Scott v. Cowen. I. The evidence in this case shows that defendants. other than Ida M. French, induced Addie Scott to procure a loan from the Grand Avenue Bank of St. Competency of Witnesses. Louis for $15,300, the proceeds of which were to be used in handling a proposition pertaining to some real estate in Ten-. nessee. Defendants, excepting French, claimed that Miss Scott was furnishing the money necessary to carry the deal ($15,000), and was to share in the profits. They say she was to receive of the profits $1500 more than the others and this was to be paid out of the first profits, then the $15,000 was to be repaid her and the remaining profits were to be divided in five parts, Addie Scott to get one part and the four defendants, other than French, to get one part each. The court permitted Bennett, Stevens and Cowen to testify, and it is this fact which occasioned the granting of the new trial. Bennett was permitted to give evidence tending to support his answer, on the theory that he was agent for Addie Scott, and Stevens and Cowen were permitted to testify to what Bennett told them at the time the note was signed, on the theory that he was the agent for Addie Scott. Their evidence shows that the four were buying an alleged first mortgage on Tennessee lands for $50,000 at the price and sum of $15,000 and they were getting Miss Scott to furnish the $15,000, and were putting up their note as an accommodation to aid Miss Scott in getting the money from the bank. This is the best we can make of the record before us on this point. on this point. The testimony is a little peculiar in spots. Reverting now to the record as to Ida M. French. Alfred Vandeventer was a nephew of Mrs. Ida M. French, and was working in the real-estate office of BenMrs. French seems to have been a client of BenVandeventer had his aunt's stock certificates in the railway company and the telephone company at Bennett's office. At the time of the loan from the bank these securities were put up as collateral to the note nett. nett. Scott v. Cowen. of Miss Scott. There is no question that the securities named were the property of Mrs. French prior to this transaction. Miss Scott in a letter to the bank at a later date, said they belonged to Bennett or one of Bennett's clients. She never claimed them as her own, as a fact. Mrs. French gave the authority for the sale of the Telephone Company stock and keeping the certified deposit in its place as collateral security. The only question in the case, so far as Mrs. French is concerned, is whether or not these securities were put up as collateral to the Scott note to the bank or the note of Bennett et al. to Miss Scott. If they were deposited as collateral to the Scott note to the bank, under the evidence this note has been paid, and these securities were thereby released. Under the fact in evidence, the trial court could not find that these securities of Mrs. French were put up as collateral to the note of Bennett et al. to Miss Scott, and its judgment was right in the first instance, so far as Mrs. French was concerned. There is nothing in the record from which even a reasonable inference could be drawn, that these securities were put up as collateral to the note of Bennett et al. More than this the alleged incompetent testimony would not affect this branch of the case. Such testimony only goes as to the liability of the three defendants Cowen, Bennett and Stevens. No personal service was had on Darby and hence no personal judgment could go as tc him. He is in by publication, and as he is shown to have no interest in the property claimed by Mrs. French, he practically drops out of the case. The evidence conclusively shows that the property claimed by Mrs. French was and is in fact her property. It is just as conclusively shown that it was used as collateral to the note of Addie Scott to the bank and not as security for the note sued upon herein. It is also admitted that the Addie Scott note to the bank was paid by her executor out of the funds belonging to Addie Scott's estate, and under these circumstances, the property of Mrs. French, involved herein, should be returned to her. As to her the judgment set aside on Scott v. Cowen. motion for new trial, was right, and should not have been set aside, unless for reasons hereinafter to be discussed. Collateral II. The testimony which the court on motion for new trial, concluded was incompetent, because the witnesses themselves were incompetent to testify, is very material to the defense interposed by Competency of Bennett, Stevens and Cowen, although not all necessary to the disposition of the controversy with Mrs. French. With Mrs. French the sole controversy was as to which note her securities served as collateral, and as there was no evidence showing them as collateral to the Bennett et al. note this evidence did not affect her status in the case. Obligor. But as said, it is urged that this evidence does have the tendency to show that this note of Bennett et al. was accommodation paper, and if it so tends, its materiality is apparent. Witness Bennett contends and states that he was the agent of Addie Scott in all her real-estate deals. That she authorized him to make the arrangements for this deal and that he spoke to the bank about getting the loan for $15,300 out of which came the $15,000 used in the purchase of the Tennessee deed of trust. His testimony is significantly not clear as to her direction as to this note in suit, the contract for consideration here. It reaches this far, however. that Miss Scott desired the note of the four to be used as collateral and that he called in the other three and procured it, by so stating this fact to the others. Other testimony in the case is to the effect that when Miss Scott's banker found out who was to get the money, he advised a note to her to evidence their debt to her, and that the note was most likely procured in pursuance to this suggestion. But be this as it may, in the actual making of this note Bennett could not be both principal in the note and agent for Miss Scott. This note is the contract in suit. Bennett is not only a party to the contract in suit, but a party to the suit. In the making of this note Scott v. Cowen. as a principal herein he was acting for Bennett. The situation is a peculiar one, and we have been cited to but one parallel case in this State. In that case, Lyngar v. Shafer, 125 Mo. App. 1. c. 400, ELLISON, J., says: "This is an action on a promissory note. The trial court gave a peremptory instruction to find for the plaintiff and defendant has appealed. "It appears that the payee of the note died and this action was instituted by his widow who, as such, became the owner of the note by administration in the probate court. The note was signed by defendant and Henry Stone. Stone was in reality a surety for defendant, though that does not appear on the face thereof. The defense was payment and that the consideration was intoxicating liquors sold in violation of law. At the trial defendant offered himself as a witness and he was excluded by the court on the ground of the payee being dead. But it was shown and urged upon the court that Stone was the deceased's clerk and agent and that he transacted the business with defendant which resulted in the note and that he also took the note for deceased. It thus appearing that Stone was deceased's agent who transacted the business and that he is also one of the obligors on the note (though not sued in this action) the question is, does that state of facts qualify the defendant payor? "The unusual circumstance that Stone was the agent in obtaining the note upon which he himself appears as an obligor presents the only difficulty in the question. We have concluded that the trial court was right in excluding defendant as a witness. The gen eral proposition that when one party to a contract is dead the other cannot testify appears by the terms of the statute itself. [Sec. 4652, R. S. 1899.] But the rule is well settled, by way of exception, that if the transaction is had with an agent of the deceased party and the agent is alive, the other party may testify. [Williams v. Edwards, 94 Mo. 447; Banking House v. Rood, 132 Mo. 256; Nichols, Shepard & Co. v. Jones, 32 Mo. App. 657.] This is for the reason that the object Scott v. Cowen. in excluding one party when the other is dead is to put them on terms of equality. [Scott v. Burfiend, 116 Mo. App. 71.] This equality is often expressed as that, since death prevents one from speaking, the law will not permit the other to speak. But the reason for the rule ceases if the deceased was represented by an agent who is alive and may speak, for in such case the parties to the contract are on the same terms of equality as if they were both alive. So it must follow that where from some cause the agent is not competent, the exception permitting the surviving party to testify cannot be allowed simply for the reason that the reason for allowing him to do so does not exist. "In this case, as already stated, we have the unusual circumstance of the agent being also an obligor in the contract. Being a party to the contract, though not a party to the suit, he is yet an interested party and is thereby disqualified as a witness at common law, and the statute does not qualify him. [Leach v. McFadden, 110 Mo. 584.] It follows therefore that to allow defendant to testify in his own interest would give him the advantage over the opposite party which the statute was designed to prevent." The rule announced in this case, and we believe it sound, would disqualify all the makers of this note, as witnesses in the case. Nor do we see that this rule conflicts with our previous rulings. We have never dealt with such a state of facts. We conclude therefore the trial court was right in holding, on the motion for new trial, that this evidence should have been excluded. He was therefore justified at least in setting aside his judgment in favor of these three defendants. This brings up a new and singular situation. Because this incompetent evidence could not change the result of the judgment as to Mrs. French, the trial court committed error, as to her, in setting aside his judgment in so far as it favored her. On the other hand the defendants made no case in so far as their defense to the note sued upon, without this evidence. |