Opinion
July 13, 1917.
Charles Blandy, for the appellant.
John H. Corwin, for the respondent.
The plaintiff claims under a deed from one John Higgins and others to the plaintiff under the name of Margaret Golden, of date January 23, 1903, the property being subject to a mortgage to the estate of Abraham Varick for $4,300. The defendant claims under the said John Higgins by deeds of later date, claiming that upon October 21, 1903, this plaintiff reconveyed said premises to said John Higgins subject to the same mortgage of $4,300. The question at issue and which was submitted to the jury was whether this paper purporting to be a deed from the plaintiff to John Higgins in 1903 was the act of the plaintiff or was a forged instrument. The plaintiff swore upon her own behalf that she had never signed a deed of the property, that the signature purporting to be her signature was not hers, and that she had not acknowledged it. Thereafter the defendant produced two witnesses, one the lawyer who drew the deed and who claimed to have taken the plaintiff's acknowledgment, and another witness, one Nora Stanton, who swore to facts establishing the execution of the deed by the plaintiff. Thereafter the plaintiff was called back to the stand for the purpose of contradicting the stories told by these witnesses, and was not allowed to contradict them under the objection made that she was incompetent to testify under section 829 of the Code of Civil Procedure. The fact was that this transaction wherein the deed is claimed to have been signed by the plaintiff's mark, and not by her written signature, took place in the presence of John Higgins, although it does not appear that he took any part in the transaction. The deed was procured through the intervention of the lawyer, Schek, between whom and the plaintiff was the entire transaction. This evidence was, I think, competent evidence. If it had been excluded on the ground that the witness had already sworn that this signature was not hers, a different question might arise. But after the detailed testimony of the witness Schek and the witness Stanton, it was only fair to the plaintiff that she should be allowed to tell her version of the transaction, and notwithstanding John Higgins, the deceased, was in the room, inasmuch as he was in no way a party to the transaction except through his agent Schek. No authority is cited by the respondent to sustain this ruling, and no direct authority is found within this State to support the view here expressed. That the fact that the deceased was present during a transaction between a third party and the deceased's agent does not render the third party incompetent to swear to the transaction, seems to be held in Denny v. Denny ( 123 Ind. 240) and in Dougherty v. Deeney ( 41 Iowa 19, 21). That a transaction between a party and the agent of the deceased does not come within the purview of the section is admitted by all the authorities, and it is difficult to see why the mere presence of the deceased person, taking no part whatever in the transaction, should alter the right of the party claiming under the deceased of giving testimony of such a transaction, especially when that testimony had already been given by the agent of the deceased who conducted the conversation in his behalf.
The main contention, however, of the respondent's brief seems to rest upon the claim that the defendant, upon the plaintiff's own showing, is a mortgagee in possession with the consent of the plaintiff and that, therefore, an action in ejectment will not lie. This claim arises from the fact that after 1903 this Varick mortgage was foreclosed and Higgins bought in the property. In that foreclosure, however, the plaintiff was not made a party, and the defendant contends that, notwithstanding the foreclosure was upon the plaintiff's claim invalid as against the plaintiff, nevertheless Higgins acquired all the rights of the mortgagee, and inasmuch as his possession of the property was with the consent of the plaintiff, that Higgins became a mortgagee in possession, subject only to an equitable action to redeem, and not to an action of ejectment. If we assume that the purchase under a foreclosure void as to the plaintiff gave to Higgins the rights of a mortgagee, and if we assume that his possession was consented to by the plaintiff, it appears that thereafter and in 1911 Higgins and his wife conveyed this property to one Touhy, who upon the same day reconveyed to Higgins and his wife as tenants by the entirety, and both of these conveyances were subject to a mortgage in the sum of $4,300 held by this same Varick estate. The record does not disclose whether the original Varick mortgage was allowed to stand, or whether a new mortgage to the same parties for the same amount was executed. In either case, Higgins could no longer be considered a mortgagee in possession. A mortgagee has no right to possession except by the consent of the mortgagor, and that consent must be deemed to be revoked whenever the mortgagee has transferred his mortgage interest, because the very reason why such a consent should be given has ceased. The plaintiff could not tender to Higgins or to his transferee the amount of the mortgage and demand possession, because neither Higgins nor his transferee has the mortgage interest.
As applied to the facts in the case at bar, the rule above stated has greater force, because the plaintiff never consented to the entry of Higgins or to his possession as mortgagee. He was in possession at the time he purchased under foreclosure of this Varick mortgage. His claim apparently was under this deed, which the plaintiff challenges as a forged instrument. Even before this deed Higgins had possession under no apparent title except as tenant at will with obligation to surrender possession after due notice. The foreclosure of this mortgage and the purchase by Higgins of the property appears to have been without the knowledge of the plaintiff and under such circumstances that the defendant cannot be deemed to hold as a mortgagee in possession, directly within the case of Barson v. Mulligan ( 191 N.Y. 306). Under these circumstances, it would seem clear that the plaintiff may bring ejectment.
For the error, then, in the rejection of this evidence of the plaintiff, this judgment must be reversed and a new trial granted, with costs to appellant to abide the event.
DOWLING and SHEARN, JJ., concurred; SCOTT, J., concurred in result.
The fact that John Higgins, through whom the defendant derived her title, was present in the room at the time it was claimed the deed was signed and acknowledged, and that John Higgins was dead at the time of the trial, did not render the plaintiff incompetent to testify by reason of the rule laid down in section 829 of the Code of Civil Procedure. Although the deed which it was alleged the plaintiff signed and acknowledged was to John Higgins as grantee, the fact of the signing and acknowledgment was testified to by the notary and attorney. It was not stated that John Higgins participated in that transaction. It was not, therefore, "a personal transaction or communication between the witness and the deceased person." The reason for the enactment of section 829 to prevent a party or one interested in the event giving testimony as to personal transactions or communications with a deceased person, is that the deceased cannot confront the survivor or give his version of the affair, or expose the omissions, mistakes or falsehoods of the survivor. Where the transaction was not with the deceased, but with a third person in his presence, it does not come within either the letter or reason of the section.
The judgment will, therefore, have to be reversed, unless the question of the execution of the alleged deed by the plaintiff to the defendant has become academic by reason of the possession by John Higgins of the premises subsequent to the foreclosure of the prior mortgage upon the premises, he having become a purchaser thereof at the foreclosure sale.
The questions necessarily to be determined upon this latter branch of the case are: Did John Higgins become a mortgagee in possession? And does the defendant succeed to his rights as such mortgagee in possession, and hence is she entitled to hold the property until the plaintiff redeems by paying the mortgage debt or such portion thereof as would be found due upon an accounting for the rents, issues and profits? If the plaintiff was the owner of the equity of redemption at the time the foreclosure action was brought (and for the purposes of this discussion it must be assumed that she was), the foreclosure as to her was void. Had the omitted party been other than the owner of the equity of redemption, the purchaser at the foreclosure sale would, as to that party, become a mortgagee in possession; but where the omitted party is the owner of the equity of redemption, it has been distinctly held that the purchaser at the sale under the judgment derives no title whatsoever, and the possession of the purchaser is because of an entry without lawful authority and amounts to a trespass. ( Herrmann v. Cabinet Land Co., 217 N.Y. 526, 529.) Therefore, the entry of John Higgins did not constitute him as to this plaintiff a mortgagee in possession by virtue of the deed given upon the foreclosure sale.
It is claimed further, however, that he entered into possession with the consent and knowledge of the plaintiff, and that by reason thereof his possession will be held to be that of a mortgagee in possession; and it is true that "whenever it appears that the mortgagor has consented, either expressly or impliedly, by contract or conduct, to the entry of the mortgagee, for purposes, or under circumstances, not inconsistent with their relative legal rights under the mortgage, the possession of the mortgagee may properly be regarded as lawful. So, on the other hand, when the entry of the mortgagee is effected by the consent of the mortgagor under a relation that is hostile to, or inconsistent with, the legal rights of the parties under the mortgage, then the mortgagee's possession must stand or fall without reference to his mortgage." ( Barson v. Mulligan, 191 N.Y. 306, 322.)
It is not claimed that, with knowledge of their relation as mortgagor and mortgagee, the plaintiff actually consented to John Higgins' entry upon the premises. In my opinion, an implied consent cannot be spelled out from the circumstances of this case. Entry was not with her express consent, nor is it shown that at the time she had knowledge that Higgins' entry was claimed to be under the mortgage, but that his entry was hostile to and inconsistent with the rights of the plaintiff. He claimed to be in possession by virtue of the deed alleged to have been executed by the plaintiff and by virtue of the referee's deed of foreclosure. His entry, therefore, was hostile to plaintiff's title, and he has no right to possession as against the plaintiff until such hostile holding shall have ripened into a title by adverse possession.
For this reason I am of opinion that the judgment should be reversed and a new trial granted.
Judgment reversed and new trial ordered, with costs to appellant to abide event.