Case Title: Sisson v. Johnson

Citation: 187 N.W.2d 745

Docket Number: 54479, 54481

State: iowa

Court: Iowa Supreme Court

Date: 1971-06-17T00:00:00Z

Document:
187 N.W.2d 745 (1971) George F. SISSON and Dale Fraser, Appellants, v. Arthur H. JOHNSON, Administrator of the Estate of B. P. St. John, Deceased, Appellee. Dale FRASER, Gunvald Sande, and George F. Sisson, Appellants, v. Arthur H. JOHNSON, Administrator of the Estate of B. P. St. John, Deceased, Appellee. Nos. 54479, 54481. Supreme Court of Iowa. June 17, 1971. Baker, Miller & Baker, Humboldt, for appellants. Johnson, Burnquist & Erb, Fort Dodge, for appellee. BECKER, Justice. The issues in the two captioned cases are identical. They are therefore decided in one opinion. In each case the petitioning parties are claimants in the estate of B. P. St. John, deceased. In each case claimants were held to have failed to meet their burden of proof and the claim was disallowed. Each set of claimants appeals on the same assignment of error and raises the same narrow issue. Hereafter the term claimants shall refer to all claimants in both actions. All parties agree on the statement of the case which is stated by claimants in No. 14-54479: No. 54481 is substantially the same except as to amount, $42,900, and the claim plaintiffs borrowed the money in order to loan it to decedent.[1] The claims sought to be established are that claimants loaned money to the deceased. The evidence indicates that at least part of the money went into the Humboldt Cornbelt Livestock Exchange, Inc. Deceased promised to repay the money and to indemnify those claimants who borrowed money to make the loan. The two alleged loans were handled in separate transactions. Because of the narrow issue involved further detail is unnecessary. In each case claimants offered testimony from other claimant-creditors, not directly connected with the two claimed loans, which would tend to prove the claims asserted in the instant actions. Joe Dodgen had filed a claim in the estate on behalf of himself. In addition he is Chairman of the Board and principal stockholder of The First National Bank in Humboldt, Iowa, which also filed a claim in the estate. Harold Knight is a stockholder and a director of the same bank and has contingent liability to the estate as a director of the bank. Donald Wayne Christensen is Assistant Cashier of the bank. Gunvald Sande had filed a claim in the estate. No other disqualifying interest was shown. Objection was made to the competency of each of the foregoing witnesses on the basis of section 622.4, Code, 1971 (commonly called the dead man statute). Offers of proof were made of record. The trial court sustained the objections and disregarded the evidence of the witnesses thus ruled incompetent. The basis of the ruling was given: We disagree with this determination, reverse and remand. I. Section 622.4, Code, 1971, provides: The exceptions in section 622.5 are not applicable here. Apropos this problem we said in Hanke v. Bjorgo, 260 Iowa 1109, 1113, 152 N.W.2d 262, 265 (1967): "`The interest which will make a witness incompetent to testify must be a present, certain and vested interest. Reichart v. Downs, 226 Iowa 870, 285 N.W. 256. We have also said that the test of interest of a witness is that he will either gain or lose by direct legal operation and effect of the judgment * * *.' Schmidt v. Schurke, 238 Iowa 121, 124, 25 N.W.2d 876, 878; Peterson v. Citizens State Bank, 228 Iowa 219, 227, 290 N.W. 546; In re Willesen's Estate, 251 Iowa 1363, 105 N.W.2d 640, 645." Cogent precedent for such succinct statements is found in Wormley v. Hamburg, 40 Iowa 22, 25 (1874): In Mollison v. Rittgers, 140 Iowa 365, 368, 118 N.W. 512, 29 L.R.A.,N.S., 1179 (1908), we said: An annotation at 145 A.L.R. 566, 568, dealing with this subject first notes the wide discrepancies both in the language of the various statutes and the factual situations involved. The author then states: The annotation cites Mollison v. Rittgers, 140 Iowa 365, 118 N.W. 512, 29 L.R.A.,N.S., 1179 (1908), in support of the general observation. Ordinarily, "the fact that the witness has a claim against decedent's estate, which is similar to that of a party to the action, does not give him such a direct legal interest in the action as to render him incompetent to testify; and where two claimants file similar claims each is competent to testify for the other." 97 C.J.S. Witnesses § 183, p. 629; Cook v. Gardner, 14 Utah 2d 193, 381 P.2d 78, 79; In re Jelinek's Estate, 146 Neb. 452, 20 N.W.2d 325; McHatton v. McDonnell's Estate, 166 Wis. 323, 165 N.W. 468. We note, of course, that the proffered witnesses had no joint or common ownership *748 or other direct interest in the claim being litigated. This being the case we conclude they were competent to testify. II. The fact that an estate may become insolvent if all claims filed against it are allowed does not change the situation. The claimed disqualifying factor does not go to the "event of the case" or even to "the question to be decided". It goes only to the collectibility of the judgment obtained. Under the authorities cited this would not make the interest disqualifying. We have said section 622.4, Code, 1971, is not to be enlarged by construction. In re Estate of Winslow, 259 Iowa 1316, 1320, 147 N.W.2d 814, 817 (1967). If we predicate incompetency on insolvency of the estate we would enlarge a statute which has been heretofore strictly construed. III. The effect of the position of the witness as employees, officers, directors and stockholders of a claimant bank need not be considered. If, as we hold above, the claimant would not be disqualified, it follows those connected with a claimant corporation would also not be disqualified. Therefore the derivative effect of the various connections with the bank is moot in this case. IV. The efforts of counsel to abbreviate this record are commendable but overdone. In order to determine whether the rejected evidence did in fact constitute reversible error it has been necessary to examine the entire transcript. The offers of proof contain evidence which, if believed by the trier of the facts, might well produce a different result. We here hold such evidence to be admissible. The trial court specifically failed to consider it. The court based its decision on failure of proof. It specifically excluded the evidence rejected by reason of the dead man statute. This affected the entire proceedings. The case must be remanded for retrial. The situation is not unlike that found in Stevens v. Peoples Sav. Bank, 185 Iowa 619, 630, 171 N.W. 130, 134 (1919), where we concluded: Reversed and remanded. All Justices concur, except REYNOLDSON, J., who takes no part. [1] The statute of frauds, section 622.32, Code, 1971 was asserted as an objection to certain evidence but was not raised as an appellate point by either party.