This action was brought to recover the proceeds of a certain check claimed to have been converted by the defendants Kling and the Importers and Traders’ National Bank. The check was drawn to the order of plaintiff’s intestate, Eugene H. Lecour, as executor of Joseph Houpert, by the chamberlain of the city of New York. The transaction, in brief, was this: • Lecour was the executor of Houpert, deceased, and as. such executor had invested certain of the funds of the estate in a second mortgage. The first mortgage being foreclosed, a sale of the premises was had and a' surplus of $8,015.13, over and above the amount of the first mortgage, was the product of the sale and was paid by the direction of the judgment to the chamberlain of the city of New York. Edmund Huerstel, as attorney for the executor Lecour, instituted proceedings to obtain such surplus moneys, which resulted in an order directing the payment of such moneys to the executor Lecour. The chamberlain, upon the presentation of such order, drew his check to the order of Lecour, as executor, and delivered the same to Huerstel. The latter, as it is claimed by the plaintiff, without authority from Lecour, indorsed his name upon the check and delivered the same to defendant Kling, who in exchange therefor'delivered his check for the same amount to Huerstel. Kling subsequently dfeposited the check with the defendant, the Importers and Traders’ National Bank, where the same was credited to the account of Kling, and the latter thereafter - withdrew such moneys from the bank and applied them to his own use. It further appears that Huerstel deposited Kling’s check in his bank, retained the proceeds to his own use and never paid them over to the plaintiff’s intestate. It is the proceeds ■ of the chamberlain’s check which it is sought by this action to recover of these defendants.
To the claim of the plaintiff the defendants interpose three defenses • First, that the executor Lecour authorized Huerstel to indorse the chamberlain’s check; second, that subsequent to *165such indorsement Lecour ratified the same; and, third, that Lecour received the money so collected by Heurstel. This is the second appearance of this case in an appellate tribunal. Upon a former trial before another referee these several defenses were overruled and the referee found as a fact that Huerstel had no authority to indorse Lecour’s name upon the chamberlain’s check; that there was no subsequent ratification of such indorsement; and that the money was never paid over by Huerstel to the executor Lecour, and directed judgment in favor of the plaintiff for the amount of the check, together with the interest thereon. Upon appeal frond this judgment, the case having been transferred from this department, it was considered by the Appellate Division of the second department. (Lecour v. Importers & Traders' Nat. Bank, 38 App. Div. 384.) The court therein reached the conclusion that the evidence was sufficient to support the findings of the learned referee upon all of the questions which had been urged by the defendants as a defense to the action. That court, however, felt constrained to reverse the judgment and grant a new trial for errors committed in the reception of evidence upon the trial. The questions controlling the determination of the court upon that appeal have been eliminated from the present record. Upon the new trial which was had the learned referee reached precisely the same conclusion upon the merits as was reached upon the former trial. Upon this trial the evidence affecting the merits of the defense interposed is very largely the same as was present at the first trial, and considered by the court upon the appeal. Upon this appeal, as upon the first, the defendants contend that the finding of the learned referee is against the weight of evidence as affecting the defense interposed. We see no reason for disagreeing with the conclusions which have been reached upon this trial upon the merits or with the conclusion" which was reached by the court upon the former appeal.
Great stress is laid upon an admission contained in an account of Lecour’s, as executor, presented to the Orphans’ Court in the State of New Jersey, and upon' an admission contained in an answer in an action brought in the Court of Chancery in New Jersey against Lecour by a daughter of his testator Houpert to recover the amount of the proceeds of the chamberlain’s check. These questions were *166urged Upon the court upon the former appeal, and it was there held that the admissions contained in the account and in the answer constituted competent evidence as an admission of the reception of the money by Lecour, as executor, but that they, were not conclusive of such fact. We again reiterate such rule. We do not find it necessary, however, to enter upon a detailed discussion of the reasons for this conclusion. It. is sufficient for present purposes to say that these admissions are to be taken in their entirety, coupled with the circumstances and conditions existing at the time when the account whs made and the answer served. It is quite clear that the admissions themselves, when so weighed, are not inconsistent with the fact that the money never reached the hands of Lecour. They are also consistent with the fact that they did and that he is the only person chargeable therewith. The evidence presents alone a question of fact which the defendants are entitled to have considered as tending to relieve them from liability,, but it is not conclusive and they may not complain if the court upon the trial resolve such question adversely to their contention. There are no other, questions upon the facts which we .deem it necessary to discuss. Upon the merits, therefore, the judgment may be upheld.
■ We are constrained, however, to again reverse this judgment for errors committed in the rejection of evidence by the learned referee upon the trial. The defendants in support of their defense called Huerstel, the attorney of Lecour, for the purpose of proving author-' ity in the latter to indorse the check in question. The plaintiff immediately made objection to the preliminary question, as to the witness’ acquaintance with Lecour, upon the ground that the witness was incompetent to testify to any transaction with the deceased, under section 829 of the Oode of Civil Procedure, the contention being that he was interested in the event of the action. The same objection was renewed at every subsequent ‘attempt to elicit any answer from the witness tending to establish his authority to indorse the check. The learned referee held and ruled that the witness was so .incompetent and excluded the testimony. .This ruling, we think, was error. The witness was not a -party to the action, noi did he, as we understand the authorities, have a disqualifying interest in the result. In Eisenlord v. Clum (126 N. Y. 552) many cases discussing this question are reviewed, and it was there held *167that the interest of a witness must be a legal interest in the event of the action. He can have an interest in two ways: First, when some legal right would be affected by the actual event of the action, and, second, when the record of the judgment might be used against him to establish a legal right charging him with liability. Unless, therefore, he comes within one or the other of these rules his testimony, so far as interest is concerned, is competent. (Albany Co. Savings Bank v. McCarty, 149 N. Y. 71, 84.) Huerstel was not a party to the action; consequently he would not be bound by the judgment rendered. He is not, therefore, within the first rule. The judgment pronounced would not be admissible against him.in an action brought to charge him with liability for the misappropriation of the money. This was clearly decided in Wallace v. Straus (113 N. Y. 238). Therein the witness was liable as a primary debtor upon an instrument in which the defendant was chargeable as guarantor, the latter being in effect surety for the debt and obligation of the witness. The action was brought by the executrix of the holder of the obligation, who had deceased. The primary debtor was offered as a witness to testify respecting certain instructions which he had given to the holder respecting the disposition of the property which was the subject of the instrument sued upon and which might have relieved both witness and defendant from liability. This testimony was excluded, and, upon appeal, the court held the ruling to be error, holding that any judgment which might be rendered against the defendant would not establish the witness’ liability as primary debtor, except that it might be received to establish the amount of the recovery, and, therefore, the sum which the guarantor would be entitled to receive as surety if he established liability against his principal, but that it could be evidence for no other purpose. The court enforced the rule that no man ought to be bound by anything to which he was a stranger. Applying that principle to the facts of this case, it is clearly evident that Huerstel would not be estopped by any judgment that might be rendered in this case or debarred from showing any defense of which he was possessed if he were sought to be charged with the misappropriation of the money. If within his power he could still prove that he had authority from his client to indorse the check or to make use of the money, or that he *168had paid it over to him or had been otherwise relieved from liability on account of the transaction. He did not, therefore, fall within the second category.' (Nearpass v. Gilman, 104 N. Y. 506; Hobart v. Hobart, 62 id. 80.)
It was said upon the former appeal that ■ it was: very doubtful whether Huerstel was a competent witness to establish the fact of authority to indorse the check, but the court did not pass upon or decide such question; consequently, it is not an authority for the ruling, and, within the authorities cited, we think such testimony was competent. Ror can the ruling be supported upon the ground that he was a person from, through or under whom the party interested derived his title. Kling derived no title from Huerstel. If he had there would be no liability. If Huerstel had no authority, he' was a forger; if he.had, he was the agent of Lecour to pass title to the moneys. This question is also settled by authority. In Eisenlord v. Clum (supra) the witness offered was the mother of the plaintiff, who, if the plaintiff established a right in his father’s estate, would be entitled to a dower interest therein. She was not a party to the action, and it was held that she was not an incompetent witness, nór would a judgment establish her dower right. The son did not derive title from her, but from the father; consequently, it was held that the witness was not incompetent under this provision of the Code. (Baxter v. Baxter, 13 App. Div. 65.)
We also think error was committed in' excluding the testimony of the witness Hurd. It appears from the evidence that he was managing clerk in the office of Huerstel. He was called to testify as to the authorization given by Lecour to Huerstel to - indorse the check. Objection was made that such testimony contravened section 835 of the Code of Civil Procedure. It is claimed that a conversation was had between this witness and Lecour in the office of Huerstel in his absence, and in the presence of two other persons, in which Lecour made certain declarations regarding the authority of Huerstel to indorse his name upon the check in question. One- of these witnesses was called and testified to such declaration upon the trial.
It is quite true that the provisions of the Code are broad enough to exclude the testimony of a managing clerk in a lawyer’s office as to confidential communications between the managing clerk of the *169attorney and the client; the reason for the rule is precisely the same as that which closes the mouth of the attorney. It is based upon the nature of the relation between the attorney and client, communications between whom a sound public policy requires shall be held sacred ; but in order that the rule or its reason shall apply, it is inherently necessary that the communication made by the client to the attorney or to the clerk should be secret and confidential. If the client chooses to make his communication open, as that others may hear, it ceases to be such a communication as is entitled to protection, and neither the reason for the rule nor the rule itself closes the mouth of any person. (People v. Hayes, 140 N. Y. 484, 495; People v. Buchanan, 145 id. 1, 26.) It having appeared in the present case that if any declaration was made, it was made to the clerk openly, in the presence of others, and not confidentially, the rule ceased to have application to it, and no one’s mouth was closed. The evidence offered should, therefore, have been received.
If these views are correct, it follows that the judgment should be reversed and a new trial granted before another referee, with costs to the appellant to abide event.
Van Brunt, P. J., Patterson and McLaughlin, JJ., concurred.
Ingraham, J.:I do not think that Huerstel was a competent witness to testify as to personal transactions between himself and Lecour, the plaintiff’s intestate.
The question at issue is as to the validity of the transfer by indorsement to the defendant Kling of the check drawn to the order of Lecour, and Kling’s right to the check or the proceeds must depend upon Huerstel’s right to indorse and deliver the check to Kling. The only interest or title to the check claimed by Kling was from its delivery to him by Huerstel, and Huerstel was, therefore, a person from, through or under whom Kling derived his interest or title in the check. Whether Huerstel had an interest or title to give depended on his authority to indorse the check, and to prove that authority by the evidence of the person who transferred the check to Kling would, I think, be a direct violation of section 829 of the Code. The case of Eisenlord v. Clum, (126 N. Y. 552) *170is not an authority on this point. There the plaintiff’s mother had no interest in. the land which was the subject' of the controversy, and the plaintiff had not derived his title or interest from, through or under his mother. His title to the land depended upon his being a legitimate child of the deceased Eisenlord, while here Kling’s title or interest in the check is derived entirely from its delivery to him by Huerstel.
I concur on the second ground stated by Mr. Justice Hatch.
Judgment reversed, new trial granted before another referee, costs to appellant to abide event.