United States District Court, Northern District of Illinois, E.D
November 10, 1958
UNITED STATES OF AMERICA
GINO MARTIN ET AL.
The opinion of the court was delivered by: LA Buy, District Judge.
Certain books and records of companies which had business
dealings with these defendants are sought to be introduced by the
government under the "shop book rule", 28 U.S.C.A. § 1732.
Among these records are letters and reports from Dun &
Bradstreet and others directed to these companies relating to the
credit rating of the defendants which were received in response
to inquiry of the companies in connection with an extension of
credit to these defendants. The defendants oppose their inclusion
as records of these companies made in the regular course of
Section 1732(a), 28 U.S.C.A., provides as follows:
"In any court of the United States and in any court
established by Act of Congress, any writing or
record, whether in the form of an entry in a book or
otherwise, made as a memorandum or record of any act,
transaction, occurrence, or event, * * * if made in
regular course of any business, and if it was in the
regular course of such business to make such
memorandum or record at the time of such act,
transaction, occurrence, or event or within a
reasonable time thereafter. * *"
The purpose of this statute is to create an exception to the
hearsay rule. Its basis was to facilitate admission of
systematically entered records, which experience had shown to be
trustworthy as routine reflections of day to day operations of a
business, and to permit the introduction of these records without
identifying, locating and calling as witnesses those who kept the
records. The statute has been liberally construed, but it does
not cover records kept which are outside the regular course of
business, or records kept by persons outside the business.
Cyc.Fed.Pro., Volume 8, ¶¶ 26.330, 26.331.
Do reports made by credit rating agencies and reference reports
to business firms and retained by them in their records come
within the statutory rule? It would be unrealistic not to
recognize that in business dealings extension of credit is of
vital importance and also that investigative reports would
normally be kept in the business files of the creditor. The
Supreme Court of the United States in Palmer v. Hoffman, 1943,
318 U.S. 109, 63 S.Ct. 477, 480, 87 L.Ed. 645, stated:
"* * * Regularity of preparation would become the
test rather than the character of the records and
their earmarks of reliability * * * acquired from
their source and origin and the nature of their
compilation. We cannot so completely empty the words
of the Act of their historic meaning. If the Act is
to be extended to apply not only to a `regular
course' of a business but also to any `regular
course' of conduct which may have some relationship
to business, Congress not this Court must extend it.
Such a major change which opens wide the door to
avoidance of cross-examination should not be left to
implication. Nor is it any answer to say that
Congress has provided in the Act that the various
circumstances of the making of the record should
affect its weight not its admissibility. That
provision comes into play only in case the other
requirements of the Act are met."
It is important to note that the Dun & Bradstreet reports in
the instant case are not prepared or made under the supervision
or control of any employee
or officer of the creditor companies, and therefore are not
records whose trustworthiness can be established by the testimony
of any person who systematically kept or supervised the records
of these companies. Such person could only testify to their
receipt and retention and not to the trustworthiness of their
contents. Such correspondence is not a representation or
admission that the contents are comprised or taken from records
made by the writers in the usual course of their business and
cannot be held to be admissions of the truth of the statements
contained therein. See Masterson v. Pennsylvania R. Co., 3 Cir.,
1950, 182 F.2d 793.
It is the opinion of the court that letters and reports made by
third persons, other than defendants, who are neither employees
nor officers of the creditor companies, are not business records
contemplated by the Act. It follows, therefore, that the
objections of defense counsel to the admission in evidence of
credit rating and reference reports must be sustained.
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