In re the Judicial Settlement of the Account of Proceedings of Van Alstyne

Per Curiam:

After our former decision herein (142 App. Div. 209) a reargument was .granted on the ground that although the record as it then stood did not so disclose, the actual facts occurring upon the trial 'would show that the testimony of Mrs. Van Alstyne given in her behalf was received under such circumstances and objection as rendered her incompetent to testify.

Leave was given to resettle the case and it now appears that such claim was unfounded and that Mrs. Van Alstyne wasfa competent witness to testify in her own behalf to the facts which she disclosed and which this court held proved a bargain between herself and her deceased husband, whereby she paid to him the rents of the Washington property in consideration ohis having canceled and discharged the incumbrances thereon. It now appears from statement of counsel and the record that prior to the accounting proceedings upon which the decree appealed from was taken, Mrs. Van Alstyne’s coexecutor, the present respondent, instituted proceedings before the surrogate to discover property withheld, by her, which property consisted of the notes in controversy. That proceeding was. instituted under the power given by section 2707 of the Code of Civil Procedure and is referred to throughout the present record as the “inquiry proceeding.” In that proceéding Mrs. Van Alstyne was sworn and examined by counsel for the present respondent executor, and against her objection was compelled to give -testimony against herself sufficient to fasten prima facie liability upon her. to account for the notes which she obtained possession of after the death of her husband. The notes were indorsed without recourse by the original holders, to her testator, and3 therefore, prima facie they belonged to him. . She was compelled to testify that she did not have possession of them during his lifetime and, therefore, no presumption arose that they were given to her by him prior to his death. She was also compelled to give testimony that the checks for the rents came to herself and that she indorsed them over to her husband. This proved, as claimed by respondent, partial payment of interest thereon and a recognition of an existing debt against her in behalf of her husband.

On the present trial the stenographer who took the testimony of Mrs. Van Alstyne on the inquiry proceeding was called and he identified 153 pages of her testimony, showing that the inquiry must have been exhaustive, and from the fact that the notes in controversy were included in the account, under objection by her, the proceeding must have resulted in an order of the surrogate directing her to place them on the inventory of the estate of the testator and to account therefor. After certain portions of the testimony given by Mrs. Van Alstyne in the discovery proceeding had been read by the respondent’s counsel the appellant read certain other portions, some of which had heen drawn out by questions propounded by the coexecutor, ‘the present respondent, and some by her own attorney, some answers being confined to what she did with the notes after her husband’s death and some relating to personal transactions with him in his lifetime, especially as to transferring the checks received for rent to him, she stating that she did transfer them to him but not as payment on the notes, and then she was called to the stand as a witness in her own behalf and examined orally, and objection was made to her testifying to personal transactions and communications had with her deceased husband, tending to relieve her from liability to account for such notes and to explain away prima facie liability which had been fastened upon her to account therefor, on the ground that she was incompetent to so testify under the provisions of section 829 of the Code.

Section 2709 of the Code provides that a person to whom a citation has been issued in a proceeding for the discovery of assets, as was done in the present case, must attend before the surrogate and be sworn respecting any property of which the decedent had possession at the time of or within two years prior .to death, and if he refuses to attend or to be sworn or to answer a proper question he may be punished as for a contempt. The section further provides: “If the witness is examined concerning any' personal communication or transaction between himself and the decedent, all objection mider section eight hundred and twenty-nine to his testimony as to the same in future litigation is waived.”

Mrs. Van Alstyne was brought into court by her coexecutor. She was examined with respect to personal transactions had with her deceased husband sufficient to fasten liability upon her to account for the notes in controversy. The provision of the section above quoted prevented the respondent from invoking section 829 to- close her mouth in explanation of why she had possession of the notes and why she indorsed the checks over to her husband, and that explanation involved the bargain which she had made with her husband and she had a right to testify, to all the facts which she disclosed because of the waiver of the provisions of the section, by calling her as a witness in the inquiry proceeding.

Almost the identical facts here appearing were disclosed in Killian v. Heinzerling (114 App. Div. 410), wherd it was held that the provisions of section 829 did not apply to the witness.

The transfer of the. checks received for rent by Mrs. Van Alstyne to her husband involved a personal transaction between her and him and presumptively showed payment on an apparent indebtedness. If she had not been examined on the inquiry proceeding she would, have been an incompetent witness to explain how she came to indorse them over to him (Koehler v. Adler, 91 N. Y. 657), as well as incompetent to say whether she had possession of the notes prior to his death or what agreement existed as to them. (Clift v. Moses, 112 N. Y. 426.)

It now appearing that she Was made competent by being sworn on the inquiry proceeding to testify to the personal transactions and communications had with her deceased husband which she testified to, and that the testimony which she gave was not improperly received, it follows that this court is bound to make the same decision which it made on the previous argument, with,costs as therein provided.

All concurred, except Smith, P. J., dissenting, and Betts, J., dissenting in opinion.