Olcott v. Kohlsaat — 27 N.Y. St. Rep. 900

Majority

p. 900

Frederick P. Olcott, Rec’r, etc., App’lt, v. John W. Kohlsaat et al., Resp’ts.

Supreme Court, General Term, First Department,

Filed December 2, 1889.)

Headnote

1. Evidence.

In an action to foreclose the lien of a bank upon collateral security givens

p. 901

to secure a debt of K., his wife set up a claim to the security as her property; that it was pledged without her authority, and that it had been redeemed by the substitution of other securities. Held, that evidence of an agreement between the debtor and cashier for such substitution was competent.

2. Same—Witness—Code Civ. Peo., § 829.

The answering defendant acquired no right or title to the security from K., who made default. Held, that K. was not incompetent under Code Civ. Pro., Sj 829, to testify in her behalf as to a demand for the security made by him of a former receiver of the bank, now deceased.

Appeal from a judgment recovered on trial at the special term.

Thos. G. Shearman and Everett P. Wheeler, for app’lt; Henry L. Burnett and Edward B. Whitney, for resp’ts.

The plaintiff, as receiver of the Wall Street Bank, brought this action to foreclose a lien alleged to have been acquired by the bank upon a bond of $4,000, issued by the county of New York. This bond was pledged to the bank by the defendant John W. Kohlsaat for a loan of $4,000 made to him by the bank. And it was proceeded against as security for this loan. Judgment was asked barring and foreclosing the right of this defendant, and that of his wife, in the bond, and for a transfer of it upon the books of the comptroller of the city, and that the bond should be sold and the proceeds applied to the payment of the debt The defendant, Sarah J. Kohlsaat, by her answer claimed the bond to be her property, and that it had been pledged to the bank without her authority and with notice that it was her property. And also that the pledge had been redeemed by depositing other securities in its place with the bank. And these facts were found by the court as they were claimed to exist in her favor. The evidence upon these subjects was conflicting, but there was no such preponderance in it in favor of the plaintiff as would allow the conclusion of the special term to be in any manner interfered with.

There was no such writing or contract between the debtor and the bank as would exclude proof of the agreement relied upon for the substitution of other securities in place of the bond. And the evidence proving that to have been agreed upon between the debtor and the cashier of the bank, was legally received and acted upon by the court. And as this part of the agreement was found to have been performed, that of itself was a defense to the action.

. The defendant, John W. Kohlsaat, was examined as a witness upon the trial, and it was proposed to prove an interview which took place between him and a preceding receiver of the bank, who is since deceased. This was objected to on the ground that the witness was not competent to give the proposed evidence under § 829 of the Code of Civil Procedure. This defendant did not answer the complaint, but made default. And by the proposed evidence it was not designed to prove, neither did the evidence which was received prove, anything in support of any title or interest which had been derived from the witness. But what it was

p. 902

' expected to prove by him was a demand made for the bond on behalf of his wife, another defendant in the action. Her claim was not that she had acquired any right or title to the bond from this witness, or that he had any interest whatever in it which she was required to support. And that excluded the proposed evidence from the restraints created by this section of the Code of Civil Procedure.

Por it is only when a party to the action, or person interested in the event, or a person from, through or under whom such party or interested person derives his interest or title by assignment or otherwise, is to be examined as a witness in his own behalf or interest, or in behalf of the party succeeding to his title or interest, 'that this section of the Code has rendered him incompetent. This witness was not within this prohibition, for his wife had in no form whatever derived any title or interest in the bond from or through her husband.' And where that may be the relation of the witness to the subject-matter of the action, and he is disinterested, there his testimony may legally be received. This was considered to be the construction to which this section as it is now framed should be subjected in Whitehead v. Smith, 81 N. Y., 151 . And that was also followed in Ehmann v. Scheuerman, 14 N. Y., State Rep.., 705; Ely v. Clute, 19 Hun, 35 ; and Hill v. Alvord, id., 77 .

7The evidence given by this witness under this objection included no more than a conversation between himself and the deceased predecessor of the plaintiff concerning the bond, and a request that it should be surrendered to the witness. It was not of any materiality to any issue or controverted part of the case. And the substantial part of the interview was also repeated and affirmed by James L. Phelps, Jr., another witness examined on behalf of the defendants. He was a disinterested witness. There was no improbability whatever in the statement made by him. And the court was bound to accept his evidence, as it was in no way contradicted, as-the truth of this part of the controversy. Elwood v. Western, etc., Co., 45 N. Y., 549 , 553.

H, therefore, there was any possible error in receiving the evidence of the other witness, it was corrected by the testimony given by this disinterested person.

The witness Kohlsaat was not interested in behalf of his wife. He could neither lose nor gain by the result of the action. But if he had any legal interest whatever, it was in favor of maintaining the action and the payment of his debt by the appropriation to that object of the proceeds of the bond. No substantial error appears to have intervened iu the course of the trial, and the judgment should be affirmed, with costs.

Van Brunt, P. J., concurs.