirds of the page, Your Honor, of willfully attempting to evade and defeat a tax imposed by the Internal Revenue laws of United States and the payment thereof to wit the special tax of $50 a year.

That’s the first crime alleged.

The face of this return itself shows that the special tax return and application for registry wagering for the fiscal year, this is on page 13, Your Honor, of our reply brief.

It was filed for the fiscal year July the 1st of 1956 to June the 30th of 1957 and the stab of the District Director of Internal Revenue shows that it was received in his office on June the 29th of 1956 along with the remittance.

And the remittance in that situation would be the $50 tax.

This $50 is actually written above the line in the upper right hand corner.

William J. Brennan, Jr.:

Were you indicted for this one?

Paul P. Waller, Jr.:

Sir?

William J. Brennan, Jr.:

Would you plan to indict it for this thing?

Paul P. Waller, Jr.:

No, Your Honor.

They were not indicted.

They were indicted for neither offense.

William J. Brennan, Jr.:

Neither of it.

Paul P. Waller, Jr.:

That — that appeared in the search warrant.

Now — now, Mr. Justice Black, the second crime alleged in the search warrant is a few lines below that on — still on page 20 and it is the fourth last line from the bottom says, “of willfully failing to prepare and file with the District Director of Internal Revenue at Springfield, Illinois, a Special Tax Return and Application for Registry-Wagering (Form 11-C).”

That is this return, Your Honor.

Hugo L. Black:

Yes.

I suppose that is a fact that statement is false but there was no ground for it.

What do you say part of — from that?

Paul P. Waller, Jr.:

Well, we say, Your Honor, that at the time — that number one, we say that if the full information had been given to the issuing judge and he’s acting as a reasonably good man, the warrant would have been issued because of the fact that the warrant, a search warrant would issue for the instrumentalities of committing a misdemeanor and a (Inaudible) failing to register would be a misdemeanor.

There are some questions to my mind as to whether this willful figure to pay is not a misdemeanor.

I think it would be but they have alleged it in the search warrant as a — as a felony.

The willful attempt to pay the usual prosecution under the other case that we say in this regard were on information filed against persons who neither pay the $50 tax or who filed their application.

That is the usual type prosecution.

But here, they alleged a different crime.

They alleged the willful attempt to evade.

They alleged a felony but I don’t see any over in act which — which they could prove it on but nonetheless, that’s what they alleged in the search warrant.

And I say that neither the petitioners were indicted for neither of these crimes.

Hugo L. Black:

Would that make any difference of the argument you’re now making why you’re saying that this was a false statement or this had been filed and it has no reasonable ground with effect — distinction between the felony and misdemeanor make any difference in the argument that you are making on that point?

Paul P. Waller, Jr.:

Well, perhaps, I might be confusing a little bit, Your Honor.

What we say here, Your Honor, is that there, in fact, no crime had been committed.

This crimes alleged in the search warrant haven’t been committed.

And since the search warrant authorizes the seizure of instrumentalities of these crimes that the search warrant wouldn’t have been issued because these crimes, in fact, have not been permitted —

Hugo L. Black:

I have —

Paul P. Waller, Jr.:

— and therefore, since the crime had been committed —

Hugo L. Black:

— I haven’t read the brief but would you mind — if it doesn’t disturb you any way, state what the Government’s difference with you is on that point what do they say?

Paul P. Waller, Jr.:

Well, they say that the — that because of the fact that they say number — number — they say this.

That a person engaged in the wagering business must file information in each place in which he does business.

They said that is required.

And consequently, since they didn’t furnish information as to each place which they did business that therefore, the agents have reasonable grounds to believe that this was not then operating at this particular occasion with somebody else.

Hugo L. Black:

Is that where the importance of the — comes in of the point about which Justice Harlan made inquiry to at large?

Paul P. Waller, Jr.:

Yes, Your Honor.

We say that our people were authorized to operate at large which meant they could operate to any place.

The Government says that —

Hugo L. Black:

You say this was the report for all the places —

Paul P. Waller, Jr.:

Sir —

Hugo L. Black:

— as — as made at large?

Paul P. Waller, Jr.:

Yes, Your Honor.

See, there would only be one application that would be filed.

Paul P. Waller, Jr.:

We say in that regard that you require — if there are two conditions under which a supplemental registration is required, one, if you add new agent and the other one is if you move your principal place of business.

We say our people did not move their principal place of business.

Consequently, they were not required to file any supplemental registration.

Also, as we’ve cited in the brief, even if they had taken the Government’s argument as true which we deny, even if they have, they have 30 days to register.

They have 30 days to file a supplemental application or registration and 30 days haven’t expired between the time that the — their first connection with the premises on April the 12th and the time of the raid on May the 6th.

Felix Frankfurter:

Mr. Waller —

Paul P. Waller, Jr.:

Yes.

Felix Frankfurter:

— I happen to rely on argument for my knowledge to the facts.

I — I get the rare occasions though readably, so I don’t know what’s in your brief.

Would you be good enough to tell me what followed this search and seizure that you moved to set aside to get back that you — would you have knowledge of what was contained in the affidavit which is the basis of the search warrant?

Paul P. Waller, Jr.:

Yes, Your Honor, there — the basis for the affidavit of the search warrant are contained in the record.

Felix Frankfurter:

I — I understand that but did you know after you began or your (Inaudible) began to defend the — did you know that there was a search warrant through which seizures were made?

Paul P. Waller, Jr.:

Yes, Your Honor, and we —

Felix Frankfurter:

Did you note?

Paul P. Waller, Jr.:

— filed a motion to suppress after the indictment.

Felix Frankfurter:

You did.

Paul P. Waller, Jr.:

Yes, Your Honor.

Felix Frankfurter:

Now, in that motion, is that in the record?

Paul P. Waller, Jr.:

Yes, Your Honor.

Felix Frankfurter:

And that motion that you set forth of the search warrant was a warrant for a non-existing crime?

Paul P. Waller, Jr.:

Yes, Your Honor.

We set — we file a motion —

Felix Frankfurter:

Where is that?

Paul P. Waller, Jr.:

We filed a motion to suppress the evidence and return the property.

And —

Felix Frankfurter:

I understand that but did you give us ground that the search warrant was for the search premises on the basis of the commission of a crime which in fact haven’t been committed?

Paul P. Waller, Jr.:

Well, in substance, we did that because we file —

Felix Frankfurter:

(Voice Overlap) mean in substance?

We’re now here in substance or in principle, I begin to be suspicious.

Paul P. Waller, Jr.:

We filed a motion for the return of the property.

Paul P. Waller, Jr.:

It’s on page 36 of the record, Mr. Justice Frankfurter.

And — and with that, we say that the warrant issued was insufficient on its face of the property and the seize was not described that there was no probable cause that the warrant was illegally executed and that the property wasn’t subject to seizure.

Felix Frankfurter:

Well, that doesn’t tell me that it charges a crime which couldn’t have been a crime because you — you’ve done what they charged you as not having done.

Paul P. Waller, Jr.:

Well, what we did, Mr. Justice Frankfurter, is that we filed an affidavit in support of that and in support of the affidavit for the search warrant for the motion to suppress.

We filed this affidavit signed by the partners stating that they had registered, that they had paid the tax and so forth.

And we have the — we introduced to evidence, exhibits —

Felix Frankfurter:

Does that — does that motion come to issue and was there a hearing on it?

Paul P. Waller, Jr.:

Yes, Your Honor.

Felix Frankfurter:

And was this issue contested?

Paul P. Waller, Jr.:

There was no information offered in — to — to controvert these facts by the Government.

As a matter of fact, they entered a stipulation that information taken from this record was presented to a grand jury which indicted these people.

Felix Frankfurter:

Yes, but was there an issue joined that in fact an affidavit alleged the crime which didn’t take place because it couldn’t have taken place because you did what the judge you would not have done?

Would that ever come to issue?

Paul P. Waller, Jr.:

Well —

Felix Frankfurter:

And if so, what was the result of it?

Paul P. Waller, Jr.:

We filed an affidavit saying that these people had registered, they paid the tax and they operated under an at large application.

Felix Frankfurter:

Would that come to issue?

Was that contested?

Paul P. Waller, Jr.:

No, Your Honor, it was not.

It was not contested by the —

Felix Frankfurter:

Can we say the Government agreed with you that they — they got a search warrant on a non — for a non-existing crime?

Paul P. Waller, Jr.:

They never filed and they never offered any evidence whatsoever nor did they ever attempt to controvert those —

Felix Frankfurter:

Was there a ruling on this and where is that ruling?

Paul P. Waller, Jr.:

The ruling is by the trial judge and the trial judge finds that this property could be seized because it’s an instrumentality for the commission of some other crime not alleged in the search warrant.

Felix Frankfurter:

Where is that ruling?

Paul P. Waller, Jr.:

On page 52, Your Honor, page 52 of the record.

Judge says that the court finds that the item seized under the authority of search warrant were used and attempted to be used as a means of carrying on the attempt to defeat and evade the excise tax.

Now, that’s — the excise tax is a 10% tax imposed on wagers, which was not alleged in the search warrant.

And the Court of Appeals affirmed the real ruling of the trial court that these were instrumentalities for the commission of a crime of attempting to evade the 10% wagering tax.

Hugo L. Black:

Is the affidavit to which you refer or are the statements about having made this report the one that appear on page 38, Number 4 (Inaudible)?

Paul P. Waller, Jr.:

That affidavit, Mr. Justice Black, is — commences on 37 and concludes on page 40 and I didn’t understand — quite understand your question.

Hugo L. Black:

On page 38 —

Paul P. Waller, Jr.:

Yes, Your Honor.

Hugo L. Black:

— (Voice Overlap) on Form 11-C which was been filed and so forth and at eight that your affidavit defines did prepare the file of tax return to each of the warrants.

Is that — is that referring to this report and for registration on —

Paul P. Waller, Jr.:

Well, four, Your Honor, refers to this registration here.

Hugo L. Black:

Yes, on — at page 13 of your appendix.

Paul P. Waller, Jr.:

Yes, Your Honor.

And the reference to eight, the monthly — the monthly returns are these returns that were filed by the month.

That shows how — how about the wagers were — how much was accepted and what the taxes were.

And they’re introduced here in a — they were introduced in evidence by the Government.

And on page 37, we say that — in this affidavit that according in — at a approx — on — that accordingly on approximately June 29th, 1956, they did prepare to file the said form referring to — preceding paragraph, Form 11-C.

I’m referring to — again to this.

And they did pay the tax due thereon if they were issued to stand.

These allegations —

Hugo L. Black:

Did the Government answer your motion within its formal pleading or did it answer within the affidavit?

Paul P. Waller, Jr.:

They did ,not Your Honor.

They did not, Your Honor.

They —

Hugo L. Black:

They —

Paul P. Waller, Jr.:

— filed a brief in opposition to our motion.

Hugo L. Black:

It all appears then and there, as I understand what you said, the motion to suppress and your affidavit didn’t support of it in the court’s judgment passing upon it here.Is that the only record that we have to —

Paul P. Waller, Jr.:

Well, there was also a stipulation.

Hugo L. Black:

Where is that?

Paul P. Waller, Jr.:

That stipulation is — begins on page 41, Mr. Justice Black, and it’s the stipulation which we entered with the United States Attorney in which he said that the information taken from these books and records which were seized were presented to a grand jury then sitting in the Eastern District of Illinois which returned the indictments against these defendants, showing directly that the information that has been taken from these records were presented to a grand jury which returned the indictments.

Felix Frankfurter:

What is Section 4412 of the Internal Revenue Code of 1954?

Paul P. Waller, Jr.:

4412, that is the —

Felix Frankfurter:

That’s one of the things set forth and the District Judge has ordered granting the search warrant for an addition to the two that you’ve mentioned, that’s on top of page 21.

Paul P. Waller, Jr.:

21.

Let’s see.

Paul P. Waller, Jr.:

Oh, Your Honor, 4412 requires the persons who are engaged in the business of accepting wagers are required to — to register.

They are required to register and there are certain requirements they’re supposed to put their name and address.

Hugo L. Black:

When they charged you for not having satisfied that requirements.

Paul P. Waller, Jr.:

Yes, Your Honor.

Hugo L. Black:

Now, is that also a false statement?

Paul P. Waller, Jr.:

That is not true.

They say the — the words, Your Honor, they said that they willfully failed to prepare and file with the District Director of Internal Revenue at Springfield, Illinois the special tax return and application for registry-wagering.

There it is.

They say that we — our people failed to file this warrant, which, in fact, had been filed.

Now —

Felix Frankfurter:

Would you —

Paul P. Waller, Jr.:

— in this —

Felix Frankfurter:

— would you mind telling me why in your motion to suppress — just curios.

You did not explicitly say they charged you with three specified offences and in fact, you did comply with the requirements of the law as to each one of the three.

Why — why wasn’t that set forth in the motion to suppress?

I don’t mean any principle or any substance or so that after (Inaudible) in corners, why wasn’t that simple fact that you now made if it’s legally — if it takes care of the invalidity of the search warrant that you maintained?

Why wasn’t — why weren’t those simple concrete allegations you made?

Paul P. Waller, Jr.:

Only allegations were made, Your Honor, in the affidavit but as far as the motion to suppress is concerned, we alleged all of the grounds listed under the — under Rule 41.

Felix Frankfurter:

Let me ask you this.

Can you under — in attacking a search warrant by a way of a motion to return the goods seized, is that the place to try the truth of the allegations — truth of the affidavit, presuming it’s otherwise sufficiently specific et cetera, is that the place to try the — the crime charged in the search warrant?

Paul P. Waller, Jr.:

Well, as far as the —

Felix Frankfurter:

Suppose the District Attorney (Inaudible) being mistaken either as to the year, for instance, that happens not frequently, all he set forth in the affidavit which is on a salable on its face, can you go in and prove that it wasn’t the year 1957 or 1958 but it was some other year in attacking the validity of the search warrant and the search that follows?

Paul P. Waller, Jr.:

Well, Mr. Justice Frankfurter —

Felix Frankfurter:

I’m asking.

I — I don’t know.

Paul P. Waller, Jr.:

I don’t know the answer to the question either.

All I can say — I would say — I would think yes because I think this that we — we felt at the time —

Felix Frankfurter:

In other words, you tried the — you tried the — the substantive case on a — on the validity of the search warrant, is that it?

Paul P. Waller, Jr.:

Well, Your Honor, I think that the Rule 41 (e) provides for a hearing on a motion to suppress and I think that the court’s required to receive evidence in support of any allegations that are made at that time.

I — and we felt that it was incumbent upon us to furnish proof of it.

Paul P. Waller, Jr.:

Now, when we file the affidavit alleging the facts and it was uncontroverted, we didn’t feel it was necessary at that point to attempt to introduce any —

Felix Frankfurter:

Well, could you — could you prove the falsity by proving an alibi?

It — it takes turns on presence in some place.

Could you say we are prepared to show that this is false because the warrant in Chicago are a bit far.

A bit (Inaudible) or whatever it is.

They couldn’t do that, I take it.

In other words, Rule 41 addresses itself to the validity of the search warrant as satisfying the requirements of the Fourth Amendment and the statute.

Paul P. Waller, Jr.:

Yes, Your Honor.

Felix Frankfurter:

Does it do any more than that?

Paul P. Waller, Jr.:

Well, all I can say, Your Honor, is that we felt that it was incumbent upon us to file an affidavit in support of our —

Felix Frankfurter:

Well, I’m not —

Paul P. Waller, Jr.:

— grounds.

Felix Frankfurter:

— I’m not quarrelling what you conceive to be a duty, I’m asking some questions of law.

Paul P. Waller, Jr.:

My associate tells me that the point that you’re — you’re making, Mr. Justice Frankfurter, that I should respond to that that they were in charge with the offense in the indictment.

They — the search warrant — the charges in the search warrant were not the same charges upon which they were indicted.

Felix Frankfurter:

Why is that deposed of the problem?

If — if a search warrant — let me put this case, as the United States Attorney filed an affidavit would satisfy the Fourth Amendment and the statute and at the time that he filed that affidavit was the time the judge granted the — issued a search warrant.

It’s — I think it’s testable that on those documents, a search warrant properly issued, can you then say, “Oh, you changed your mind.

You — we thought you were going to charge him with discipline but now you’re charging some other offense.”

Paul P. Waller, Jr.:

Well, I — I say this, Your Honor, if I understand and that we understand that the case is in regard to search and seizure, historically, the purpose for the issuance of the search warrant is to authorize an officer upon furnishing proof of probable cause that a crime is being committed before a magistrate to obtain the warrant to go out and to seize the property to prevent the future commission of the crime.

Felix Frankfurter:

I’m assuming — of course, I’m assuming that he is not committing a — the call is brought on the court.I’m assuming he’s doing this thing in good faith.

And he charges the year and it should be another year where he charges an offense which on further consideration and think some other statute it covers the circumstances.

That happens when this Court has decided a thousand years ago, so that it would be 50 or 60 years ago which has been truth moment of jurisprudence is nearly a thousand years, that a District Attorney may have prosecuted on the assumption of prosecuting for one crime labeled as such and put it all out on the fact of the indictment and it isn’t — he can’t make good on that crime but the Court certainly may could on the allegations with reference to another crime.

Paul P. Waller, Jr.:

Well, Your Honor, I — I —

Felix Frankfurter:

That settled doctrine, I suppose, never been questioned in this Court.

Paul P. Waller, Jr.:

We — we submit that this provision of Rule 41 (e) gives the Court a second look at the question of probable cause that there might be certain facts presented to the Court when — when receiving that information, I think there is a probable cause but that is — that’s an ex parte hearing and we certainly don’t think that constitutional rights of individuals can be determined in an ex parte hearing.

We submit that Rule 41 (e) gives the persons aggrieved, the persons withstanding the complaint, the right to come in to file their motion to suppress and for the return of the property and that — and at that time to introduce evidence to prove that there were no grounds for the seizure of their property or to assert their constitutional rights.

We think that — we — we felt that it was incumbent upon us to —

Felix Frankfurter:

I think whether — whether there was probable cause and what were assumed to be the fact at the time that a search warrant was sought doesn’t satisfy the requirement of a probable cause.

Paul P. Waller, Jr.:

Yes, yes.

For the issuance.

Paul P. Waller, Jr.:

For the issuance, Your Honor.

If I — if I may I would like to save the remainder of the time for Mr. O’Connell for rebuttal.

Earl Warren:

You may.

Paul P. Waller, Jr.:

Thank you.

Felix Frankfurter:

What’s that case about Mr. Friedman?

Daniel M. Friedman:

This case basically is about two questions, I would say.

First, whether there was a probable cause for the issuance of the search warrant not whether in fact the crimes alleged to have been committed in the search warrant were committed.

That’s the first question.

Whether there was a probable cause, whether if the answer to that question is yes, the seized property was properly seized as the instrumentalities of the crime for which there was alleged to be probable cause in the search warrant.

And three, assuming those two questions are answered affirmatively, as we believe, whether there was anything wrong in the fact that the crime for which these people were convicted and for which this evidence was introduced was not the same crime alleged in the search warrant.

That’s the first question, which I proposed to discuss first.

And the second question relates to the nonproduction on the court, as shown by the record, of the statements of three of the government witnesses.

And I might, by way of anticipating, state that despite the affidavits, the Government does adhere to the position taken in its brief that this matter should be remanded to the lower court.

William J. Brennan, Jr.:

You don’t — you haven’t filed any affidavit for (Voice Overlap) —

Daniel M. Friedman:

No, Mr. — no, Mr. Justice, we have not but we have — I have personally, on the basis of this brief which was received Thursday, made some further inquiries which I will explain to the Court when I come to that point.

Now, I would like first to deal with the statutes that are involved in this case.

The —

William O. Douglas:

When you — are you talking now about your — the last point of —

Daniel M. Friedman:

No, I’m talking now — addressing myself the question of probable cause.

But —

William O. Douglas:

On some point when you’re reading that point, would you — right after my difficulties, how would this case differ from any income tax evasion?

If the Government can do this here, why can’t it — the cases respect person for not having any faithful, full complete income tax return and the search warrant to one of his files in the record and get the documents necessary to — to this case?

Daniel M. Friedman:

I — I think Mr. Justice because —

William O. Douglas:

What (Inaudible) to do it now (Voice Overlap) —

Daniel M. Friedman:

Now, I — I think I — I’d like to answer it right now.

I think because in this case, the basis on which the Government attained the search warrant was not that they had probable cause to believe that these people were not paying the full 10% tax on the wages but that at these particular premises over the tavern that was being conducted a wagering operation which had not been registered and on which the tax had not been paid.

William O. Douglas:

After that, what was done with (Inaudible)

Daniel M. Friedman:

That’s correct but — but that is, as we think, is a significant thing in this case that there was probable cause for obtaining the search warrant on the basis of what the Internal Revenue agents had discovered about these premises.

Felix Frankfurter:

Does that — let me see if I understand it.

Felix Frankfurter:

Does that mean that it all turned on the fact that we’re dealing here with fiscal provisions relating to wagering contract?

Daniel M. Friedman:

I think so —

Felix Frankfurter:

I mean this goes back to the question on which some would disagree.

Am I right?

Daniel M. Friedman:

That’s — that’s correct, Mr. —

Felix Frankfurter:

That’s where it’s all turned on the (Inaudible), if that’s the name of the case, is that the name?

Daniel M. Friedman:

That’s (Inaudible) yes.

Now —

Felix Frankfurter:

And that’s what — that’s what the anchorage of your case — of your —

Daniel M. Friedman:

That’s — that is correct because of the congressional provision —

Felix Frankfurter:

Alright.

Daniel M. Friedman:

— imposing certain requirements on —

William O. Douglas:

That —

Daniel M. Friedman:

–people engaging —

William O. Douglas:

That does —

Daniel M. Friedman:

— in the business of accepting —

William O. Douglas:

(Voice Overlap) — principle because you — you could have many, many federal laws that could be violated.

These federal laws involved here and all sorts of laws (Inaudible) to get search warrants looking for — for certain violation and you can use that income tax violation —

Daniel M. Friedman:

Well, only —

William O. Douglas:

That’s your — that’s your problem, isn’t it?

Daniel M. Friedman:

Well, I — only, Mr. Justice, but — but there is the protection that the citizen is protected in this because a search warrant cannot be issued except upon probable cause to believe that what is alleged in the search warrant has in fact happened.

In other words, they can’t just go in and say, “We have probable cause to believe that a citizen is concealing his income tax, therefore, give us a search warrant unless they have some basis for this allegation.”

And furthermore this is the protection that the property seized must be the instrumentalities used in committing the offense.

Felix Frankfurter:

Let me ask you along the lines of (Inaudible) has questioned.

If an income tax is filed giving us (Inaudible) giving items of income so on, then a search warrant he had set forth, if we have reason to believe that there’s an invasion of the income tax in that the taxpayer did not save his income on past portfolio securities which we know are in his — in his study in his house at 1000 Grand Riverview Avenue, what about that?

Daniel M. Friedman:

I would rather doubt it, Mr. Justice, because this would turn on whether the securities involved were conceived to be the instrumentalities of committing the offense or merely the evidence.

And I would say that in that case, for all that was involved was the filing of a false return.

In that case, the instrumentality used for committing the offense is the return itself and you could not, on the basis of a search warrant, obtain evidence to prove the falsity of the statement.

For that, I would like to emphasize is not, I think, the problem we have before us in this case because I like to come again — return to the statute which is involved in this case.

Now, Section 4412 which we have set forth at page 56 of our brief is the provision requiring registration and it states that each person required to pay a special tax under this subchapter.

Daniel M. Friedman:

And the special tax is referred to in the previous Section 4411 which is the special tax of $50 to be paid by each person who is liable for the 10% excise tax on wager.

4412 says that each person required to pay the special tax shall register with the appropriate official his name and place of residents and then if he is liable for tax under Subchapter A.

In other words, if somebody is liable for a tax — the excise tax on wagers, someone is engaged in the business of accepting wagers, he is to register each place of business where the activity which makes him liable is carried on.

So that what we have in this statute is the registration requirement is not a general registration but to register and to register with certain specific information.

And some of that informa — one important element of information is that each place where this business is carried on be registered.

Now, in this case, the search warrant filed by the agent which had attached to it seven other search warrants of other Internal Revenue Service agents showed the following.

First, the Internal Revenue agent who is in charge of the collection division which had control of registrations under this statute for this area testified in his affidavit stated that there was no record of any registration for these particular premises, 2300A State Street, the second floor over the top and he so unequivocally stated.

So that from the point of view of the Internal Revenue agent and the District Judge, it was clear that there was no record of a registration for these premises.

Now, therefore, it seems to us the next question is, did the remaining affidavits give reasonable cause for belief that in fact a wagering operation was being conducted at this premise?

And we submit that these affidavits did afford a reasonable basis.

In addition to the material that’s — petitioners’ counsel has referred to the Internal Revenue agent himself who made the primary affidavit stated that on one occasion, in addition of placing bets, he had seen a woman come in and give some — give some — some money to the bartender and the bartender went and placed it in a stairwell that led up to the second floor.

He waited a few minutes and then he said to the bartender, “I have some money coming from me,” because he had previously placed a bet and won.

The bartender said, “Just a minute,” and he went open the stairwell.

He took out an envelope with $9.60 and gave it to him in his winnings on a previous bet.

In addition to that, there is an affidavit by another agent that he had interviewed certain well-known bookmakers in a town in the vicinity called Collinsville.

And these bookmakers testify — stated they picked up wagers at a certain tavern.

And there’s further indication, further show that an examination of the telephone company records indicated that a number of telephone calls had been made from this tavern to the upstairs premises where the raid took place.

Now, we don’t say that this established in fact that this crime had been committed.

That’s not the standard.

The standard is that probable cause was there — a reasonable basis for the conclusion by the District Judge which he found in the search warrant that there was probable cause to believe that the premises were being used in violation of federal law.

William J. Brennan, Jr.:

May I ask you, Mr. Friedman?

If that address had been included on this 11th suit, would that have been the basis?

Daniel M. Friedman:

If they had specified —

William J. Brennan, Jr.:

Yes.

Daniel M. Friedman:

— the operation?

William J. Brennan, Jr.:

Yes.

Daniel M. Friedman:

No, I think, because in that case, there would have been no reasonable basis to assume the operation is being conducted at those premises.

But Mr. —

William J. Brennan, Jr.:

(Voice Overlap) — being conducted illegally in those?

Daniel M. Friedman:

That’s right.

William J. Brennan, Jr.:

Yes.

Daniel M. Friedman:

But —

William J. Brennan, Jr.:

I just wanted to — what — my next question was, what’s the significance under at large?

Daniel M. Friedman:

Well, I think the significance of at large is this.

The —

William J. Brennan, Jr.:

May I just interrupt once more?

Daniel M. Friedman:

Yes.

William J. Brennan, Jr.:

I think counsel said that — has filed the — the lines which appear on this property has not been there, isn’t it?

Daniel M. Friedman:

Well, it’s unclear from the record.

We don’t know when —

William J. Brennan, Jr.:

But assuming they were not, what would be the significance?

That was not struck out.

Daniel M. Friedman:

Well, first of all, it’s ambiguous there because it states on the one hand, it gives as the business address, both the address of the petitioner Clancy which says “at Large – 2401 Ridge Avenue, East St. Louis, Illinois”.

But Mr. Justice, we don’t think this makes any difference because the concept of an at large operation is where they have no place of business.

This is to deal with the case of a man who is engaged in the business of accepting wagers and he’s wondering around.

He picks up a better two at boot black stand, he perhaps goes into different restaurants, he may go into a drugstore on the corner.

William J. Brennan, Jr.:

Well, now, this gets me back on the statute which you refer previously, Subdivision 2 of 4412, the bottom of page 56.

If he does not operate a place of business as such, this would satisfy that the reports at large, is that it?

Daniel M. Friedman:

That is correct.

William J. Brennan, Jr.:

I see.

Daniel M. Friedman:

Because he has no —

William J. Brennan, Jr.:

Is this five minutes of the ruling or how — is there any other provision which authorizes that kind of report where he has no (Inaudible)?

Daniel M. Friedman:

There is the — the provision relating to the posting of the wagering stamp.

It specifically states that he shall keep the stamp posted in his principle place of business except that he has no such place of business, he shall keep his stamp on his purse.

(Inaudible)

Daniel M. Friedman:

Now, the — our point on this is that what the record showed here as far as the District Judge was concerned when he executed the search warrant, but this didn’t appear to be in at large operation, this appeared to be a going operation as for —

William J. Brennan, Jr.:

Well, are you also saying that those provisions of the affidavit which referred — especially to the non-filing of 11-C, are really not upon the truth.

Is that right?

As —

Daniel M. Friedman:

That is —

William J. Brennan, Jr.:

— as related to these premises.

Daniel M. Friedman:

That is correct.

William J. Brennan, Jr.:

Because no such 11-C had ever been filed as to those premises.

Daniel M. Friedman:

That is correct.

William J. Brennan, Jr.:

Unless embraced within at large and you say that cannot be because if you have a place of business, then you can’t be operative for it.

Daniel M. Friedman:

That’s right.

William J. Brennan, Jr.:

Is that it?

Daniel M. Friedman:

But the — the whole concept of the at large operation is to deal with the man who has no principle place of business and where you have a principle place of business — I mean it seems to me the whole purpose of making you registered as so the people can find out what’s going on.

Charles E. Whittaker:

Is there any place that (Inaudible) at large?

Daniel M. Friedman:

Not into — no, there is no reference.

This is a — a phrase that apparently has crept into it as a matter of practice.

And of course, if you register and show that you’re operating at large, it maybe very difficult for the Government to ascertain where your operations are being conducted and by the same token makes it very difficult to point out the true extent of your operations.

I think that’s the reason why the “at large” concept should be limited to the true case of an “at large” operation.

Now —

Hugo L. Black:

Do you have any regulation on that?

Daniel M. Friedman:

I don’t believe so, Mr. Justice.

William J. Brennan, Jr.:

I’m just curious, Mr. Friedman.

Is there anything else on which authorizes acceptance of at large application except that you referred to us in the provision as posting?

Daniel M. Friedman:

I don’t believe so but I think it’s the administrative practice to accept applications where it appears to be a truly at large operation.

Now, I’d like to refer to the argument which petitioner has advanced that the fact that he had a stamp ment there was no probable cause for the issuance of this warrant.

The stamp merely referred to the North Sales Company, the three petitioners doing business as the North Sales Company and gave the address shown of petitioner Clancy’s residence.

That is set forth at page 14 of our brief.

Hugo L. Black:

What is that address?

Daniel M. Friedman:

Pardon me, sir.

Hugo L. Black:

What address is that?

Daniel M. Friedman:

2401 Ridge Avenue, which is the same address shown on the second line of their application after the words “at large” and that is the home address of petitioner Clancy.

Tom C. Clark:

Application is the home address.

Daniel M. Friedman:

Well, we infer that from the fact on line four where it goes down Thomas Clancy that shows the same address.

Hugo L. Black:

They’re under the home address.

Daniel M. Friedman:

Under the home address and of course, it’s perfectly — it would be consistent that a business might be operating out of the home address.

Daniel M. Friedman:

So there might be situations where the home address would also be the principle business.

Hugo L. Black:

Where is that?

That’s the inference you draw from this, I suppose.

Suppose the business is 2401 Ridge Avenue and the home address of Clancy is 2401 Ridge Avenue, home address of the others is in different place.

Daniel M. Friedman:

That’s right.

We draw that inference and they state that this is the home address and we don’t question that.

But our point is that whether it’s the home address or not and whether Mr. Clancy was or was not conducting operations from that premise is immaterial because the critical thing is that the premises where the search was made are premises where the business was being conducted.

Hugo L. Black:

What number?

Daniel M. Friedman:

2300A State Street, above the tavern.

Now, there is —

Tom C. Clark:

The point is that he should have point that in number 5.

Daniel M. Friedman:

Pardon me, sir?

Tom C. Clark:

He should have put the — that address down to number five of “at Large”.

Daniel M. Friedman:

That is right.

He should have put that address and also in line two where he states again his business address.

If he had done that, if he had stated that they were operating at 2300A State Street as their principle place of business, there would plainly have been no basis for the showing made in the warrant that there was probable cause to believe that an unregistered business was operating illegally at these premises because it would then be a registered business at these premises.

William J. Brennan, Jr.:

But I’m still bothered about that “at large”, Mr. Friedman.

A business “at Large – 2401 Ridge Avenue, how is it — do you have any evidence how he — this was treated by the Department with that kind of filing?

Daniel M. Friedman:

No, we have this evidence.

We have the evidence that Mr. Heckelbech who testified that he would not accept this kind of an application because you couldn’t operate both at large and with a business address —

William J. Brennan, Jr.:

Well, that’s what I had referenced to.

Is that on the record?

Daniel M. Friedman:

Yes, Mr. Justice.

That’s at page 86.

William J. Brennan, Jr.:

Thank you.

Oh, I don’t —

Tom C. Clark:

I thought your point was whether having each other address would exercise business at 2401 Ridge in — if it was not at large.

Well, he should’ve put the number five instead of “at Large”, he should’ve put the other — other number also —

Daniel M. Friedman:

He should — that is —

Tom C. Clark:

— Mr. Friedman.

Daniel M. Friedman:

— that is correct.

He should have put down his principal place of business when they were operating.

Tom C. Clark:

That says the name and address where each sets of business is different.

Daniel M. Friedman:

Yes.

Tom C. Clark:

Well, he should’ve put each one (Inaudible)

Daniel M. Friedman:

That is correct.

Tom C. Clark:

Besides Ridge — besides Ridge is the number.

Daniel M. Friedman:

Yes.

And in any event, he certainly was required specifically to put down his principal place of business and we think all of it.

We — I don’t think we have to decide whether 2300A was — it was not their principal place of business.

Hugo L. Black:

I don’t see anything here about principle place of business in this report or in the census.

I don’t know what materiality that you have but I don’t see it.

Daniel M. Friedman:

Well, that is in the regula — the — the words “principal place of business” arise in the provisional relating to the posting of the tax stamp in Section 6806 at page 57 of our brief.

Hugo L. Black:

Page 57.

Daniel M. Friedman:

Page 57.

This relates that the stamp is to be posted in the principal place of business but Section 4412 states that the registration shall specify each place of business.

Felix Frankfurter:

I suppose there are other businesses in which responds to the rubric of business address or business.

All you can say honestly at large that at least when I knew something about that ticket sculptors in New York, I suppose, business — I suppose at large.

They move from the Hip Theatre from time to time.

There are ticket sculptors that have — that have locality that localized for a good many of them to (Inaudible) I didn’t know about it, one is localized at all.

They work either for the James Theatre or the — or the (Inaudible) Theatre or what now?

Daniel M. Friedman:

That — that might — I — I don’t think so.

And I suppose they would well be.

Sure, there are many people in the wagering business who don’t have any fixed place who just — you know that if you want to place a wager, you can get in touch with someone and you’ll find them around 14th (Inaudible) or something like that.

Now, the warrant in this case was not directed to seizing any of petitioner’s books and record to it directed to seizing —

William J. Brennan, Jr.:

Mr. Friedman, I want to get myself quick down on this if I may.

Apparently, there’s some significance and as you placed in the fact that the stamp was not issued at large.

The stamp was issued with the address 2401 Ridge Avenue which is the one which appears next to business following the — the specs that stricken out words “at Large”.

Another — this testimony you referred me to Mr. Heckelbech indicates that if you want it at large, you don’t — you must not look on the address down, they returned it to you and you have to make a choice either at large or at a named address.

And I gather his testimony is that the significance was striking out of “at Large” here is this was returned that the applicant had to make an election did elect to give an address and receive the stamp —

Daniel M. Friedman:

Well —

William J. Brennan, Jr.:

— is that it?

Daniel M. Friedman:

— this might be — we don’t know.

We don’t know because Mr. Waller, their accountant who prepared the return testified that it was not returned to him.

And it’s the — there is — but I think the fact that the stamp gives us the address not “at Large” but the 2401 address indicates, we suggest, that these people were accepting the stamp on that basis.

Now, I’d like also —

Earl Warren:

Mr. Friedman, does the “at large”, the term “at large” have any other significance on that they just doesn’t have any state of place in doing business?

Daniel M. Friedman:

As far as I know that is the significant —

Earl Warren:

That’s all there is — that’s all there is to it.

Daniel M. Friedman:

— that’s why the man who has no particular place —

Earl Warren:

Yes.

Daniel M. Friedman:

— of business that he calls his place of business that is his place of business.

I — I’d like to also refer the Court to the affidavit of Agent Johnson at page 6.

At the bottom of page 6 which we think —

Earl Warren:

In your brief?

Daniel M. Friedman:

— shows clearly that at the time this search warrant was obtained, the agents did not know that North Sales Company was operating here because he says, “The failure to file the special tax return in the name of the operator of said business, namely one John Doe.”

And when we look at this from the point of view of the District Judge who issued the search warrant, it seems that he was fully justified in concluding that unknown persons were conducting this wagering operation on the premises.

And that these premises had not been registered as required by law.

And that we think is sufficient under this Court — this Court — decisions of this Court to just constitute probable cause for the issuance of the warrant.

And we think that once this standard of probable cause has been satisfied when the motion to suppress is made, the ultimate correctness of the things alleged for probable cause should not be tried out in other words, if probable cause exist at the time the warrant is issued, the probable cause does not disappear because of the claim that additional facts show there was not — the facts were not as had been assumed to be at the time the warrant was issued in the same way that a search is good or bad depending on what happen at the time, it is not validated or invalidated by what later turns up.

Felix Frankfurter:

Now, hasn’t that — you just stated the proposition, hasn’t that been before the Court and been adjudicated in the way in which you’ve stated?

Daniel M. Friedman:

I believe so, Mr. Justice.

I — I’m not familiar with the cases but I think I’m not familiar with the cases which deals specifically with the question of attempting to claim that the probable cause alleged to exist did not exist but in the broader that the general proposition has been stated many times by this Court and other courts.

Hugo L. Black:

For that questioning what you’ve said that — but I don’t know.

Is that consistent with what I understood you to say that if they had searched 2401 under such ans such testimony, would that have been invalid?

Daniel M. Friedman:

I would — yes, I would think, Mr. Justice, that they would not have been able to get a search warrant for 24 —

Hugo L. Black:

Suppose they had though.Suppose they had gotten it.

That gets back to the question of Mr. Justice Frankfurter has been asking.

Suppose they have gotten it with reference to 2401 for the plain and simple case (Inaudible) — it seems to be at first here that they gave an affidavit that there’s been no tax to the judge.

There has been no taxes paid for doing business at 2401 and there had been, what would say about that?

Daniel M. Friedman:

Well, I’m not sure I understand you hypothetically.The same facts that you have —

Hugo L. Black:

(Inaudible)

Let’s assume that what he said have to — this man had no place of business except 2401.

Daniel M. Friedman:

Yes.

Hugo L. Black:

And they searched it on an affidavit which said that he was there and he was doing business, they haven’t paid the tax and they have paid the tax which — could they search them even though the undisputed evidence showed that the tax was paid at the time the affidavit was made?

Daniel M. Friedman:

I — I have to inquire one further thing, Mr. Justice, in your hypothetical was there also an affidavit from the collector of the district that, in fact, there was no registration for 2401.

I think that is the crucial thing.

Hugo L. Black:

No what?

Daniel M. Friedman:

No registration.

You see, in this case, there was an affidavit that —

Hugo L. Black:

Well, suppose that — yes, there is an affidavit.

Yes, there is a registration and payment of tax, isn’t it, for 2401?

Daniel M. Friedman:

There is a registration and payment of tax.

Hugo L. Black:

And payment of tax.

Daniel M. Friedman:

Yes.

Hugo L. Black:

What I’m asking is just this.

The statement was that — the affidavit over the search warrant was issued was that they were guilty of not doing it, not paying.

Suppose that there’s nothing in it except 2401, would that affidavit support this search —

Daniel M. Friedman:

Well, I’ll —

Hugo L. Black:

— warrant merely on the ground that the judge had a reasonable ground to believe it because they told them that?

Daniel M. Friedman:

No, I would think, Mr. Justice, there would have to be some basis in the affidavits for the conclusion that, in fact, no registration had been filed for a particular —

Hugo L. Black:

Well, there is one because of the statement made is that their tax had not been paid.

Daniel M. Friedman:

No, Mr. — no, Mr. — in this case, it’s much stronger than that.

In this case, there’s an unequivocal affidavit by Mr. Heckelbech that there was no registration at all for the premises at 2300A State Street.

Hugo L. Black:

Yes, that’s — that’s 2300A.

Daniel M. Friedman:

That’s right.

Now, if all we — if all we have was a statement that it was believed to be a — a wagering operation at 2401, I wouldn’t think that would be sufficient probable cause without some further indications, some further affidavit that there had been no registration for those premises.

But that — that is not this case because in this case, we do have an affidavit that the premises for which the search warrant was issued had in — had, in fact, no registration, had been filed for those premises.

Now, I want to just reiterate again the statute requires a registration of each premises.

Hugo L. Black:

I don’t get quite get — I had rather assume that the law, according to the inquiry that Mr. Justice Frankfurter made, if you judge the validity of the search warrant by looking at it to see if it was reasonable to the judge with a reasonable ground.

Daniel M. Friedman:

Yes.

Hugo L. Black:

Now, I understood you to say later that if, as a matter of fact, before that there’s been no tax paid, they do business at the same place, when they had, is that search warrant wasn’t legal — a search warrant issued on such an affidavit wouldn’t be good?

Daniel M. Friedman:

Now, Mr. — Mr. Justice, my point was that if in fact there was no basis on what was before the District Judge for concluding that these premises had not been registered, then I think there wouldn’t be probable cause.

Hugo L. Black:

Suppose there’s — there’s an oath that they had not been ready.

He had it before, he issued a warrant.

Daniel M. Friedman:

Yes.

Hugo L. Black:

As a matter of fact, they had been registered —

Daniel M. Friedman:

Yes.

Hugo L. Black:

— and that oath was not true, would that be a good search warrant?

Daniel M. Friedman:

Yes, I think so, Mr. —

Hugo L. Black:

What do you think?

Daniel M. Friedman:

I think so.

Hugo L. Black:

Well, I understood you to say that —

Daniel M. Friedman:

No.

I’m sorry.

I think so.

William J. Brennan, Jr.:

Well, let me see if I get that.

That is to say then, Mr. Friedman, if everything you have in this case, as you states — appeared an affidavit so related to 2401 and say that the warrant was still good, notwithstanding the fact that there was an outstanding registration of 2401.

Daniel M. Friedman:

Yes.

I think if — if that were the case, someone may have filed the false affidavit which is another crime but —

William J. Brennan, Jr.:

But — I see but the —

Daniel M. Friedman:

But as —

William J. Brennan, Jr.:

— probable cause would appear and the warrant —

Daniel M. Friedman:

Probable cause would appear.

That’s correct.

I mean the — the —

William J. Brennan, Jr.:

And the only remedy then, as you suggest, is that there’s going to be a false affidavit some prosecuted person.

Daniel M. Friedman:

Yes, Mr. Justice, because I think the whole purpose of the probable cause requirement is to ensure that between the citizen and the searching and seizing officers that there is the magistrate who is — has an opportunity to examine as to protect the people against laws and if in fact a false statement is made to the magistrate, there are other remedies, otherwise, you can check in every case for which an attack was made on a search warrant.

It has been suggest you have to try out all these collateral issues.

Now, we, therefore — we think have reached the point as far as our argument is concern that the search warrant was issued on probable cause.

Daniel M. Friedman:

The next question, as we see it, is whether, in these circumstances, they were justified in seizing the property.

Now, the property that was seized in this case is precisely the property set forth in the search warrant as the various records specified used in the conduct — the conduct of this alleged illegal operations.

Set forth at page 20 of the record, books, memoranda, tickets, pads, tablets, papers, recording of the receipt of money, receptacles in the nature of envelopes in which there is kept money won by patrons and diverse other tools, currency and records, all designed for the use in violating these laws.

Now, this Court has repeatedly recognized that the instrumentalities used in committing an offense as distinct from mere evidence of that offense are properly subject to seizure.

And in the Marron case, the Court pointed out that the category of seizable items as instrumentalities is not limited to those used to carry on the criminal enterprise but also those so closely related to the business but it is not unreasonable to consider them as used to carry it on.

John M. Harlan II:

Supposing the agent got — got in to the premises, it was searched and found the stamp tacked up on the walls, would you say he is still can go ahead and execute that search warrant?

Daniel M. Friedman:

I would — I would think — think so, Mr. Justice —

John M. Harlan II:

Without having to go back and make an inquiry as to whether him say (Voice Overlap) —

Daniel M. Friedman:

It might — it might be — I would think the better course would be and I am told that in — if that situation occurs, the general practice is to check back.

But I think again, if he’s got a search warrant that he is justified in executing the search warrant.

Charles E. Whittaker:

(Inaudible)

Daniel M. Friedman:

Certainly, I think so.

Now, this Court has stated in the Lewis case that the various provisions of the Internal Revenue Code dealing with the wagering tax and the special $50 tax for engaging in this business together with another provision, which we, unfortunately, have not cited in our brief but which petitioners have filed in their reply brief, at page 17 which is 4109 of the Code which provides that no person shall be engaged in or carry on any trade or business subject to the $50 wagering tax unless he has paid that tax.

These — these provisions carried to — read together as this Court has said in the Lewis case indicate that the $50 tax is a registration fee that must be paid before engaging in a business of wagering.

In other words, we think that read together this various provisions indicate that the operation of an unregistered business is in violation of federal law.

And we think the material which was seized here, the very paraphernalia used in carrying on the business, the pieces of paper on which the bets were recorded, the daily record of the particular intake and outtake, these were the instrumentalities used in conducting this business that isn’t conducting the wagering business.

And since at the time of the search warrant was issued, this business had appeared had not been registered in accordance with the federal law.

We think this were properly seizable as the instrumentalities used in carrying on this illegal operation.

William J. Brennan, Jr.:

You wouldn’t say that those — this was 2401 of the agents walked in and saw the stamp on the wall, the question Mr. Justice Harlan asked you.

Daniel M. Friedman:

I mean if they were 2401 —

William J. Brennan, Jr.:

If these were 2401, they — you’ve been over that you — you, I take it is that the warrant nevertheless maybe executed even though the fact stated is untrue and if you walked in and you find the — the stamp on the wall.

Daniel M. Friedman:

Well, I would — I would say, Mr. Justice, there’s still warrant to seizing what the warrant commands them to see.

William J. Brennan, Jr.:

Well, but in this instance, would this then be the carrying on of a — an unlawful business —

Daniel M. Friedman:

I would think —

William J. Brennan, Jr.:

— in the premises?

Daniel M. Friedman:

— they would — they would be the instrumentalities for carrying on a business which there was probable cause at the time the search warrant was issued to believe was being carried on —

William J. Brennan, Jr.:

But how could it be an illegal business —

Daniel M. Friedman:

Well, as —

William J. Brennan, Jr.:

— for carrying on an illegal business if in fact the — this is a registered place to carry on just that business?

Daniel M. Friedman:

Well, if — in — it would be illegal from the point of view of — as of the time the search warrant was issued.

Daniel M. Friedman:

There would be probable cause.

In other words, again, put it this way, Mr. Justice, if I may, that when an agent comes to serve a search warrant and directs him to seize particular property, I don’t think at this point, he has to look around and say, “Well, in fact, is the business being conducted —

William J. Brennan, Jr.:

I’m not telling it has to but I suggest that he — he sees it.

Daniel M. Friedman:

He’s — well —

William J. Brennan, Jr.:

He sees the stamp right on the wall, so that the business being carried on then, I take it, as lawful, isn’t it?

Daniel M. Friedman:

It may or may not be depending on who is — who is conducting this particular business.I mean, it maybe —

William J. Brennan, Jr.:

Let’s take our set of facts, the 2401 (Inaudible)

Daniel M. Friedman:

Yes.

William J. Brennan, Jr.:

And there is on the wall a stamp.

Daniel M. Friedman:

Yes.

William J. Brennan, Jr.:

And he walks in with the warrant, he sees the stamp.

Daniel M. Friedman:

Yes.

William J. Brennan, Jr.:

You suggest he may still see and you — this evidence to convict of a crime for carrying on an unlawful business when in fact it’s a lawful business?

Daniel M. Friedman:

Oh, Mr. Justice, they may — sorry.

On your hypothetical, they have not committed the crime of conducting the unlawful operation.

But I think that they are still justified in seizing the property.

William J. Brennan, Jr.:

To what purpose?

Why would they justify the seizing?

Daniel M. Friedman:

Let me —

William J. Brennan, Jr.:

They can seize it only if it is an unlawful business being carried on.

Daniel M. Friedman:

Only if there’s probable cause to believe this is an unlawful business.

William J. Brennan, Jr.:

They can seize it, you say, because of probable cause, they can’t use it because it was a lawful business.

Daniel M. Friedman:

They can’t — they can’t use it.

The man has committed no crime in conduct — in other words, there wouldn’t be any possible prosecution for the unlawful business.

William J. Brennan, Jr.:

You don’t suggest there is no indication it’s coercive.

The court would justify that (Voice Overlap) —

Daniel M. Friedman:

I — I don’t think that problem has come up because I — I don’t know of a — of that —

William J. Brennan, Jr.:

And that — that problem isn’t here, you tell me.

Daniel M. Friedman:

That certainly is not here.

Now, I’d also like to refer briefly to one other point.

Daniel M. Friedman:

They have consistently argued that there is — that this people, in fact, were not using 2300A State Street as their principle place of business.

In our view, we don’t think this makes any difference as long as there was probable cause at the time to believe there were but we respectfully refer the Court to the record in this case where there is, we think, abundant evidence that, in fact, once the trial took place that this was being used for that purpose.

I refer specifically to the testimony at pages 121 to 126 of the record involving certain statements as to how this particular business was being operated.

Now, the final point —

Hugo L. Black:

Does it make any difference where they operate for their principle place of business or just operating (Voice Overlap) —

Daniel M. Friedman:

What they were operating — we think this shows they were operating maybe even in their principal place of business.

Hugo L. Black:

Well, suppose they were not, what difference does that make?

Daniel M. Friedman:

It would not make any — it would not make any difference.

It’s certainly clear they were conducting a regular operation from this place.

And the final point which we have discussed in our brief and we think it’s fully covered by the decisions of this Court is that once the original search and seizure were valid, the fact that the offenses for which the evidence was introduced are not the same offenses as those alleged in the search warrant is immaterial even that was specifically ruled by this Court in the (Inaudible) case which we have quoted in our brief at pages 40 to 42 and also recently in the (Inaudible) case.

I would now like to turn to the second issue on this case which the question of the nonproduction of the agents in courts.

This involves the testimony of three Internal Revenue Service agents concerning certain conversations they had or overheard with the defendants.

In each case, as far as the record is specific, and I’ll develop in a moment, I think it is ambiguous on one of them, the trial court directed the turning over where they were available of the handwritten notes of the agent but refused to direct production of the agent’s memoranda or reports based upon those notes.

And we agree with the petitioners that this was an erroneous principle of law as we had previously explained to the Court last term in the Needleman case.

We think that if it is a report in writing signed by the agent, it is producible under the Jencks Act even though the fact that the agent who testified and made the report is a government witness.

However, our position is that although these rulings were erroneous in the case of one witness, the man named Minton, this was not prejudicial error.

And with respect to the other two witnesses with whom the — concerning whom the affidavit has been filed, we think that there is sufficient doubt on the base that we have of this record that we — we understand according to our information that, in fact, we believe these reports were turned over but we think on this basis that matter should be remanded to the trial court for a hearing.

Now, I like to discuss first this agent named Minton.

Minton’s testimony —

Earl Warren:

Would you mind clearing for us first that discrepancy between you and the counsel on — on whether they were turned over.

Daniel M. Friedman:

Yes.

Let — let me explain, Mr. Chief Justice precisely how this came into the case, what we did and what our information is.

At the time when the Government was preparing its brief on the merits in this case in September, we wrote to the United States Attorney requesting him to furnish us with copies of the various notes and memoranda that had been made.

And he wrote us back a letter on the date of September 26, 1960 in which he gave us this information at the last paragraph of the letter added the statement that these documents had actually been turned over to the defense during the trial that carbon copies of those have been turned over.

We then had a series of letters back and forth.

And there were five letters in which the United States Attorney advised us of the fact.

They were based — his statement was based principally on what had been related to him by Mr. Mochel, one of the two agents, who, according to his information, had turned the documents over.

And Mr. Mochel stated in — sorry.

Mr. Raymour (ph) of the United States Attorney advised us that Mr. Mochel had told him that at the time he was on the stand, he had in his inside “pocket” folded carbon copies of these typed documents.

And on the basis of this information, we prepared our brief in the form that it was filed with this Court and sent a copy to the United States Attorney before filing and he approved it.

Daniel M. Friedman:

I received the defendants — petitioners’ brief last Thursday.

And upon receipt of it, I have made some further inquiries.

Now, due to the shortness of time, we have been unable to file anything with this — this Court.

The principal man involved Mr. Mochel, the Internal Revenue Service agent, was not available to talk to until yesterday morning.

I did talk to him yesterday morning, however, Mr. Mochel advised me personally on the telephone that the version of the facts given in the Government’s brief is correct.

He stated unequivocally that he had turned over carbon copies of these reports to the defense.

At the trial, he further told me he was willing to testify under oath and he further told me that he is willing to give us an affidavit to that effect.

I —

Earl Warren:

Who did he turn it over to at the trial?

Daniel M. Friedman:

He is not clear as to whether he turned it over to the United States — Assistant United States Attorney or directly to defense Counsel.

But he is unequivocal in his statement that the documents were turned over to the defense.

William J. Brennan, Jr.:

That makes a lot of (Inaudible) [Laughter]

Earl Warren:

Some did it.

Daniel M. Friedman:

It would make a lot of — his —

William J. Brennan, Jr.:

— (Voice Overlap) — not clear whether he turned it over to the Assistant United States Attorney or to defense counsel.

Daniel M. Friedman:

He is not — he stated to me he’s not sure whether he — but he is sure that they were turned over.

William J. Brennan, Jr.:

Turned over to whom?

Daniel M. Friedman:

To the defense whether — in other words, it was either turned over directly to defense Counsel or to the United States — Assistant United States Attorney who in turn turned it over to the defense Counsel.

Hugo L. Black:

Who — what did he say?

Daniel M. Friedman:

Pardon me, sir?

Hugo L. Black:

What did the United States (Voice Overlap) —

Daniel M. Friedman:

The — it’s Assistant United States Attorney, Mr. McNally.

Now, Mr. McNally testi — told me that his recollection was hastened but that he does definitely recollect that typed copies of reports were turned over to the defense at —

Felix Frankfurter:

What is he hasty about?

What is he hasty about, the person to whom he turned it over?

Daniel M. Friedman:

No, he is hasty as to what they were.

He said his recollections as he thought they were merely typed copies of the preliminary note.

I think it maybe helpful if I explain precisely to the Court what happened with respect to this, what these documents were.

Earl Warren:

Or did — may ask this.

Did the United States Attorney swear positively that they were turned over or did he say that in his affidavit that Mr. Mochel had told him that they were turned over?

Daniel M. Friedman:

He — it was — it was in his letter.

He —

Felix Frankfurter:

(Voice Overlap) — no affidavit.

Earl Warren:

Oh, I thought he made an affidavit.

Daniel M. Friedman:

No, no.

Earl Warren:

Oh, I beg your pardon —

Daniel M. Friedman:

I’m sorry.

Mr. Mochel —

Earl Warren:

— please.

Daniel M. Friedman:

— indicated he would be willing to make an affidavit.

Earl Warren:

Oh, I see.

I thought there was an affidavit.

Daniel M. Friedman:

I’d like to explain to the Court precisely what these documents are because I think it would be helpful in —

Felix Frankfurter:

What was the date of the trial, Mr. Friedman?

When — when –what —

Daniel M. Friedman:

In May of —

Felix Frankfurter:

— what is the date of this suppose occurrence?

Daniel M. Friedman:

Date of the trial was in May 19, 15 — May 19, 1959.

This was around May 11 to May 12.

Felix Frankfurter:

Less than two years —

Daniel M. Friedman:

Less than two years.

Felix Frankfurter:

— we’re talking about.

Daniel M. Friedman:

Yes.

What happened at this interview involving Mr. Mochel was that two agents, Buescher and Mochel interviewed first, Mr. Clancy on the13th of December 1956 and then Mr. Kastner and Mr. Prindable the following day.

Mr. Buescher took no notes but Mr. Mochel did.

Now, the notes, which I’m going to refer to the hand — of the handwritten notes of this rather short things on large pieces of paper.

And in each case, on each day, a set of these notes was made with respect to each individual defendant.

So there were three sets of handwritten notes.

Immediately upon returning to the office after the interviews, the agents prepared what I shall refer to as the handwritten report which was they wrote out in hand.

On the basis of the notes, a chronological narrative statement of what was said at the interview.

Daniel M. Friedman:

And following that, they had typed up verbatim copies of this handwritten report which I also referred to as the final typed report which is a document like this.

Now, it is this document, the typed of final report that according to our information was turned over to the defense at the trial.

Those are the documents which we have reprinted —

Hugo L. Black:

Suppose it was not —

Daniel M. Friedman:

— in our appendix.

Hugo L. Black:

— suppose it was not turned over, does the Government say that was harmless error too?

Daniel M. Friedman:

The other report?

Yes.

Hugo L. Black:

Both — all of them.

Daniel M. Friedman:

Oh, well, there are three reports relating to these two interviews that we think were turned over.

William J. Brennan, Jr.:

But if they were not?

Hugo L. Black:

If they were not.

Daniel M. Friedman:

If they were not turned over, no, we do not claim it is harmless error.

William J. Brennan, Jr.:

Defense would be entitled to a new trial.

Daniel M. Friedman:

That — that is correct.

But we think that on the basis of this information that we have and also the somewhat cryptic portions of the transcript describing this which — that is not in the printed record before this case but is set forth in our brief at pages 21 to 23, we’ve set forth the transcript here, at least, this — this portion is certainly not inconsistent with the position we have taken.

On one occasion as a reference by the witness, in the middle of page 22 of the memorandum, then there’s a question with respect to a statement lowered down.

So we think that in the circumstances, if in — as we believe as we are advised, these documents have been turned over, we think this is a clear case upon was error and we say that they — this Court should not decide this basic question in this state of the record but should remanded to the trial court for a hearing.

We’re asking that it be remanded with a vacation of the Court of Appeals judgment but not a reversal of that judgment.

Earl Warren:

Mr. Friedman, I wonder if I have the sequence of this — this seems correct.

As I understand it, the defense asked for this written — or memorandum or —

Daniel M. Friedman:

That’s correct.

Earl Warren:

— or rather reports —

Daniel M. Friedman:

The written reports.

Yes.

Earl Warren:

— they asked for them and the United States Attorney objected to them.

Daniel M. Friedman:

No.

There’s nothing in the record to show any objection.

The trial court himself ruled — trial court judge himself rule that under the Jencks — that he said the Jencks Act is contemporaneously.

And contemporaneously said doesn’t mean something that you made later on.

Daniel M. Friedman:

We think he was confused between the first subdivision of the Jencks Act and the second subdivision.

Earl Warren:

United States Attorney took no position of it.

Daniel M. Friedman:

Not as far as I know.

I was not present then.

There’s nothing in the record to show any objections by the United States.

Hugo L. Black:

Where is that ruling of the judge?

What page?

Daniel M. Friedman:

That is at page 21 to 23 of our brief, Mr. Justice.

Hugo L. Black:

But is it not in the record, printed record?

Daniel M. Friedman:

It’s not in the printed record, it’s in the — in this transcript of the — which is on file with the Court but it’s not in the printed record.

Hugo L. Black:

This is all that took place according to this?

Where is (Voice Overlap) —

Daniel M. Friedman:

This is with respect —

Hugo L. Black:

— of the judges (Inaudible)?

Daniel M. Friedman:

There are earlier — there is — we refer at page 18 of the — of our brief.

There’s an early ruling by the trial court at the time the witness Minton was on the stand.

That’s the indented material at the top of page 18.

Earl Warren:

I’ve been wondering why if — if the United States Attorney didn’t give them up presence of the Court.

Why would give them up at all after the Court said it was necessary to do so?

Daniel M. Friedman:

Well, I — I don’t know, Mr. Chief Justice.

All as I say — all that I can present to the Court is the information that we have been given.

I think these are questions which properly should be canvassed at the hearing before the District Court.

Tom C. Clark:

Mochel is the —

Daniel M. Friedman:

Sir?

Tom C. Clark:

— tax agent?

Mochel?

Daniel M. Friedman:

Mochel is the agent, yes.

He was one of those who participated in the interview with the defendant.

And he is the one who made the notes and then who made the handwritten report and found that the two agents made the typed report and this report was signed by both pages.

Now, our position is, with respect to this, as far as the witness Mochel was concerned who was on the stand at the time we believe this happened that there was clearly, as to that witness, not prejudicial error.

Daniel M. Friedman:

And it’s the witness Buescher who had not made the notes and who would testify and had let the stand.

We think that in that situation since the reports show that they were signed by both agents that it — in no circumstance, it was still not prejudicial error because the man could have been recalled for further cross-examination on the basis of this report as happened with respect to, at least, five other witnesses during the course of this trial.

Now, I would like in my remaining time —

Earl Warren:

If they could have been called on the basis of this report?

Daniel M. Friedman:

Could have been recalled, yes.

Earl Warren:

Well, let’s — assuming that they got it.

Daniel M. Friedman:

That is — that is correct.

Earl Warren:

Yes (Voice Overlap) —

Daniel M. Friedman:

My point, Mr. Chief Justice, is just this.

We think that on this record, it’s unclear what happened.

All that we are saying is that if, in fact, the facts are, as we understand to be, then that would be not prejudicial error.

But we say that it should go back to the trial court to determine the fact.

We are asking this Court to hold that if these documents were turned over, if the Court should — trial court so find that then any error was not prejudicial.

Hugo L. Black:

What you are asking us, as I understand it, is that the entire stenographic transcript to the trial failed to show the papers were delivered.

The judge had said, “They couldn’t have it.

We should send it back for a trial by the judge alone,” that the fact predetermined whether or not a seizing of the record, outside of the record, they were turned over to the counsel.

Daniel M. Friedman:

Well, we — we think that the record doesn’t affirmatively show that they were turned over.

The record also doesn’t negatize that position.

We think that this is a case where the record may not fully disclose all the things that happened at the trial with respect to what particular documents were or were not produced.

Earl Warren:

Well, I should say as — as an ordinary fair that or the judge denies the rights to the defense to see it but the record does disclose that they were not turned over.

Daniel M. Friedman:

Well —

Earl Warren:

There’s no intimation in there that they were turned over except your correspondence with the United States Attorney beginning September 26 of this year.

Daniel M. Friedman:

Well, there is —

Earl Warren:

So why doesn’t — why do you say the record doesn’t — doesn’t show that — that they weren’t turned over?

Daniel M. Friedman:

Well, I will say, Mr. Chief Justice, the record, as it exist, is consistent would argue that they — that the statements that they were turned over.

There is nothing affirmatively that says “only notes turned over”.

And as I’ve suggested that this is not a case where the Government is going outside of the record, really, to bring to the Court things that happened outside the courtroom, this is a case were we said that we don’t think the record fully discloses what happened at the court from circumstances before the case is decided it’s appropriate for the record to be supplemented to develop fully —

William J. Brennan, Jr.:

Well, what if two, Mr. Friedman, here we have the two trial counsels for the defense, not only has made of affidavits but they’re here in this courtroom personally representing to this Court, they never received any (Inaudible) what do we supposed to do with that kind of representation?

Daniel M. Friedman:

Well, I — I —

William J. Brennan, Jr.:

You — you want us to send it back and make this a testing of credibility of the Internal Revenue agent and these two attorneys, don’t you?

Daniel M. Friedman:

Well, I — I think that is the inevitable result because —

Felix Frankfurter:

Is it inevitable?

I just wonder why the Department doesn’t take appropriate steps on the basis of the information that has come to it to supplement ascertaining what the facts are to supplement the records.

You just said in answer to Chief Justice’s question that what you are presenting to the Court as the result of this interchange between yourself and the U.S. Attorney’s office took place in court.

This isn’t something — you see all the record in sense that the record doesn’t disclose it, doesn’t —

Daniel M. Friedman:

Yes.

Felix Frankfurter:

— import it and I should think, I don’t quite understand, why the Department didn’t take appropriate steps to make presentation to this Court that it wants to ascertain the fact in order to enlarge or — or correct the record.

Daniel M. Friedman:

Well, I — I think what we — what we attempted to do was to indicate to this Court in our brief the information that had been brought to our (Voice Overlap) —

Felix Frankfurter:

Yes, I know but it — it isn’t, to put it mildly, a little informal, isn’t it?

Daniel M. Friedman:

Well, I — I —

Felix Frankfurter:

Well, I — I don’t mean to be derogatory in that adjective.

It isn’t that, isn’t it?

We’ve got a record here in which the Government makes a statement if it had been exceeded to by the petitioner, that’s one thing but it’s challenged and what you — what the controversies about is what really took place what you say in court —

Daniel M. Friedman:

That’s right.

Felix Frankfurter:

— of which there is no record.

Well, the — the procedure is, I’m familiar with is — if that so, then you’d take an appropriate step to correct the record.

Daniel M. Friedman:

Well, I — I suggest, Mr. Justice, that the appropriate steps to correct the record is to have the fact fully developed at the trial.

Felix Frankfurter:

But you — but further investigation by you may indicate that with utmost good faith on everybody part, I envy the person who never had an experience of being that sure about something which turned out to be that sure of the opposite.

Daniel M. Friedman:

This may — well —

Felix Frankfurter:

It could be.

This may well be on one side or the other.

Daniel M. Friedman:

That’s correct, sure.

And we — we believe that — and we presented to the Court the copies of these interviews and we —

Felix Frankfurter:

Yes, I guess one does still wonder why you didn’t resort to what is not unfamiliar practice of asking the enlargement of correction or addition or subtraction of the record.

Daniel M. Friedman:

Well, for one thing, Mr. Justice, we were — didn’t know until last Thursday that this was to be challenged.

And as I say —

Felix Frankfurter:

Today is true.

All I say is today is true.

(Inaudible)

Daniel M. Friedman:

Well, I didn’t find this — it would have impossible because we didn’t ascertain this information until yesterday.

Daniel M. Friedman:

Now, if the Court wants we would be very glad to get an affidavit, promise to Mochel which he has told me, he would be glad to furnish and — and oblige that with the clerk.

Hugo L. Black:

But —

Felix Frankfurter:

Even then we have to decide affidavit against affidavit.

Daniel M. Friedman:

No, no, no Mr. Justice, I don’t — I don’t think this Court should attempt to decide these controversies.

Certainly, this Court cannot resolve this conflicting affidavit.

This, it seems to me, is a matter for the triers of the trier of fact for the District Court to determine the first instance.

John M. Harlan II:

The way you state, the — what you heard from the District Attorney, it seems to me, wholly inconclusive.

I don’t say why the Department of Justice can’t find out from itself whether there is — people are talking across purposes and then if it is to do the appropriate thing in this case instead of passing the back down of the District Court against it.

Daniel M. Friedman:

Well, I — I — you — Mr. Justice, I think the appropriate thing in this case is to have all the fact fully determined.

Now, when the case goes back, we will, of course, attempt to develop with that.

But on the basis of the information that we had received, we think we were warranted in presenting these facts to this Court.

Now, on — our version of the fact has been challenged, we think the appropriate proceeding is to send it back to the District Court to determine all of this fact.

Felix Frankfurter:

What you’re saying — are you — the Government’s position there feeling justified in believing that, in fact, document appropriately called for by the defendant at the trial were given to them.

So that the — so that that portion of this case does not justify reversal of a conviction, otherwise jury have, if kind of a — therefore it requires an ascertainment of the facts to correct the record if that turns out to be the truth, so that the case should be decided on what actually took place instead of — instead of relying merely on an incomplete record when there should have been a complete record —

Daniel M. Friedman:

Precisely.

Felix Frankfurter:

— which is (Inaudible) against trying a case on the record instead of trying a case on the merits.

Daniel M. Friedman:

Precisely.

Earl Warren:

Did the United States Attorney participate in any way in the writing of the briefs or — or in the argument that — in the Court of Appeals?

Daniel M. Friedman:

Yes, the Assistant United States Attorney argued the case in the Court of Appeals.

Earl Warren:

And this issue was raised there in the Court of Appeals, the Jencks — Jencks issue wasn’t raised at all.

Daniel M. Friedman:

Yes, the Jencks issue was raised in the Court.

Earl Warren:

I mean in that — at that time and since then, nothing was done to — to bring out this point that the United States Attorney had delivered these things to — to the defense.

Daniel M. Friedman:

Mr. Justice, at that stage of the case, the theory of the United States Attorney’s office was under the Jencks Act.

The production of the notes satisfied the Act and that the defendants had no right to receive the reports.

And as I am told that was the reason why they attempted and did not inject this point of the case and attempted to argue it on — on that basis.

William J. Brennan, Jr.:

But Mr. Friedman, he would not — have had to argue that position if, in fact, they’ve what they were demanding, they were entitled to have —

Daniel M. Friedman:

Well —

William J. Brennan, Jr.:

— as you now say they did.

Daniel M. Friedman:

Well, all that I can say, Mr. Justice, is that at that point, this was theory.

There was some — that point, several Courts of Appeals, at least one or two, had held —

William J. Brennan, Jr.:

Well, have you found out what it was they learned from Mochel if that’s his name, when Mochel — that he’d given these to defense as you say?

Daniel M. Friedman:

I don’t know.

I — I all I can I say is that the United State Attorney reported to — to us for the first time —

William J. Brennan, Jr.:

In September.

Daniel M. Friedman:

— in September.

I would be glad to try to ascertain from —

Felix Frankfurter:

Was this volunteered by him or was it some solicitation from you?

Daniel M. Friedman:

No.

This was volunteered by him after — after he had sent copies of letters to us in which — after he had given certain information.

His last paragraph of his letter —

Felix Frankfurter:

What was the date of the letter?

Daniel M. Friedman:

September, 26th.

Felix Frankfurter:

Well, that’s — I’m just wondering, I’m just looking at the brief of the petitioner.

Their brief was filed on the 24th of September.

Daniel M. Friedman:

On the 24th.

That’s right.

Felix Frankfurter:

So this letter is — if this has been the sequence of time after the — after he (Inaudible)

Daniel M. Friedman:

That’s right.

We — this letter was in response to our letter of the September 20th which was written before we received their brief.

And if I may just say the first statement made by the United States Attorney which raised this issue said that portion of the trial transcript pertaining to Internal Revenue agent Mochel’s testimony as related in your letter, we’ve quoted from that transcript, does not appear to state the fact clearly.

The fact is that Mr. Mochel upon request delivered to the defense attorney a typewritten carbon copy of his secondary notes.

Thank you.

Earl Warren:

Mr. O’Connell.

John F. O’connell:

From the time I was in the law school, my aspiration was to talk before the Supreme Court of United States.

I never thought I had to be talking in front of the Supreme Court of the United States and say that I’ll take an affidavit that I am not a lawyer.

Felix Frankfurter:

Well, I don’t think you —

John F. O’connell:

And I am not —

Felix Frankfurter:

(Voice Overlap) — you ought to put it on those terms.I —

John F. O’connell:

That’s the only — that’s where I (Voice Overlap) —

Felix Frankfurter:

I suggest to you that — that if overwhelmingly the experience of mankind that people are dead sure about things about which subsequently turns out they have no business to be that sure.

John F. O’connell:

I’m — I’m sorry if I use the wrong language but I noticed that Chief Justice Warren had to ask me please not two attorneys at the same.

And that’s — actually this — this — he has excited me and upset me more than — than the whole case itself.

We did not receive anything but longhand notes from the Government and there’s no question about it.

Mr. McNally would — for whom I have the greatest respect in the world, I call him on the phone and I said, “Mr. McNally, give me the facts now.

Here’s what the Solicitor General said and he says he gets this from Ramer, Ramer wasn’t even in the courtroom.”

And he said, “You received the longhand notes.”

Now, Mr. McNally can really be telling completely the truth when he has said he has a vague memory of some typewritten reports.

The typewritten reports came from Mr. Hudak who do we — we do not deny would receive those — that report.

I thought it was his regular investigator report but Mr. McNally said, “No, that was his longhand notes typed up and signed by him, so you didn’t receive his investigative report that you demanded.”

We received Mr. Hudak, he is the Chief of the Internal Revenue Service in East St. Louis, and we received Henry Zittel, he had a typewritten report signed by him.

Those are two reports we received pursuant to the Jencks Act.

The others, we did not receive.

Mr. Minton’s —

Earl Warren:

We’ll recess now, Mr. —