Court Opinion

ID: 6381158
Source: CourtListenerOpinion
Date Created: 2022-06-25 00:00:52.783661+00
Date Added: 2024-06-11T15:50:21.591899
License: Public Domain

Klein, J.,
dissenting. — The question raised by these exceptions is whether officers and directors of eleemosynary corporations are competent witnesses to testify in support of claims of the corporations against the estates of decedents or are disqualified by section 5(e) of the Evidence Act of May 23, 1887, P. L. 158. The learned auditing judge, relying principally upon Aquetong Hall Assn. v. James, 100 Pa. Superior Ct. 440 (1930), ruled that such witnesses were not competent to testify and ex-*543eluded their testimony. I cannot agree with this ruling, nor with the majority opinion filed in this case sustaining the auditing judge.
In order properly to understand the problem before us, it is necessary to consider the development of this phase of the law of evidence in this State. Under the common law interest of a witness had always been recognized as a ground for the exclusion of his testimony whether he was an actual party to the litigation or merely one interested in the event of the suit: Wolf v. Carothers, 3 S. & R. 240 (1817) ; Bennett v. Hethington et al., 16 S. & R. 193 (1827). Although this rule of exclusion was said to be based upon public policy, it had its origin in the common law, in the presumption of want of integrity of those personally interested in the litigation.
In order to disqualify a witness it was early decided that he must have a legal, certain, and immediate pecuniary interest in the result of the issue or in the record as an instrument of evidence. Miller, in his interesting book, The Competency of Witnesses, states at page 21:
“It must be a pecuniary interest. With the single exception of the relation of husband and wife, no relation, however close or powerful in its influence, is sufficient to exclude, unless it involve a pecuniary interest; as was said by Gibson, C. J., in Bennett v. Hethington, 16 S. & R., 193: ‘Although the case of the witness be, in every point and particular, the case of the party by whom he is called to testify; although he expects a benefit from the event; and, in short, although he be subject to as strong a bias as can influence the understanding and actions of man; yet, if he be not implicated in the legal consequences of the judgment, he is competent.’ ”
The Supreme Court reiterated this rule in somewhat different language in Braine v. Spalding, 52 Pa. 247 (1866), in which Mr. Justice Woodward said at page 248:
“It is only a fixed vested interest, that disqualifies. The true test of the interest of a witness is that he will either gain or lose, as the direct legal operation and effect of the *544judgment, or that the record will be legal evidence for Or against him in some other action. It must be a present, certain and vested interest, and not an interest uncertain, remote or contingent: Greenleaf’s Ev., vol. 1, §390.”
See also Abrams v. Musgrove, 12 Pa. 292 (1849), Hatch v. Bartle, 45 Pa. 166 (1863), Dickson et ux. w McGraw Brothers, 151 Pa. 98 (1892), Spotts’ Estate, 156 Pa. 281 (1893), Sargeant v. National Life Ins. Co., etc., 189 Pa. 341 (1899), Joseph Horne & Co. v. Petty, 192 Pa. 32 (1899), and Dillon’s Estate, 269 Pa. 234 (1920).
The application of this rule of exclusion greatly hindered the administration of justice, and in many cases led to harsh and unreasonable results. Because of this, the courts endeavored wherever possible to admit testimony and permit the objection to go to the credit rather than to the competency of the witness. However, the principle was so firmly entrenched in our law that it required legislative action to secure relief.
With a view to ameliorating this situation, the legislature, starting in 1705, passed a long series of individual acts attacking the problem piecemeal. The greatest step forward was made by the Act of April 15,1869, P. L. 30, which abolished the rule of exclusion for interest in all civil proceedings. This act, however, reserved several exceptions, among which were actions by or against executors, administrators, or guardians and cases where the assignor of the thing or contract in action was dead.
All of the decisions construing this statute hold that it is an enabling and not a restraining act and that its purpose was manifestly to enlarge and not to restrain the admission of evidence. They also decide that no person competent before the passage of the act was rendered thereafter incompetent either by the words or by the spirit of the law: McFerren v. Mont Alto Iron Co. et al., 76 Pa. 180 (1874); Sheetz et al. v. Hanbest’s Execs., 81 Pa. 100 (1876); Pratt v. Patterson, 81 Pa. 114 (1876); The American Life Insurance & Trust Co. v. Shultz, 82 Pa. 46 (1876).
*545However, it was soon apparent that this act did not entirely cure the evil and the legislature started afresh to treat the problem by passing individual acts. Thus, at almost every session of the legislature from 1870 to 1885, one or more such statutes was passed, culminating in the passage of the Act of May 23,1887, P. L. 158, which is a codification of all of the earlier statutes. This act is still in force, and section 5(e) thereof is now before us for consideration.
This statute has likewise been held to be an enabling act, which should be construed liberally so as to give effect to its purpose. The decisions also clearly hold that it made no change in the laws existing prior to its passage and that it did not render any person incompetent who was previously competent: Dickson et ux. v. McGraw Brothers, supra; Brown’s Estate, 131 Pa. Superior Ct. 463 (1938). And it is now well established that the competency of witnesses in civil cases is the rule and incompetency the exception and, further, that objections to the competency of a witness for interest should be discountenanced unless they clearly appear: Bates v. Carter Const. Co., 255 Pa. 200 (1916) ; Allen’s Estate, 207 Pa. 325 (1904).
Having demonstrated that the Acts of 1869 and 1887 rendered no one incompetent who was competent prior thereto, we must examine the state of the law as it existed previous to the passage of these acts to find the answer to the problem before us.
The question of the competency of members, stockholders, officers, and directors of corporations of both the first and second class had often been before our courts. Although stockholders of corporations for profit had been held incompetent to testify because of their pecuniary interest, this restriction had never been applied to officers who did not own stock.
In The Philadelphia Ins. Co. v. The Washington Ins. Co., 23 Pa. 250 (1854), the Supreme Court held that the president of an insurance company who was not a stock*546holder was a competent person to testify on behalf of the corporation. The court said at page 254:
“There is not a shadow of ground for the objection to Riche. Though the president of the company, he was not a stockholder nor party to the record. Having no necessary interest in the event, he was competent, and his credibility was for the jury.”
This same conclusion was reached by the Supreme Court subsequent to the passage of the Acts of 1869 and 1887 in Sargeant v. National Life Ins. Co., etc., 189 Pa. 341 (1899), and Gantt v. Cox & Sons Co., 199 Pa. 208 (1901).
Following the same line of reasoning, the Supreme Court has decided that agents and managers of corporations who are not stockholders are disinterested persons and therefore competent witnesses: Canon v. Pennsylvania Trust Co., Admr., etc., 305 Pa. 422 (1931); Eaton v. New York Life Insurance Co. of N. Y., 315 Pa. 68 (1934).
The principle enunciated in the Aquetong case that a member and trustee of an incorporated beneficial association is an interested witness and therefore incompetent to testify is not new in our law. The same conclusion was reached in Washington Beneficial Society v. Bacher, 20 Pa. 425 (1853), and in Hamill v. Supreme Council, etc., 152 Pa. 537, 542 (1893).
However, the courts from early days have drawn a distinction between the competency of the members and directors of beneficial associations and those of charitable or religious societies. Although the former were held to be incompetent, the latter were declared fully qualified to testify. In Sorg v. The First German Evangelical St. Paul’s Congregation, 63 Pa. 156 (1869), the court said at page 162:
“It was also objected that the witness was a trustee of the church and a member of the building committee. This appeared, indeed, by the written agreement. But *547the trustees of charitable or religious societies, having no personal and private interest in the property holden by the corporation, are competent witnesses in any action in which the corporation is a party: 1 Greenl. on Ev. §833.”
To the same effect see Shortz v. Unangst, 3 W. & S. 45 (1841), and Davies v. Morris, 17 Pa. 205 (1851).
When the question is studied more closely, we believe it becomes evident that the distinction we are discussing is logical and sound. In the first place, there is no doubt that a fraternal or beneficial association is not a charity: Sharp’s Estate, 71 Pa. Superior Ct. 34 (1919); Channon’s Estate, 266 Pa. 417 (1920). Its members have a property right in the assets of the association. Usually, in consideration of the payment of dues, they are entitled to certain definite privileges, which may be purely social or may be of pecuniary value, such as insurance in case of death or benefits in ease of illness. Often the members of beneficial associations also possess for themselves and the. members of their families other valuable privileges, such as burial benefits or the right to enter a hospital and orphanage, a home for the aged, or some similar institution maintained by the association. Members of these associations are also usually liable to assessments to meet deficits and, in the case of the dissolution of the organization, are entitled to a pro rata share of the distributive value of its property.
The members and directors of purely charitable or religious organizations, however, have no such privileges and cannot be said to have a pecuniary interest in the corporation. They are merely trustees of the institutions in their charge and cannot, under any circumstances, benefit personally from their membership. Furthermore, in the event of dissolution or liquidation of the corporations, the members could not profit personally, as the assets would either be transferred under the cy pres doctrine or escheated to the Commonwealth.
*548In the Aquetong case the claim was by a corporation of the first class which owned a building. It had no stockholders, but its membership was composed of the members of the Aquetong Lodge of Odd Fellows. Since it is clear that this corporation was not a charity, the analogy drawn by the Superior Court to Crozer’s Estate, 296 Pa. 48 (1929), would be readily subject to misunderstanding unless the entire problem is carefully analyzed.
The expression “whose interest shall be adverse” found in the Act of 1887 has an entirely different connotation from the words “disinterested witnesses” found in section 11 of the Act of April 26,1855, P. L. 328, and should not be confused therewith.
“The object of all interpretation and construction of laws is to ascertain and effectuate the intention of the Legislature. . . .
“When the words of a law are not explicit, the intention of the Legislature may be ascertained by considering, among other matters — (1) the occasion and necessity for the law; (2) the circumstances under which it was enacted; (3) the mischief to be remedied; (4) the object to be attained; (5) the former law, if any, including other laws upon the same or similar subjects . . .”: Statutory Construction Act of May 28,1937, P. L. 1019, art. IV, sec. 51.
It seems clear beyond doubt that both the Act of 1869 and the Act of 1887 were enacted for the express purpose of liberalizing harsh rules of evidence prohibiting interested persons from acting as witnesses. Both of these acts are enabling acts which must be construed liberally to give them full effect.
The Act of 1855, however, was passed to serve an entirely different purpose. It is entitled “An act relating to corporations and to estates held for corporate, religious and charitable uses.” It is, in effect, a mortmain statute which prescribes the manner in which charitable corporations can receive and hold property in this State. Prior to its passage, members of charitable corporations *549were permitted to act as subscribing witnesses to wills making gifts to the charity of which the witness was a member. See Davies v. Morris, supra, decided in 1851. Section 11 of the act is clearly designed to correct this situation. It obviously was not intended to change any other rule of evidence in force in this State.
This conclusion becomes apparent when the decisions construing this section of the act are examined. In Chan-non’s Estate, supra, the Supreme Court said at page 422:
“In Kessler’s Est., 221 Pa. 314, we call atténtion to the fact that (pp. 320, 321) ‘the Act of 1855 is a remedial statute,’ and the evil it has in mind is to prevent ‘the importunities of designing persons,’ interested in charities, at or near the time of the impending death of a testator.” In Crozer’s Estate, supra, the court said at page 53:
“While the disqualifying interest must be certain, it need not be a matter of personal benefit to the witness. To hold that those only were disqualified who had such an interest would practically nullify the statute, for who has a personal financial interest in a charity or church? The statute, as we have construed it, disqualifies those who have charge of and responsibility for the business and financial affairs of the institution.”
I am convinced that the learned auditing judge erred in this case by following dictum in the Aquetong case which would appear to extend the scope of disqualification of witnesses in a manner not intended by the legislature. In so doing he has made the same error that I made in Deal’s Estate, no. 1319 of 1934 (not reported), in which I said:
“Placing the most favorable light on the testimony of claimant’s witnesses and allowing in evidence the testimony of witness Young, President of the Board of Trustees of Geneva College (although his testimony is inadmissible under the rule laid down in Aquetong Hall Assn. v. James, 100 Pa. Superior Ct. 440 (1930), we still *550must hold that the claimant has failed to prove an en-forcible claim.”
I now believe that I was wrong in what I said in Deal’s Estate and that Judge Sinkler was correct in admitting the testimony to which objection was made.
The application of the rule stated in the Aquetong case should not be broadened but must be limited to cases involving beneficial associations and the reference thereto in Broderick Co. v. Emert et al., 110 Pa. Superior Ct. 327 (1933), must also be regarded only as dictum. The rule cannot be applied in cases, such as the present one, involving charitable corporations.
Since officers and directors of eleemosynary corporations were not disqualified to act as witnesses because of interest prior to the passage of the Acts of 1869 and 1887, I am of the opinion that they are fully competent to testify today in support of a claim of the corporation against the estate of a decedent. I think the testimony of Mrs. Sarah Logan Wister Starr and Miss Yida Hunt Francis was admissible and should have been received by the learned auditing judge.
The facts in every case should determine whether or not the witness is adverse. Whereas in some, at least, of our purely charitable institutions, the contributors are the members of the body corporate, and the trustees and officers are elected by, from and among the contributors, such a trustee or officer would be regarded as not adverse but quite without gain or profit of any character. If his sole association with the institution is to give his money and services to it, he must be regarded as disinterested in any gainful sense. We must recognize that there are individuals who serve on boards for a humanitarian reason, without any ulterior motive.
I would, therefore, sustain the exceptions and refer the case back to the auditing judge in order that the testimony of these two witnesses might be considered.
Sinkler, J., joins in this dissent.