In re Estate of Schultz
| Decision Date | 22 June 1923 |
| Docket Number | 34969 |
| Citation | 194 N.W. 242,196 Iowa 125 |
| Parties | IN RE ESTATE OF HERMAN SCHULTZ. FARMERS' STATE BANK OF SCHLESWIG, Appellee, v. HERMAN SCHULTZ ESTATE, Appellant |
| Court | Iowa Supreme Court |
Appeal from Crawford District Court.--E. G. ALBERT, Judge.
HEARING to the court on a claim in probate. The claim was founded on certain promissory notes. Judgment was rendered establishing the claim. The executor appeals. The facts appear in the opinion.
Reversed.
Conner & Powers, for appellant.
Sims Kuehnle & Page, for appellee.
The appellee filed its claim in writing against the estate of Herman Schultz, deceased. Said claim is predicated upon three promissory notes, said notes being for $ 500, $ 2,000, and $ 2,600 respectively. They are all payable to the claimant, and are all signed by one George Schultz, son of the decedent Herman Schultz. No pleadings were filed in the cause, except the written claim of the appellee, with copies of said notes attached thereto.
Briefly stated, it is the contention of the appellee that the maker of said notes, George Schultz, was in partnership with the decedent, Herman Schultz, and that the action was brought to establish said notes as a claim against the estate of the said Herman, because of such alleged partnership. It appears that the said notes have been reduced to judgment against the maker, George. It appears from the record that Herman owned a farm of about 280 acres, located near the town of Schleswig. He occupied this farm, with his family, until about the year 1916, when he moved to town. About this time, the son George married, and took charge of said farm, under an oral arrangement with his father. The question as to whether or not this oral arrangement between the father and son constituted a partnership is the primary question in this case. No one testified in regard to the terms of the oral arrangement between Herman and his son George, except the latter. We will review his testimony later.
The burden rested upon the appellee to establish that the promissory notes signed by George were, in fact, the obligation of the alleged partnership claimed to exist between him and his father. Did appellee carry such burden and legally establish its claim that, although the decedent did not sign the written instruments, they were, in fact, his obligations, and that his estate is bound to pay the same?
The action was tried to the court, although, under Code Section 3341, it might have been submitted to a jury.
I. Appellee offered evidence of certain of its officers tending to show that the maker of the notes, George, had stated to such officers that he and his father were "partners" in the operation of the farm. These declarations by the son, not made in the presence of the alleged partner, even if fully established by the evidence, would not be sufficient to establish the fact of the partnership, as against the alleged partner or his estate. One party cannot be charged as a partner by the declarations of another, claiming that he is such partner, without notice or knowledge of such declarations. If one seeking to obtain credit could charge a stranger to the transaction as a partner by his declarations to that effect, made in the absence and without the knowledge of the one sought to be charged, there would be no safety for anyone. To so declare would be to open a door to fraud and to issue an invitation to dishonesty. We have refused to do so. Evans v. Corriell, 1 Greene 25; Brown v. Rains, 53 Iowa 81, 4 N.W. 867; Chambers v. Grout, 63 Iowa 342, 19 N.W. 209; Anfenson v. Banks, 180 Iowa 1066, 1098, 163 N.W. 608. See, also, Brown v. Crandall, 11 Conn. 92.
The objections of the appellant to the testimony of the witness for the appellee regarding the declarations of George Schultz, to the effect that George and his father, the decedent, were partners, should have been sustained, and the evidence excluded.
II. The claimant also offered evidence to prove that, when certain stock buyers interviewed the son about the purchase of stock on the premises, he advised them that his father was interested in the stock with him, and that he wished to consult with him about the selling of the same.
This evidence is closely allied to the evidence regarding the declarations of George to the bank officials to the effect that he and his father were partners. There was no proof that the decedent was present at or took any part in these conversations, or that he ever had any notice or knowledge thereof. The evidence was not offered for the purpose of impeachment of the testimony of George, but as a part of appellee's main case.
For the reasons previously suggested, a party cannot be held to the liability of a partner by such statements and declarations of one who it is claimed was a copartner, where it appears that the one sought to be held by such declarations in no way ratified the same, and is not even shown to have ever had any knowledge thereof.
Upon the record as made, we think this evidence should have been excluded.
III. The appellee also offered the evidence of an officer of appellee bank, to the effect that he overheard a conversation between the decedent, Herman, and another officer of the appellee, in which conversation Herman stated that he and George were partners on the farm; that he and George were going to run the farm together; that George was to run the farm, and the proceeds were to be divided.
This testimony was objected to on the ground that the witness was incompetent to testify to the conversation, under Code Section 4604, familiarly known as "the dead man's statute." This statute has been before this court so frequently that a review of the decisions construing it is unnecessary. We have been exceedingly liberal in applying this statute. Curd v. Wisser, 120 Iowa 743, 95 N.W. 266; In re Estate of La Grange, 191 Iowa 129, 181 N.W. 807.
It is contended by the appellant that the bank, being a corporation, can act only through its officers and agents, and that, where one officer of the bank has a conversation with a party who is afterward deceased, another officer of the bank who took no part in said conversation, but overheard the same, is incompetent to testify to such transaction.
By the language of the statute it is provided that a person is incompetent to be examined "as a witness in regard to any personal transaction or communication between such witness and a person at the commencement of such examination deceased," etc. The transaction or conversation referred to in this case did not take place between the witness and the decedent, but between another party and the decedent, and in this conversation the witness took no part. We have frequently held that, under circumstances of this kind, the witness who overheard the conversation but took no part therein was not incompetent to testify to such conversation. Sweezey v. Collins, 40 Iowa 540; Johnson v. Johnson, 52 Iowa 586, 3 N.W. 661; Gable v. Hainer, 83 Iowa 457, 49 N.W. 1024; Leipird v. Stotler, 97 Iowa 169, 66 N.W. 150; Allbright v. Hannah, 103 Iowa 98, 72 N.W. 421; Mallow v. Walker, 115 Iowa 238, 88 N.W. 452; Wright v. Reed, 118 Iowa 333, 92 N.W. 61; Jacobs v. Jacobs, 130 Iowa 10, 104 N.W. 489; Foreman v. Archer, 130 Iowa 49, 106 N.W. 372; Barto v. Harrison, 138 Iowa 413, 116 N.W. 317; Schubert v. Barnholdt, 177 Iowa 232, 158 N.W. 662; Hayes v. Snader, 182 Iowa 443, 165 N.W. 1041; Crist v. Tallman, 190 Iowa 1248, 179 N.W. 522.
Appellant, however, contends that an exception to this rule should be recognized in the instant case, because of the fact that the conversation referred to took place between an officer of the appellee bank and the decedent, and that the witness who testified to said conversation is also an officer of the appellee bank, and as such is interested in the event of the action, and is rendered incompetent under the statute.
So far as we are advised from the arguments of counsel, this precise question has never before been before this court. Applying, however, the general rule which we have recognized in the cases above cited, we are of the opinion that the witness was not rendered incompetent to testify to the transaction, in which he took no part, between the bank officer and the decedent, merely because of the fact that he is an officer in said bank. The court did not err in refusing to hold that the witness was incompetent to testify to said conversation.
IV. The burden of this case rested upon the appellee, not only to establish the existence of a partnership between the maker of the notes and the decedent, but also to show that the notes grew out of and were connected with the business of the partnership. The evidence in the case discloses a not altogether unusual situation, where a father who owns land which he has farmed, and which is provided with stock and machinery, turns the same over to a son, to farm and operate under an arrangement with the son that h...
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