Case ID: ad_44/html/0107-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Van Brunt, P. J. :", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Edward Brennan, Respondent, v. Michael Glennon, as Executor, etc., of Bridget McCabe, Deceased, Defendant; Henry Hoyt, as Executor, etc., of Bridget McCabe, Deceased, Appellant.
    Evidence— when an executor may testify to a conversation with a former client — an agreement to give an employee, during service, twenty-five per cent on money in the business is not usurious.
    
    In an action upon a disputed claim against an estate, the executor is not precluded from testifying to a conversation between himself and the claimant at the time* of the presentation of the claim, hy the fact that he had been the attorney for the claimant and still had in his hands some matters in reference to an old-j udgment, where it appears that for some time he had done no new business-for the claimant and that the claimant knew that, in the matter of the claim, the attorney represented the estate and not her.
    An agreement by an employer with an employee by which the. employer gave the employee a §10,000 interest in the business, to remain therein as long as the employer should conduct the business and at the termination thereof to be paid-to the employee from the same, and which contained a further covenant by the employer to pay the employee twenty-five per cent interest on said §i0,000, payable quarterly, which interest was to be in full satisfaction of all earnings- and interest on said §10,000, and was to cease in case the employee left such-employ, is not usurious, it being clear that the twenty-five per cent interest outlie §10,000 was intended as a compensation for the services of the employee in addition to compensation for the use of the money.
    Appeal by the defendant, Henry Hoyt, as executor, etc., of Bridget McCabe, deceased, from a judgment of the Supreme Court-in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 7th day of February, 1899, upon the verdict of a jury rendered by direction of the court.
    
      Christian G. Moritz, for the appellant.
    
      Austen G. Fox, for the respondent.
   Van Brunt, P. J. :

The action was brought upon an account alleged to have been stated between the plaintiff’s assignor, Catharine Donovan, and the •defendants, as executors of one Bridget McCabe. The answer .denied the account stated and any promise of payment, and set up a •counterclaim alleging that at the time of the death of Bridget McCabe, -the plaintiff’s assignor, Catharine Donovan, was indebted to her in a -considerable sum of money under a contract between the said Cath-Ai'ine Donovan and Bridget McCabe.

Upon the trial of the action it appeared that the defendant Hoyt, who was one of the executors of Bridget McCabe, had been the Attorney of Catharine Donovan and had still in his hands some matters in reference to an old judgment, but that he had done no new "¡business whatever with her for a considerable period of time. It Appeared that upon the presentation of the claim of Catharine Don.ovan to Hoyt as executor, a certain conversation took place between himself and her, and this conversation was excluded upon the ground ■that the relation of attorney and client existed and that he could not •divulge the communications made to him by her. It appears clearly •that in reference to this claim the relation of attorney and client did not exist, and that Donovan and Hoyt were dealing at arm’s ¡length. She knew that he was representing the estate and not representing her. There is no pretense that she employed him in reference to this* claim, or that he had given up the duty imposed upon him as executor of protecting the estate, by accepting retainers from -clients who had claims to present against the estate. • The foundation of the claim in respect to an account stated depends largely -upon the fact that there was an implied promise to pay because nothing was said in reference to this claim. It is perfectly clear that if -the silence of the executor is to bind the estate, his mouth cannot be shut when he would speak, by the claim that the relation of Attorney and client existed between him and a claimant against the estate which he is bound to- represent. The result of the position taken by the plaintiff would be that if the executor had absolutely rejected this claim and had given Catharine Donovan notice of that fact by telling her that he had rejected it and would not allow it, it. "became an account stated, because he had been her attorney and •could not open his mouth. Ho such rule can possibly prevail. We think, therefore, that it was error not to allow the defendant Hoytto testify as to his conversation with Catharine Donovan in respect to this claim.

We think, also, that the court erred in holding that the agreement between Donovan and McCabe was usurious. Bridget McCabe was-an employee of Catharine Donovan, and, as it seems, had been with her a considerable number of years. On the 21st of February, 1888,-by an instrument under seal, a $10,000 interest in Catharine Donovan’s business was given to Bridget McCabe, which $10,000 was to-remain in the business for so long a period as she (Catharine Donovan) should carry on the same, and at the termination thereof said-$10,000 was to be paid to said Bridget McCabe from the businessr The instrument then went on and contained an agreement u2)on the? part of Catharine Donovan to pay Bridget McCabe twenty-five p)er cent interest on said $10,000, interest in quarterly payments at the? end of- each quarter, which said interest was to be in full satisfaction of all earnings and interest on said $10,000 interest, but in case-Bridget McCabe left the employment of- Catharine Donovan the? twenty-five per cent interest should cease.

It is clear that this twenty-five per cent on the $10,000 was to be a compensation for the services of Bridget McCabe in addition to-the use of the money. It was to cease the moment she left the? employ of Catharine Donovan, and in the contract she agreed to remain in such employ, and did so remain until she died. The twenty-five per cent was not paid for the forbearance of any sum of money. The $10,000 could not possibly become due until the termination of the business, and she was to remain in the employment-' of Donovan during that period, and it was for such services and the ' use of the $10,000 that she was to receive the $2,500 a year.

The judgment should be reversed and a new trial ordered, with costs to the appellant to abide the event

Barrett, Rumsey and McLaughlin, JJ., concurred; Ingraham,. J., concurred on first ground.

Judgment revfersed, new trial ordered, costs to appellant to abide event.