Case ID: ohio_14/html/482, 483-01.html
Source: Caselaw Access Project
Author: {"author": "Birchard, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John Treon v. Wilson N. Brown and Aaron Fuller, Partners, ETC.
    A party to a negotiable paper can not be a witness to invalidate it, by showing that it was founded on an illegal consideration.
    A bill of exchange and the protest are admissible in evidence, and may go to the jury, although they may not, of themselves, show a sufficient demand and notice to entitle the party offering them .to recover. Objections to them go to the effect of the evidence, not to its admissibility.
    This is a writ of error directed to the Supreme Court of Montgomery county.
    Brown and Fuller, in the court below, sued Treon upon two drafts of $500 each, drawn upon M. T. Miller, of Philadelphia, signed by Edward L. Jones, as cashier of an unauthorized ^banking association, called the Washington Bank, charging Treon as a stockholder in said bank.
    At the May term, 1844, of the Supreme Court in Montgomery county, the cause was submitted to the court, without the intervention of a jury, and judgment rendered for the plaintiffs for $1,227.80, together with the damages and costs of suit.
    During the trial, a bill of exceptions was taken, from which it appears that, to sustain their action, the plaintiffs offered in evidence the bills of exchange or drafts declared upon, and also the protests of the notary public who protested the same, and that the “ defendant objected to both said protests, as not showing sufficient demand and notice; but the same were received in evidence, and tho plaintiffs then closed.”
    It also appears, from said bill of exceptions, that the defendant offered Joseph Watson, one of the indorsers appearing upon said bills of exchange, to prove that the same were issued by an unauthorized banking association, and were therefore void; and also to prove the handwriting of the plaintiffs to various letters, accounts current, and papers, showing the connection of said plaintiffs with said illegal bank, for the purpose of showing said drafts illegal- in their inception, and prior to and at the time they were indorsed by said Watson, the witness, fraudulent and void, and not obligatory upon the defendant; that the testimony was objected to by the plaintiff, because of the incompotency of tho witness, and the testimony excluded by tho court.
    The defendant below, now plaintiff, assigns for error in these decisions of the court:
    1. That the court admitted the drafts and protests offered in evidence to go to tho jury as evidence, when the same ought to have been excluded.
    2. That the court overruled and excluded the testimony of tho witness, Joseph Watson, which would have proved that the plaintiffs were particeps criminis with the defendant, in dealing with and putting in circulation tho paper of an unauthorized ^banking institution, when the same was competent and pertinent, and should have been admitted.
    3. That the court overruled all the other testimony that was offered by the evidence of said witness, whereas the same was competent and pertinent, and should have been admitted.
    Odlin & Schenck, for plaintiffs in error :
    Tho question arising in this case is of importance, and is now to be settled for the first time in bank ; and that is, how far an indorser of a negotiable instrument may be received to impeach it. Upon this question, we refer to G-reonleaf on Evidence, 429.
    Tho leading case upon this subject in England is the case of Walton v. Shelley, 1 Term, 296, deciding against his admission, overruled by the case of Jordaine v. Lashbrooke, 7 Term, 599; the , rule, in England, now being that he is a competent witness to prove any fact to which any other witness would bo competent to testify. In the United States, the decisions are conflicting, and are found collected in a note to Greenleaf on Evidence, 429; United States Bank v. Dunn, 6 Pet. 51, 57. The indorser to negotiable security, negotiated before due, not admissible to impeach it in the hands of an innocent holder. In New York, the decisions admit the indorser. 5 Cow. 23, 153; 3 Wend. Same in Virginia, 3 Rand. 316. Same in Connecticut, 1 Conn. 260. Same in South Carolina, 3 McCord; and in Tennessee, 2 Merger, 35.
    In Stone v. Vance, 6 Ohio, 246, the indorser was admitted to prove subsequent facts.
    
    The leaning of the courts of late has been to let all questions of interest go to the credibility of the witness, and we submit whether the English rule, sustained as it is by the decisions of some of the ablest courts in the state, is not more *in accordance with the present policy of admitting a witness in all cases where he is not directly interested in the event of the suit. Truth should not be excluded in any case, if it comes from a reliable source.
    Whatever may be the opinion of the court as to the competency of an endorser to impeach a negotiable security in the hands of an innocent holder, yet this is not in the hands of an innocent holder ; he was offered to prove, not a fact between the original makers of the note, rendering it void in the hands of a subsequent innocent holder; but to prove, in the language of the exceptions, “that the bill was drawn by E. L. Jones, as cashier of the Washington Social Library, doing business as a bank, under the stylo of the Washington Bank, being an unauthorized institution; that Wilson N. Brown & Co. were brokers, doing business at Lho city of Cinnati, Ohio, under an arrangement with said bank, at, before, and subsequent to the making of their drafts; receiving, redeeming, and circulating, at Cincinnati, the notes of said illegal institution ; that the drafts wore made at Miamisburg, fully indorsed there by all the parties, and given to Wilson N. Brown & Co. to adjust and settle a balance duo them as brokers, in sustaining and circulating the paper of said institution at Cincinnati, and to induce them to make further advances for said purposes.” And also to prove the handwriting of "W. N. Brown & Co. to letters, accounts current, etc., establishing those illegal transactions.
    We contend, therefore, that if the court should ever establish the rule that an indorser shall not be permitted to impeach negotiable paper in the hands of an innocent holder, yet the policy even of that rule can not embrace this case.
    Stoddard & Haynes, for defendant in error:
    The only question we propose to discuss is stated by counsel for the plaintiff, and some of the authorities on each side %eforred to. Is a party to a negotiable instrument, admissible to impeach it, for facts occurring before or at the time ho became a party? There is a diversity in the decisions upon this point; but we think the court, in rejecting the testimony of the indorser, was right, and is fully sustained by the weight of authority. The admissibility of the witness does not depend upon the fact of the instrument being in the hands of an innocent holder, or of one having knowledge of the transaction which would avoid it. There is no reason for such distinction. The decision of Lord Mansfield, in Walton v. Shelley, and similar decisions which have followed this, are based upon the maxim of the Roman law, “ Nemo allegans suam turpitudinem est audiendus,” which applies equally in either case. In the application of the rule, in a suit upon these bills, there can be no such distinction. If they are void for the facts which the witness was offered to prove, they are so by positive enactment, as claimed by plaintiff’s counsel, or necessary implication of this statute ; and are therefore void, oven in the hands of an innocent holder, without notice. Story on Bills, sec. 189, and authorities there referred to. The law makes no distinction as to the right to recover. Why, then, should it, as to admissibility of witnesses, to prove facts to defeat a recovery? Such a distinction would defeat the policy of the law itself. The cases cited by plaintiff’s counsel make no such distinction. In Walton V. Shelley, the plaintiffs, we suppose, were assigned in bankruptcy of the obligee, and stood in the same position. In the Bank of the United States v. Dunn, the plaintiffs, it was claimed, were, by their officers, parties to the contract. In Churchill v. Suter, 4 Mass. 449, the usurious 'contract was with the plaintiff himself. So in Widgery v. Monroe, 6 Mass. 449; and in Mann v. Swan, 14 Johns. 270.
    The weight of authority we think decidedly against the admissibility of the indorser, Watson, to prove the facts set forth in tho bill of exceptions. The decision in Walton v. Shelley, is approved by Lord Kenyon, in Charrington v. Milner, Peake’s N. P. 6; Humphrey v. Moxon, Ib. 52; Phetheon v. *Whitmore, Ib. 4; and when he had changed his opinion, and admitted a party to the instrument as a witness, on the trial, at nisi prius, of Adams v. Langard, Ib. 117, tho court granted a new trial. In Hart v. McIntosh, 1 Esp. 298, the common pleas sustained the decision in Walton v. Shelley. In Jordaine v. Lashbrooke, one of the justices dissented, and two others urged, as a reason for their decision, tho necessity of enforcing the revenue laws. The earlier decisions of the court of New York; the authority of the court of Massachusetts; the numerous decisions of the courts of other states; and finally, the authority of tho Supreme Court of tho United States, we think have settled the rule in this country.
    The Supreme Court of the United States has'recently reaffirmed the decision, in the United States Bank v. Dunn, in Henderson v. Anderson, 3 Howard, 73. But we do not admit that the effect of the proof sought to be made by Watson would have been to defeat the action.
   Birchard, J.

One question only is presented by the second and third assignments.

Can a party who has aided the circulation of negotiable paper, by giving currency to it as indorser, be admitted as a witness to impeach it, for facts accruing before or at the time he becamo a party ?

This question has been decided differently by-the courts of the different states of this Union, and in the courts of king’s bench. Grecnl. Ev. 453, 454. So far as is known, the'rule, as established in Walton v. Shelley, 1 Term, 296, has been uniformly followed in this state. It is, as we conceive, a rule of sound policy, tending to secure confidence in commercial transactions, and one that should not, for slight causes, be departed from. Rules governing commercial transactions should remain settled and uniform among a people so much inclined and so often compelled to engage in traffic and to deal in bills of exchange as are the people of the 488] United States. ^Notwithstanding tho old rule of Lord Mansfield has been disregarded in some of the state courts, and shaken by more recent English decisions, it has been steadily adhered to by the Supreme Court of the United States (Henderson v. Anderson, 3 Howard, 81), and reaffirmed upon full argument within the last year. It is a rule of commercial law, is incorporated into the system, and affects alike all parts of the Union Had the course of decision in this court been heretofore uniformly in conformity to the more recent English decisions, we should not hesitate to change our course upon the authority of the Supreme Court of the United States. The necessity of uniformity in matters of this nature would be a sufficient justification. It would certainly present a case very much to the discredit of the law were a citizen of a sister state to sue one party to a bill, and recover, in the circuit court, because the learned judge who presides there ruled out the evidence of an indorser; and a citizen of Ohio, suing upon the same bill in this court, should fail because the testimony of the indorser was let in ; yet badly as this supposed case might appear, it would frequently occur in substance. Should this rule of evidence be changed, the doctrine established by the United States court should be binding throughout the Union upon such a question. The state courts ought to follow it, because it is founded in reason, and for the sake of uniformity.

The remaining error assigned is, that the court permitted the drafts and protest to be received in evidence, when they ought to have been excluded.

It is not sufficient cause for rejecting evidence that, of itself, unsupported by other evidence, it fails to sustain the cause of action. If it tends to prove th.e issue, it must be admitted. The bill and protest certainly looked that way.

Under this assignment, the question of its sufficiency has been argued; but it is not presented, and therefore need not be further noticed. Judgment affirmed.