Croker v. New York Trust Co.

• Decision Date: 29 March 1927
• Citation: 245 N.Y. 17,156 N.E. 81
• Parties: CROKER v. NEW YORK TRUST CO. et al.
• Court: New York Court of Appeals Court of Appeals

245 N.Y. 17

156 N.E. 81

CROKER

v.NEW YORK TRUST CO. et al.

Court of Appeals of New York.

March 29, 1927.

Action by Richard Croker, Jr., against the New York Trust Company as temporary administrator of the goods, chattels and credits which were of Richard Croker, deceased, and others. Judgment for plaintiff was affirmed by the Appellate Division (216 App. Div. 832, 215 N. Y. S. 833), and the defendant named appeals.

Reversed, and new trial granted.

See, also, 154 N. E. 636.

Appeal from Supreme Court, Appellate Division, First department.

Edmund L. Mooney, Wilbur W. Chambers, both of New York City, and Jacob Quat, of Mt. Vernon, for appellant.

Frederick R. Ryan, Samuel A. Adamson and Sydney Ehrlich, all of New York City, for respondents.

POUND, J.

Plaintiff sued in equity to recover on an oral contract made by him with his father, Richard Croker, deceased, whose administrator, the New York Trust Company, is one of the defendants, for the benefitof the other defendants, his brother Howard and his sister Ethel, whereby, in consideration of plaintiff's promise to transfer to Howard his share in his mother's estate, Richard Croker agreed, upon being notified of the amount of such share, to pay a like amount to Howard and to Ethel. Plaintiff established the amount of his one-fourth interest in the estate of his mother at $76,191.15 and the payment thereof to Howard. The total of each share with interest has been computed at $114,587.29, and plaintiff has recovered for the benefit of his brother and his sister the sum of $229,174.58.

[1] After the unanimous affirmance by the Appellate Division prior to July 15, 1926, no question of fact remains for our consideration.

[2] Appellant contends that although the defendants Howard and Ethel might have recovered the amount of their shares in an action at law against Richard Croker or the administrator of his estate as third party beneficiaries under the rule of Lawrence v. Fox, 20 N. Y. 268, and Seaver v. Ransom, 224 N. Y. 233, 120 N. E. 639, 2 A. L. R. 1187, the plaintiff may not maintain an action in equity for the enforcement of their cause of action. That plaintiff's remedy in law would be inadequate is obvious. He has suffered no pecuniary damage by the failure of the promisor to perform his agreement. His injury in law is, therefore, purely technical. It has been suggested (Williston on Contracts, §§ 358, 359) that a court of equity is the only proper forum for such actions so that all parties in interest may be before the court. Although the right of the beneficiary in such a contract to maintain an action thereon has been upheld, and although no reported case has been cited where equity has been invoked by the promisee to enforce the liability of the promisor to the third party beneficiaries, the suit in equity should be sustained in principle. The contract is with the promisee and the promisor was under an equitable obligation to him to perform. The promisee, while not financially interested in the result, except as to the question of costs, is interested in asserting the duty of the promisor to carry out the terms of the contract. ‘Equity insists upon the conscientious obligations of the suitors.’ Otherwise we must hold that a promisee who has parted with a substantial sum in exchange for the promise of another to pay a similar amount to third party beneficiaries in remediless. The procedure adopted provides adequately for the situation and should be upheld.

[3] When it comes to the competency of proof to sustain plaintiff's cause of action, questions of substance arise under Civil Practice Act, § 347, formerly Code of Civil Procedure, § 829. The oral contract between plaintiff and his father was established by plaintiff's evidence. At common law parties and persons interested in the event of the suit were disqualified from being witnesses in their own behalf. The common-law rule has been almost unversally abolished, but in New York an important exception is preserved by section 347, Civil Practice Act. The intention of this statute is that the surviving party to an action against the deceased's estate shall not have the advantage of giving his version of the matter in controversy in his own behalf or interest or in behalf of those who derive their title or interest from him when the other party is prevented by death from being heard to contradict or explain it. To hold otherwise has been thought to imperil the estates of the dead by subjecting them to the uncontradicted perjuries of the mendacious. Meritorious claims have thus been sacrificed to the general interest in order to prevent fraud and injustice. We still find the meaning of ‘party’ and ‘person interested,’ as disqualifying terms, in the old common-law decisions.

Three questions present themselves:

1. Is plaintiff a party ‘examined as a witness in his own behalf or interest?’

2. Is he a person ‘interested in the event?’

3. Is he ‘a person from, through or under whom’ his brother and sister derive their interest or title by assignment or otherwise?

The first two questions become on examination practically one and inseparable in meaning and application. It is contended that plaintiff is neither a party examined in his own behalf or interest nor a person interested in the event because, as stated in Eisenlord v. Clum, 126 N. Y. 552, 556,27 N. E. 1024, 1025 (12 L. R. A. 836), he had, although nominally called to testify in his own behalf, no ‘direct and certain interest in the event of the cause or an interest in the record for the purpose of evidence,’ was merely a titular party, and in the words of Hiscock, C. J., in Harrington v. Schiller, 231 N. Y. 278, 285, 132 N. E. 89, 91, had no ‘financial interest in the event of the litigation which would be supported and forwarded by the testimony which’ he gave. Parties were disqualified at common law not so much as parties as because of their interest in the event of the litigation. ‘Every person so circumstanced, however small and insignificant the amount of his interest, was presumed to be incapable of resisting the temptation to perjury; and every judge and juryman was presumed to be incapable of discerning perjury under circumstances peculiarly calculated to excite suspicion and watchfulness.’ See 1 Wigmore on Evidence (2d Ed.) p. 999. Parties are now clearly competent under section347 to testify against their own interest as to personal transactions with a deceased person, as when called by an adverse party. As at common law, the fact that the witness is a party to the record is not controlling. An interest in the question is not enough to disqualify, as that is not an interest in the event. ‘Unless the witness will gain or lose by...