Murphy v. Waterhouse

McFarland, J. J.This action was brought upon a promissory note for ten thousand dollars, made by the defendant, Waterhouse, to the Pacific Bank, and alleged to have been assigned by said bank to the plaintiff Murphy. Afterward, however, the plaintiff Murphy withdrew his claims to the note, and the contest was thereafter between the Pacific Bank, intervenor, and the defendant, Waterhouse. The case was tried with a jury, who returned a verdict in favor of the intervenor for the amount of the face of the note. Defendant, Waterhouse, appeals from the judgment.

The defense set up by the appellant, Waterhouse, was that there was no consideration for the note. The facts alleged by him were that the Pacific Bank requested appellant to place the apparent or record title of three hundred shares of the stock of the People’s Home Savings Bank in his name for the benefit of the said Pacific Bank; that appellant was to hold said stock in trust for said Pacific Bank; that the promissory note sued on in this action was given by appellant to said Pacific Bank for the purpose of protecting said bank in case of the [470]death of defendant, or any other contingency, and as collateral security for the performance by appellant of his agreement to hold said stock of the People’s Home Savings Bank in trust for the said Pacific Bank; that the real ownership of the stock was to remain in the Pacific Bank, and that appellant had the right at any time to transfer the stock to the said Pacific Bank and receive back the said note.

At the trial of the cause the appellant testified substantially to the matters of defense above stated. He then called as a witness D. S. Dorn, who is an attorney at law, and proposed to prove by him (in substance) that he was present when the said contract testified to by appellant was made between him and one McDonald, who was acting for said Pacific Bank, and witnessed the contract. The intervenor objected to any testimony of said Dorn as to anything that passed on said occasion between the appellant and said McDonald, upon the ground that said Dorn was at that time the attorney and counselor for said Pacific Bank,.and that anything that occurred upon said occasion should be excluded because privileged as a communication between client and attorney. The objection was sustained, and the appellant excepted. This ruling of the court excluding the offered testimony of Dorn was clearly erroneous. It appears, we think, very plainly from the testimony of Dorn, that at the time of the transaction referred to he was also the attorney for the appellant, Waterhouse. Assuming that to be the fact, then the point was expressly decided in favor of the contention of appellant by this court in In re Bauer, 79 Oal. 304. In that case this court said: “ When two persons address a lawyer as their common agent, their communications to the lawyer, so far as concerns strangers, will be privileged, but, as to themselves, they stand on the same footing as to the lawyer, and either can compel him to testify against the other as to their negotiations” (citing numerous authorities). The rule, however, is the same where the witness is attorney for only one. of the contracting parties. Where two per