Cardin v. State

• Decision Date: 20 June 1989
• Docket Number: No. 65A01-8811-CR-360,65A01-8811-CR-360
• Citation: 540 N.E.2d 51
• Parties: Nancy K. CARDIN, Appellant (Defendant Below), v. STATE of Indiana, Appellee (Plaintiff Below).
• Court: Indiana Appellate Court

Page 51

540 N.E.2d 51

Nancy K. CARDIN, Appellant (Defendant Below), v. STATE of Indiana, Appellee (Plaintiff Below).

No. 65A01-8811-CR-360.

Court of Appeals of Indiana First District.

June 20, 1989.

Rehearing Denied Aug. 16, 1989

Glenn A. Gramp, Evansville, for appellant.

Linley E. Pearson, Atty. Gen., Lisa Anne McCoy, Deputy Atty. Gen., Indianapolis, for appellee.

ROBERTSON, Judge.

Nancy K. Cardin appeals her conviction of sixteen counts of theft, all class D felonies. The State alleged that Cardin obtained checks belonging to her employer, negotiated them, and used the funds for her own purposes, without authorization from her employer and with the intent to deprive him of the money's use or value. Cardin argues in this appeal that the trial court erred in:

(1) admitting certain exhibits;

(2) admitting evidence of admissions of guilt made by the defendant;

(3) failing to grant Cardin's Motion for Judgment on the Evidence and in entering judgments of conviction on the jury's verdict.

We affirm.

I.

Cardin challenges the admissibility of two sets of exhibits. The State offered the first set, of which only exhibits 11-13, 23, 25, 27, 28, 33, 37, 39, 45, and 48 are relevant to this appeal, for the purpose of showing the action the Posey County National Bank took when it accepted each instrument, i.e. whether the instrument was negotiated for cash, deposited, or exchanged partially for cash and the remainder deposited or used to pay on a debt. The trial court admitted these exhibits as a group with a limiting instruction solely for the purpose of showing that they constituted transactions of the Posey County National Bank.

Cardin argues the exhibits are inadmissible hearsay and not admissible as business records for essentially four reasons: the exhibits were introduced through a person who was not the custodian of business records; the exhibits are copies of checks which were not made in the ordinary course of the institution's business; the endorsements on the checks were not authenticated by anyone; and, the State did not attempt to connect the exhibits with any particular count. The State maintains the exhibits at issue were not offered to prove the truth of matters asserted therein, but to show what action the bank took with respect to each. In the alternative, if the exhibits do contain hearsay, the State argues they are admissible pursuant to the business records exception to the hearsay rule.

All of the contested exhibits appear to have been endorsed by both the victim, Dr. Ropp, and Cardin. Exhibits 11-13 are copies of checks issued by the U.S. Treasury representing the victim's social security benefits. Exhibits 23, 25, 27, 28, 33, and 39 are copies of stock dividend checks and the remaining exhibits, 37, 45 and 48 are copies of income checks from a trust account and life insurance policy. In addition to the writing on the front of the checks creating the negotiable qualities of the instruments, each contains the words "Pay Any Bank, P.E.G. The Posey County National Bank, Mt. Vernon, Indiana" and the number 71-564, all stamped inside a rectangle. These markings appear on the back of the checks with at least one other stamp of a similar nature, apparently made by some other institution within the banking system. Some of the exhibits also reveal a circular marking with the word "Teller" and a number. The bank official who sponsored these exhibits could not discern those exhibits made from Posey County National Bank records stored on microfilm from those obtained from other sources by police officers investigating the case, but he could determine that the original instruments were processed by the Posey County National Bank.

The exhibits, because they contain a number of entries made at different times, pose several potential hearsay problems; yet, that which is truly objectionable hearsay evidence can be dissected. The hearsay rule excludes extrajudicial written utterances only when offered for a particular purpose, namely, as evidence of the truth of the matter asserted in the document. Connell v. State (1984), Ind., 470 N.E.2d 701, 705. The rule applies only to statements of fact which could be considered true or false, id., and which derive evidentiary value because of their testimonial character. Indianapolis Newspapers, Inc. v. Fields (1970), 254 Ind. 219, 259 N.E.2d 651, 673-674, cert. denied, 400 U.S. 930, 91 S.Ct. 187, 27 L.Ed.2d 190. Imperative declarations, such as orders or instructions, which by their nature can be neither true nor false, cannot be offered for their truth. Instead, these types of utterances are generally used circumstantially to establish that an order or instruction was given. Since there is no need to cross-examine the declarant of an imperative statement other than to determine whether the statement was in fact made, these utterances ordinarily fall outside the purview of the hearsay rule. See, E. Imwinkelried, Evidentiary Foundations Part 1B Sec. 1(a) (2d ed. 1989); D. Binder, Hearsay Handbook Sec. 2.01-2.04 (2d ed. 1983); Crawford v. Garnier (7th Cir.1983), 719 F.2d 1317; U.S. v. Shepherd (10th Cir.1984), 739 F.2d 510, 514. See also Roberts v. State (1978), 268 Ind. 348, 375 N.E.2d 215, 219 (statements in the form of questions not hearsay). On this basis, we can discern that the written utterances on the front of the checks directing the payment of funds are not hearsay.

Likewise, the endorsements appearing on the back side of the checks made a part of these exhibits are not objectionable because they were not offered to prove that the defendant is in fact Nancy Cardin, the matter asserted by the writing. ¹

We turn then to the admissibility of the markings on the front and back of the checks which enabled the Posey County Bank official to identify the checks as instruments processed by the bank. In this case, the stamps meet the definition of hearsay. They are respectively the bank's written assertions that the instrument passed through the bank's hand, and as various witnesses explained, evince that cash was given by the bank through a particular teller, in exchange. Because the State offered the exhibits to prove that the instruments were processed by the bank and the manner in which they were processed, exactly what the marks (and with respect to the teller stamps, also, the lack of any marks) assert, the stamps are hearsay.

The State offered testimony from James Alsop, Vice-President of the Posey County National Bank, to show that the stamps were entries made routinely by the bank as part of its business. Cardin maintains that Alsop could not properly sponsor the exhibits because at the time the exhibits were offered, he was not custodian of the records and did not supervise personnel in the record-keeping departments of the bank. This court's second district addressed a contention analogous to that made by Cardin in Baker v. Wagers (1984), Ind.App., 472 N.E.2d 218, trans. denied. There, we clarified that the law did not demand by the foundational requirement of identification by the entrant or one under whose supervision the document is kept, a witness with a particular title but one with a functional understanding of the business's record-keeping process as it relates to the specific entry, transaction or declaration contained in the document. Id. at 221. The foundation can be established by anyone who is knowledgeable about the business's record-keeping process and can testify that the other foundational elements have been met.

Cardin argues that Alsop is unable to satisfy this prerequisite because he cannot testify that the exhibits were made in the ordinary course of the bank's business. Cardin points out that the exhibits are checks prepared by persons not employed by the bank, and that Alsop could not discern which of the copies he made from the bank's microfiche and which were prepared from outside records. Cardin's argument raises two concerns: first, the reliability of the bank's entries on the checks, i.e. whether the stamps contained on the checks are competent evidence of the processing of the checks, and second, the reliability of the exhibits themselves.

As we indicated earlier, our state courts have for some time, though perhaps not expressly, permitted qualified witnesses other than the custodian of records to give foundational testimony for the admission of a business record. Since the person with firsthand knowledge of the transaction intended to be recorded by the stamp is under the bank's supervision and not the check's issuer who ultimately regains possession of the document, only a representative of the bank knowledgeable about the process could explain what the stamp means and whether it was placed on the check in the course of regularly conducted business. Although Alsop's testimony demonstrates that he retains such knowledge, the State failed to elicit from him testimony establishing that the transaction stamp was affixed by the bank in the regular course of business, that it was the duty of an employee of the bank with personal knowledge of the transaction to so stamp, or that the stamp was placed on the document at or near the time of the transaction. ² Similarly, the record shows that it was the bank's practice to record its transactions daily on microfilm, but Alsop did not explain why some transactions were recorded and others were not.

To our knowledge, this state has not adopted the approach taken by the federal courts which would permit the admission of business records based upon circumstantial evidence derived from the document itself, without the testimony of the custodian or another qualified witness. Cf., e.g. Matter of Richter & Phillips Jewelers & Distr. (1983), Bankr., 31 B.R. 512, 514-515, n. 1. Neither are we aware of any catch-all exception in Indiana similar to the Federal Rules of Evidence, Rule 803(24) which would allow a trial judge in the exercise of discretion to consider the inherent...