Case ID: serg-rawl_9/html/0137-01.html
Source: Caselaw Access Project
Author: {"author": "Gibson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

[Philadelphia,
    Dec. 30th, 1822.
    DAVIS, Assignee of Morrison, against BARR and another.
    IN ERROR.
    A party, on taking a bond and warrant, agreed, by a separate writing, not to enter up judgment, nor get it done by any body else. He afterwards assigned to another for a valuable consideration, without notice of the agreement, who entered up judgment.
    
      .Held, 1st, That the judgment was valid.
    2d, That the obligee was a good witness to prove, that the assignee had no notice of the agreement.
    Error to the Court of Common Pleas of Chester County.
    On the 4th March, 1816, a bond and warrant of attorney were executed by the defendants, John Barr and Conrad Barr, in fa-vour of John Morrison, in the penal sum of 2,200 dollars, conditioned for the payment of 1100-dollars, on the 20th August, 1817. On the 30th March, 1816, John Morrison, by indorsement on the bond and warrant, assigned the same to the plaintiff, Ellis Davis, who procured judgment to be entered up, on the 16th April, 1816, in the Court of Common Pleas of Chester County. On motion of the defendants in the court below, tó set aside this judgment, as improperly entered, the court directed an issue, which was tried by jury before Hallowell, President, at a special court, and a verdict was rendered for the defendants.
    On the trial, the defendants offered to give in evidence, an agreement, or memorandum in writing, signed by John Morrison, on the day of the date of the bond, in these words:
    This is to serty, that I am never to enter the bonds that I have against John Barr and his father Conrad Barr, in the office at' Westchester, nor get it done by any body else.
    * John Morrison,
    
    March the 4th, 1816.
    Witnesses present.
    
      Conrad Barr,
    
    
      William Morgan.
    
    
      This evidence was objected to by the plaintiff, but the court admitted it, and the plaintiff tendered a bill of exceptions.
    The plaintiff offered John Morrison, the obligee, as a witness on his behalf, and the defendants examined him upon his voir dire. He stated, that, he had no interest in this cause, and was therefore sworn in chief. On his examination in chief, he stated, íhát he had, assigned the bond without'informjng the plaintiff of the agreement, not to enter judgment. The court, on the disclosure of this fact, declared Morrison an incompetent witness, and rejected his testimony, and the plaintiff excepted.
    The court charged the jury, that the plaintiff took from Morrison the assignment of the bond and warrant, subject to every equitable consideration and agreement, to which they were subject in the hands of the original obligee. That if, before he took the assignment, he had inquired of the obligor, he would have been informed by him of the agreement, not to enter judgment thereon in Chester County. That every man who takes an assignment of a bond in Pennsylvania, if he wishes to be safe, must make such inquiry before he takes it. The plaintiff, therefore, being bound by the agreement proved, the judgment entered was irregular and invalid; and of course, the verdict ought tp be for the defendants. On one of the points proposed by the plaintiff, the court concurred therein, that the assignment of the bond to Davis, was not a violation of the agreement, but that the operation of that agreement was, to prevent the plaintiff from entering the judgment in Chester County.
    To this charge the plaintiff excepted.
    
      Edwards for the plaintiff in error.
    1st. The first question is, whether the paper signed by Morrison, and delivered by him to Barr, was admissible in evidence. We contend, that it was not, because it was the admission of parol evidence; ÍQ vary an instrument under seal. The principle is well settled, that in an action on a bond, a party will not be permitted to show a condition different from that expressed in the bond. 1 Phill. Evid. 424. In Skinner v. Henderson, 1 Root. 252, parol evidence was not allowed to shew, that a specialty was delivered to the party on certain conditions. To the same point are Paine v. MiIntire, 1 Mass. Rep. 69. 10 Mass. Rep. 244. Jlthinson v. Scott’s Executors, 1 Bay. 307. Townsend v. Weld, 8 M^s. Rep. 146. The plaintiff, in the present instance, having paid the value is a purchaser for a valuable consideration without notice.
    2d.. Was Morrison a competent witness ? He was examined, by the defendants on his voir dire, and declared that he had no interest: after such declaration, he could not be proved to be interested by evidence aliunde. 1 Phill. Evid. 96.
    ThecouRT intimated, that this point was settled. You cannot after examining a witness on his voir dire, produce evidence to prove him interested: but if it comes out in the course of the examination of the witness, that he is interested, the court will reject him.
    
      Edwards then relinquished that point, but insisted, that the witness was not interested. To constitute such an interest as will disqualify a witness, it must be a legal, fixed interest, not a remote or contingent one: for this only affects his credit. 1 IP hill. Evid. 39. Stockham v. Jones, 10 Johns. .21 Stewart v. Kip, 5 Johns. 256.
    There was nothing in Morrison’s evidence, to shew a fixed, determinate interest. No objection was made, until he had acknowledged, that he had not disclosed the private agreement. Why did he not disclose it? Because, as we contend, he thought the agreement was at an end: and if so, it absolves him from a .charge of fraud on Davis, or liability, to Davis, in case Davis failed in establishing the judgment. The agreement itself may be considered as fraudulent, if it enabled the obligee to defraud third persons. But the operation of .this agreement was confined expressly by its terms, to the original parties: it does not extend to an assignee of the bond and warrant, and a judgment entered by him is valid. The charge of the court was, therefore, incorrect in stating, that the as-signee stood in the place of the obligee* and.took the bond subject to all the equities to which the obligee was liable.
    Tilghman, contra*.
    
    The honesty and equity of the case, and the agreement of the parties, are in favour of the. defendants. The agreement bears the same date with the bond; it was signed and executed at the same time, and before the same witnesses, and was. one of the considerations on which the bond was .given. It ought to be considered as inserted in the bond. The effect cannot be. destroyed by the circumstance of its not being under seal: there is no magic in a seal.
    1st. The first question is, whether in Pennsylvania, under the circumstances of the case, this paper was proper evidence to be presented to the jury. Since the case of Hurst v. Kirkbride, 1 Sinn, 616, parol evidence has, uniformly, been received, of what passed at the execution of a deed, to explain, vary and control sealed instruments, provided it be by circumstances occurring at the time, and in the presence of the parties. In proof of which, may be mentioned, among others, the cases of Thomson v. White, 1 Dali. 424. Field v. Biddle, 2 Dali: 171. .1 Yeates, 132. S.C. Me Minn v. Owen, 2 Dali. 173. 1 Yeates, 135. S. C. Cozens v. Stevenson, 5 Serg. & Eawle, 421. It is a clear case of fraud, if a paper be obtained for one purpose, and used for another,Birchfield v. Castleman, Jtdd. 181. If aparty be drawn in by assurances, or promises to execute a writing, equity will grant relief. 1 Pern. 296. The plaintiff can blame no one but himself. It is the duty of every person, about to take an assignment of a bond, to go to the obligor, and ascertain whether there is any equitable claim against it.
    2d. Morrison’s evidence was properly rejected. If the cause were decided in favour of the plaintiff, by his evidence, he overthrew a written instrument signed by himself, and escaped with impunity. The verdict would relieve him from responsibility to Davis, for fraudulently concealing the agreement. Whereas if the verdict were for the defendants; he was answerable over to Davis, for the debt, and for the costs which had been incurred.
    As to the charge of the court, it is excepted to because the court told the jury, that the assignee took the bond subject to every equity between the obligor and obligee; that the assignee stood in the place of the obligee:, that the assignee was bound by the agreement of the obligee. The principles laid down by the court are supported by the cases determined in this state. In Inglis v. Inglis’s Executors, 2 Dali. 49, the court say, that if the obligee of a bond' assigns it, notice ought to be given to the obligor, in order to prevent his paying the money to the person who has thus parted with his interest. From this ease it is apparent, that it is not incumbent on the obligor to seek for the assignee, but it is the duty of the assignee to inquire of the obligor what equities he has: and this is the only mode which can, in ordinary cases, be pursued. The obligor cannot know to whom the bond maybe assigned: but the assignee must always know who is the obligor, and in this state the law obliges him,to inquire, and if he does not, construes such omission to be laches on his part. In Bundle v. Ettwein, 2 Yeates, 23, the assignee of a bond, without notice, is considered as standing in the place of the obligee. If the present case be viewed as a case between the defendants and Morrison, no court could say that Morrison could enter judgment in violation of his agreement. In Solomon v. Kimmel, 5 Binn. 232, it was determined, that the assignee of a bond takes it subject to all the equity which the obli-gor had against the obligee, unless the obligor promoted the assignment: and therefore in a suit by the assignee, the obligor may, under the plea of payment, show that the bond was given for lands-to which the obligee had no title. In Bury v. Hartman, 4 Serg. & Bawle, 175, a payment made by the obligor to the obligee before notice of the assignment was held good against the assignee.
    
      J. JR. Ingersoll, in reply. As to the competency of Morrison? as a . witness, it is true, that if it came out in any part of his testimony that he was interested, the court did right to reject him. But he was not interested, or if interested, he would be equally interested, let the cause terminate as it may. He would be liable to an action by the plaintiff or defendant, whatever might be the result. But in truth, the agreement, such as it was, was confined to the obligee, and did not extend to an assignee.
    As to the questions of admitting parol evidence, or papers of an inferior character, to vary contracts under seal, courts of law do not admit them, and the question is, would a court of equity admit them in such a case as this. There was neither fraud, mistake, nor trust; or if there were fraud, it was practised not by the assig-nee, but against him. The error into which the plaintiff was led, was owing to the conduct of the Barrs themselves, in resorting to a secret intrument of writing, instead of. placing the agreement in the warrant itself. That memorandum might have been introduced into the warrant, and if it has be.en omitted by them, fraudulently or otherwise, no court of equity would relieve against the judgment. Its being in writing is nothing. It was distinct from the bond, and inferior in its nature: and its'object was to contradict the power of attorney in an essential point.
    The sanction of such an agreement would tend to encourage fraud and litigation. The defendants have no equity, for they ought not to have resorted to this secret agreement. It is objected, that the assignee ought to have given notice of the assignment to the obligor. He is not bound to give notice; but if he does not, he runs, the risque of payment being made to the obligee.
   The opinion of the court was delivered by

Gibson, J.

We commonly say that the assignee of a bond, under our act of assembfy, takes it subject to every equity which might have been set up against it in the hands of the obligee: but this, however generally true, is to be understood with some restriction. The rule established in Wheeler v. Hughes, has never been carried further than to put the assignee in the place of the obligee as to defalcation and want of consideration; and that it has been carried even so far, is owing to the special wording of the act, which enables the assignee to recover only “ so much as shall appear to be due at the time of the assignment.” Had it not been, for thisj I- apprehend the assignee would not have been affected by any transaction between the original parties; for it certainly is not a general principle of equity that a purchaser for valuable consideration, of the legal title to any kind of property, should take it subject to an equity of which he had not notice: and as to policy, I much doubt whether it would not have conduced to fair dealing if our bonds and notes had, in this respect, been put on a footing with promissory notes under the statute of Ann. We are however to take the law as we find it; and as to want of consideration or set-off, it is certain that where there has been no fraud on the part of the obligor, the assignee stands on no better ground than that on which the obligee stood. To exclude all transactions between the original parties, it is necessary that it should appear the assignee took the assignment at the instance of the obligor, or at least that the’ latter stood by with full knowledge of his rights, and without disclosing them. But with any agreement between the original parties, inconsistent with the purport or legal effect of the instrument, the assignee has nothing to do. No such agreement is within the" purview of the act; and the assignee is not bound to call on the ob-ligor for information about matters, the existence of which he has no reason to suspect; the necessity of inquiry being limited as I have said to want of consideration and set-off. Then the agreement here, was that the obligar would not enter up judgment in Chester county; which in no respect affected the existence of the debt but was collateral to it. The warrant of attorney was annexed to the instrument or incorporated with it, (no matter which,) and the right of directing the exercise and application of the power under it, passed by the assignment as an incident of the property in the debt. At law, the agreement not being under seal, was no revocation'of the power, although it was a revocation in equity; and to obtain relief against the judgment as an incumbrance, it would be necessary for the obligors to go into chancery for a perpetual injunction against having execution.of the land. On what ground of equity would they claim this against án assignee for a valuable consideration and without notice? The bond was made assignable in express terms; and it would seem, from the evidence, the obligors knew that the obligee intended to raise money on it. Taking such an engagement and enabling the obligee successfully to hold out the appearance of a state of things which had no existence in fact, was very like a fraud; and I am satisfied that judgment was well entered up by the assignee, and that it is a lien on the land of the obligors.

As to the competency of the obligee as a witness, it is difficult to see what interest he ’had to exclude him. He was not liable to. the assignee, and he therefore got rid of no responsibility by promoting a recovery in this suit.

Judgment reversed and a venire de novó awarded.