State ex rel. Ingram v. North Carolina Farm Bureau Insurance Agency, Inc., 303 N.C. 287

303 N.C. 287 | N.C. | 1981

BRANCH, Chief Justice.

By its first assignment of error, defendant contends that the Court of Appeals erred in reversing the trial court’s allowance of defendant’s motion for involuntary dismissal. Defendant maintains that it did not “procure” insurance under G.S. 58-53.3.

We have carefully examined the majority opinion of the Court of Appeals as it relates to this assignment of error. We conclude that the authorities cited, the principles of law enunciated, and the reasoning of the majority opinion are correct and fully support the result reached on the question of law presented by this assignment of error. We therefore approve and adopt the majority decision which reversed the involuntary dismissal.

We turn now to the State’s two assignments of error relating to evidentiary rulings of the trial judge. Although not necessary to decision, we elect to address the assignments of error not considered by the Court of Appeals because of the possibility they may arise in further proceedings in this matter.

The State contends that the trial judge erred by ruling that the State could not ask leading questions of witnesses Paul J. Lancaster and Charles E. Houck who were called by the State. The State contends that under Rule 43(b) of the Rules of Civil Procedure if one party calls a witness who is an employee or agent of an adverse party, the party who calls the witness has a right to ask leading questions on direct examination.

Since this action is civil in nature and the statutes provide for no other procedure, the Rules of Civil Procedure govern this action. G.S. 1A-1, Rule 1. Rule 43(b) states:

A party may interrogate any unwilling or hostile witness by leading questions and may contradict and impeach him in all respects as if he had been called by the adverse party. A party may call an adverse party or an agent or employee of an adverse party, or an officer, director, or employee of a public or private corporation or of a partnership or association which is an adverse party . . . and interrogate him by leading questions and contradict and impeach him in all respects as if he had been called by the adverse party.

This language clearly gives the calling party a right to ask leading questions when it calls an agent or employee of an adversary party.

In this case the record shows the witnesses Lancaster and Houck were either agents or employees of defendant. Both admitted they acted as manager of defendant. Lancaster executed the verification of defendant’s answers to the State’s interrogatories. Whether denominated as agents or employees of defendant, we hold that the two witnesses come within the provisions of Rule 43(b), and the State had a right to ask leading questions of them on direct examination.

Defendant’s citation of a criminal case for the proposition that the judge has discretion in permitting leading questions is in-apposite since Rule 43(b) does not apply to criminal cases. State v. Anderson, 283 N.C. 218, 195 S.E. 2d 561 (1973).

The State next contends that the trial judge erred by excluding a summary of a State auditor’s examination of defendant-corporation’s books. The trial judge ruled that the best evidence rule prohibited the State from offering the auditor’s summary because the records themselves are the best evidence of defendant’s business transactions. The State contends that the summary should have been admitted into evidence because an exception to the best evidence rule permits such an abridgement where the evidence is voluminous and examination difficult.

The best evidence rule, simply stated, is that “a writing is the best evidence of its own contents,” and it requires “a party to produce the writing itself, unless its nonproduction is excused, whenever its contents are to be proved.” 2 Stansbury, North Carolina Evidence, § 190 (Brandis rev. 1973). In this case, to determine the amount of tax which defendant must pay, the State must show the total amount of premiums defendant collected for insurance it procured. G.S. 58-53.3. Since this amount can only be determined from an examination of defendant’s business records, the best evidence rule requires production of those records unless an exception applies.

In a number of cases, this Court has applied the well-recognized exception to the best evidence rule where the records to be produced are voluminous. State v. Franks, 262 N.C. 94, 136 S.E. 2d 623 (1964); State v. Rhodes, 202 N.C. 101, 161 S.E. 722 (1932); 2 Stansbury, North Carolina Evidence, § 192 (Brandis rev. 1973). In the leading case of State v. Rhodes, supra, this Court said:

[The exception] is founded on considerations of policy and convenience, if not of necessity .... Where a fact can be ascertained only by the inspection of a large number of documents made up of many detailed statements it would be practically out of the question to require the entire mass of documents and entries to be read by or in the presence of the jury. As such examination cannot conveniently be made in court the results may be shown by the person who made the examination. [Citations omitted.] The production of the documents and the privilege of cross examination and of the introduction of evidence afford ample protection of the defendant’s rights.

Id. at 104, 161 S.E. at 723. To lay a proper foundation for this evidence, the cases require (1) a qualified witness who has examined the records and (2) a showing that “the documents are so voluminous that it would be impracticable to produce and examine them in court.” 2 Stansbury North Carolina Evidence § 192 (Brandis rev. 1973).

In this case the State has shown sufficient foundation to invoke this exception. The witness, Richard B. Fields, identified himself as a Deputy Commissioner of Insurance, Field Audit Division, and he testified that in September, 1977, he audited defendant corporation’s books. He testified that he examined checks, premium notices and invoices among other papers. He said that he did not make copies of all the documents because “[i]n a normal audit of records of this type you would not make copies of every paper or every sheet that you review because of the volume of paper involved.” Thus, the State met both foundation requirements; Fields was a qualified witness who had examined the defendant’s records, and production of the records was impracticable. We therefore hold that the trial judge erred by failing to permit the auditor to testify to his findings. Defendant is sufficiently protected from any inaccuracy by its ability to cross-examine the auditor, to introduce the records which are in its custody, and to call its own qualified witness to testify to his findings.

The decision of the Court of Appeals as amended is

Affirmed.