Case ID: serg-rawl_6/html/0113-01.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

Hepburn against Cassel.
    In ERROR.
    
      Monday, July 3.
    .T1^ 1'ni« which renders incompetent,a evWeücetewU to impugn an instrument which he has though not mterested in the event of the ments strictly the usual candle busi-'' neas-
    ON a writ of error to the Common Pleas of Luzerne . . county, it appeared, that this suit was brought by Henry Cassel, for the use of Benjamin Perry, against Patrick Hepburn, on a promissory note for one hundred dollars, drawn r- » . t _ . . at Lancaster, on the 21st April, 1817, by-Hepburn, payable to Henry Cassel, or order, one year after date. It was endorsed by John Smith, Henry Cassel, and Benjamin Perry, , J J ... J ’ whose names stood m the order m which they are here mentioned. The defendant’s counsel, having called John Smith, as a witness, he was objected to, because his name was upon the instrument; upon which, the defendant paid into the amount of the note, interest, and costs, for the purpose of removing any interest which Smith might be supposed to have, in the event of the suit. The defendant’s counsel, then offered him again, to prove, that he had never received the note from any person; that he had never negotiated or passed it away ; that he had never received any thing for putting his name upon it, which was done, while it was in the possession of Cassel, and before it had been negotiated by him, and that it was given by Hepburn, to Cassel, without any consideration. The counsel for the plaintiff, still objected to the competency of Smith, as a witness, and the Court rejected him; upon which, a bill of exceptions was tendered and sealed.
    
      Mallory and Greenough, for the plaintiff in error.
    Independently of an interest in the event of the suit, which if it ever existed, (and we deny that it ever did,) was removed by the payment of the money into Court, there was no legal objection to Smith’s testimony. He cannot be viewed in the light of an endorser of a negotiable instrument, because he put his name upon the note, before it was endorsed by the payee, and the money was never payable to hipi. Nor does it appear, that the note was ever negotiated, or passed away in the usual course of business, by any one. If 
      Cassel, the payee, endorsed it to Perry, it became the property of Perry, and no suit upon it in the name of Cassel, could be supported. He might, it is true, have stricken out ^is name at the trial, Theed v. Lovell;
      
       but this was not done ; the parties treated the instrument, as if it had never been negotiated. Whether it was negotiable at all, properly speaking, is susceptible of great doubt. The act of 1715,
      
       merely made notes assignable, and permitted the assignee to sue in his own name. Their true negotiable character was given to them, by the act of 27th February, 1797, whose operation is confined to the city and county of Philadelphia. It is there only, that they are negotiable in the strict sense of the term, Gourdon v. Insurance Company of North America : and that neither Cassel nor Perry, considered it as a negotiable instrument, is evident from the suit having been brought in the name of the payee, instead of th at of the indorsee. ■ The rule therefore, which prevents a man from destroying by his evidence, a security to which he has affixed his name, is inapplicable to the present case, because, it is now well settled, that it extends only to instruments strictly negotiable, which have been actually negotiated in the regular course of business. Baring v. Shippen.
      McCullough v. Nuston.
      
       Cromwell v. Arrott.
      
       Pleas-ants v. Pemberton.
      
       1 Esp. N. P. 29.
    
      Dyer, for the defendant" in error.
    The note in question, was in the usual form of a negotiable instrument, payable to order, and transferable from hand to hand by indorsement. It was therefore a negotiable instrument, notwithstanding it was not made in the city or county of Philadelphia. Before the act of ,27th February, 1797, the object of which was, to place promissory notes drawn in the city or county of Philadelphia, on the same footing as in the other parts of the commercial world, with respect to defalcation, the rule laid down in Walton v. Shelley,
      
       that no one shall be" permitted to impeach a security, which he has given, though not • interested in the event of the suit, was the established law of Pennsylvania. It was so held, in Stille v. Lynck.
      
       It was recognised in Pleas-ants v. Pemberton,
      
       though the rule was not applicable to that case ; and again in Respublica v. Ross,
      
       and in Shaw v. Wallis ;
      
       all of which, were decided before the act of 1797. It is true, the suit is in the name of Cassel, the payee, but that does not affect the negotiable quality of the instrument, nor prove that it had not been negotiated, because the suit was for the use of Perry, in whom the property was vested, and who retained the character of indorsee, as much as if it had been in his own name as such. He cited also, Erb’s Lessee v. Underwood.
      Coleman v. Wise.
      
       Shading v. Warren.
      
       31‘Ferranv. Powers.
      
       2 Bac. Ab. 592. (Wils.Ed.)
    
    
      
       2 Str. 1103.
    
    
      
      
        Purd. Dig. 70.
    
    
      
      
        Purd. Dig. 70.
    
    
      
      
         1 Binn. 433. note.
      
    
    
      
       2 Binn. 166.
    
    
      
       1 Dall. 441.
    
    
      
       1 Serg. & Rawle, 183.
    
    
      
       2 Dall. 196.
    
    
      
      
         1 T. R. 296.
    
    
      
      
        а) 2 Dall. 194.
    
    
      
       2 Dall. 196.
    
    
      
      
         2 Yeates, 4.
    
    
      
      
        2 Yeates, 17.
    
    
      
       3 Yeates, 17.
    
    
      
       2 Johns. 165.
    
    
      
      
         15 Johns. 270.
    
    
      
      
         1 Serg. & Rawle, 102.
    
   The opinion of the Court was delivered by

Gibson J.

There is no colour for the pretence that Smith, the witness, had such an interest, as affected his competency ; for being liable, if at all, to Cassel or Perry, and not to the defendant, by whom he was called, his evidence, by defeating the recovery in this suit, would have called into immediate action, whatever liability he may have contracted, from his name being on the note. Whether he was in fact liable to any body, it is not only unnecessary, but very difficult to determine, especially as we know not under what agreement his name came on the paper; and as he was called to swear against his interest, the deposit was unnecessary to remove the objection on the score of interest. Then, as to the objection on the supposed applicability of the rule in Walton v. Shelley. That rule has been adopted here; but only as applicable to bills and notes strictly negotiable : nor do we, as Lord Mansfield did, found it on the maxim of the civil law, that no one is permitted to allege his own turpitude ; for that maxim, would embrace all the transactions of life, and cannot, therefore, I apprehend be the real foundation of the rule even in England, where, according to every common law principle of evidence, an accomplice in the most flagitious crimes may be heard. The true foundation of the rule, therefore, is policy, which intérposes its protection only in favour of third persons, who, in the common course of business., have become the holders ’ of paper strictly negotiable. By strict negotiability, I mean, not only that which, under, the act of 1797, carries with it, an exemption from defalcation of matters, between the original parties, (foythe rule was adopted, before that act was passed, when all notes were taken by the indorsee, subject to such defalcation,) but also, that which depends on the Stat. 3 and 4. Anne, and our own act of 1715. Where, therefore, the contest is between the original parties, or between the drawer, and a person who has not become the holder by the usual mercantile indorsement, there is no ground for the application of the rule. Here we know not how Smith’s name came on the note. If, as it is said, it was intended to guarantee payment by the drawer, and could, in point of law, have that effect (which I, for one, deny,) still between the original parties, the rule would not operate. The question, then, is whether the original parties to the note, are the parties to the suit. The note was, in all respects negotiable, under the act of 1715, and the statute of Anne ; and the names of Smith, the witness, Cassel., the payee, and person in whose name the suit was brought, and Perry, for whose use it was brought, were endorsed in the order in which I have named them ; and yet, for some cause, which I cannot discover, the suit was brought in the name of Cassel. But the mere act of indorsing and delivering over, divested all Cassel’s property, so that no suit could be maintained in his name, while it remained on the back of the paper. It is true, that no objection having been made to the form of the action, his name was not, as it might have been, struck out at the trial: but that the suit was suffered to be maintained in his name at all, amounted to the same thing ; for by that, all parties shewed they were content to treat the note as if it had never been negotiated: the plaintiff could not have stood for a moment on any other ground. WV are certainly, therefore, to consider Cassel, as the legal party. Then what is the nature of Perry’s interest? If the note was, in fact, negotiated to him in the usual course, (which we might, from the indorsements be inclined to think,) he has chosen to treat the matter differently, by not bringing, as he might have done, the suit in his own name; in which case, notwithstanding the order in which the names appear, Smith, must necessarily have been con-. sidered a prior indorsee. As it is, although the Court, iri case of an equitable assignment, will, for many, purposes, look to the real party, and might, even here, treat Perry as such, yet, for protection under the rule, it is impossible to treat him as an indorsee, because he chose not to treat himself as such, but as a person having an equitable interest, acquired out of the common course of business ; and although he may, in fact, be the real party, still the policy of the rule does not extend to paper, either not negotiable at ail, or negotiated out of the usual course, so as not to give the holder an action in his own name. But here the suit was brought in the name of the payee, which cannot be done, where a note is negotiated, so as to give the indorsee an action. An objection to the form of the action, might have been obviated at the trial, by striking out the names of the payee and indorsees, or indeed of the first alone; but that, by openly leaving the controversy to the original parties, would have removed even all apparent ground of objection to the witness. But although no objection was made, yet as the suit was actually sustained, we are to view it as standing, for every- purpose, exactly on the ground on which, alone, it was sustainable. We are of opinion, therefore, that Smith was a competent witness.

Judgment reversed, and a venire facias <je novo awarded.