This action was brought to recover the amount of a promissory note, made by John S. Howell, the defendants’ testator, payable to the plaintiff or order. The signature to the note was proved to be in the testator’s handwriting, and no objection was taken to the evidence given for that purpose. It was produced by the plaintiff at the trial, and that circumstance added to the form of the note itself, sufficiently established the plaintiff’s right to it to entitle him to recover upon it. Possession alone was presumptive evidence that he owned the note; and as it was made by the testator and had become due when the suit was commenced, the case upon his part was fully made out. (Bedell v. Carll, 33 N. Y., 581.) Nothing further was required, or lawfully could be in that state of the case, upon his part. But the plaintiff was asked, as a witness on his own behalf, whether he owned and held the note ; which was objected to, as asking him to determine a question of law, and because he was incompetent to testify to any transaction between himself and the testator. The objections were overruled and the defendants excepted. The witness then answered that he was. Then he was asked whether it had ever been paid, and the same objections were repeated, which the referee overruled. To this decision the defendants again excepted, and the witness answered that it had not. The possession of the note by the plaintiff was presumptive evidence that it had not been paid; and he might very well have rested his case upon that circumstance, with the other proof that had been given in his favor. But he was unwilling to do that, and for that reason undertook to disprove payment of the note by the testator in his lifetime, which was one of the defenses alleged in the answer, and that too before any evidence on the subject had been given by the defendants. The referee allowed him to do it by his own statement as a witness in the case; which, as the action was against the executors of the other party, was not proper under section 399 of the Code. (Dyer v. Dyer, 48 Barb., 190; Clarke v. Smith, 46 id., 30; Strong v. Dean, 55 id., 337; Barrett v. Carter, 3 Lans., 68.) The only effect that this evidence could possibly have, under the issue, was to show that the testator, in his lifetime, had not paid the note ; which, if true, proved that no such transaction, as was alleged in *117the answer, had transpired. And as to that the plaintiff was not competent to give evidence. After it was allowed to be given the defendants may very well have considered it injudicious to endeavor to make proof of their defense of payment. They may have been able to produce sufficient evidence for that purpose alone, which would not at the same time also overcome the effect of the statement ■ improperly allowed to be made upon the same subject by the plaintiff as a witness in his own behalf. It cannot be held because it did not appear that they had no such proof to offer, although that may be the fact. They had a right to stand upon their exception, as long as it was well taken, for the purpose of having this illegal evidence excluded from the case, before they undertook to establish their defense. They were entitled to be relieved from the effect of that evidence, before they finally tried the fact of payment, in order that their own proof might not be impaired by its presence in the ease.
The other exception cannot be sustained, for the plaintiff was competent to prove that he was the holder of the note. The question, as far as that, inquired only for a fact which was within the knowledge of the witness; and the referee rightly overruled .the objections which were taken to that, as well as the other portion of the question propounded to the witness. But, upon the other point considered, the judgment should be reversed and a new trial ordered, with costs to the defendants, to abide the event.
Beady, J.:The plaintiff is the payee of a promissory note made by the defendants’ testator, John A. Howell. A defense of payment was set up. The plaintiff became a witness on the trial, and was asked, “ Are you the owner and holder of the note ? ” “ Has it ever been paid ? ” and he was permitted to answer both questions against the objections and exceptions of the defendants. This evidence was not necessary for the success of his case. By proving payment he was anticipating the defendants’ case, which might not have been made out, and adding to the strength of the presumption of non-payment from the possession'of the note itself, his own affirmative declaration that it had not, in fact, been paid. When the defendants were to begin their defense, in consequence of this addi*118tional evidence they bad not only to overcome the presumption, but tbe fact, and were thus subjected to greater peril. The allegation of payment might be established satisfactorily by facts and circumstances sufficient in themselves to warrant the conclusion to which they led, but not to destroy affirmative evidence like that given by the plaintiff. Was the question within the prohibition of the Code, section 399 ? It sought evidence of a transaction or communication between the plaintiff and the testator, and the most important transaction which they could have had in reference to the note, namely, its payment. The effect was to declare the existence of a contract made by the testator to pay, because if the note was not paid it was a subsisting liability. It will not do to answer that it was unnecessary to the plaintiff’s case to make this proof, and that he could, therefore, succeed without it. It strengthened the plaintiff’s case in face of the issues to be tried, and tended to prove what the plaintiff’s case and the transaction really was. The word transaction means “ the act of transacting or conducting any business negotiation; management; that which is transacted; a proceeding; an affair; and, according to the civil law (Bouvier), the settlement of a suit or matter in controversy by the litigating of parties between themselves without referring it to arbitration.” The payment of a note is a settlement, a proceeding, an affair between the maker and payee of a note, and, as already suggested in reference thereto, a very important transaction. I have no doubt that the question is within the prohibition referred to, and agree, therefore, with DaNiels, J., that the judgment should be reversed. The testator was the person, and the only person, it may well be presumed, who could have met the positive affirmation of the plaintiff, that the note was not paid, and the legislature did not intend that the estate of a deceased person should be placed in jeopardy by such a proceeding.