This is an action to recover damages for loss of an alfalfa crop on an alleged contract of insurance. Two trials were had. The jury disagreed on the first and rendered verdict for plaintiff in the amount of $9,595 on the second. Plaintiff's motion for new trial having been refused and judgment having been entered on the verdict, this appeal by the defendant insurer followed.
Briefly summarizing the evidence in such light it appears that the plaintiff, Carlos W. Bentz, is a farmer living near Newell, South Dakota. For many years his insurance needs were handled by Guy H. Hemminger of Deadwood. Hemminger represented several different insurers including the defendant Cimarron Insurance Company. In 1955 plaintiff had a crop of alfalfa growing on 60 acres of irrigated land which he intended to harvest for seed. On August 25th he went to Mr. Hemminger's office to obtain insurance on said crop and requested coverage against loss by fire, wind, and hail. The value of the crop was determined to be $12,600 computed on the basis of 7 bushels of seed per acre at $30 per bushel. Hemminger made and filed a written notation of such crop valuation. Because plaintiff wanted the crop insured while in the field Hemminger said it would be necessary to take it up with some companies and he would notify plaintiff when covered and would bill him for the premium. On September 8, 1955 plaintiff received a letter from agent Hemminger which plaintiff regards and refers to as a "binder". The pertinent part of the letter which was marked and received into evidence as Exhibit 2 reads as follows:
On September 28th the alfalfa crop was severely damaged by wind and hail and plaintiff made oral and written proof of loss, and furnished the legal description of the land requested in the "binder" letter. The actual policy of insurance was not issued by defendant until October 5, 1955. It was countersigned by agent Hemminger on October 17, 1955. The policy period was stated to be from August 25, 1955 to October 25, 1955 and loss on cut or uncut grains by windstorm and hail was limited to grain in buildings.
Defendant denied liability contending the only peril talked about and the only peril insured against either under the so-called "binder" or its policy was loss by fire. The evidence on this point is sharply conflicting. This issue was submitted to the jury and determined adversely to defendant.
As there is competent evidence in the record to sustain the verdict based on conflicting evidence, the same is conclusive on appeal in the absence of some error at law occurring during the trial. In this respect, defendant urges that the trial court erred in rejecting Exhibits A-10, A-14, and A-15. These exhibits are all letters written or received by defendant's witness, and agent, Guy H. Hemminger.
Exhibit A-10 is a copy of a letter written by agent Hemminger on July 21, 1955, and addressed to the Fritz A. Forseth Company, Aberdeen, South Dakota. The Forseth Company had no connection with
Exhibit A-14 is a copy of a letter written by agent Hemminger on September 2, 1955 addressed to the defendant's divisional office in Minneapolis, as follows:
Exhibit A-15 is the original letter dated September 6, 1955 received by agent Hemminger in response to Exhibit A-14 from defendant. It is signed by D. D. Sewell, Special Agent. It reads as follows:
Agent Hemminger testified the rejected letters were written or received by him in the regular course of his business as an insurance agent and all related to his efforts to procure the insurance requested by plaintiff. Despite the hearsay character of such correspondence defendant contends the same was properly admissible in evidence under our Uniform Business Records as Evidence Law, SDC 1960 Supp. 36.1001, which provides as follows:
In the case of Clark v. Bergen, 75 S.D. 48, 59 N.W.2d 250, 253, this court pointed out that the common law rules relating to books of account and business records became so burdensome relief was sought in this state by the enactment of the Uniform Business Records Act which, in effect, "enlarges the operation of the business records exception to the hearsay rule."
The Business Records Act is based on the premise that entries and memoranda made in the regular course of business contemporaneously with an act, condition or event are circumstantially trustworthy having been made before any issue arises and before any motive to misrepresent occurs. To effectuate its purpose the act should be liberally construed. As stated in the case of Allen v. St. Louis Public Service Co., 365 Mo. 677, 285 S.W.2d 663, 666, 55 A.L. R.2d 1022, "To construe the act too strictly would be to repeal it". Letters, inter-office memoranda, and the memorandum of a telephone conversation by a bank employee, have all been admitted, as business records, under similar acts by other courts. In re Potlatch Forests, 72 Idaho 291, 240 P.2d 242; Henderson v. Allis-Chalmers Mfg. Co., 65 Idaho 570, 149 P.2d 133; and United States v. Moran, 2 Cir., 151 F.2d 661.
Not every written memorandum, letter, or report, however, is admissible under the act simply because it was made or rendered in the conduct of some business. In the case of Palmer v. Hoffman, 318 U.S. 109, 63 S.Ct. 477, 87 L.Ed. 645, 144 A.L.R. 719, a railroad engineer's report of an accident was held to be inadmissible under the federal statute as not being a record made in the regular course of business. In an opinion by Justice Douglas the court said that such employees' "reports are not for the systematic conduct of the enterprise as a railroad business. Unlike payrolls, accounts receivable, accounts payable, bills of lading and the like, these reports are calculated for use essentially in the court, not in the business. Their primary utility is in litigating, not in railroading". Similarly, copies of letters written by physicians who examined the plaintiff to the railroad's chief medical examiner were excluded in the case of Masterson v. Pennsylvania R. Co., 3 Cir., 182 F.2d 793. Also, in the case of Fuller v. White, 33 Cal.2d 236, 193 P.2d 100, Rehearing 201 P.2d 16, a letter from the home office of an insurance company, dated October 25, 1945, signed by its supervisor of claims and addressed to its general agent in San Francisco was held to be inadmissible under the act because the letter merely stated an opinion and conclusion of company records made in 1932 and no circumstantial guarantee of trustworthiness existed as to an account of a record by an employee made many years after the event.
The proponent of a purported business record must show by the custodian of the record or other qualified witnesses (1) that it is, in fact, a record of an act, condition, or event, (2) it is relevant to the issues, (3) its identity and mode of preparation, and (4) that it was made in the regular course of business, at or near the time of the act, condition, or event. The trial court is then vested with discretion to determine if, in its opinion, "the sources of information, method, and time of preparation are such as to justify the admission of such record in evidence. Its rulings, in this regard, will not be disturbed on appeal in the absence of a manifest abuse of discretion. Cascade Lumber Terminal v. Cvitanovich, 215 Or. 111, 332 P.2d 1061; Northwestern Improvement
In our opinion the trial court abused its discretion by refusing to admit the letters marked Exhibit A-14 and A-15 in evidence. They were an integral part of the insurance transaction involved and were explanatory of the "binder" letter marked Exhibit 2 which did not itself indicate the "peril" insured against. Such letters were written and received in the regular course of business and their identity, mode and time of preparation were sufficient to justify their admission. Their evidentiary weight, of course, was for the jury. In this regard, we cannot escape the further conclusion that the defendant was prejudicially handicapped in the presentation of its case to the jury by the exclusion of such letters from its consideration.
Reversed but without taxation of the cost of appellant's brief as, contrary to our rules, the same unnecessarily includes over 45 pages of testimony duplicative of the transcript.
RENTTO, P. J., and ROBERTS and SMITH, JJ., concur.
BIEGELMEIER, J., concurs in result.