Case ID: day_4/html/0108-01.html
Source: Caselaw Access Project
Author: {"author": "Bt the Court.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Elijah Cowles, Jonathan Cowles, Sets Cowles, Gad Cowles and Martin Cowles against Robert Wilcox.
    June, 1809.
    In an action against the cndorsor of a promissory note, the maker, for whose accommoda-tionthe defendant endorsed the note, and who had executed a mortgage deed to the defendant as security, was held tobe ble witness for the defendant defence of fcterested^ in the suit6*11 OÍ Quxre, whe-who^as^no event SofD the suit, can be admitted as a witness toim-lieach a^ecu-he has given,
    MOTION for a new trial.
    This was an action of assumpsit against the defendant; as endorsor of a promissory note.
    The defendant pleaded non assumpsit; and gave notice, according to the rule, that he should give usury in evidence.
    On the trial, the defendant stated, that before the making of the note, Isaiah Tuttle applied to the plaintiffs for forbearance and day of payment of certain executions in ⅜ . their favour against him, which were then in the hands an officer for collection: that the plaintiffs thereupon a,r.reed with him, that if he would make a note of the of that described in the declaration^ payable to defendant, and procure his endorsement thereon, they wou'(^ receive it, by the hand of sdme third person, at the rate ef seventeen shillings in the pound, and apply the same in satisfaction of the executions : that Tuttle, *n pursuance of this agreement, made the note descriBed in the declaration, and procured the defendant to . feiutorse itj for the purpose of being delivered over to the plaintiffs; immediately after which, it was aceordingly, with the knowledge and consent of the defendant, delivered, over to the plaintiffs, by the hand of Russell Munson; who thereupon received an order from them, in favour of Tuttle, for the sum so agreed to be allowed for the note, viz. for seventeen shillings in the pound to be applied and endorsed on their executions against him. The defendant then offered Tuttle as a witness to /prove these facts. But, it appearing that he had executed to the defendant a mortgage deed of certain land, defeasible on his paying to the defendant the contents ©f sáld fióte, the court decided that he was not a competent witness for that purpose, and rejected his testimony. The plaintiffs obtained a verdict; and the defendant moved for a new trial.
    Gould, in support of the motion.
    If Tuttle was incompetent, he was so, either because he was interested in the event of the suit; or, from principles of policy.
    1. Wilcox was in the nature of a surety, with a mortgage as counter security, from the principal. Tuttle was not interested in the event, first, with respect to his land mortgaged; nor, secondly, as to his liability to reimburse Wilcox.
    
    First, as to the mortgage. If judgment should be for Wilcox, that would not discharge the mortgage, nor enable Tuttle to avoid it. The mortgage was good, or void, ab initio, and independently of the event of this action. If Tuttle can aver the usury as against Wilcox, it is bad, though Wilcox should be subjected. If not, it is good, though Wilcox should not be subjected. - No averment that he has been, or has not been, subjected; can be admitted to affect the mortgage. Mease v. Mease, Coivp. 47.
    But, it will be asked, if Wilcox never pays, shall he hold the land ? Why not ? If he holds, it must be on the ground that he is not affected by the usury. Then this case will be like any other, where the grantor has estop.-ped himself by his deed. At any rate, Wile Ox can hold as well without paying as with. If the mortgage is infected with usury, he cannot hold in any event; if not, *1 averment contradicting the condition is not admissible.
    Secondly, as to Tuttle’s liability to reimburse Wilcox. Suppose a judgment in this action against Wilcox, that will not subject Tuttle further than he would otherwise be. It will be contended, that if Wilcox is compelled to pay, he may maintain indebitatus assumpsit for money paid, &c. against Tuttle, or an action on the note. If so', then payment by Tuttle to Wilcox will discharge the' land. For aught that appears, he would gain as much in this way as he would lose by a recovery against him; and thus his interest would be balanced.
    
    But no action would lie against Tuttle. Wilcox knew of the usury. It was through his agency that the corrupt and illegal transaction was effected. If the surety was privy to the usury, he cannot recover against the principal. Pat kins' case, 3 Leon. 63. Bac. Abr. tit. Usury, H. Com. Dig. tit. Usury, B. Ord on Usury, 101. In Collins v. Blantern,:2 Wils. 341. a bond executed as an indemnity to a third person, who had given his note to stifle a prosecution for perjury against the defendants was held void; and this has since been regarded as a leading case. Mitchell v. Cockburn, 2 H. Bla. 379. was decided upon the same, principle. Further, a'suretv having taken a bond of indemnity, cannot maintain indebitatus assumpsit on paying the debt. Touissaint v. Martinant, 2 Term Rep. 100. His remedy is on the bond. Wilcox has taken his security.
    . 2. The principle of policy relied upon to exclude the witness, is, that no man shall be allowed to impeach his own security. Here it is necessary to remark only, that the rule, as introduced in England, by the case of Walton v. Shelley, 1 Term Rep. 296. is limited, in its application, to negotiable instruments; and that that decisiorrhas since been overruled by the ease of Jordaine v. Lashbrookc, 7 Term Rep. 601. In this state it has never been directly recognised. In Allen v. Holkins, 1 Day, 17. the witness was offered to contradict the. terms of his own deed. The court very properly decided that he was estopped; and decided nothing more. The remarks upon the rule in Walton v. Shelley were extrajudicial. Further, the object of the rule in Walton v. Shelley was to protect only such holders of negotiable paper, as had received it, without knowledge of the usury. But in this ease, the evidence, offered went to prove that the plaintiffs were privy to the corrupt agreement.
    Benedict, contra.
    1. Tuttle was an incompetent witness, because he was interested in the event of the suit. Wilcox endorsed the note for Tuttle, at his request, and for his benefit. If he is obliged to pay the money to the plaintiffs, he will have a clear remedy against Tuttle, for so much money paid for his use. This cannot be controverted, unless by saying either that as the defendant had taken a deed of mortgage to secure him for becoming an endorser, he can, at all events, hold the land, because the consideration on which it was given cannot be averred by Tut-tle ; or that because Wilcox knew of the contract between the plaintiffs and Tuttle, his deed is void, and he has, therefore, no remedy against him.
    The fact being admitted, the situation of the witness is not varied by any'supposed difficulty in his availing himself of it; nor is it certain, from any thing appearing on the motion, but that the real and true nature of the transaction might be proved by proper testimony. But if nq averment can be received regarding the mortgage, and if Wilcox can, at all events, hold the land, then it follows, that as the note was endorsed by Wilcox for Tuttle, at his request, Wilcox, upon paying the money, can have his action against Tuttle just as though no security had been taken. If Tuttle cannot be received to prove the facts for the purpose of compelling a re-conveyance, having saved Wilcox harmless, neither can he when sued by him in an action for money paid for his use.
    He can sustain tins action, though he knew for what purpose the note was negotiated. It was not endorsed for the purpose of carrying into effect any corrupt agreement between Wilcox and Tuttle. V/ilcox was not to take benefit of it in any mariner whatever.
    
      It was a mere accommodation note to enable Tuttle to r^se money for his own use only. As between these parties, every thing was perfectly fair. In the case of jju¡¡en v. Dovjnham, Cro. Eliz. 643. it was holden, that an action on a bond to indemnify and save harmless the plaintiff from a usurious bond, in which the plaintiff had united with the defendant as his surety, would lie, notwithstanding he knew of the usury; And although Patkins’ case, cited on the other side, seems to oppose this decision, the reason given in that case does not apply to this, because if Wilcox recovers in a suit here* after to be brought, it will be on the ground that he could not resist the claim of the plaintiffs; whereas in that case, he had a good defence, and ought to have made it. But if it is admitted, that the counter security is not usurious as between the parties, it by no means follows, that it should be cut down, lest the contract, which is really so, should, by means of the surety refusing to oppose it, be carried into effect contrary to the intention of the statute. The cases cited from Bac. Abr. tit. Usury, H. do not support the positions for which they are adduced.
    2. Tuttle is inadmissible from principles of policy. Having given the note in question, and procured it to be negotiated to the plaintiffs, he is incompetent to testify to any facts tending to impeach it. Walton v. Shelley, 1 Term Reft. 296. Allen v. Holkins, 1 Day, 17. Hart v. AT In tosh, 1 Esfi. 298. Coleman -v. Wise et al. 2 Johns. 165. Parker v. Lovejoy, 3 Mass. Reft. 565.
    It is indeed said, that the rule in Walton v. Shelley extends only to negotiable instruments. Our notes of hand, it is true, are not negotiable so as to enable the endorsee to commence a suit in his own name against the maker, but for every other purpose they are so. After being negotiated, they are not subject to process by foreign attachment; the endorsee may sue the endor-sor upon his endorsement; an action at law may be sys-tained for giving or accepting a discharge after a transfer ; and it has in one case been held, that the endorsee might sue in his own name under special circumstances. Hoyt v. -Maltby, superior court, 1802; and, at any rate, the reason of the rule extends to our notes when negotiated, as much as to any paper.
    But it is said that the witness was offered to prove that the plaintiffs knew of the usury. This presupposes the evidence given, and may be said in every case. Besides, in the case of Hart v. M‘Intosh, the witness was offered to prove that the plaintiff had knowledge of the illegal transaction, but was rejected.
   Bt the Court.

The question in this case is, whether Tuttle, offered as a witness, was interested in the event of the suit ?

Notwithstanding the expression contained in the condition of the mortgage deed from Tuttle to Wilcox, which is, that the same shall be defeasible on Tuttle’s paying to Wilcox the contents of the note according to the tenor thereof; yet the intention of the parties is manifest. The object of the mortgage was indemnity to Wilcox, Not only payment of the note by Tuttle would defeat the mortgage, but should that note be, avoided by any other means, so that Wilcox would be saved harmless from it, the result would be, that if the estate had vested in Wilcox by virtue of the mortgage, ft court of chancery would decree a redemption of it.

On the other hand, should Wilcox be subjected on his Warranty, he would either be entitled to the benefit of the mortgage for his indemnity, or he would have his action of indebitatus assumfisit against Tuttle for money paid to his use and benefit.

The witness offered was, therefore, interested in the event of the suit.

New trial not to be granted,