Opinion ID: 1924664
Heading Depth: 1
Heading Rank: 3

Heading: Exclusion of Copies of Checks Drawn on Sayer's Account.

Text: On defendants' appeal, they contend that the trial court erred in excluding from evidence, as hearsay, microfilmed copies of cancelled checks drawn on Sayer's account at the plaintiff bank, which had been subpoenaed from the records of the bank. The purpose of the proffered evidence was to establish that some of the construction loan funds which are the subject of the present action and which were deposited in Sayer's account at the bank were used for purposes other than the construction project on defendants' real estate. Defendants urge that the checks are admissible as business records under Iowa Code section 622.28 (1981), which provides: Any writing or record, whether in the form of an entry in a book, or otherwise, including electronic means and interpretations thereof, offered as memoranda or records of acts, conditions or events to prove the facts stated therein, shall be admissible as evidence if the judge finds that they were made in the regular course of a business at or about the time of the act, condition or event recorded, and that the sources of information from which made and the method and circumstances of their preparation were such as to indicate their trustworthiness, and if the judge finds that they are not excludable as evidence because of any rule of admissibility of evidence other than the hearsay rule. Evidence of the absence of a memorandum or record from the memoranda or records of a business of an asserted act, event or condition, shall be admissible as evidence to prove the nonoccurrence of the act or event, or the nonexistence of the condition, if the judge finds that it was in the regular course of that business to make such memoranda of all such acts, events or conditions at the time thereof or within a reasonable time thereafter, and to preserve them. The term business, as used in this section, includes business, profession, occupation, and calling of every kind. The foundation laid for admissibility under the foregoing statute was the testimony of the responsible bank officer (1) that in the regular course of its business, the bank routinely makes microfilmed copies of checks drawn on its customers' accounts, the originals of which are returned to the customer, and (2) that the subpoenaed documents were microfilmed copies of checks drawn on Sayer's checking account at the plaintiff bank prior to April 19, 1979. Initially, we note that these checks were not being offered on any claim of defendants against Sayer on the basis of the admissions exception to the hearsay rule. Nor did Sayer testify at the trial. For purposes of the business record act exception to the hearsay rule embodied by the foregoing statute, the defendants seek to sustain the admissibility of the microfilmed copies as business records of the bank. No claim is made that they are business records of Sayer. We believe that to the extent these microfilmed copies are records of the bank made in the ordinary course of its business, their method of preparation only evidences that upon presentation of these negotiable items, Sayer's account was debited in an amount corresponding to the face amount of the check. The filming by the bank was not the recordation of any information known by the bank concerning (a) Sayer's business purpose in issuing the checks or (b) whether the proceeds were in fact disbursed to the payees named in the instrument. Sayer would be the declarant as to such facts. We believe that if the checks were to be admitted for purposes of proving these facts, this would violate the rule excluding double hearsay contained in business records. See McCormick's Handbook of the Law of Evidence §§ 310, 313 (2d ed. E. Cleary 1972); Laughlin, Business Entries and the Like, 46 Iowa L.Rev. 276, 296-99 (1961). See also Fed.R.Evid. 805. Because the microfilmed copies were offered for purposes of establishing either Sayer's business purpose in issuing these checks or that the proceeds were in fact disbursed to the payees named therein, the trial court did not err in excluding the copies as hearsay.