deny that Davis had any financial interest in the loan, and that while Kaufman may be criticized for loaning money at the request of Davis, there was no other impropriety in it.

It is undisputed that all the details of this loan were attended to by Judge Davis. The original request for a loan was made to Davis by Stokley in January 1935 (R. 2652-2655). A number of letters and telegrams passed between Davis and Stokley and Davis and Cooley, attorney for the Town of Mount Dora, between that date and November 25th, when the loan was actually made. These letters and telegrams are in the record (R. 2267-2319). They refer to negotiations with the Town of Mount Dora as to the basis upon which the properties would be reconveyed, the condition of the title, the security to be given, whether title insurance could be obtained and other matters of that character. There is no evidence that Kaufman paid any attention to these negotiations or knew anything about them. Pursuant to arrangements made by Davis the parties met on October 24, 1935, in Davis' judicial chambers and prepared a contract.

Subsequently, it appearing that the property could not be conveyed clear of all encumbrances but must be subject to certain taxes referred to as "county taxes", Davis entered into a vigorous correspondence with Cooley and with Stokley on the subject and ultimately succeeded in obtaining additional security from Stokley to cover the amount of this lien.

Amici contend that the contract between Kaufman and Stokley was revised by Davis to include the additional security after it had been prepared originally in Davis' chambers by Kaufman and Lord. It is apparent that some revision was made, but the evidence does not definitely show who it was that made it. It is perhaps not very important as there is no doubt from the testimony and the correspondence that every detail of the arrangement of this loan was attended to by Davis without consultation with Kaufman.

This, of itself, is not sufficient to justify the conclusion requested by Amici that the loan was made on Davis' behalf, but there is certain further evidence as to what was done after the contract had been executed and the money paid over.

On February 19, 1936, the day before Stokley had agreed in his contract with Kaufman to pay the delinquent county taxes, Davis sent a telegram to Stokley warning him not to forget to pay his taxes on time (R. 2387, 2758). Stokley was unable to pay these taxes and other obligations at that time and on March 10, 1936, Davis obtained a loan from one Ungerleider in Philadelphia in the amount of $4,000, and immediately loaned it to Stokley. With this money Stokley was able to discharge a lien on his fruit crop as well as to pay the taxes (R. 2755-2768). Davis is largely indebted to Ungerleider at the present time. Later in the same month, March 31, 1936, Stokley wrote Davis that his first payment of interest on the Kaufman loan would be a little late. There is no evidence that any explanation was given to Kaufman. Many of the letters passing between Stokley and Davis contain expressions indicating that it was Davis and not Kaufman who was the real party in interest.

More important, however, than these statements, although of much weight when their number and character are considered, are certain payments which Stokley made to Judge Davis during the period from the date of the Stokley loan until the investigation was begun. He made payments, inter alia, to Davis which were retained by him, as follows: $200 on June 22, 1936; $200 on July 7, 1936: $400 in February 1937; $200 on August 1, 1937; and $400 on February 28, 1938. Davis now says these payments were on account of the principal of the $4,000 loan (R. 2414), but that they were interest payments is indicated by such contemporary documentary evidence as there is. The first payment mentioned above Stokley referred to in a letter of June 18, 1936, saying: "I shall send on interest Saturday to you." (Amici Ex. 115, R. 2432-2433.) That these payments were not made on account of the principal of the $4,000 loan is also apparent from the fact that Stokley on February 9, 1937, paid $320 to Davis as a full year's interest at 8% on the loan of $4,000 due March 10, 1937 (R. 2414). Had the earlier payments actually been applied to the principal of this loan, it would have been reduced accordingly and the interest would not have amounted to $320. Moreover, Stokley wrote to Davis on March 25, 1937, that he was sending $500 as "first payment on Orange Co. Grove," which was the security for the $4,000 loan (Amici Ex. 114, R. 2427). Davis acknowledged this letter and check as a payment on account of principal of the $4,000 loan (Amici Ex. 114, R. 2428), and did not dissent from Stokley's statement that it was the first payment.

The last payment above noted made on February 28, 1938, Davis said he thought was made in cash or at least that it might have been so made (R. 4094-4096). This, however, appeared not to be the case from the testimony of Wilmer Stokley, who had acted as secretary for his father and who recalled that this payment had been discussed with Judge Davis, that it was made by check and that it was a payment of interest. He also said that he was quite sure that it was so designated both on the face of the check and the corresponding stub (R. 43164320). Neither the cancelled check nor the stub of this check was produced, although the amount of the check appeared in Stokley's account at the Bank of Tavares as having been charged against his account on March 15, 1938 (R. 4333). The check book covering the period during which this check was apparently drawn was, however, produced. It contained no stub corresponding to this $400 payment, although it shows on a stub dated February 28, 1938, that there was then a balance of $531.82 in the bank, and the stub immediately following, dated March 1st, shows a balance of $131.82, indicating that on one of these dates a check might have been drawn in the amount of $400. This stub book is an exhibit in this case (Amici Ex. 235, R. 4354). It shows between the two stubs dated February 28th and March 1st, respectively, a very small portion of an intervening stub which had been torn out. This had been carefully done; a casual inspection would not disclose the fact that a stub had been removed. A list of "Expenses" made by Wilmer Stokley for his father in September 1938 contained an item reading "Interest paid Judge Davis 2/28/38, $100" (R. 3910-11). Judge Davis presented an account book showing these payments as on account of principal of the $4,000 loan. He said he was "dead sure" the entries in this book were made contemporaneously with the dates of payment (R. 4119), but when his secretary was called it appeared the items were copied from some earlier record which was said to have been destroyed (R. 4217-4220, 4244).

Judge Davis' testimony, supported in part by his secretary, that these payments were not interest payments but were payments on account of the principal of the $4,000 loan, must be rejected in view of the documentary and other evidence to which reference has been made. That these payments were not interest on the $4,000 loan is obvious, as they far exceeded the amount of interest which would have been due on that loan up to the time of the last payment, and Davis himself says that $320 had been paid to him as interest in full on the $4,000 loan up to March 10, 1937 (R. 4111). It is also to be noted that while the payments were made at irregular intervals they exactly equalled in each case either one-half or one-quarter of a year's interest on the $10,000 loan. There is no claim that interest was due Davis on any transaction other than the $4.000 loan. There is no evidence that Kaufman made any effort to collect the interest due on the $10,000 loan prior to the investigation of Judge Davis. I conclude and find as a fact that upon five separate occasions interest on the $10,000 loan was paid to Davis and retained by him.

An important consideration bearing upon the character of this transaction is the conduct of the parties involved in it. Not only did Davis falsely testify that the interest payments above referred to were payments on account of the principal of his $4,000 loan to Stokley but Davis and Kaufman made contradictory and false statements as to the date when Kaufman was first spoken to by Davis with respect to the $10,000 loan.

Stokley lived in Mount Dora, Florida, and Davis stopped there overnight in January 1935 on his way to a small hotel known as the Battle Creek Sanitarium, near Miami, where he expected to spend some time on his vacation. During this visit Stokley told Davis about the loss of his orange grove properties and asked him whether he could assist him in obtaining a loan to redeem them, provided he could arrange to compromise his indebtedness to the Town. Davis promised to see what he could do, and upon his return from his vacation early in March 1935 again stopped at Stokley's house, and, Stokley says, told him that he had arranged to procure the necessary money, if the security was adequate, from Morgan S. Kaufman (R. 2658-2661).

Stokley had previously testified on this point before the Grand Jury in New York. Referring to the interview in Judge Davis' chambers when the loan was arranged, he testified:

"Q. That was the first time then that you had heard of Morgan Kaufman's name in this picture?-A. The first time I ever seen him was when I got

"Q. That wasn't my question. Is this the first time you had ever heard of his name in this picture?-A. Yes-no-please put down no. He spoke of it, gentlemen

"Q. Who is he?-A. Davis spoke of a gentleman in Miami that was spending the winter that he would see him and possibly he would make me the loan, but he didn't know that he would.

"Q. Who was that gentleman? A. That was Kaufman who was spending the winter in Miami where Judge Davis was in the same city.

"Q. When was it that Judge Davis told you this about the man in Miami? A. Possibly at my home or in the grove as I was telling you gentlemen or at the Lakeside Hotel.

"Q. You mean at that original conference that you had with reference to the $10,000 loan? A. Yes, sir.

"Q. In connection with the $10,000 loan how many times was Judge Davis in Florida in connection with that loan? A. He wasn't in connection with the loan; he was in Florida spending the winter and I asked him about the loan and before he left the State of Florida he told me of Kaufman and would notify me after he found out whether I could get the loan or not."

(Excerpt from Proceedings before the New York Grand Jury filed herewith, pp. 405-406.)

Stokley also said in the same proceedings that when he went to the conference in Judge Davis' chambers he had already heard of Kaufman and understood he was the man who would make the loan. (Id. 460–461.)

Davis' and Kaufman's statements with regard to the time when the loan was first discussed are contradictory. In the first criminal trial Davis testified that he first spoke to Kaufman about it "some time in the spring of 1935" (R. 2328). Kaufman, testifying in the first criminal trial said he told Davis in "the early part of the spring or summer of 1935" that he would make the loan if the value was satisfactory (R. 1863-1864). These two statements are in a measure corroborative of Stokley's statement that Kaufman's name as the prospective lender was disclosed to him in March. When the parties testified in the criminal trials they evidently did not realize the importance of this date.

Davis and Kaufman both now claim that they never discussed this matter until an accidental meeting on the train in August (R. 1864), which would be after the Root case had been decided. Davis also testified that he had endeavored, without success, to obtain the loan from two friends of his, other than Kaufman, both of whom are now deceased, during the period between his visit to Stokley, on his way North and the date when he spoke to Kaufman in August. I find that this testimony is untrue and that Kaufman's name was disclosed to Stokley as the prospective lender in March. The false testimony on the part of Davis and Kaufman is a clear indication that the transaction was an improper one and they were endeavoring to conceal its real nature.

That Stokley knew that the financial arrangements he had made with Judge Davis were not legitimate is apparent from a letter which he wrote to one Eunice Cole dated December 19, 1940 (Amici Ex. 205, R. 3877, 4416). Mrs. Cole evidently had some knowledge with respect to certain of these transactions and, among other things, he said to her:

"Where I made my mistake I sent the check with a Tavaries Bank ch
to Judge D paying my years interest. I should have deposited ch from
Ins. Co. in Bank of Tavares and made ch for the whole amt. They have
sent for me to explain to the High Court why I called this ch in on
policy. I shall tell them for business reasons
* * they believe we

*

are holding out on government evidence in regards to the Investigation.
Now pleas don't know anything or they will pick you to pieces and have
Mr. Barker up there as the government dont mind expences.
Should they come questioning you know nothing."

This is not the letter of an ignorant but innocent man. It is the letter of a man who knew at least that he had been involved in proceedings of a doubtful character.

The evidence in this case has convinced me that Davis had a financial interest in the loan made by Kaufman to Stokley and that he received substantial sums on account of this interest prior to the beginning of the investigation of his judicial conduct. There is no evidence before me from which I can find the extent of his interest, but that is not material to the matter submitted to me for investigation. I find that he had an interest and that is sufficient for present purposes.

This brings me to the second question above noted: Was the loan made as compensation to Davis for his favorable decision in the Root case? Counsel for Universal say in their brief (p. 4) :

** * *

"We hold no brief for Kaufman or Davis; certainly the evidence offered upon the criminal trials placed them in no enviable light. We respectfully urge, however that the Master has before him no evidence involving Universal in any dealings with Kaufman and Davis or in any fraud, corruption, obstruction, or distortion of justice whatever, or from which any such inference or deduction may reasonably be made."

Counsel for Universal correctly urge that the testimony relating to the Fox case cannot be used against their client as it was not involved in that transaction. I have considered it only as bearing upon the question whether the Stokley loan was a bona fide investment by Kaufman or was intended to influence or compensate Davis for judicial action favorable to Kaufman's cases. The question therefore remains whether it was for his action in the Root case or in some other case that this favor was conferred upon him by Kaufman.

At the outset the question arises whether Davis knew that Kaufman was interested in the Root case. Both Davis and Kaufman deny that Davis knew that Kaufman was in the case. As to this there is no direct evidence and we must rely entirely upon inference.

There is, however, evidence which points incontestably to the conclusion that it was understood between Davis and Kaufman that the amount loaned to Stokley should come from the Root fee. Davis must therefore have known Kaufman was interested in that case. Davis and Stokley admittedly had been discussing the loan since the latter of January 1935. Some time necessarily was consumed in coming to an agreement with the Town of Mount Dora as to the amount which it would accept in payment of the delinquent assessments, but there were other facts brought out by the testimony which Amici argue indicate that Davis intentionally delayed final action on the loan until the Root case was finally decided. This is a reasonable assumption from some of the evidence in the case, including the letters passing between the parties, but the most convincing evidence that the amount of the loan was to come from the Root fee is a telegram which Davis sent to Cooley on October 4, 1935 (R. 1882), in which he said: "The money has been definitely promised from a reliable source and I think it will be available in a few days." The "reliable source" was admittedly Kaufman (R. 2346). At that time Davis knew that the petition for certiorari would probably be acted upon within a "few days," and had reasonable ground to believe that it would be denied as there was no Federal question in the case. That the money was available without waiting for the certiorari to be denied, in the sense that Kaufman had plenty of money in his various bank accounts, is admitted (R. 1873). The only inference which can be drawn from Davis' telegram is that the money from which the loan was to come was not then available but would be "in a few days." This points unerringly to the conclusion that it was not Kaufman's individual funds which were to be used in making the loan but funds yet to be received from some other source.

When this evidence is considered in connection with Kaufman's statement that he was not to receive his fee until the certiorari was denied, the fact that he was paid his fee on the day following the denial of the certiorari, that arrangements for the loan were completed two days thereafter at a conference held in Judge Davis' chambers, and that the check for $10,000 was drawn on a bank account in which the Root fee had been deposited and in which there were at that time not enough other funds to meet the check (R. 1969-1971), the conclusion is irresistible that the understanding between Davis and Kaufman was that when Kaufman got his fee in the Root case $10,000 of it was to be used for the Stokley loan.

The evidence taken in these proceedings has convinced me, and I find, that Davis and Kaufman had an understanding or arrangement between them, although it may have been entirely informal, that in cases in which Kaufman was interested he would procure some finncial benefit for Davis in return for favorable judicial action. If this be true, it is incredible that Kaufman, who was retained in a case involving so large an amount of money as the Root case, for a period three and one-half years prior to the decision, as contended by Universal, or for some lesser period, should not have informed Davis of his interest in it. The testimony shows that they were often together with very intimate relations, and in particular that Kaufman was vacationing with Davis in the South at the very time when the Root case had been assigned to Davis for an opinion.

There does not appear to be any reason for the false testimony given by Davis and Kaufman regarding the date when Davis spoke to Kaufman about the Stokley loan except a desire to disassociate the Stokley loan from the Root case, which in itself gives rise to a strong inference that the two were connected. Why Davis chose this method of procuring from Kaufman a benefit out of the Root fee can only be conjectured. But whatever the reasons may have been, I find that the Stokley loan was made pursuant to a previous understanding between Davis and Kaufman that Davis was to lend his influence to a favorable decision in the Root case and was to receive some financial benefit out of the fee which Kaufman was to receive.

Counsel for Universal strenuously contend that even if this were true, the decision in this case should not be held to be tainted with fraud if, as they claim, Universal did not know what Kaufman meant to do with the money it paid him. If a litigant pays a large sum of money to a lawyer from whom it neither expects nor receives any legal service, and it is afterwards shown that without its knowledge the lawyer has bribed the judge, it may well be questioned whether the decision of its case is not tainted with fraud. However, although there is no direct evidence that anyone representing Universal agreed with Kaufman that he was to bribe Judge Davis, there is evidence in the record which leads me to conclude that Universal was not entirely innocent.

In the first place, there is the fact that a large fee was paid to a comparatively unknown lawyer who was not competent to assist, and who was not asked to assist, in the litigation, but who was a close friend of Judge Davis. If Universal did not expect legal services from Kaufman, then what services did it expect? As noted above, the testimony of the president of the company, Mr. Halle, on this point was vague and unsatisfactory (R. 639-641). Moreover, Mr. Halle's testimony is not entirely consistent with frankness. Testifying before the Grand Jury (R. 495) he claimed he could not recall the names of any of the judges who sat in the Root case, although he admitted at other points in the testimony that the case was of the most vital importance to his company. He also said he could not recall having read the opinion in the case (R. 500), although in view of the importance to his company of the opinion sustaining the validity of the patents, it is scarcely credible that he did not read it at the time. He later admitted that he did (R. 634).

Amici call attention to the fact that a considerable amount of documentary evidence that might throw light upon the connection of Halle and Kaufman has disappeared, but as the records in question might have been lost or destroyed in normal course, I do not rest my decision on that fact.

Halle testified that he had a number of contacts with Kaufman by way of interviews or telephone calls during the period between the date he was said to have been retained in 1932 and the date of the decision in 1935 (R. 518-519). A diary was kept by a receptionist in Halle's office in New York in which there was a careful record of persons who called to see Mr. Halle, to whom he telephoned or who telephoned him. Kaufman's name does not appear anywhere in this 'record until October 22, 1935 (see statement following R. 4479).

While the omission of Kaufman's name in one or two instances might not seem significant, the fact that his name never appeared during this period, although Halle said he had communicated with him or received visits from him on several different occasions at this office, leads me to the conclusion that Halle's testimony is incorrect and that in fact he did not communicate with Kaufman or receive visits from him as alleged during this period. It is true, as argued by Universal, that there was no evidence before me that the receptionist's diary was complete, but so far as I could see by my inspection of it, it was a careful record of all persons who called upon or telephoned Mr. Halle during the time he was in the New York office. Even if not a complete record, it is not probable that Kaufman's name would have been inadvertently omitted on every occasion when he called or telephoned.

There is one other respect in which Mr. Halle's testimony was not entirely frank. In the effort to explain the extremely informal character of his dealings with Kaufman and particularly the fact that Kaufman had never submitted a bill of any kind (R. 512), Halle testified before the Grand Jury on February 8, 1940, with considerable emphasis, that some of his attorneys rendered no bills, and when asked for particulars said that the firm of his leading trial counsel, Wall, Haight, Carey & Hartpence, never submitted a bill. He said: "Never had a bill from them; never had a receipt from them; never had any understanding with him [Haight] as to his fees" (R. 547). After Judge Haight's death a letter from a member of his firm, explaining about the destruc