
    CUNNINGHAM v. WHITFORD et al.
    (Supreme Court, General Term, Third Department.
    December 6, 1893.)
    1. Witness—Transaction with Decedent—Party in Interest.
    In an action to subject to decedent’s debts land which had been mortgaged by the devisee, the mortgagor and the personal representatives of the mortgagee were made defendants. Held, that the mortgagor was not, by Code Civil Proc. § 829, forbidding a party in interest to testify in his own behalf as to personal transactions with a decedent, disqualified from testifying in behalf of plaintiff as to whether he told the mortgagee about the debts of the estate before the mortgage was taken.
    Mortgages—Bona Fide Incumbrancers.
    Before the expiration of the three years within which creditors -may proceed to charge the real estate of decedent with payment of debts, no presumption arises that the debts have been paid, and therefore one who takes a mortgage from a devisee of decedent is not a bona fide incumbrancer.
    Appeal from circuit court, Queens county.
    Action by George A. Cunningham against Alexander Whitford and others, for the benefit of himself and all other creditors of Daniel Whitford, deceased, who would come in and contribute to the expenses of the action, to subject decedent’s estate to the payment of his debts. From a decree adjudging that a mortgage given by Alexander Whitford on land devised to him by decedent was a prior lien on the land, as against the debts of testator, the legatees named in the will and the creditors of deceased appeal.
    Reversed.
    Argued before MAYHAM, P. J., and PUTNAM and HERRICK, JJ.
    J. A. Griswold, for appellant legatees.
    A. C. Griswold, for appellant creditors.
    Emory A. 'Chase, for respondents.
   MAYHAM, P. J.

The case discloses that Daniel Whitford died May 20, 1888, the owner of a farm, and leaving a will whereby he bequeathed to three of his children $300 each, and to two grandchildren each $100. In and by said will he devised his farm to his son Alexander Whitford, by the following provisions:

“3d. I give, devise, and bequeath unto my beloved son Alexander Whitford all the rest, residue, and remainder of my estate, both real and personal, of what nature and kind so ever, to have and to hold the same to him, his heirs and assigns, on the condition and proviso that he pay to the above-named legatees, respectively, the legacies herein given, Within four years after my decease, without interest; and the real estate so devised to my son Alexander Whitford is charged with the payment of the same.’’

The testator also, in his will, nominated Alexander Whitford as sole executor. The will was duly proved and admitted to probate on the 25th day of June, 1888, as a will of .real and personal estate, and letters testamentary were duly issued to the executor named therein, who duly qualified as such executor, and thereupon took possession of the real estate of which the testator died seised, as devisee under the will. One of the legacies in the will has been paid by the executor and devisee of the testator’s real estate. The trial judge finds that the testator, at the .time of his death, owed debts, not secured by mortgage, to five persons, amounting in the aggregate, without interest, to $3,024.59, which are still unpaid, and that there are four unpaid legacies, amounting, without interest, in the aggregate, to $1,046.97. This action is prosecuted by a creditor of the testator, upon a simple contract debt. to reach the estate of the deceased in the hands of the legatees, devisees, or heirs of the deceased, under the provisions of section 1843 of the Code of Civil Procedure.

The case shows that on the 1st day of April, 1890, the defendant Whitford, the devisee of the real estate under the will of the testator, executed and delivered to David M. Hamilton a mortgage on the real estate devised to him for $2,200, to secure a loan of that amount at that time made to him. The mortgagee having died before the commencement of this action, his personal representatives are made defendants in this action, and are the respondents on this appeal. The only question of fact litigated on the trial, and in dispute on this appeal, is as to whether David M. Hamilton took and accepted the bond and mortgage from Alexander Whitford in good faith, and without notice of the debts of the testator above referred to. Upon this subject the mortgagor, Alexander Whit-ford, who was called as a witness for the plaintiff, was, on plaintiff’s behalf, asked this question: “Did you tell David M. Hamilton, now deceased, about the debts of the estate in favor of the creditors?” This question was objected to by respondents on the ground that it involved a personal transaction between the witness and deceased, and was therefore inadmissible, under section 829 of the Code of Civil Procedure; and the objection was sustained, and the plaintiff duly excepted. “By Plaintiff’s Counsel: The plaintiff offers to prove by the witness that, at the time of the execution of the bond and mortgage executed by witness to David M. Hamilton, the mortgagee, the witness told the mortgagee of all the debts of the testator and the legacies in the will. (Counsel for Parker, Jennings, and Hamilton objects to the offer on the same grounds last above. Objection sustained by the court, to which plaintiff excepted.)” Counsel for the legatees and other creditors .named as defendants, on their behalf, repeated the same question and offer, to which the counsel for the personal representatives of Hamilton made a similar objection, which was in like manner sustained by the court, and like exceptions were taken. The attorneys for the respondents, on the behalf of the personal representatives of the mortgagee, called a witness, and proved a conversation between Hamilton, the mortgagee, and Whitford, the mortgagor, at the time of making and accepting the mortgage, to the effect that the mortgaged property was unincumbered, except by an $800 mortgage. The counsel for the plaintiff further inquired into that conversation, and Alexander Whitford was recalled by plaintiff, and testified:

“I remember the occasion I was at Mr. Bronk’s office with David M. Hamilton. At the time spoken of by Mr. Bronk as a witness here, I was present. 1 heard Mr. Bronk testify. Q. Now, what was said between you and David M. Hamilton about liens and claims on the property? (Objected to by counsel for defendants Parker, Jennings, and Hamilton, as a personal communication or transaction between the witness and a deceased party in which he is interested, and a party in this action, and otherwise objected to as incompetent under section 829 of the Code. Objection sustained by the court, and exception by the plaintiff and the defendants, except the executors of Hamilton.)

It is now insisted by the learned counsel for the appellants, both plaintiff and defendants, that the exclusion of this evidence' was error. There can be no question as to the fact that this offer bore directly upon the question of knowledge in the mortgagee of the existence of these debts. But was the witness by whom it was sought to be proved competent to give evidence upon the subject? The provisions of the Code invoked by the. respondents provide that:

“A party or persons interested in the event, * * * shall not be examined as a witness, in his own behalf or interest, * * * against the executor * * * concerning a personal transaction or communication between the witness and the deceased person,” etc.

The witness in this case was not called as a witness ip. his own behalf. He was called by an adverse party, who.was seeking to establish a liability against him. Nor do we see how it can be maintained that he was called in his own interest. He was liable on the covenants in his bond to Hamilton for the full amount of his mortgage, and, if the debts of testator were first to be paid out of this real estate, that fund would be so diminished as to increase his probable chances of liability on his bond. It is urged, on the other hand, that, if the debts of testator are left to stand behind the mortgage, his liability on them may be increased; but if, as we shall see, he fails to perfect his title under the will, by neglecting to comply with its conditions, then the real estate devised to him would be the primary fund for the payment of the legacies, out of which they would be paid, and to that extent his interest in the real estate would be diminished, so that it is difficult to see how he could promote his own interest by his testimony. It is true, he is a party to the action, but that alone does not disqualify him from being a witness, unless coupled with some of the elements of disqualification specified in section 829 of the Code.The disqualification created by that section is where the witness testifies in his “own behalf or interest.” Carpenter v. Soule, 88 1ST. Y. 251. We do not see that the testimony offered comes within that prohibition, and think its exclusion was error. H it was material in this case to show knowledge of the testator’s indebtedness, then the rejection of this evidence was to the prejudice of the appellants, and should furnish reason for reversal.

The respondents’ mortgage was executed in less than two years after the proof of testator’s will, and within two years from the time of testator’s death. There could, therefore, at the time of taking of such mortgage, be no legal presumption that the simple contract debts of the testator had all been paid, as the three years within which such creditors might apply to the surrogate, under section 2750 of the Code, for proceedings to charge the real estate with the payment of such debts, had not expired. In Platt v. Platt, 105 N. Y. 488, 12 N. E. 22, the court say:

“During three years after his [testator’s] death, his creditors have a kind of statutory lien upon the real estate left by him, and such real estate cannot be so aliened by his heirs or devisees during that time as to defeat the claims of creditors thereon;” citing 2 Rev. St. p. 100 et seq.; Code, § 2749 et seq.

It is true that, after the expiration of the three years from testator’s death, this presumption of the existence of a lien ceases. Covell v. Weston, 20 Johns. 414; Hyde v. Tanner, 1 Barb. 75; Wilson v. Wilson, 13 Barb. 252. Under these circumstances, it cannot, I think, be held that at the time Hamilton took this mortgage from a devisee under the will, who claimed no title except through it, he can be treated as a bona fide incumbrancer or purchaser, so as to place his lien upon these premises prior to the claims of creditors of the deceased devisor, whose liens were in force upon this land at the time he took the mortgage. .The creditors of the deceased at that time owed him no duty, and, as he is presumed to have known the law relating to the rights of deceased’s creditors, he, and not they, must suffer, if either, by his neglect.

The counsel for the creditors requested the court to find and decide that the creditors of the estate be paid out of the proceeds of the sale of the real estate prior to the bond and mortgage. The refusal of the court so to find, we think, for the reasons above stated, was error. The devisee under the will took the land only upon the condition of payment of the legacies. As the will was Ms only source of title, the payment of the legacies was a condition precedent to the vesting of the title in him; and, in addition to that, the payment of the legacies was expressly charged on the real estate devised. It seems to require no argument or citation of authorities to reach the conclusion that the mortgagee, under such circumstances, cannot claim under his mortgage, taken from the devisee, priority over the legatees. We think the learned judge erred in his conclusion, and that the judgment should be reversed.

Judgment reversed, and a new trial ordered; costs to abide the event. All concur.  