
    (82 Hun, 139.)
    DUANE v. PAIGE et al.
    (Supreme Court, General Term, Fourth Department.
    December 7, 1894.)
    1. Witness—Competency—Transactions with Decedents.
    A mortgage was foreclosed by the deceased mortgagee’s executors, and L., one of the executors, purchased the land, and took a deed in his own name. After L.’s death a controversy arose over the ownership of the land, the deceased mortgagee’s heirs claiming that the executor purchased for the estate, and the representatives of L. claiming that he bought the land for himself. Held, under Code Civ. Proc. § 829, which provides that a person is incompetent to testify as to a personal transaction with a deceased person against the interest of that person’s representatives, and in his own interest, that a coexecutor who had an interest in the deceased mortgagee’s estate was incompetent to testify as to whether L. paid for the land the alleged purchase price.
    3. Evidence—Declarations of Mortgagor—Rights of Mortgagee.
    The declarations of a mortgagor, made after the execution of the mortgage, are not admissible to affect the rights of the mortgagee.
    3. Release and Discharge—Impeachment.
    Where the heirs stipulate in a surrogate’s court that the executor may be fully discharged from all liability for all money, property, and choses in action and property rights which came to his hands as the estate of his testator, they will not be allowed to show that certain land belonging to the estate, held by the executor in his individual name, was not included in the agreement, in the absence of proof of fraud or mutual mistake.
    
      4. Parties—Executors.
    Where plaintiffs seek to reach the assets of a testator’s estate which must be administered, the executor must be made a party, as one without whose presence “a complete determination of the controversy cannot be had.” Code Civ. Proc. § 452.
    Appeal from judgment on report of referee.
    Action by Julia R. Duane against Clinton F. Paige, Maria A. Lewis, and others to determine the rights of the respective parties to certain premises in the town of Fenton, Broome county. From an interlocutory judgment directing a sale of said premises, and payment of one-half of proceeds to plaintiff, one-fourth thereof to plaintiff as the administratrix of Patrick H. Drake, deceased, and one-fourth thereof to defendants Clinton F. Paige and Jane L. Boss as administrators of Caroline L. Paige, deceased, after first paying from such proceeds certain costs, defendant Martha J. Clark and defendants Maria A. Lewis and others, executors of Charles Seymour, deceased, appeal.
    Reversed.
    Argued before HARDIN, P. J., and MERWIN, J.
    Edward K. Clark, for appellants.
    Millard & Stewart, for respondents.
   MERWIN, J.

On the 3d day of July, 1863, Hazard Lewis, a resident of Binghamton, N. Y., died, leaving a will which was duly proved in Broome county on the 15th July, 1863, and letters testamentary issued to Frederick Lewis, Clinton F. Paige, and Horace S. Griswold, the executors therein named. The decedent left, him surviving, his widow, Maria Lewis, and three children, Frederick Lewis, Jane E. Drake, wife of Patrick H. Drake, and Caroline L. Paige, wife of Clinton F. Paige. By the will, after certain general bequests and devises were made, all the residue after the payment of debts and expenses was devised and bequeathed to the wife and the three children equally, one-fourth part thereof to each. The testator, at the time of his death, owned a bond and mortgage given by Freeman Randall to secure the payment of $3,500, and the principal and some interest thereon was then unpaid. The mortgage covered about 201 acres of land in the town of Fenton. The bond and mortgage passed into the hands of the executors, and were included in the inventory made and filed by them. On the 17th July, 1867, there then being due on the bond and mortgage about the sum of $4,194, an action.was commenced in the supreme court, in the names of the executors as such, as plaintiffs, for the foreclosure of the mortgage, and such proceedings were had that on the 10th August, 1867, a judgment of foreclosure and sale in the usual form was entered. In pursuance of the judgment the premises were sold by the sheriff on the 26th November, 1867, and were bid in by Frederick Lewis for the sum of $2,400; and at same date the sheriff executed and delivered to him a deed, it being recited therein that the bid had been paid by the party of the second .part, and the receipt thereof was acknowledged. The deed did not run to Lewis as executor. It is alleged in the complaint that Lewis paid no part of the consideration or bid, but in taking the deed to himself made himself the trustee of the owners of the residuary estate. Mr. Griswold, one of the executors, was the plaintiff’s attorney on the foreclosure, and he drew the deed to Lewis, and it was duly recorded on November 27, 1867. On the 6th January, 1868, the three executors, as such, united in a deed to one Wilcox of 64 acres, part of the 201 acres conveyed to Lewis by the sheriff. The consideration of this deed, as stated therein; is $1,700, and it was recorded January 6,1868. On the 31st June, 1873, Frederick Lewis and Maria A., his wife, executed to Patrick H. Drake a mortgage upon an undivided one-fourth of the balance of said premises, being about 137 acres. This mortgage covered a large amount of other real estate, and was given to secure the payment of $60,000. It was afterwards foreclosed by Drake, and the premises bid in by him, the affidavits of sale being recorded February 11, 1876. The plaintiff, as the representative of Drake, who died in 1882, claims, by virtue of this foreclosure, to be the owner of an undivided fourth in the said premises. In August, 1870, Griswold, one of the executors, died. On the 25th August, 1873, Frederick Lewis resigned as executor, under what authority does not appear. He died on 4th March, 1890, after the commencement of this suit. After the resignation of Frederick, Patrick H. Drake seems to have acted as executor under an order of the supreme court. He died in November, 1882. On the 28th May, 1885, Frederick Lewis and Maria A., his wife, duly executed and delivered to Charles Seymour a mortgage on the premises in question for the sum of $600, being money loaned by Seymour to the mortgagors at the time of the execution of the same. This mortgage was recorded. The papers do not disclose the date of the record, though it may perhaps be inferred that it was recorded at or about the time of its execution. Previous to this, and on the 3d June, 1884, Frederick Lewis conveyed the premises to one Van Name, and he, on June 6,1884, conveyed the same to Maria A. Lewis, the wife of Frederick. The purpose of these deeds was to pass the title to the premises, or whatever interest Frederick might have therein, to his wife, and the consideration was a precedent debt. The deed to Van Name was recorded November 22, 1887, and the deed to Mrs. Lewis on December 18,1888. Jane E. Drake, one of the residuary legatees, died in May, 1883, leaving a will by which all of her property was given to her two children, the plaintiff and Virginia M. Drake. The latter died in 1884, leaving a will giving her property to her sister, the plaintiff. The plaintiff, as the owner of the residuary interest of Jane E. Drake, claims an undivided fourth interest in the premises in question or their proceeds. Maria Lewis, the widow of Hazard Lewis, was adjudicated a bankrupt on October 31, 1873, and on May 24,1877, her assignee in bankruptcy executed and delivered to Jane E. Drake a deed purporting to convey, among other pieces of property, an undivided one-quarter of the premises in question. Under this the plaintiff, as the successor in interest of her mother and sister, claims an undivided one-fourth interest in the premises or their proceeds. Caroline L. Paige, the other of the residuary legatees, died in June, 1878, intestate, leaving, her surviving, her husband, Clinton F. Paige, and three children. Clinton F. Paige and Jane L. Paige (now Ross) were afterwards duly appointed administrators. Prior to the commencement of this action, all the debts of Hazard Lewis and funeral and testamentary expenses were paid. This action was commenced March 25, 1889, for the purpose of having determined the rights of the respective parties in the premises, the plaintiff claiming to be owner of a three-fourths interest therein. The plaintiff as administrator of Patrick H. Drake, deceased, is not a party, nor is Clinton F. Paige as surviving executor of Hazard Lewis, deceased, a party, nor are Clinton F. Paige and Jane L. Ross as administrators of Caroline L. Paige, deceased, parties. No objection is raised, by the answers of defendants, that there is any defect of parties.

It is found by the referee that Frederick Lewis, in the foreclosure sale, purchased the premises for the benefit of the estate, and paid no part of the purchase price; that after he ceased to be executor, in 1873, he could not convey the premises, or any interest therein, and that the deed to Maria A. Lewis through Van Name, as well as the mortgage to Seymour, was inoperative; that plaintiff, individually and as administratrix of Patrick H. Drake, was the owner of a three-fourths interest in the property, and that the administrators of Caroline F. Paige owned the other one-fourth. The referee also found, at the request of the appellants, that the premises in question have not been in the actual possession of any person within the past 20 years; that no action appears to have been taken by any person interested in the estate of Hazard Lewis to set aside the deed from the sheriff to Frederick Lewis until the beginning of the present action, in March, 1889; that the premises in question were to be treated as personal assets in the hands of Frederick Lewis, so far as the heirs and legatees of Hazard Lewis are concerned. It also appears that prior to May, 1887, there was a proceeding in the surrogate’s court of Broome county entitled “In the Matter of the Intermediate Accounting and Judicial Settlement of the Accounts of Frederick Lewis, Clinton F. Paige, and Patrick H. Drake, as Executors of the Will of Hazard Lewis, Deceased”; and on the 16th May a decree was made, whereby it was adjudged, among other things, that Clinton F. Paige pay Maria Lewis the sum of $1,691.03; that Clinton F. Paige and Frederick Lewis jointly, as such executors, pay to Maria Lewis the sum of $11,128.39; and that the executor Frederick Lewis pay to her the sum of $1,288.29,—amounting, in the aggregate, to the sum of $14,107.71. By the same decree it was adjudged that Clinton F. Paige, either alone or jointly with Frederick Lewis, pay to Julia R. Duane, the plaintiff herein, either as administratrix of Jane E. Drake or of Patrick H. Drake, sums in the aggregate amounting to $9,688.69. On the 7th September, 1887, after divers negotiations, the parties interested in the estate executed and delivered an instrument of which the following is a copy:

“State of New York, Surrogate’s Court, Broome County.
“In the Matter of the Accounting and Judicial Settlement of the Accounts of Frederick Lewis, Clinton F. Paige, and Patrick H. Drake, as Executors of the Will of Hazard Lewis, Deceased.
“Stipulated, that Frederick Lewis be, and hereby is, fully discharged from all liability for all money, property, and choses in action and property rights which came to his hands as the property of the estate of Hazard Lewis, and a decree of surrogate’s court of Broome county fully discharging him may be entered at any time without further notice; and his acts as executor of the will of Hazard Lewis, deceased, are closed and settled, and he is fully discharged as such executor from all further liability; and a decree to this effect, making it a final decree so far as the liability of said Frederick Lewis is concerned, may be entered at any time. Sept. 7th, 1887.”

This was signed by the attorneys for Clinton F. Paige, by Clinton F. Paige and Jane L. Paige as administrators of Caroline L. Paige, by the plaintiff herein, Julia R. Duane, and her attorney, and by Maria Lewis. At the same date, and as a part of the same transaction, Maria Lewis, and Maria A. Lewis, who claimed, as assignee of Maria Lewis, to own the interest of Maria Lewis in the estate and in the amounts awarded to her in the decree, executed and delivered a satisfaction of the decree. No money was paid them except the sum of $1,950 furnished by Frederick Lewis by means of an insurance policy. The delivery of this satisfaction was the consideration of the release. It is found by the referee that the parties executing the release did not intend to include therein the premises in question, or the avails thereof, and that there was no agreement or understanding that the title of Frederick Lewis and Maria A. Lewis to the premises in question should not be questioned; and he held that neither Maria A. Lewis nor the holder of the Seymour mortgage could derive any benefit in this action from the release.

1. Upon the trial the plaintiff called as a witness the defendant Clinton F. Paige. Among other things, he testified that he was present at the foreclosure sale in 1867, that the other executors, Griswold and Lewis, were there, and that Lewis bid off the property, and that Griswold was the attorney who brought the suit. The question was then asked him: “Did Mr. Lewis pay the $2,400 to the plaintiff’s attorney in the action?” This had reference to the bid for the 201 acres. The objection was made by the appellants that under section 829 of the Code the witness was not competent to testify as to the transaction, in that he was personally interested in the case, and was testifying in his own interest to a personal transaction with a deceased person, against that person’s representatives in interest. The objection was overruled, and exception taken, and the witness answered, “He did not” Mr. Paige was a party, and interested in the event of the action. If the subject of the action was to be deemed real estate, he was tenant by the curtesy of the share of his deceased wife, and, if personal property, then he was interested, as his wife died intestate, and he vrould be entitled to a distributive share of her personal estate. Although called by the plaintiff, he was in effect examined as a witness in his own behalf or interest, as the position of the plaintiff and of the witness as to the character or effect of the foreclosure was the same, and his evidence would necessarily operate to his own benefit. Mr. Lewis was then dead. But it is suggested that the question did not call for a communication or transaction between witness and the deceased, and that to be objectionable it must appear that the witness participated in the conversation or transaction. The witness was at the foreclosure sale as one of the parties to the action, and, if the money was paid in his presence, he was in reality a party to the transaction. The fact that the answer was negative does not affect the point. The latest expression of the_ court of appeals, that we have noticed, upon the subject of the participation of the witness in the conversation or transaction, is found in Re Bernsee’s Will, 141 N. Y. 392, 36 N. E. 314, where it is said:

“If active participation in the conversation was necessary to exclude an interested witness, and he should, as an observer, he permitted to testify to transactions in form between the deceased and third persons, although such transactions were in his interest, it would furnish an easy and convenient method, in every case, of evading the statute. The decisions have enforced the spirit of the statute by excluding such evidence, and have treated transactions between the deceased and third persons in the presence of interested parties as if the witness actually participated therein.”

The exception was, we think, well taken. The referee also received in evidence, over the objection and exception of the appellants, statements made by Frederick Lewis in January, 1888. This was after the rights of Maria A. Lewis and of Mr. Seymour had accrued, and his declarations as against them were not competent. They related to what occurred at the foreclosure sale and the conduct of Lewis afterwards, and tended to support the plaintiff’s theory on the subject. Statements of Lewis made after this suit was commenced, and shortly before Ms death, were also received in evidence over proper objection and exception. They related to the extent of the interest he or those claiming from him had in the property. We do not see how these rulings can be sustained. It is, however, claimed that the rulings referred to, if erroneous, were harmless, and did not affect the result. That is not entirely clear.

2. A more important question arises as to the effect to be given to the stipulation or release of September 7,1887; and in considering this question we may assume that Frederick Lewis did not, by the transaction upon the foreclosure, become individually the owner of the property, but that he held the title for the benefit of the estate. In such a case, as said in Lockman v. Reilly, 95 N. Y. 64, 70, “the legal title to the land is in the executor or administrator; but as between him and the legatees, next of kin, and creditors of the deceased party, it is personal estate, and he holds it as the legal representative of the deceased.” On page 71 of the Lockman Case it is said:

“That land bought In by executors on a foreclosure of a mortgage belonging to the estate is to be treated as personal property, which the executors may sell, and for which they are accountable as such, has been frequently decided, and it is immaterial whether the deed is taken in the names of the executors as such, or in their individual names. Clark v. Clark, 8 Paige, 152; Schoonmaker v. Van Wyck, 31 Barb. 457; Valentine v. Belden, 20 Hun, 537; Cook v. Ryan, 29 Him, 249. In all these cases, land thus purchased by an executor or administrator is regarded as a substitute for the mortgage foreclosed, and takes its place for all purposes, as between the executor or administrator and the parties interested in the estaté. It is not treated as land belonging to the testator. His heirs or devisees take no direct interest in it, and cannot dispute the title of a purchaser from the executor, though no power of sale be contained in the will. The heirs of an intestate cannot question the title of a purchaser from, his administrator, who has purchased land under such circumstances. Long v. O’Fallon, 19 How. 116; Williams, Ex’rs, p. 650, note d.”

In Clark v. Clark, supra, it is said that if, upon an accounting, the land so bid in remains unsold, the surrogate may direct a sale thereof, and a distribution of the proceeds as a part of the estate. The expression- in the release, “all money, property, and choses in action and property rights which came to his hands as the property of the estate of Hazard Lewis,” is broad enough to include the property in question. It came to his hands, for he took the title to himself individually, and he did not, when he resigned, transfer it to his coexecutor. It remained still in his hands, to be accounted for as personal assets. That being so; the release applies, unless for some .good reason this property is to be excepted from its operation. In this line it is found that it was not the intention of the parties to include this in the release. If by this it is meant to be found that there was a mutual mistake in making the language so broad, then the evidence does not, I think, warrant that conclusion. The evidence does not show that Maria A. Lewis or her assignor, Maria Lewis, who together furnished practically the consideration of the release, did not intend that the release should include the property in question. On the contrary, there is evidence that Maria A. Lewis relied on the fact that this property would be released. Neither they nor Frederick Lewis agreed that it should not be. The attorneys for the plaintiff and for Mr. Paige testified that nothing was said in the negotiations about this property, and that they did not know that Frederick Lewis had the title in his own name. It, however, appears that Mr. Paige had known of it for several years, and the plaintiff had brought a suit for partition, including this property as a part of the real estate owned in common, so that she or her attorney must have known that the mortgage had been foreclosed, and the title bid in by some one; and the record showed who took the title, and that a mortgage had been afterwards given thereon. It is not claimed that any of the parties, when they signed the release, did not fully know its contents. It is said on the part of the plaintiff that all that Frederick Lewis wanted was a discharge of the decree. Still, plainly, the release is more than that, and it is presumed that all parties knew it when they signed it. Nor does the evidence show that as between Maria Lewis, Maria A. Lewis, and Frederick Lewis of the one side, and the other parties who signed the release upon the other side, there was any agreement except such as is indicated by the papers themselves. There was therefore no mutual mistake, and it is not claimed there was any fraud. “Where a release is general in its terms, and there is no limitation by way of recital or otherwise, the releasor may not prove an exception by parol. The instrument itself is the only competent evidence of the agreement of the parties, unless avoided for fraud, mistake, duress, or some like cause. So, also, if the words of a release fairly import a general discharge, their effect may not be limited so as to exclude a demand simply upon proof that at the time of its execution the releasor had no knowledge of the existence of the demand.” Kirchner v. Sewing Mach. Co., 135 N. Y. 182, 31 N. E. 1104. The rule that, when the writing does not contain the whole agreement, the balance may be shown by parol, does not help the plaintiff, for the parol agreement must not be inconsistent with or vary the terms of the written part Chapin v. Dobson, 78 N. Y. 80. There is no question about the consideration. Bank v. Blair, 44 Barb. 641; Morehouse v. Bank, 98 N. Y. 510. It was a stipulation in the surrogate’s court which was intended to furnish a basis for a final settlement and discharge of the executor Frederick Lewis. We are of the opinion that the release, upon its face, covered the claim in question, and that no sufficient ground or reason appears in the case to restrict its operation, and that therefore the referee erred in not giving it effect.

3. Clinton F. Paige is the surviving executor of the estate of Hazard Lewis. He is not a party to the action in his representative capacity, and is not, as such, bound by the result. Rathbone v. Hooney, 58 N. Y. 467; Landon v. Townshend, 112 N. Y. 93, 19 N. E. 424; Hall v. Richardson, 22 Hun, 444. The plaintiff in this case seeks to reach assets which, if they exist at all, primarily belong to the personal representative, and are to be by him administered upon. It would seem that the executor, as such, was a necessary party to a complete determination of the controversy, and that under section 452 of the Code he should be brought in, although the objection of want of proper parties is not taken. Osterhoudt v. Board, 98 N. Y. 239; Peyser v. Wendt, 87 N. Y. 322; Bear v. Telegraph Co., 36 Hun, 403. There has been no final settlement of the estate.

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