G.M. McKelvey Co. v. General Casualty Co. of America
166 Ohio St. 401, O.O.2d 345, 142 N.E. 854 (1957)

  • McKelvey had fidelity insurance.  That means that if an employee embezzled money, McKelvey could recover from its insurer.
  • McKelvey suffered a loss, and was able to obtain written confessions by two employees that admitted misappropriation of funds.
    • After making the confessions, the employees left town in a hurry, and the police were unable to find them.
  • General refused to pay.  McKelvey sued.
  • At trial, McKelvey attempted to introduce the signed confessions.  General objected on the grounds that they were hearsay.
    • General argued that the employees were not available for cross-examination, so their out of court statements were hearsay.
  • The Trial Judge excluded the statements.
  • The Trial Court found for General. McKelvey appealed on the grounds that the evidence had been improperly excluded.
  • The Appellate Court reversed and found the written confessions to be admissible.
  • The Ohio Supreme Court affirmed the Appellate Court.
    • The Ohio Supreme Court looked to the common law and found that when a witness is unavailable, and where such witness is the only source from which his evidence can be obtained, then as a matter of necessity a declaration by such witness against his interest should be admitted into evidence.
      • Because no one would make a statement against their interest unless they believed it to be true.  Therefore there isn’t an absolute need for cross-examination.
  • Interestingly, under the old common law, the only statements that were admissible were those against pecuniary interest (aka $$$).  Statements against penal interest were not admissible.  So copping to a crime that will get you jail time was treated differently than copping to something that is going to cost you money.
    • In this case, the Court found that since McKelvey could have sued the employees for reimbursement, their statements were theoretically against pecuniary interest even though they hadn’t been sued yet.
  • This case as decided under the common law.  Today, it would be governed by FRE 804(b)(3).