Lockwood v. House

Headnote

Waiver—statement in sworn proof claim in bankruptcy that'claim is not secured, is waiver of the security, —e.g., a deed—only as to so much of indebtedness as is mentioned in claim.—Privileged communication—counsel who draws proof claim in bankruptcy cannot be compelled to testify as to it—•-waiver of privilege.

Appeal from a judgment entered on report of referee.

Action to recover possession of a deed of certain real property, which deed was claimed to have been delivered by plaintiff to defendant for safe keeping.

The property in question was owned by the husband of the plaintiff and was by him and plaintiff conveyed to the defendant House, by a deed, the consideration being therein stated as one dollar.

Subsequently a deed was signed and acknowledged by the defendant House and wife which purported to convey to the plaintiff the same property for the same consideration, and the action is brought to recover possession of thi§ deed as executed. It appeared that said deed had been executed but never delivered. And that the property in question was conveyed by plaintiff and her husband to defendant as security for certain moneys'owing by plaintiff’s husband to defendant or to his firm, and’ which were -still . unpaid.

Plaintiff claimed that because defendant proved his claim against the estate of plaintiff’s husband in bankruptcy, and in the proof of debt which is verified by defendant, it ’ was stated that he had no security; defendant is estopped by that proof of debt from claiming that he holds this property as security for any debt due him.

The court at General Term, said : “ The answer to that position is that the proof of debt is for one note of $500 , only and refers only to that note. The evidence shows

that Lockwood (plaintiff’s husband) was indebted to defendant in a large sum amounting to several thousand dollars, besides the note of $500, which was proved a debt in the,bankruptcy proceedings. If defendant was willing to waive his security for that portion of his claim he had a right to do so, and that would not be an abandonment of his security for the residue of the amount due to defendant or to his firm. Judgment should therefore be affirmed unless there was error in the reception or rejection of evidence. The only exceptions insisted on by plaintiff’s counsel on the argument was to the exclusion of the testimony of Mr. Fay, who was the attorney for the defendant in the proceedings in bankruptcy. The witness was asked to testify as to a conversation between himself and defendant, when defendant instructed the witness to prepare the proof of debt in the bankruptcy proceedings. The witness was allowed to answer the questions as to what was said on the subject of. security, but was not allowed to testify as to the remainder of the conversation that occurred, on the ground that the communication was a privileged communication from a client to his attorney. I do not think that the evidence was competent, and it was properly excluded (Root v. Wright, 84 N. Y. 72 ).

“ The appellant insists, however, that as the defendant had testified at to what took place at the interview referred to, when he was examined as a witness, he thereby waived the privilege, and plaintiff should have been allowed to prove what happened at that time, but an examination of the testimony of the defendant will show that the account given by the defendant of the interview in question was in response to questions asked him by the plaintiff on cross-examination, and plaintiff made him for that purpose his witness.”