In re the Judicial Settlement of the Account of Proceedings of Watson

O’Brien, J.:

The facts are sufficiently stated in the-opinion of Mr. Justice Laughlin. The rule is- settled that where inferences are. equally •consistent with innocence or guilt; equally consistent with good faith or bad, or equally consistent with the view that one Upon whom a duty is placed has or has not performed it, we are required to draw those inferences which are consistent with innocence, with good faith, with diligence and performance of duty, rather than the ■opposing inferences. I think that, without doing violence to any of-the inferences that should fairly be drawn from the facts surrounding the obtaining and -paying of the judgment by the executors, an argument could be built up in support of the view, equally as cogent .and logical as that presented against it, that, so far as the ejxecutors are concerned, there is no reason for- holding that by any collusion with the widówor through any fraud upon tlie estate'of which they are trustees, they entered into any arrangement or were’ guilty of bad faith or were negligent .in permitting the judgment to. be obtained.

It must be conceded that there, was a question as to whether ’the widow had or had not -a valid claim against the estate. She had, asserted it and was engaged in pressing it and, in addition, she had! a right and had shown an inclination to contest the validity of the will itself. Tire executor. Watson, who' had been the private secretory and business manager of the testator, and who was entirely familiar with the merits of the claim, as well as with what were the chances of success had the widow, contested the will, is not to be charged with bad faith or want of diligence if, in his best judgment,, he. concluded that it would be better to avoid the contest of the will and pay the claim of the widow if -it could be.established. To that, end, the claim was. rejected by-the executors and afterwards referred and it is because the attorney for the executors did not object to the widow’s testifying to personal transactions between herself and her -deceased husband, which were, incompetent under section829 of the Code of Civil Procedure, that the charge of negligence is made.

The executor Watson was examined ag a witness on the reference to prove the widow’s claim, and his testimony tended- to establish its-validity. This testimony was competent when given, and was sufficient to sustain the validity of the widow’s claim. On this accounting, however, wherein the good faith .of the ¿xecutors in paying -the' claim or judgment is brought in question, Watson’s testimony was. excluded upon .the ground that .-it is incompetent under section S29 of the Code of .’Civil' Procedure, although concededly competent' when given on behalf of the widow on the reference to prove her claim. ' ,

' ^Tlie testimony, of the widow upon this accounting of- the executors was received, but, as appears- from tlie report. of -the referee,, the proceedings had upon the hearing and the discussion by him in his final opinion, no weight was attached to it, because, as suggested, the testimony which she had formerly given upon -the reference to-' establish , her own claim was then incompetent. In this, record,. therefoie., we have these anomalies : That the original claim-of the,widow was sustained by her own testimony, which should have been-excluded because incompetent, and by the testimony of the executor Watson, who was on that proceeding a competent witness, while upon the subsequent accounting of the executors it was held to be= an invalid claim, as the referee rejected the testimony of Watson, because it was then incompetent, and rejected the testimony of the= widow .as of little or no weight because formerly incompetent. Thus the executors are “ between the devil and the deep sea,” and. it cannot be that these inconsistent rulings on evidence are right.. We are of opinion that as the widow was a competent witness upon this hearing the executors were entitled to have her evidence^ received and to have the same fairly considered and weighed, and if" it established that the claim which she enforced was a just claim,, the executors would be protected in the payment of it. As her testimony appears to have been arbitrarily rejected by reason of her-former incompetency, the executors have been placed in a position of being unable to establish the validity of the claim, even though it exists as a fact, and of which they had competent evidence at the-time of its payment. • ,

It would seem to be a harsh and unjust rule to apply or surcharge-the executors with this judgment. It is only, as said, by resolving-against the appellants’ inferences, equally as consistent with their good faith and honesty as with bad faith and fraud, that the conclusion can be reached that the claim of the widow, which was reduced to judgment and which was admittedly paid by the executors, is-not a proper credit to allow them. The principal argument in support of this finding is that their attorneys, upon the reference, were-not sufficiently astute and did not avail themselves of the advantage which, under section 829 of the Code of Civil, Procedure, they possessed of keeping ont certain testimony which was given in support of the widow’s claim. Taking the then situation from the executors’ standpoint, there was a fair question as to whether the widow’s-claim was honest and valid. They required her to establish it before-a referee, and the reason why a more stubborn contest was not made-is furnished by the testimony of the executor "Watson, who believed it to be a good claim. After it was proven, the executors, by paying-'it, avoided the contest of the will. Are they to be judged upon the-basis of the fuller knowledge of all the facts which they now pos- • sess, and which now appear, rather than, upon the knowledge and the facts which they possessed at the time when the widow’s- claim was presented? I think their acts are to be judged in the light of' the knowledge which they possessed when they paid the claim ; and ■so judged, I do not think they can be justly characterized as fraudulent,- collusive or negligent; but, on the contrary, though they may not have acted wisely, and though their judgment, as shown by subsequent events, may have beén faulty when they exercised it, I •believe they acted in -good faith-and honestly¡

The decree should be reversed, and a - new hearing had before another referee, With costs to appellants to abide the event.

Van Brunt, P. J., and Hatch, J., concurred; Patterson and ,, .Laug-hlin, JJ., dissented. .