Source: https://supreme.justia.com/cases/federal/us/350/359/
Timestamp: 2019-04-18 14:54:44+00:00

Document:
A defendant in a criminal case in a federal court may be required to stand trial, and his conviction may be sustained, where only hearsay evidence was presented to the grand jury which indicted him. Pp. 350 U. S. 359-364.
(a) An indictment based solely on hearsay evidence does not violate the provision of the Fifth Amendment that "No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury. . . ." Pp. 350 U. S. 361-363.
(b) In the exercise of its power to supervise the administration of justice in the federal courts, this Court declines to establish a rule permitting defendants in criminal cases to challenge indictments on the ground that they are not supported by adequate or competent evidence. Pp. 350 U. S. 363-364.
"May a defendant be required to stand trial and a conviction be sustained where only hearsay evidence was presented to the grand jury which indicted him?"
United States for the years 1947, 1948, and 1949. [Footnote 1] The charge was that petitioner falsely and fraudulently reported less income than he and his wife actually received during the taxable years in question. Petitioner promptly filed a motion for inspection of the minutes of the grand jury and for a dismissal of the indictment. His motion was based on an affidavit stating that he was firmly convinced there could have been no legal or competent evidence before the grand jury which indicted him, since he had reported all his income and paid all taxes due. The motion was denied. At the trial which followed, the Government offered evidence designed to show increases is Costello's net worth in an attempt to prove that he had received more income during the years in question than he had reported. [Footnote 2] To establish its case, the Government called and examined 144 witnesses and introduced 368 exhibits. All of the testimony and documents related to business transactions and expenditures by petitioner and his wife. The prosecution concluded its case by calling three government agents. Their investigations had produced the evidence used against petitioner at the trial. They were allowed to summarize the vast amount of evidence already heard, and to introduce computations showing, if correct, that petitioner and his wife had received far greater income than they had reported. We have held such summarizations admissible in a "net worth" case like this. United States v. Johnson, 319 U. S. 503.
"No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury . . . ,"
and (2) that, if the Fifth Amendment does not invalidate an indictment based solely on hearsay, we should now lay down such a rule for the guidance of federal courts. See McNabb v. United States, 318 U. S. 332, 318 U. S. 340-341.
determining whether or not the finding was founded upon sufficient proof. . . ."
In Holt v. United States, 218 U. S. 245, this Court had to decide whether an indictment should be quashed because supported in part by incompetent evidence. Aside from the incompetent evidence, "there was very little evidence against the accused." The Court refused to hold that such an indictment should be quashed, pointing out that "[t]he abuses of criminal practice would be enhanced if indictments could be upset on such a ground." 218 U.S. at 218 U. S. 248. The same thing is true where, as here, all the evidence before the grand jury was in the nature of "hearsay." If indictments were to be held open to challenge on the ground that there was inadequate or incompetent evidence before the grand jury, the resulting delay would be great indeed. The result of such a rule would be that, before trial on the merits, a defendant could always insist on a kind of preliminary trial to determine the competency and adequacy of the evidence before the grand jury. This is not required by the Fifth Amendment. An indictment returned by a legally constituted and unbiased grand jury, [Footnote 7] like an information drawn by the prosecutor, if valid on its face, is enough to call for trial of the charge on the merits. The Fifth Amendment requires nothing more.
courts and establish a rule permitting defendants to challenge indictments on the ground that they are not supported by adequate or competent evidence. No persuasive reasons are advanced for establishing such a rule. It would run counter to the whole history of the grand jury institution, in which laymen conduct their inquiries unfettered by technical rules. Neither justice nor the concept of a fair trial requires such a change. In a trial on the merits, defendants are entitled to a strict observance of all the rules designed to bring about a fair verdict. Defendants are not entitled, however, to a rule which would result in interminable delay but add nothing to the assurance of a fair trial.
The indictment was based on § 145(b) of the Internal Revenue Code of 1939, 53 Stat. 63. There was also a count in the indictment for the year 1946, but petitioner was found not guilty of this charge.
For discussions of the "net worth method," see Holland v. United States, 348 U. S. 121; Friedberg v. United States, 348 U. S. 142; Smith v. United States, 348 U. S. 147; and United States v. Calderon, 348 U. S. 160.
221 F.2d 668. The Court of Appeals reversed petitioner's conviction on the 1947 count on grounds not material here.
Varying views have been expressed concerning whether indictments may be challenged because based in whole or in part on incompetent evidence. See, e.g., Chadwick v. United States, 141 F. 225; United States v. Violon, 173 F. 501; Nanfito v. United States, 20 F.2d 376, 378; Brady v. United States, 24 F.2d 405; Banks v. United States, 204 F.2d 666; Zacher v. United States, 227 F.2d 219. See also cases collected in 62 Harv.L.Rev. 111; 38 Yale L.J. 680; 71 Cent.L.J. 9; Joyce, Indictments (2d ed., Blakemore, 1924), 166-168; Note, 24 A.L.R. 1432.
As to the development of the grand jury as an institution here and in England, see Hale v. Henkel, 201 U. S. 43, 201 U. S. 59; Blair v. United States, 250 U. S. 273, 250 U. S. 282; McGrain v. Daugherty, 273 U. S. 135, 273 U. S. 157; United States v. Johnson, 319 U. S. 503; 4 Blackstone Commentaries 301 et seq.; 1 Pollock and Maitland, History of English Law (1895), 130; 1 Holdsworth, History of English Law (1927), 312-323; Morse, A Survey of the Grand Jury System, 10 Or.L.Rev. 101, 217, 295.
See, e.g., Pierre v. Louisiana, 306 U. S. 354.
I agree with the denial of the motion to quash the indictment. In my view, however, this case does not justify the breadth of the declarations made by the Court. I assume that this Court would not preclude an examination of grand-jury action to ascertain the existence of bias or prejudice in an indictment. Likewise, it seems to me that, if it is shown that the grand jury had before it no substantial or rationally persuasive evidence upon which to base its indictment, that indictment should be quashed. To hold a person to answer to such an empty indictment for a capital or otherwise infamous federal crime robs the Fifth Amendment of much of its protective value to the private citizen.
testimony later given at the trial by the three government agents who said that they had testified before the grand jury. At the trial, they summarized financial transactions of the accused about which they were not qualified to testify of their own knowledge. To use Justice Holmes' phrase in the Holt case, such testimony, standing alone, was "incompetent by circumstances" supra at 350 U. S. 248, and yet it was rationally persuasive of the crime charged, and provided a substantial basis for the indictment. At the trial, with preliminary testimony laying the foundation for it, the same testimony constituted an important part of the competent evidence upon which the conviction was obtained.
"if it appeared that no evidence had been offered that rationally established the facts, the indictment ought to be quashed, because then the grand jury would have, in substance, abdicated."
221 F.2d 668, 677. Accordingly, I concur in this judgment, but do so for the reasons stated in the opinion of the Court of Appeals and subject to the limitations there expressed. See also Notes, 62 Harv.L.Rev. 111; 65 Yale L.J. 390.

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