62 N.Y.S. 48 | N.Y. App. Div. | 1900
This is the third time this case has been before us. The facts and questions of law involved fully appear in the reports of the previous appeals. Squire v. Greene, 32 App. Div. 258, 52 N. Y. Supp. 1013; Id., 38 App. Div. 431, 56 N. Y. Supp. 551. On the last appeal we held that Maria N. Anderson, to whom the $3,000 mortgage was made, was, for reasons then stated, not disqualified from testifying as to personal transactions with the attorney William H. Nafis. To that view we still adhere. We also held that James Kearney, who executed the mortgage to Mrs. Anderson, and was the owner of the mortgaged premises at the time, was disqualified from testifying to such personal transactions, because he was liable on the bond for $3,000 which he gave with the mortgage, and the success of the defendants Greene and Dunkin in this suit would operate to his advantage by relieving him from liability for any deficiency thereon. After our decision, and prior to the last trial of the action, the defendants Greene and Dunkin released and discharged Kearney from all liability on his bond. This restored his competency, for we cannot see that he has any possible interest in the result of the action.
The competency of the declarations of Nafis to Mrs. Anderson and Kearney is now challenged on the further ground that the declarations of the owner of a chose in action are not admissible as against an assignee for value. The general rule contended for is the settled law of this state, and has been for many years. Stark v. Boswell, 6 Hill, 405; Paige v. Cagwin, 7 Hill, 361; Tousley v. Barry, 16 N. Y. 497. But the conversations testified to by these two witnesses were far more than mere declarations by Nafis. They were not only part of the res gestae, but constituent elements of the transaction itself, which resulted in the execution of the $3,000 mortgage. To such declarations the rule in no way applies. The evidence of Kearney shows that he executed the $3,000 mortgage for the purpose of raising that amount to apply in discharge of the two existing mortgages already on the property,—one for $1,800 and the
The present cases are distinguishable from those of Kellogg v. Ames, 41 N. Y. 259, and Coles v. Appleby, 87 N. Y. 114. It may be the general rule that, “when the amount due is paid, the intent of the parties in making such payment, whether to extinguish or keep alive the security, will govern.” But the question is, who is to be considered as making the payment, and whose intent is to control? We think it is the owner of the land. The money obtained by the mortgage to Mrs. Anderson was his money. Nafis held the money (apart from his duty to Mrs. Anderson) simply as the agent of Kearnéy, and he was to do with it what he was bid and what he had
We do not see any force in the criticism that Kearney’s testimony was inadmissille because he held the property merely for Patrick Mc-Cann. Even if we assume Kearney to have been a mere dummy, he was interested in the agreement he made with Nafis, because his liability on the bond he executed was very much affected by the question of whether it was to be a first mortgage that he was giving or a third. The property might well be of sufficient value to pay a mortgage debt of $3,000, in which case he would practically be súbject to no personal liability. Therefore Nafis could not have diverted the moneys obtained on this mortgage without the consent of Kearney, even though he might obtain such authority from McCann. Of this last "fact, however, there is not the slightest evidence, and no presumption to that effect should be indulged in. The plaintiffs could have called McCann as a witness, but we held on the last appeal that he was not a competent witness for the defendants, because he was the bondsman on the $1,200 mortgage.
The judgment appealed from should be affirmed, with costs.
This opinion was written by Mr. Justice CULLEN before his designation as an associate judge of the court of appeals, and is adopted by this court.