While this may be regarded as a close case, I am of the opinion that the appellant Nathaniel P. Rogers is entitled to a reversal of the judgment appealed from and a new trial.
The contest arises over the alleged loan of $10,000 from appellant's late father to the firm of Maguire Rogers, of *Page 353 which the appellant was a member. The first question is: Did the plaintiffs, as the executors of the will, etc., of Nathaniel P. Rogers, deceased, go into a part of a communication or transaction between the deceased and the firm of his son, the appellant, so as to entitle the firm to show the entire transaction?
The plaintiff Henry P. Rogers, one of the executors, took the stand and swore that he knew that his father in his lifetime made loans to the firm of Maguire Rogers.
He also testified that he was entirely familiar with his father's pecuniary affairs, and held his power of attorney.
Having introduced this general evidence as to loans, the plaintiffs put the defendant Maguire, a member of the firm, on the stand, and sought to prove by him the $10,000 loan by testator to the firm.
This witness testified that on December 19th, 1890, the testator gave his check to the firm for $4,000, and on January 20th, 1891, a second check for $6,000.
He further testified that a policy for $5,000 on his life in the Equitable Company was not in his possession, but he presumed it was in the possession of his partner, the appellant.
Plaintiffs' counsel called for its production, and, on handing over the policy, appellant's counsel said he wished it noted on the record that Nathaniel P. Rogers, Jr., personally produced the policy.
The witness then swore that what purported to be an assignment of the policy annexed to it was an assignment to Nathaniel P. Rogers, deceased, and was made to secure the two amounts of $4,000 and $6,000, already referred to as a loan.
The plaintiffs then put the assignment and policy in evidence.
Defendant's counsel, on cross-examining Maguire, showed that this $10,000 transaction was represented by the note of Maguire Rogers, at six months, 4½% interest.
This note was produced and marked for identification, and *Page 354 later was read in evidence. Maguire further testified, on his re-direct examination by plaintiffs' counsel, as follows:
"Q. Didn't you see him" (testator) "with reference to the giving of this policy as security for this $10,000? A. I had a conversation with him relative to the matter."
This was the state of the proofs as to the alleged $10,000 loan when the plaintiffs rested their case.
We thus come to the question, how far the lips of the appellant Nathaniel P. Rogers, Jr., were sealed at the trial by § 829 of the Code of Civil Procedure.
It is to be observed that this was a firm transaction with the deceased, and that the members of the firm are the only defendants; that the plaintiffs put one of the firm on the stand and proved what they claimed was the transaction between the firm and the testator.
Did this examination of a member of the firm open the whole transaction and thereby make the partners, who are sued as such, competent witnesses to testify in their own behalf as to the same transaction?
The defendants' counsel put this appellant Nathaniel P. Rogers, Jr., on the stand and sought to prove by him what they claimed was the transaction.
It will be remembered that when defendant Maguire was on the stand as plaintiffs' witness, defendant proved on cross-examination that the loan was represented by the firm note bearing 4½% interest and the note was marked for identification and afterwards read in evidence.
The defendant's counsel showed appellant this note and asked him when he first saw it.
The plaintiffs had already objected to appellant generally as an incompetent witness under section 829, and at this point renewed the objection, and the court stated that all the testimony of the witness was received subject to this objection.
The learned trial judge had previously intimated that he would suspend his ruling, and subsequently struck out all the testimony as to the delivery of the note and policy to this witness and the conversation with testator. *Page 355
The witness then stated that on the day the note was given his father handed him the note and policy which was issued before that time and said he could have them.
It is true that on cross-examination the witness was uncertain whether the note had not been dated back, but his best recollection was that at the time of the transaction, whenever it was and without regard to date of note, his father handed the note and policy to him and said he could have them. We are not now called upon to consider how much weight this evidence would have with a jury when taken in connection with the cross-examination which followed and wherein witness became somewhat confused, but the question is whether this part of the transaction which tends to negative the theory of a loan is competent.
I think it is and that this conclusion is founded in reason and supported by authority.
The principle governing this case was recognized by this court in Nay v. Curley (113 N.Y. 575).
That was an action by administrators to recover an alleged loan made by their intestate to the defendant, evidenced by the intestate's check payable to defendant.
The plaintiffs called the defendant as a witness and proved by him that at the time of the delivery of the check the intestate did not owe him anything. The defendant offered himself as a witness in his own behalf, and after stating that he received the check from the drawer was asked by his counsel, "State what took place between you and him?"
An objection to this question was sustained under section 829 of the Code. Judge ANDREWS, speaking for this court, held this ruling erroneous, and at the close of an elaborate and convincing opinion uses this language: "The examination of the defendant by the plaintiffs, as to the existence of a debt between the witness and the intestate when the check was given, directly bore upon the nature and character of the transaction, and was an indirect method of proving the transaction itself. They thereby made the defendant a competent witness to testify in his own behalf as to the same transaction." *Page 356
So in the case at bar the plaintiffs put one of the firm on the stand and elicited such facts and transactions with testator as tended to prove a loan, and it was competent for the firm to show the entire transaction and prove, if possible, that, owing to the intimate relations existing between testator and appellant of father and son, the transaction, when completed under the legal forms of a loan, was at the time immediately changed into a gift.
Judge ANDREWS further remarked, in Nay v. Curley, already cited, and in speaking of section 829 (113 N.Y., at page 578): "But that section was not intended to abrogate the principle in the law of evidence, that where a party calls a witness and examines him as to a particular part of a communication or transaction, the other party may call out the whole of the communication or transaction bearing upon or tending to explain or qualify the particular part to which the examination of the other party was directed. This rule does not need the sanction of authority. It is founded upon obvious equity and justice. A part of the truth often implies a falsehood, and in the search for truth through the examination of witnesses, courts do not countenance partial statements of facts by witnesses."
I, therefore, think it was error for the trial judge to strike out the testimony of Nathaniel P. Rogers both in the direct and cross-examination as to the delivery of the note and policy to him by the deceased and the conversation between them, as it tended to prove the entire transaction that plaintiffs had established in part and to show that the firm of Maguire Rogers were not indebted to plaintiffs for a loan of $10,000, made by plaintiffs' testator.
This evidence also explained the appellant's possession of the note, and rebutted the presumption, if any existed, that he held it as one of his father's executors.
The law does not presume a gift (Grey v. Grey, 47 N.Y. 552), and the burden was on defendants to show the real transaction.
The appellant makes the further point that his possession of *Page 357 the note is presumptive evidence of ownership until his right to hold it is attacked.
It is true there is no affirmative proof that appellant, as executor, was in possession of any of the estate papers after his father's death; but, as his answer admits that he qualified and entered upon the discharge of his duties as executor and is still acting as such, I prefer to rest my dissent upon the main point already discussed.
The judgment should be reversed and a new trial ordered, with costs to abide the event.
All concur, with O'BRIEN, J., for affirmance, except BARTLETT, J., who reads for reversal, and GRAY, J., absent.
Judgment affirmed.