that time Mr. Belknap was in California recovering from an illness (R. 260–261). Kaufman's name did not appear among Mr. Belknap's diary entries (R. 260, 279). Kaufman's statements regarding the date of his retainer were not altogether consistent. In his testimony before the Grand Jury, in New York, he testified that at the time he was retained he thought Belknap informed him that testimony was then being taken in the Root case (R. 1691). As the trial in that case did not begin until June 21, 1932 (R. 1478), this would put the date of the interview later than June 21 st In the proceedings before me Kaufman testified that he had been misunderstood and that his "best guess" was that the interview with Belknap was in March or April (R. 1678). He never appeared in the Root case at any stage; his name did not appear on any briefs, records or memoranda used in the case.

I have carefully considered all of the testimony with reference to this matter and I have come to the conclusion that there is nothing in the record upon which I can base a finding as to the date when Kaufman was retained. The date is important only as bearing upon the question whether the length of time during which Kaufman was under retainer would explain the compensation paid him.

The evidence is in conflict as to what, if any, legal services Kaufman performed in the Root case. Kaufman, testifying before the Grand Jury in New York, said that when briefs were drafted either at the Universal office or at Judge Haight's office, "copies would come back to me, and I would redraft them or send them back in such form as I thought would be necessary, or go over there and straighten the thing out." (Excerpts from Proceedings before the Grand Jury, New York, filed herewith, p. 56.) He also said that he spent one afternoon in conference with counsel at the offices of Universal Oil Company prior to the argument of the appeal (Id. 62-63). He again said (Id. 64) that he had been sent "rough copies" of the briefs for his criticism. In these proceedings Kaufman testified that he discussed the Root case with Judge Haight (R. 1705), but he did not remember the substance of the discussion (R. 1707). He further testified (R. 1708):

"Q. Have you any recollection as to the subject matter of the conversation when you saw him at those times?

"A. About the character of the case and the progress of the case. He was a great fellow to sit down and show me the--how this apparatus was working and all that sort of thing, great fellow to draw outlines and show me the importance of how the Dubbs patent-I think it was an improvement on some old patent-that they had, and how some Eugoff

By Mr. HARRIS:

"Q. Egloff?

"A. Egloff, that is right, is even an improvement on that, and all that line. We had spent many very pleasant hours consulting; that is, discussing this matter."

On the other hand, Judge Haight's statement to the United States Attorney referring to Kaufman's services was as follows (R. 654–655) :

"A. I never asked him to do anything. When we were preparing the brief here in New York, I called him over and told him we thought it inadvisable to put his name on the brief, because I knew from what had been told me once down there that a resettlement had occurred when someone was put in a brief that wasn't in the lower court and wasn't a patent lawyer, and I was afraid of the effect it would have on Judge Buffington particularly, because his brother was a pretty warm friend of Judge Buffington's. He agreed with that.

"Q. He did no work with respect to the brief?

"A. No; it would have been useless to have him do work with respect to the brief. We were pressed for time.

"Q. As far as active participation and preparation of the brief or the case in any way, he did nothing?

"A. That's right."

Judge Morris' testimony was to the same effect (R. 227).

It is not now claimed by Universal that Kaufman performed legal services in connection with the Root case to any substantial extent, and I find that he performed none.

The record, however, discloses that he was paid, admittedly for services in the Root case, $25,000 on October 22, 1935 (R. 389–392), and $5,000 on July 27, 1936 (R. 1805-1807). He was also paid during the year 1936 $20,000 additional, mak

ing a total of $50,000. The two payments of $10,000 which were made to him on March 18, 1936, and December 2, 1936, were said to be retainers for the years 1936 and 1937, during which it is alleged he was expected to render services in other cases which were pending or about to be begun. The testimony, however, has convinced me that Kaufman would not have been paid these "retainers" except for his services in the Root case, and that the agreement to pay the retainers was entered into as a part of the transaction whereby he was compensated for whatever services he had performed in the Root case.

Halle testified that in September 1935 Kaufman asked him for $35,000, allegedly compensation for a retainer for three and one-half years at $10,000 a year; that he objected to the amount requested and after some discussion he agreed to pay Kaufman $25,000, in view of a continuing "arrangement" with him involving a further retainer of $10,000 a year (R. 517, 590-593, 599-600, 640-641). He said that Kaufman made no objection to this arrangement and accordingly he was paid $25,000 on October 22, 1935. Subsequently, when the final payment of $10,000 was made, Halle requested information as to the amount which Kaufman had been paid and had before him a memorandum made up by his bookkeeper showing that altogether, with the payment about to be made, Kaufman would have received $50,000. (Amici Ex. 37, R. 834.) If the only question then before Halle was whether Kaufman was entitled to a $10,000 retainer for the ensuing year, the question as to how much he had been paid for the Root case seems immaterial. Mr. Halle made it clear that when this last payment was made, the obligation to Kaufman was ended so far as he was concerned (R. 543, 567, 624).

There is no credible evidence from which I can find what the arrangement made with Kaufman was at the time he was retained. The only evidence on this point is from Kaufman himself, all other statements regarding it being merely hearsay. His testimony is that he was retained in March or April of 1932 (a date which is certainly incorrect), and that while no definite arrangement was made with him at the time, he was promised that he would be well compensated with the suggestion that he would fare better if he waited until the case was over, and with the understanding that he was to accept no other retainer from oil companies. The theory which Universal has presented in these proceedings is that Kaufman was retained at or about the time stated by him; that he was paid at the rate of approximately $7,000 a year for three and one-half years, $5,000 additional because another case had been profitably settled on account of the decision in the Root case, $10,000 as a retainer for the year 1936, and $10,000 as a retainer for the year 1937, both sums, however, being paid in the year 1936.

The real question involved here is whether the arrangement with Kaufman was a retainer in the normal sense or an agreement to pay him a fee in the event of success in the Root case. The facts developed by the testimony, including Kaufman's recital of his conversation with Belknap, point to the conclusion that the arrangement with Kaufman was that he was to be paid a substantial fee if the Root case was ultimately decided in favor of Universal. If he had been retained on a "hold off" basis as claimed, a fee would have been due him whether or not the Root case was successfully terminated, and in the normal course of events such retainer would have been paid currently. It is admitted that Kaufman received nothing at all until after the Supreme Court had finally denied the petition for certiorari in the Root case, and that he was paid $25,000 on the day after the certiorari was denied. The voucher directing the issuance of the check to Kaufman is dated October 18, 1935, and reads that the payment was to be made "on account of legal services to date in connection with the Root-Winkler Koch case and pending matters" (R. 384). The check was dated October 18, 1935 (R. 390), but it was not delivered until October 22nd, certiorari having been denied on October 21st.

Universal contends that the delay in delivering the check to Kaufman was merely accidental, due to delays in its accounting department, but this is not in accordance with the testimony of Kaufman himself (R. 1755-1757, 1765). He testified as follows:

"Q. And am I correct in saying that your payment was delayed until that decision was to come down?

"A. Well, I don't know whether you would say the word 'del,' but it was not to be given to me. I asked for it beforehand, but it was not delivered to me until the decision was handed down. That is correct” (R. 1765).

It will be noted that Kaufman in his answer not only said that the check was not actually delivered to him until the Supreme Court had denied the certiorari, but that it was "not to be given" to him until the denial had occurred. This appears

to be a plain recognition that the $25,000 payment was contingent upon final success in the Root case. It is conceded that Kaufman never asked for any money until after the decision by this court, and, as above indicated, he was put off until after the Supreme Court had acted upon the petition for certiorari.

I conclude that there was an agreement or understanding between Universal and Kaufman that he was to be paid a substantial fee if and when the Root case was finally decided favorably to Universal. The question then arises: What service was he expected to perform in return for this fee? As to this, there is substantially no evidence. Mr. Halle's testimony on this point was vague and unsatisfactory (R. 638-645). There was no need for local counsel in Pennsylvania and Kaufman was not asked to assist in the trial or argument of the case. What Kaufman was to do in return for the money he was to receive, and did receive, can only be inferred from what he did. Immediately after he had received the $25,000 payment, he was requested by Judge Davis to meet him in his chambers, together with a man named Charles L. Stokley, said to be a distant cousin of Davis', who lived at Mount Dora, Florida. This meeting took place on October 24, 1935, two days after Kaufman had received his check (R. 2355, 2356). The interview which then took place was described at some length by Judge Davis, by Mr. Kaufman, and by Mr. Lord, Judge Davis' secretary. The substance of the interview was that Kaufman agreed to loan $10,000 to Stokley on the security of certain property most of which Stokley had formerly owned, but title to which he had lost (subject to redemption) to the Town of Mount Dora by reason of inability to pay paving liens assessed against it.

A contract covering the details of the loan was then drawn up with the assistanie of Mr. Lord, Davis' secretary, and Miss Kleish, his stenographer; subsequently, after certain matters which afterwards arose were adjusted, Kaufman drew his check for $10,000 to the order of B. F. Lord, attorney, against a bank account in which he had deposited the $25,000 check received from Universal and in which account he had not enough other money to meet the check. Lord took this check to Florida, used it to redeem Stokley's property from the Town of Mt. Dora, secured from the town and from Stokley and his wife papers vesting title to the property agreed upon as security in Kaufman, recorded these papers, and sent them to Kaufman, together with a policy of title insurance. A revised contract dated November 25, 1935, was signed setting forth the terms of the transaction providing for the repayment of the $10,000 to Kaufman with interest at the rate of 8% per annum and that the properties would be reconveyed to Stokley upon repayment of the loan with interest (R. 1596).

There are two questions concerning this transaction about which much of the evidence has revolved.

The first question is whether it was a legitimate business transaction entered into by Kaufman as an investment or was merely a device to benefit Davis with intent to influence his judicial action or in compensation therefor.

The second question is whether the loan was made as compensation to Davis for his favorable decision in the Root case.

I have no difficulty in finding that the loan was not a bona fide business transaction entered into for profit by Kaufman, but that it was made as a favor to Judge Davis in response to a request from him. Although Kaufman apparently dictated the agreement between himself and Stokley in the first instance, or at least was present when it was dictated by Davis' secretary, Mr. Lord, Kaufman gave little or no attention to the matter from that time forward except to issue his check when he was requested to do so. All the details with reference to the loan and the security therefor were attended to by Judge Davis and Mr. Stokley; Kaufman, so far as appears, was not even informed of the various steps taken in connection with the matter. He had no information except statements made to him by Stokley and Davis with regard to the value of the land received as security which he has never seen (R. 1933). He testified that he relied upon Lord as his attorney to see to it that the proper conveyances were made and the title checked (R. 1887, 1894-95, 1927), but Lord said that he was a mere messenger acting at the request of Judge Davis; that he did not act as attorney for Kaufman and was paid no fee (R. 1574–1576).

Kaufman was aware of the fact that Stokley had lost title to his property because he had been unable to pay paving liens which had been assessed against it, and it was a reasonable inference that Stokley would not make application to him for a loan unless he had failed to get it from sources in Mount Dora or its vicinity. The transaction bears no resemblance to a bona fide investment.

As bearing upon the question whether this loan was a bona fide investment or was intended to benefit Judge Davis for some fraudulent purpose, I admitted

în evidence testimony relating to another transaction (hereinafter referred to as the Fox transaction) involving Davis and Kaufman, which began the same year during which payments were being made on the Stokley loan. Counsel for Universal objected to the admission of this evidence, but I admitted it on the theory that where the question at issue is the intent or purpose with which an act is done, a similar act at or near the same time involving the same persons may be shown in order to throw light upon the intention of the parties. Particularly is this rule applicable, I think, where an act apparently innocent on its face is charged to have been done with a fraudulent intent, and a similar act at or near the same time, done by the same persons, is shown to have been done with such intent. The following authorities, I believe, sustain this ruling: Wood v. United States, 16 Peters 342; Commonwealth v. Mezick et al., 147 Pa. Superior Ct. 410, 24 A. 2d 762; Commonwealth v. Bell, 288 Pa. 29, 135 A. 645; State v. Williams, 136 Mo. 293, 38 S. W. 75; National Labor Relations Board v. National Seal Corporation, 127 F. (2d) 776; Wigmore on Evidence, §302 and § 343.

Many of the facts regarding the Fox transaction were brought out in the criminal trials to which reference has been made, and in disciplinary proceedings against Kaufman, who has now been disbarred. They are briefly as follows: William Fox, who had large investments in the moving-picture industry, became heavily involved and on May 29, 1936, filed a voluntary petition in bankruptcy in the United States District Court for the District of New Jersey (R. 2855, 3466). Kaufman had represented Fox in a previous matter (R. 1673–77) and was a friend of his, although there is no evidence that he represented Fox professionally in the proceedings about to be referred to. Fox, however, had advised him of his impending bankruptcy (R. 3468) and Kaufman kept in touch with the proceedings ('R. 3489). Kaufman introduced Fox to Judge Davis about the time his bankruptcy petition was filed (R. 2457, 3469, 3470). Upon the occasion of this meeting Fox introduced the subject of his bankruptcy proceeding (R. 3470, 3471), recited his "troubles" to Judge Davis, and inquired whether Davis and Kaufman knew the referee before whom the proceedings would take place. Davis and Kaufman said that they did not know who the referee was, but if they found out they would try to see that a certain procedure, which Fox preferred, would be carried out (R. 3472-3473). Kaufman and Judge Davis did call on the referee in bankruptcy, Robert E. Steedle, Esq. (R. 2012–13, 2456–57) ; Judge Davis invited him and Mrs. Steedle to dinner (R. 2467, 2469, 3016) and to his daughter's wedding which took place that summer (R. 2469, 3017), although he had never previously known him. Davis also took Steedle fishing twice in a borrowed boat (R. 2459-2461) and suggested to Steedle that he might be advanced to a judgeship (R. 2463-2464). Kaufman also called upon Steedle at least twice (R. 3655, 3680), and Judge Davis telephoned several times (R. 3031). Mr. Steedle is now deceased. I admitted in evidence a memorandum made by him, in which he recorded a number of incidents in which Kaufman and Judge Davis were involved, which he evidently thought were intended to influence him improperly in the discharge of his duties as referee in bankruptcy in the For case. My reasons for admitting this document are fully stated in a memorandum opinion which I gave to counsel at the time and which is attached hereto as part of this report p. 83. Since that opinion was filed, one of the cases which was discussed in it has been before the Supreme Court of the United States (Palmer et al. v. Hoffman. 318 U. S. 109), and counsel for Universal argue that the opinion of the court in that case should change my opinion as to the admissi bility of the memorandum. There is some language in the opinion of the Supreme Court which seems to afford basis for their argument. I think that case distinguishable and that the memorandum was properly admitted, but as the statements contained in it are not necessary to a decision and are merely corroborative of evidence given by other witnesses, I have not considered them in arriving at my decision and now grant the motion to strike the Steedle memorandum from the record. I have also excluded from consideration and grant the motions to strike exclamations or remarks made by Mr. Steedle, in one instance when called on the telephone by Judge Davis (R. 3031) and in another at the conclusion of one of Mr. Kaufman's visits (R. 3679).

There is no doubt, however, as shown by other evidence, that Kaufman and Judge Davis displayed an unusual interest in Steedle from and after the time when the Fox bankruptcy petition was filed.

In July of 1936 Kaufman visited Fox in Atlantic City and told him that Judge Davis was in need of $15,000 to pay the wedding expenses of his daughter, and requested a loan to Davis in that amount (R. 3475). Fox obtained the

money, allegedly by borrowing it from his wife, and delivered it to Kaufman, who, in turn, gave it to Davis (R. 3475-3480). Subsequently, Davis solicited another loan in the amount of $12,500 from Fox, which Fox made him largely in $1,000 bills (R. 3481-3484). These "loans" have not been repaid.

It is argued that the testimony as to this second loan at least should be excluded on the ground that Kaufman was not directly concerned in it. However, it is corroborative of the fact that Davis had obtained the $15,000 loan through Kaufman as it shows his willingness to accept favors from Fox while his cases were pending or about to be appealed to the court on which Davis sat. There are other facts which bear on this question. Fox testified in the second criminal trial that on Sunday evening, March 16, 1941, Morgan Kaufman came to the home of Fox's attorney, Becker, while Fox was conferring with Becker and told Fox that Judge Davis wanted to see him. He advised Fox to "secure a room at the Pennsylvania Hotel under the name of Herman Goldberg" (R. 3498) for the interview. Becker relayed this advice to Judge Davis and Davis registered under that name (R. 2525, 2526) at another hotel. At a conference between Davis and Fox which took place at this hotel the next day, March 17, 1941, Davis expressed to Fox his alarm over the fact that the Government had traced the $1,000 bills which Fox had delivered to Davis and requested him to say that he had given these bills to a man named Lewis, then deceased, from whom Davis would say he had subsequently received them in payment of a loan (R. 3496). Fox refused to make such a statement as he said it was not the fact and he would not be a party to it (R. 3497). Davis did subsequently at tempt to explain his having had possession of the $1,000 bills which the Government had traced by saying that he had gotten them from Lewis, although he made contradictory statements as to the time. Prior to this interview Davis says he "called Mr. Kaufman and told him that the investigation was going on in Philadelphia, not knowing whether or not he had been informed" (R. 2525). At this time the matter principally under investigation was the $12,500 loan as to which the Government had traced the $1,000 bills; up to that time Fox had denied that such a loan had been made. A few days later, after consulting his attorney, Martin W. Littleton, Esq., he admitted the facts regarding the $12,500 loan and for the first time informed the Government attorneys of the $15,000 loan in which Kaufman was directly involved (R. 3516) and of which they had previously known nothing. In view of these facts, it is impossible to escape the conclusion that Davis and Kaufman were both involved in all of these corrupt proceedings; otherwise there would appear to be no reason for Davis' having turned to Kaufman at a time when he was being investigated concerning a loan with which Kaufman apparently had not been connected and for Kaufman's advice to Davis and Fox to meet in a clandestine manner. These facts I consider to be ample basis for admitting the testimony with regard to the $12,500 loan.

The testimony is clear that subsequently this court decided five separate appeals in the Fox bankruptcy matter in favor of Fox. Some of these decisions were of an extraordinary character; some were delayed and others unduly advanced, apparently to favor Fox (R. 2839-2970). Judge Davis denied that he wrote the opinions in these cases which were signed by Judge Buffington. I find, however, based on the testimony of Judge Buffington (R. 3556), that Davis did write them. His effort to conceal the fact that he was the author of these opinions is a clear indication that his decisions were influenced by the money favors he had received.

The motive or purpose of the favor granted to Davis through the making of the Stokley loan must be considered in the light of the testimony regarding the Fox transaction, and I find that it was made for the purpose of influencing or compensating Davis for favorable judicial action in cases in which Kaufman was interested.

The question remains whether Davis received or was to receive any financial benefit from this loan, for if not it might well be argued that the mere loaning of money to a relative of a judge is not sufficient reason to find there was any corrupt intent.

Amici contend that the transaction was a mere cover for a loan really made on behalf of Davis; that the loan was to be repaid to Davis or the property ultimately transferred to him, and that he was paid interest on it on several different occasions prior to the beginning of the investigation by the United States Government. On the other hand, Universal, and Davis and Kaufman,

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