New York Life Ins. Co. v. Taylor , 147 F.2d 297 ( 1945 )

On Rehearing.

ARNOLD, Associate Justice.

The insured was found dead at the foot of a stairwell in Walter Reed Hospital. The question is whether he died as a result of suicide or of an accident. As evidence of suicide the defense offered a number of authenticated hospital records to prove that the insured’s state of mind was one which indicated the probability of suicide. These hospital records were kept in the regular course of business according to the colloquial use of these words. The issue here is whether they were “in the regular course of business” within the technical meaning of that phrase as used in the Federal Shop Book Statute.¹

The trial court rejected all these hospital records and though we reversed on another ground we upheld that ruling. Thereafter, this rehearing was granted confined to the question of whether the hospital records offered, or any part of them, were properly rejected. The records which seem to be most relevant to show a state of mind of the insured which might indicate suicide consist of two reports of a neuropsychiatric consultant and one report of an attending physician, based on information obtained from a nurse, that the insured took an overdose of medicine because he wanted to die. We will briefly analyze the contents of these records.

One of the psychiatric reports gives a history of what are termed “vague hypochondriacal complaints” over a period of twelve years. It recites the patient’s inability to work, the fact that he had been only getting $37.50 a month, that he said he wanted to die because he had been suffering so much, that he had consulted twenty-five different doctors and had been in five hospitals prior to coming to Walter Reed, that he had hypochondriacal discomfort prior to the severe itching of the rectum which started in May, 1938. It closes with the following words: “Diagnosis : Psychoneurosis, hypochondriasis.” This report was made after the patient had been in the hospital six months without responding to ordinary treatment.

Another report by the same neuropsychiatric consultant begins by reciting an experience told by the patient in the course of a psychiatric examination which might have contributed to a neurosis. It discloses that a year before the patient came to the hospital he had been given doped whiskey by a hitchhiker and indecently assaulted. Two weeks afterwards he noticed itching in the rectal area. This report closes with the following diagnosis:

“Neurological examination shows deep superficial reflexes normal and equal; cranial nerves intact; no disturbance in sensation other than the above described pruritus ani. At present patient shows no depression and no suicidal ideas. Appears cheerful, smiling and friendly. Has been seen by four or five psychiatrists previous to this hospitalization who said that all his troubles was in his imagination.

“Diagnostic impression: psychoneurosis, hysteria, conversion type.”

No mention was made of the necessity for any special measures to prevent suicide.

We believe that the court properly rejected these hospital reports. For the purpose of proving suicidal intent they do not come within the Federal Shop Book Statute. It is clear from the legislative history of the Federal Shop Book Statute that it was intended to make it unnecessary to call as witnesses the parties who made the entries rather than to make a fundamental change in the established principles of the Shop Book exception to the hearsay rule. The report of the Senate Judiciary Committee incorporates the recommendation of the Attorney General, which reads in part as follows:

“The old common-law rule requires that every book entry be identified by the person making it. This is exceedingly difficult, if not impossible, in the case of an institution employing a large bookkeeping staff, particularly when the entries are made by machine. In a recent criminal case the Government was prevented from making out a prima-facie case by a ruling that entries in the books of a bank, made in the regular course of business, were not admissible in evidence unless the specific bookkeeper who made the entry could identify it. Since the bank employed 18 bookkeepers, and the entries were made by bookkeeping machines, this was impossible.” S.Rep.No.1965, 74th Cong., 2d Sess., pp. 1, 2.

The report of the House Judiciary Committee is to the same effect. It sets out the recommendation of the Attorney General with the following introductory statement. :

“This hill was introduced by the chairman of the committee at the request of the Attorney General. The committee concur in tlic opinion of the Attorney General that the proposed legislation should he enacted into law for the reasons set ont in his communication and its accompanying memorandum, which are made a part of this report.” H.Rep.No.2357, 74th Cong., 2d Sess., p. 1.

The remarks of members of the House Judiciary Committee explaining the hill show the same clear intent. Chairman Sumners said:

“The circuit judge, sitting as a trial judge, held that record books kept in the ordinary course, would not be admissible unless the Government produced the individual who had made the entry, who could testify with reference to the making of the entry, and so forth. Of course, according to the manner that books are now kept, many times entries are made by machines. It may be that a dozen or a half a dozen people will make entries in a set of books and nobody will be able to swear that he made a given record.

“Personally, I am ashamed to ask the House to pass this bill. This holding by the judge is ridiculous. It is more than that, but that is the situation that has developed up there. I do not understand how any judge can hold, in view of what is generally accepted, that one must bring the identical person who made the identical entry, before that entry can be introduced in evidence where the books kept are regularly and properly kept in the ordinary course of business. But he has held it, and this hill has been introduced for the purposc of curing that situation.” (V. 80, 5733. Apr. 20, 1936)

Congressman Duffy of the Committee made the following comment:

“* * * section 1 which enlarges the exception to the hearsay rule relating to the admissibility of business records. That section removes the obsolete common-law requirement that business entries be identified by the persons who made them. * *” Vol. 80, 9647.

The records offered here are not the kind of entries which are admissible under the established principles of the Shop Book exception to the hearsay rule. Such records must be those which are a product of routine procedure and whose accuracy is substantially guaranteed by the fact that the record is an automatic reflection of observations.² This obviously excludes those which depend on opinion or conjecture. The internal check on the reliability of admissible records comes from two sources: (1) an efficient clerical system, and (2) the fact that they are the kind of observations on which competent men would not differ. As the Supreme Court recently pointed out, the test of admissibility is “the character of the records and their earmarks of reliability * * * acquired from their source and- origin and the nature of their compilation.” ³ Typical of such records are “payrolls, accounts receivable, accounts payable, bills of lading and the like.” The Supreme Court further observed that the Federal Shop Book Statute is not one “which opens wide the door to avoidance of cross-examination * * ⁴

Hospital records are no different from any other kind of records kept in the regular course of business. They must be subjected to the same tests as to subject matter. Regularly recorded facts as to the patient’s condition or treatment on which the observations of competent physicians would not differ are of the same character as records of sales or payrolls. Thus, a routine examination of a patient on admission to a hospital stating that he had no external injuries is admissible.⁵ An observation that there was a deviation of the nasal septum is admissible.⁶ Likewise, an observation that the patient was well under che influence of alcohol.⁷ But the records before us here are not of that character. The diagnosis of a psychoneurotic state involves conjecture and opinion.⁸ It must, therefore, be subjected to the safeguard of cross-examination of the physician who makes it. . And accounts of selected items from interviews with patients must be subject to the same safeguard.⁹

If this were not true, a newspaper reporter’s notes on an interview or observation of an accident would be admitted in evidence without calling the reporter himself. Certainly they are made in the regular course of business of running a newspaper, as that phrase is colloquially used, since they are the basis of the accounts which are afterwards printed. Newspaper reporters are certainly as skilled in observation as any other group and ordinarily have no motive to misrepresent. Corporations today keep a vast mass of records, all of which are used as the basis for management action. All such records would be admissible in evidence if the kind of psychiatric diagnosis and hearsay accounts offered here were ruled admissible. A few hypothetical cases will illustrate the distortion of the common law rule which would occur if the contentions of appellant regarding the admissibility of the above described psychiatric diagnosis and report of conversations were upheld.

(1) A corporation is engaged in taking a nationwide poll as to the number of members of the Communist party. In the regular course of that business its employee interviews X, Y and Z. The interviewer reports that X, Y and Z are Communists, giving excerpts from the conversations to support this opinion. The report would be admissible in subsequent litigation to make a prima facie case that X, Y and Z are Communists ¹⁰

(2) A research foundation is engaged in determining the amount of insanity in Washington, D. C. A trained psychiatrist sends in a record that John Doe is insane. Since this record was made in the regular course of the business of the research foundation it would be admissible without calling the interviewer in order to make a prima facie case in a subsequent contest of John Doe’s will.

(3) A large corporation employs a firm of efficiency engineers to investigate its personnel. In the regular course of that investigation the report is made that employee X is willfully insubordinate, supported by excerpts from his conversation. The efficiency firm has no interest in or probable cause for litigation with X. The report, therefore, would be admissible against X in a suit for breach of his employment contract without calling the man who made it.

These are extreme cases but there seems no logical escape from the above results if the conjectures and conversations contained in the hospital records which I have described above are held admissible.

It is no reflection upon the profession of psychiatry to say that it necessarily deals in a field of conjecture. Even in the diagnosis of actual insanity, cases are rare in which trained psychiatric witnesses do not come to opposite conclusions. The opinions here relate to neurosis, a condition short of insanity, on which there are countless theories and infinite diagnostic possibilities. It is difficult to conceive of records in which the right of cross-examination is more important than the conjectures of a psychiatrist on a psychoneurotic condition.¹¹

The drastic impairment of the right of cross-examination resulting from the admission of this type of unsworn observation and opinion evidence will he recognized by anyone familiar with the psychology of a jury trial. The unsworn psychiatric diagnosis would be introduced, with appropriate fanfare as to the distinguished character of the alienist who made it, but who is not called as a witness. The opposing party might have plenty of data to shake this testimony on cross-examination, yet he would have to remain silent while a strong prima facie case is made against him. The risk of perjury would be neatly avoided because the real witness is not sworn.

It is true that after the party who introduced such opinions has closed his case the opposing party would have a chance to rebut them. But the disadvantageous position in which the denial of his right of cross-examination would place him is obvious to any trial lawyer. A period of time has gone by; an impression on the jury has been made. The expensive and sometimes impossible burden of hunting out and producing the psychiatrist who gave the opinion is unjustly shifted to the party against whom the opinion is used. And after he catches and produces the psychiatrist he must offer him as his own witness — a disadvantage only slightly limited by the fact that the trial court may in its discretion allow him to impeach his own witness. Only a lawyer without trial experience would suggest that the limited right to impeach one’s own witness is the equivalent of that right to immediate cross-examination which has always been regarded as the greatest safeguard of American trial procedure.

These considerations apply with equal force to the hospital records offered below which disclose that the patient said lie took an overdose of codein and aspirin because he wanted to die. This remark was retold by the nurse to the attending physician and recorded by him. It is contradicted by another conversation with the same physician, also part of the record, in which the patient said he only wanted to get relief from itching. The record that the patient took an overdose was a routine entry of a fact on which observers would not differ. But the excerpts from the patient’s conversation reported by a nurse are no different from a newspaper reporter’s account of an interview. They are made in the regular course of business in the colloquial sense but not as that term is intended for use by statute. The consequence of the position taken by Judge Edgerton would he that the mere absence of an apparent motive to misrepresent makes admissible any and all business records which are regularly kept regardless of their character. This, we believe, is a legislative change in the Shop Book Rule which is not permitted by the statute. Of course it is true that in an occasional case the presence of an unusually strong motive to misrepresent may exclude an entry otherwise admissible under the rule.¹² But this limitation on the application of the rule does not mean that the absence of motive to misrepresent is the basis for admissibility.¹³ For example, it would scarcely be argued that a bank ledger, kept in the regular course of business, would become inadmissible to show the state of a customer’s account because he was engaged in a dispute with the bank as to the amount of his balance. Books of account are ordinarily kept for the very purpose of having proof in case litigation develops. To introduce the absence of motive to misrepresent, as a test of admissibility, would be to completely change the rationale of the Shop Book Rule. For example, an entry of a credit manager that he had learned from conversation with a customer that he owed $10,000 would go in if the manager had no motive to misrepresent.

In other words, it is not the absence of a motive to misrepresent which is the basis of the Shop Book exception to the hearsay rule. Purely clerical entries come within the rule regardless of the fact that the party making them has an interest in what they may be used to prove. Conversely where the accuracy of the entries depends on opinion, conjecture or judgment in selecting the particular entries from a larger mass of data which some other observer might consider equally relevant, the entries are not within the Rule regardless of motive.

The reasons for the Shop Book Rule are well stated by Wigmore¹⁴ to be (1) that the influence of habit may be relied on, by very inertia to prevent casual inaccuracies ; (2) that errors or misstatements in a regular course of business transactions are easily detected and misstatements cannot safely be made if at all except by a systematic and comprehensive plan of falsification; (3) that since the entrant is under a duty to an employer or other superior there is a risk of censure or disgrace from the superior in case of inaccuracy. The records of opinion and hearsay accounts of conversations involved in this case fail to satisfy any one of these tests. Nothing in the words of the Shop Book Statute itself or its legislative history justifies overturning these established principles of evidence. It is true that in Palmer v. Hoffman, supra, the Supreme Court spoke of the opportunity for manufacturing evidence which would exist if an engineer’s statement, made in the course of a company investigation of an accident, was held admissible in a suit based on that accident. But this was not the sole ground for the decision. The Court’s rule as to admissibility is clearly based upon the subject matter of the entries, their routine character, and their similarity to payrolls and the like. The opinion is not intended to “open the door to avoidance of cross-examination” on the mass of opinion, conjecture and observation now regularly reported in the course of modern business.

Today every great corporation is making thousands of records, obtaining credit information, making psychological examinations of its employees, hiring efficiency experts and recording the activities of its personnel. To admit this potpourri on the sole tests of regular recording and absence of motive to misrepresent would be a drastic impairment of the right of cross-examination. In a criminal case it is doubtful whether such a deprivation of the right of the accused to be confronted with the witnesses against him would be constitutional.

The entire hospital records offered in this case are not before us.” It may be that some of the entries are admissible. The test should be whether they are records of a readily observable condition of the patient or of his treatment. There is no magic in the word diagnosis which makes everything which can be included in that term admissible. Some diagnoses are a matter of observation, others are a matter of judgT ment, still others a matter of pure conjecture. The admissibility of records of such diagnoses must depend upon their character. Certainly the hearsay accounts and the psychoneurotic conjectures contained in these records cannot be received without cross-examination as proof of a tendency to commit suicide.

Reversed and remanded.

1 Act June 20, 1936, 49 Stat. 1561, 28 U.S.C.A. § 695.

2 5 Wig'inore on Evidence (3rd Ed., 1040) § 1522.

3 Palmer v. Hoffman, 1943, 318 Ü.S. 109, 114, 63 S.Ct 477, 480, 87 L.Ed. 645, 144 A.L.R. 719.

4 Ibid.

5 Ulm v. Moore-McCormack Lines, Inc., 2 Cir., 1940, 115 F.2d 492, certiorari denied 313 U.S. 567, 61 S.Ct. 941. 85 L.Ed. 1525; Wickman v. Bohle, 1938, 173 Md. 694, 196 A. 326 (record stating that the patient had “a fractured right clavicle”).

6 Ulm v. Moore-McCormack Lines, Inc., supra note 5 ; Borucki v. MacKenzie Bros. Co., 1938, 125 Conn. 92, 3 A.2d 224 (record from the laboratory giving the analysis of food from the eating of which plaintiff was made ill); Grossman v. Delaware Elect. Power Co., 1929, 4 W.W.Harr. 521, 34 Del. 521, 155 A. 806 (laboratory tests and history sheet).

7 Reed v. Order of United Commercial Travelers of America, 2 Cir., 1941, 123 F. 2d 252; Sadjak v. Parker-Wolverine Co., 1937, 281 Mich. 84, 274 N.W. 719; Adler v. N. Y. Life Ins. Co., 8 Cir., 1929, 33 F.2d 827 (record admitted to show that at the time of filing application plaintiff had ulcer, chronic prostatitis and seminal vesiculitis) ; Prudential Ins. Co. of America v. Saxe, 1943, 77 U.S.App.D.C. 144, 134 F.2d 16, certiorari denied 1943, 319 U.S. 745, 63 S.Ct. 1033, 87 L.Ed. 1701.

8 Ulm v. Moore-McCormack Lines, Inc., supra note 5, 115 F.2d .at page 495; “But whatever should be the judicial attitude toward this statute, we do not think the cited New York cases are in point on the immediate issue here. They did not involve the problem of identification, but only whether or not opinion statements of a doctor and of a policeman contained in official or business records were admissible. Here the records were claimed primarily to show direct observations made by attending physicians, not entries of opinions.” (Emphasis supplied.)

9 Cf. Cottrell v. Prudential Ins. Co. of America, 1940, 260 App.Div. 986, 23 N. Y.S.2d 335.

10 Such evidence might be used in a proceeding for the cancellation of a naturalization certificate. See Schneiderman v. United States, 1943, 320 U.S. 118, 63 S. Ct. 1333, 87 L.Ed. 1796.

11 Of course if the fact that a patient had been treated for a psychoneurotic condition becam" relevant to prove some issue in the case other than the truth of the diagnosis the record would be admissible to show that such treatment had taken place. For example, in the recent case of Becker v. United States, 7 Cir., 1944, 145 F.2d 171. the issue was whether u finding of permanent and total disability cause,d by insanity was supported by the evidence. Nearly all the evidence of disability was direct testimony of physicians. To corroborate that direct testimony hospital records were introduced to show that the insured had been discharged from an evacuation hospital with a diagnosis of acute rheumatism; that the next month the insured was hospitalized again because of his mental condition ; that he was shipped bade to the United States in a cage with other mental patients and n tag placed upon him which read “Mental Case” ; that on his return to this country his condition was diagnosed as “Psychoneurosis, Hysteria”. It is apparent that these records are relevant to show that the insured was disabled during the period of confinement regardless of the accuracy of the diagnosis. These records corroborate the direct testimony of the physicians that lie continued to be under the disability after his discharge from the hospital. But the case is hardly an authority for admitting a psychiatric diagnosis as a substitute for direct testimony as to the character of the insanity in inducing a tendency to suicide. See also People v. Kohlmeyer, 1940, 284 N.Y. 366, 31 N.E.2d 490.

12 Cf. Estate of William Buckminster v. Com’r of Internal Revenue, 2 Cir., 147 F. 2d 331.

13 Wigmore, op. cite, supra note 2, § 1527: “It is often added that there must have been no motive to misrepresent. This does not mean that the offeror must show an absence of all such motives; but merely that if the existence of a fairly positive counter-motive to misrepresent is made to appear in a particular instance the entry would be excluded. This limitation is a fair one, provided it be not interpreted with over-strictness.”

14 Wigmore, op. cite, supra note 2.