Case Name: Samuel Bebee and Augustus Diggins, William Kibbe and William Howard, Executors of the last will and testament of William Barlow, deceased, Appellants, against The President, Directors and Company of the bank of New-York, Respondents
Court: New York Supreme Court of Judicature
Jurisdiction: New York
Decision Date: 1806-02
Citations: 1 Johns. 529
Docket Number: 
Parties: Samuel Bebee and Augustus Diggins, William Kibbe and William Howard, Executors of the last will and testament of William Barlow, deceased, Appellants, against The President, Directors and Company of the bank of New-York, Respondents.
Judges: 
Reporter: Johnson's Reports
Volume: 1
Pages: 529–580

Head Matter:
Samuel Bebee and Augustus Diggins, William Kibbe and William Howard, Executors of the last will and testament of William Barlow, deceased, Appellants, against The President, Directors and Company of the bank of New-York, Respondents.
E gave a bond aa<^ 'variant of attorney to Ws w]10 entered up judgment g preme court. W assigned judgment to O, to secure tke payment of a debt ; O assigned it_to R, who again as signed it'to N. E having paid nearly tinf’ °V whole _ amount menTt^W, he acknowledged The day after hac^been^ac-11 knowledged, B & B finding the judgment agamst E regularly satisfied, lent him a sum tooka’bondand warrant of at-which’he'entered up judgment against E in the same comt. N after-wards applied to the supreme court to have the satisfaction acknowledged by W, on the first judgment, vacated on the ground of fraud. The thesatisfaction to be vacated, and the judgment to he festored ; and thereupon N took out a fierifacias on that judgment, which was levied on the estateof E. B B then filed a bill in chancery against N imd others for relief, and to obtain restitution of the money levied on the execution, and in the hands of N. On an appeal from an interlocutory order of the chancellor in that cause, it was held, that E having paid W 'the amount of the first judgment before notice of the assignment, and the same having been satisfied on the record, at the time the second judgment was entered up, the latter was entitled to a priority, notwithstanding the subsequent vacatur of the satisfaction entered on the first; and the money levied on the first judgment, in favour of W, was ordered to be paid to B B. On an appeal from an interlocutory order of the court of chancery, this court will give judgment on the merits of the cause, if the same be brought before them.
THIS cause came before the court, on an a Interlocutory order of the court of chancery. ppeal from an
The following are the material facts which appeared in the case: On the 15th June, 1800, Joseph Eden, in order to indemnify John Wardell, a broker, in the city of New- entered up in the supreme York, against certain indorsements which he had made on the notes of J. Eden, and to secure the payment of monies lent to J. Eden, executed a bond in the penal sum of $100,000, conditioned for the payment of $50,000, with a warrant of attorney, to confess judgment thereon. On the 8th July, 1800, by virtue of the warrant of attorney, a judgment was court, in the name of the said Warded, against J. Eden. In order to secur^ Nathaniel Olcott, another broker in the city of New-York, the payment °f certain monies lent by him to Warded, the latter assignec| to him the judgment thus entered against J. Eden. In July and August, 1800, y. Eden paid to Warded all the money ^ue on ^le judgment, except about $4-67, which was paid the 6th October, 1800, and on the 10th October, 1800, ‘ , . ’ , ’ . r , . , warded acknowledged satisfaction oi the judgment.
About the 24th July, 1800, Warded and Olcott settled ■ ’ their accounts together, when the former was indebted to t^le *atter about $25,000, for which he gave his three promissory notes, payable in 30, 60 and 90 days, which were so'on after transferred by Olcgtt, and have since been paid, except the sum of $1200, due on one of them. On the 11th 1 October, 1800, Joseph Eden and Medcef Eden, his brother, executed to William Barloxv, now deceased, a bond, in the penal sum of $40,000, conditioned to pay $20,000, andawarrant of attorney to confess judgment thereon ; upon which bond, by virtue of the warrant of attorney, a judgment was entered up in the supreme court. The appellants stated, in their bill in the court below, that they were jointly interested in the judgment, and had never received any satisfaction on it 1 and that the money on which the judgment of Barloxv was founded, was loaned to Joseph Eden, after the satisfac- . . . tion of the judgment of Warded against Eden, had been re gularly acknowledged ; this money consisted, according to the testimony of y. Eden, of §8,000 in cash, and §12,000 in notes and checks.
The respondents, in their answer in the court below, stated, that Olcott, by fraud and imposition,' induced one.of the tellers, employed in the bank, named Roe, to pay certain checks drawn by Olcott, on their cashier, to the amount of §120,000, at a time when Olcott had no money, or a very trifling sum in the bank. To secure Roe, and to indemnify him in part, Olcott, on the first day of August, 1800, assigned over to Roe the bond and judgment, against J. Eden, which had been assigned to him by Warded, on the 7th October, 1800. Roe■ (his transaction with Olcott having become known) assigned over to the respondents the same bond and judgment, and on the 9th October, 1800, they gave notice'm writing of this assignment to yoseph Eden. In October, 1800, the respondents applied to the supreme court to vacate the satisfaction acknowledged by War delicti the judgment against y. Eden, on the ground of fraud, having given notice of the application to J. Eden and his attorney. In April following, the supreme court ordered the satisfaction to be vacated; and, thereupon, the respondents caused a fieri facias to be issued on the judgment, against the estate of f. Eden, on which the sheriff returned, that he had levied Si4,076 54- cts» and nulla bona, as to the residue of the debt and damages..
One of the witnesses examined in the court below, stated, ¿hat when he gave notice of the assignment to J. Eden, on ihe 9th October, 1806, in behalf of the respondents, Eden observed that he had paid, during the last sixty days preceding, £40,000 to Warded on account of the judgment ; that he knew of the assignment to Olcott at the time it was made, and supposed it was intended for security only ; but Eden, on being examined as a witness, denied that he had received any notice of the assignment.
In June, 1801, Bebee and Barlow filed their bill__Olcott, who had become a bankrupt, and his assignees, were made defendants to the bill, and answered separately ; but after filing their answers, they did not, by themselves, or otherwise, appear or join in any of the subsequent proceedings of the cause on the part of the respondents. Barlow afterwards died, and the names of his executors were, by an order of the court, inserted in the bill in his stead.
In May, 1803, the cause was brought to a hearing before his honour the chancellor, who, in August following, directed a trial of feigned issues by a special jury, to determine, whether Joseph Eden had notice of the assignment of the judgment against him, before the 7th October, 1800, and what payments were made by him, when, and to whom, on such judgment previous to his receiving such notice. On the 5th July, 1804, the issues were tried, and the jury, by their verdict, found that Joseph Eden had no notice of the assignment of the judgment against him, on or before the 7th October, 1800, but that he received notice thereof on the 9 th October, 1800, and that he had paid Wardell $50,000 on such judgment, previous to his receiving notice of such assignment. At the trial of the cause, the respondents offered Olcott as a witness, but he was objected to by the counsel for the. complainants, 1. Because he was a defendant in the suit in chancery, and no measures had been taken to have his name struck out of the bill, or for his examination as a witness, saving all just exceptions. 2. Because, though discharged as a bankrupt, he was interested in the cause, as his evidence would tend to increase his estate : 3. That he had been guilty of fraud in assigning absolutely a judgment, which he had received as a mere collateral security, and would be, therefore, liable for costs. The second ob-. jection was removed by a release from the witness to his assignees of all his right to any surplus in his estate ; but, on the first and third grounds he was rejected by the judge before' whom the issues were tried. In March, 1804, the postea having been returned and filed, a motion was made by the counsel for the respondents, for a new trial ofthe issues, in order to let in the evidence of Olcott, who, they contended, ought not to have been excluded. After hearing the arguments of counsel on both sides, his honour the chancellor ordered, “ that a new trial be had between the present appellants and respondents, to try the several issues therein directed ; that in such trial the present respondents, be made plaintiffs, and the' present appellants, defendants, and thát the several payments (if any) made on the judgment before the notice thereof, be indorsed upon the postea with the verdict; and that upon the trial, Nathaniel Olcott, one of the defendants, be admitted to be sworn as a witness, notwithstanding his being a party in the cause, saving other ’just exceptions if any there should be; and if his testimony be rejected upon the said trial, the causes of rejecting the same, are also to be indorsed on the postea.”
From this order the complainants below appealed to this court. The reasons for the order were assigned by
The Chancellor. A motion was made on the part of the defendants for a new trial.
It was admitted that Olcott, having become a bankrupt, offered to release, at the trial, all his rights to his surplus estate.
The judge who presided at the trial, certified that- he was satisfied with the verdict.
The rejection of Olcott as a witness was on the technical ground of his being a party—it was a legal consequence of his situation as such, and the certificate of the judge had no bearing on this point, as the correctness of the verdict, on the evidence admitted, is not questioned.
An important object of the issues had been defeated by this rejection, as the testimony which was intended to be referred to the jury on the relative credibility of the witnesses privy to the transactions respecting the judgment, had not been brought into view. This was evidently owing to the mistake or inattention of the defendants; and the reason of his rejection, though a valid one at the trial of the issues, must by me be considered as merely formal. Tc con» dude, the parties on it in a case, circumstanced as this is, would be very rigid, as no interest or sinister intent can be imagined to induce the parties to risk the consequence of a rejection.
The issues, even in their original form, could not have affected the interests of Olcott, for the points referred to the jury expressly related to the payments made to Warded, and the fraud imputed to Olcott could not, in any point in which I have viewed the subject, influence the verdict of the jury.
I was, therefore, of opinion that these considerations ought to prevail in favour of a new trial, unless the defendants had lost their right of applying for one by their laches.
The trial was in June ; the complainants had the verdict in their power and'retained it. As soon as they applied to have the effect of it, they were followed by this motion ; this must be governed by the practice which prevails in the supreme court. If the party in possession of the verdict does not take the usual rule on the postea, the opposite partymay, any time before he enters the rule, move in arrest of judgment, or for a new trial, though, otherwise, he is strictly held to the four days.
An order was, accordingly, made for a new trial, but upon payment of costs.
The counsel on both sides then entered into a very wide field of argument on the merits of the case, which is here contracted into as narrow compass as possible.
Baldwin, for the appellants.
1. The appellants, after finding that the judgment to Warded had been satisfied, and the satisfaction acknowledged and regularly entered on record by the person in whose favour it was given, and who had the legal controul over it, lent their money to Eden on the security of a judgment, and in full faith and confidence, that his estate, as a, peared from the records was unincumbered by any. prior judgment. They are, therefore, to be regarded as bona jide purchasers, or incumbrancers, for a valuable consideration, without notice of any fraud, and ought not, in. equity, to be postponed, by the restoration of the former judgment at the instance of a secret assignee. Though Eden was called on to show cause before the supreme court why the satisfaction should not be vacated, the appellants had no notice of the application. The propriety of the decision of that court, in ordering the satisfaction to be vacated, under a view of the facts then before them, is not questioned. But they did not, nor could they have intended to decide, that a fair, innocent, intervening judgment creditor, without any knowledge of the fraud, should be deprived of his security, and that unheard, or without being called upon to defend his rights. The respondents were secret assignees, and must have known that the assignor had a legal controul over the judgment, and ought to have given some public notice of the assignment, 'or have entered it upon record. The appellants, therefore, as innocent purchasers without notice, stand on higher and better ground than the respondents, who have neglected to give notice, and have- a prior and superior right to satisfaction of their ' judgment.
*2. If Eden did actually pay off the judgment given in favour of Wardell, previous to notice of any assignment, it will be admitted on all hands, that the appellants ought to prevail. How is the fact ? Wardell and Eden both swear that Eden did pay off the judgment before Olcolt assigned it : and their evidence is strongly corroborated 0 . 0 J by the fact of Eden's making payments to Wardell, which he would not have done, had he known of the assignment, This evidence stands uncontradicted, except by the imr 1 • „ . „ . rTT perleet and inaccurate recollection oí. one witness. [He then went into an examination of the testimony of the witnesses on both sides, to show that there was, in reality,, * * no contradiction, and that the evidence of Wardell and Eden, as to the payment of the judgment, and the want of prior notice, stood unimpeached.]
3. There was, then, no necessity for awarding an issue to ascertain those facts; nor was such an order proper on any sound principles. Olcott admitted, in bis answer, that the judgment was assigned to him as collateral security merely; he had, therefore, no fight to hold it for any other purpose than the one for which it was made, and the moment that purpose was accomplished* his rights became extinct, and the assignment void. The consideration or object of the assignment was a debt due from Wardell to Olcott of $25,000, for which Olcott received promissory notes, which were, negotiated by him and were afterwards paid. Even if the notes had not been paid, Olcott could not have assigned the judgment for a different purpose, nor could Roe have transferred it to the respondents for any other object. The issue was directed to ascertain the fact of notice. But the judgment having been satisfied by the payment of the notes, the question of notice was of no importance, and could .not affect its decision, especially, as, if the fact of notice were admitted, the appellants had a superior and prior right to have their judgment paid. For the appellants used all due diligence to know the situation of the estate of Eden before they parted with their money to him, and finding it clear of incumbrance, they lent their money upon the security of a judgment which would be a lien on that estate. The judgment was assigned to Olcott, to secure a previously existing debt, not one contracted on the condition of that assignment; and it was his duty to have given immediate notice to Eden of the assignment, in order to prevent his paying over the money to Wardell. It is the same in regard to Roe. The respondents advanced, no money to Roe, but found the assignment among, his papers after his decease. There was gross neglect in 'Olcott and Roe, and though no neg-ligence in fact be imputed to the respondents, yet they must be affected by the negligence of those under whom they claim ; and in this comparison of rights, the neglect of Olcott and Roe, may be justly imputed to the respondents. The appellants, therefore, have superior claims to equity.
4. A new trial ought not to have been directed, for the sake of letting in the testimony of Olcott, which had been rejected at the former trial, on legal and just grounds. He was a party in the cause, and it is an universal rule that a party in a cause cannot be a witness. It was said, on the other side, that as the issue was between John Den and Richard Fen, the technical objection to the evidence of Olcott could not be made. Such an observation is not entitled to a serious answer in a court of equity. If it were well'founded, a fiction devised for the purpose of justice, would become the instrument of -injustice and oppression. If the respondents wished to avail themselves of the testimony of Olcott, they ought, according to the practice of the court, to have applied to have his name struck out of the bill, or, for an order for his examination, saving all just exceptions ; but though three years had elapsed from die commencement of the suit, and nine months from the granting of an order for the trial of an issue at law, no steps were taken to remove this objection to the admissibility of his testimony.— Again, Olcott was guilty of a fraud in making the assignment, after the notes had been paid, and in assigning absolutely, what he held as mere collateral security.. The consequence of this fraud is to subject him to the costs in chancery. On both these grounds, the judge was right in rejecting him when offered as a witness. If so, anew trial ought not to have been granted for the purpose of admitting him. Further, a new trial ought- not to be granted to let in testimony, which was in the power of the party, and which he did not produce, or which he -might have obtained by using ordinary diligence : And it has been shown that the respondents had neglected to take any measures to make Olcott an admissible witness, though two regular terms of the court of chancery intervened between the first trial, and the application for a new one. There has been, throughout, great neglect, and an unreasonable delay on the párt of the respondents, who have no claim to the indulgence of a new trial, the granting of which is always matter of sound discretion in courts, who are cautious in exercising this power, for it gives the party an opportunity to speculate as to witnesses. It is a well settled principle, that a new trial cannot be granted, to admit testimony which might have been, produced, where there is no pretence of surprise or fraud. In the case of Standen v. Edwards, the court refused a new trial, » .•though greatly dissatisfied with the verdict, merely to let in evidence which had been kept back. It may be said, on the other side, that Olcott was not kept back, but was offered as a witness ; yet the counsel of'the respondents must have known that he was incompetent, and could not be received by the judge before whom the cause was tried. Here, too, the judge certified that he was satisfied with the verdict.
5. The appellants ought to have been made plaintiffs as they were at the first trial, for the respondents are interested to delay the cause.
6. Another objection to the order is, that it directs Olcott to be admitted as a witness., though a party; allowing the reasons for rejecting him, if he should be rejected, to be indorsed on the postea. Now, as judges may differ in opinion, there may be one trial after another, to the very great delay and injury of the appellants..
Benson and Hañson, for the defendants.
The history of the transaction, disclosed by the facts in this case, (which were recapitulated and commented on) exhibits the appearance of mystery and management. The appellants, it was to be remarked, are said to have lent their money, which consisted part in cash, and part in notes and checks, to Edent on the 11th October, the very day on which the satisfaction piece was filed in the clerk’s office. This circumstance, in connection with the other facts, was enough to excite a suspicion that the judgment was confessed collusively, and with a view to cover Eden’s property. There was no delay of payment; no stay of execution. Notwithstanding the notoriety of the conduct of Olcott and Warded, and of the application to the supreme court to vacate the satisfaction acknowledged by the latter, the appellants waited until the judgment was reinstated, and the respondents had taken out execution and levied to the amount of §14,000 ; they then came in, after eight months of silence and inactivity, to claim, and, if possible, to take, the money from the respondents. This was enough to induce the chancellor to scrutinize and probe these transactions to the bottom. It was his duty to take every step which could inform his conscience on the subject, and to satisfy his mind whether the appellants had superior equity on their side or not. The respondents are admitted to be bona fide and innocent creditors. It is not pretended that they knew or countenanced the prodigality and extravagance of Eden, or the frauds of Warded and 01-cott. The most, then, that can be said in favour of the appellants is, that they are also bona fide creditors ; and that there is equal equity between the parties. Now, it is a well-settled principle, that where the equity is equal, the party having the legal advantage, and in possession, shall retain it. A person who gets possession of a satisfied term, and lias the legal estate, will hold against a person having equal equity. It is the same thing where a person having an imperfect title gets possession of a recognizance. In the case of Wilker v. Bodington, cited from Vernon, the complainant came into court to ask a favour. FI ere the respondents are brought into court by the appellants, who ask a favour, not the respondents. The court will not grant a favour against a party having the legal right. The priority of judgments. makes no difference in the equity existing between the parties. Satisfaction is fraudulently acknowledged on a judgment ; another judgment is then confessed, and afterwards the satisfaction on the first is vacated, an'd shall the intermedíate judgment be allowed to gain a preference ?
There is no doubt that payments made to the original creditor, without notice of any assignment, are good. The principal question in the cause is, whether there was a notice or not. On this point there was a contrariety of evidence, andthe chancellor very properly awarded an issue to ascertain the fact. Wardell was certainly entitled to little credit. He was mistaken in one point at least; and falsus in uno, faims in omnibus. There never was a case in which it was more proper to direct an issue ; if the jury, by their verdict, had satisfied the doubts existing in the mind of the chancellor, he would have been prepared to decide on the cause ; otherwise, he would direct a new trial for the purpose of gaining that light which he wanted to lead him to a right judgment. As the judge rejected Olcott as a witness, the chancellor had not the benefit of his testimony. The judge who presided at the trial, it is true, rejected the witness on legal grounds. But the court of chancery had a right to his evidence. The objection to him might be valid at law, but not in equity. The complainant may have a party struck out of a bill, in order to examine him as a witness. All that the defendant can do is to move to have a party examined as a witness, saving all just exceptions. Olcottfs name being on the record is no objection to his being a witness in a court of equity. The court of law arenot to inquire who are the parties to the suit. They have only to see whether the witness be interested or not. There was no ground for rejecting the witness as a party to a fraud. He assigned merely all his right and title, and that was notice to the assignee to inquire into the title ; nor was he interested. There could not be any surplus to his estate, and he released any possible interest. It is s^id he would be liable to costs ; but on what pretence ? He was a certificated bankrupt; and he would no more be liable for costs, in regard to this transaction, than for the original contract itself. He may be made a party in a suit in chancery, but for discovery only, not so as to subject him to costs. He cannot be liable for any contract previous to his discharge on the mere. allegation of fraud. For torts he may be answerable, but not for any thing arising ex contractu.
In Tyrell v. Holt which was an issue to inquire as to a fraud, a party was admitted to be a witness, and the court said, where the party has no interest, he cannot be made liable to costs. Olcott could have had no possible interest in the question between the appellants and respondents. But it is said, that a new trial ought not to have been awarded, because the respondents might have had the benefit of Olcott's testimony, if they had taken proper measures for that purpose. At the first trial, it was not thought necessary by the chancellor, to direct Olcott to be examined, and he could not anticipate the objection that was made to his evidence. But if there were any neglect or mistake on the part of the respondents, still they ought not to be prejudiced, for a court of equity is not governed by the rigid rules of a court of law : it looks to the substantial justice of the case, regardless of matters of mere form. In the case of Standen v. Edwards, the party wilfully kept back the witness. But had there been any surprise or mistake, a new trial would have been awarded. In the present case, Olcott was offered by the party as a witness, and rejected on a ground unexpected to the party. He was, in truth, not to be considered as a real party; he never attended a hearing, nor did any person appear for him ¿ and no decree was sought against him. The objection to the order, that the respondents were made plaintiffs, is of no we ight. It was easy to add to the order, that the bill should be taken pro confesso, unless the cause were tried in a certain time, or it might be tried by proviso, so as to prevent delay.
It is true, that the court, instead of reversing the order, may examine into the merits of the case, as they appear before them, and give judgment thereon. They did so, in the case of Le Guen v. Governeur & Kemble, and Bush v. Livingston.
[Spencer, J. It was so decided in Coe v. Furman, in which judgment was given here on the merits.]
But ought not all persons interested to be made par ties ? If all proper parties are not before the court, it will not proceed to determine the merits, but send the cause back to the court below. This court will not pronounce afinal de~ cree *n a causei unless they can really put an end to litigation,
Radcliff and Hoffman, in reply.
The appellants appear before this court, as bona fide creditors, for a valuable consideration, and with characters as unimpeached as those of the respondents. When they lent their money to J. Eden, they searched the records of the supreme court, and found the judgment of War dell to be satisfied. They could do no more. Were they not to rely on the records of the court ? Suppose a mortgagee has lent his money, knowing a prior mortgage to be regularly cancelled, shall he be postponed, or excluded, because the first mortgage was fraudulently can-celled ? When the motion was made to the supreme court, by the respondents, to vacate the satisfaction of the former judgment, the appellants ought to have received notice of the application ; for it is against every principle of justice that innocent and bona fide purchasers should be thus affected by the decision of a court, unheard. The supreme court could do no more than a court of equity ; and had the respondents applied to a court of equity to have the judgment restored, the chancellor would have imposed terms : he would have restored their lien, but not'so as to affect "intermediate, bona fide incumbrancers, without notice of any fraud. The proceedings in that court cannot, nor ought, in equity, to affect the rights of the appellants. The respondents having, against law and equity, obtained possession of the money on the execution, are to be considered as trustees to the appellants. The two, and-the only material facts in this cause, the notice and the payment by Eden to Warded, are fully before the court, and it is in their power to decide on the merits. All necessary and proper parties appear in the case ; there is no possibility of any surplus property, which the assignees of Eden can claim ; nor can the assignees of Olcott have any interest in the cause. Both Eden and Warded testify, that the payments to Warded were made before the respondents gave notice of the assignment. Eden had no motive or in terest in speaking falsely. His evidence is confirmed by that of Wardell. Olcoit, in his answer, admits that the assignment was given to him as security for certain notes, all of which, except about 04,000, had been paid. He could not assign any other, or greater interest, than he held in the assignment to him. The payment of the notes put an end to the security ; and there is no pretence for saying it was for future advances. After the payment, Olcott and his assigns must be considered as holding the judgment as trustees to Wardell, the original assignor. If there were any fraud in the conduct of Wardell, the respondents must look to their cestuy que trust, or to the covenant in the assignment to them, for their relief. An innocent third person, ignorant of these transactions, is not to be prejudiced by them. There is not equal equity in this case ; for all the equity is in favour of the appellants, who relied on the judgment to them, and lent their money specifically on that security, which is not the case with the respondents. By the satisfaction of the first judgment, the legal advantage also, was on the side of the appellants, who are not to be deprived of it by the subsequent order of the supreme court, on a motion in which they were not heard.
[Spencer, J. By a rule of this court, of 1786, only one counsel can be heard in reply. This rule has not been observed in the argument of this case ; but I hope it may be enforced in future.]
See Wardell v. Eden, Coleman’s Cases, 137, where the facts and arguments of the- counsel on this application, in October term, 1800, and the rule granted de bene esse, for vacating the satisfaction, are reported.
In January term, 1801, a motion was made in behalf of the bank of New-York, that the rule for vacating the satisfaction entered de bene esse of October term preceding, should be made absolute. A motion was also made by the defendant, that the judgment should be set aside, or that an issue should be awarded, to try the allegation that the bond was usurious, or at least, the truth and validity of the payments made to the plaintiff on the judgment subsequent to the assignment to Olcott.
In April term following,
Kent, J. delivered the opinion of the court on both motions. 1. With respect to the first motion, I am of opinion that the vacatur of satisfaction directed at the last October term, ought to be made absolute. The assignee of the judgment is to be recognised by this court as the owner, and all acts of the plaintiff' subsequent to the assignment, and affecting the validity of the judgment, were fraudulent. He has no more power over the judgment than a stranger ; but until the defendant has notice of the assignment, all payments made by him, and all acts of the plaintiffin respect to him, are good. In this case, however, the satisfaction was acknowledged and entered after the time that the defendant had notice ; consequently, that act is to be considered as void in respect to him, as well as to the purchaser of the judgment. (1 Term, 619. 4 Term, 340. 1 B & Puller, 447. See also, Andrews v. Beecker, in this court, as t, the rights of the assignees of a chose in action at law. As to liis rights in equity, see 2 Vernon, 540.)
It is proper, therefore, that the satisfaction should be done away, without imposing any terms, as a condition of the vacatur ; because, in judgment of law, it was an act done in fraud, and against right.
2. The motion on tile part of the defendant is to be considered first, in respect to the allegation of usury. If that charge is now to be investigated, yet the judgment ought certainly to stand to preserve the lien that it has created upon the land ; and the authorities are clear and decisive, that the proper way to try the question of usury on % judgment entered by confession is, not, by setting aside the judgment, but by-awarding a feigned issue. (Barnes, 52, 277. Cowper, 727. 1 B. & Puller, 270.)
But I think the "court ought not to aid the plea of usury, under the special circumstances of this case. A bona fide purchaser is here the owner of the judgment; and although a bond or note, if usurious, maybe void in the hands of a bona fide purchaser, because the statute makes tlie instrument itself void ; yet, the case is varied in respect to n judgment, which is not within the words of the act. There are also grounds in this case, to suspect collusion between the plaintiff and defendant, to defeat the claims of the bank, and that this charge of usury is an afterthought. The parties carried on negociations, and effected payments from time to time, between the first assignment of the judgment and the 6th of October, the one hnow¡ng that the j.udgment was transferred, and, therefore, acting fraudulently, and the other, acting under circumstances that ought, at least, to put him on inquiryand finally, after direct notice to the defendant, they concur in having satisfaction entered to consummate their transactions ; and, after failing in their efforts, at the last October term/to render the satisfaction valid, they now unite in setting up this new impediment to the claims of the assignee. Under these circumstances, I think the court ought not to interfere to help this defence.
3. The next object of the application on the part of the defendant is, for an issue to try the truth and validity of the payments made by the defendant to the plaintiff; and this will depend on the time at which the defendant is to be considered as having notice of the assignment of the judgment. The application for a feigned issue is addressed to the! sound discretion of the court. These issues appear from the cases which I have examined, (1 Wilson, 331. Sayer, 253. Barnes, 130. Cowper, 727.) to liave been granted only for the information of the court, or where the party is otherwise without relief. In the present case the party has a regular and competent remedy, as a matter of right, and without a special interference of the court. This is by the writ of audita querela, which lies where some matter of discharge has arisen to the defendant subsequent to the judgment. It is true that, in many cases, where the defendant might be entitled to his writ of audita querela, the court will relieve, in a summary way, on motion / but, as Lord Holt observed, if the ground of the application be a release, or other matter of fact, it is reasonable to put the party to his audita querela, because the plaintiff may deny it; and if he .does deny it, the court will not relieve pn motion.' (1 Lord Raym. 439, 445. 1 Salk. 264.)
In the present case, the time of the notice, and, consequently, the validity, as well as the truth of the payment, is contested between the parties, and it is proper that these points should be tried in the ordinary and established mode for the trial of facts.
It is in the power of the court to arrest execution upon the judgment, until the same he revived by scire facias, or by action of debt, when the defendant would have an oppoitunitv of pleading the payments. But I see no good reason why the court should act at all in this, more than in any other case, as long as the party has the power to aqt for himself, and the law has supplied him with the adequate means of obtaining relief, without the special interposition of the court. I am, therefore, of opinion, that the motion on the part of the assignees of the plaintiff, that the vacatur of the satisfaction should he made absolute, be granted, and that the effect of the motion, on the part of the defendant, be denied.
Per tot. curiam. Rule made absolute.
2 Vernon, 599. Wilker v. Bodington. 2 Vernon, 751. Bothomley v. Fairfax. Ambler, 313. Mertins v. Joliff, 2. Fonb. on Equity, 307. 308. 309.
Vernon, 693. 765. 1 Vesey, jun. 249. 4 Vesey, jun. 249. 4 Vesey, jun 118. 128. 389. 1 Equity Cases Ab. 44. § 4. 2 Equity Cases, Ab. 87. § 7. and note.
2 Comyns Digest, Chancery P. 7, 2 Chancery cases, 214.
Barrett v. Gore & Mornfreville 3 Atkyns, 401.
1 Vesey, jun. 134.
1 Atkyns, 451. Cotton v. Lutterell.
1 Vesey, jun. 133.

Opinion:
Tompkins, J.
The appeal in this cause is from an order of his honour, the chancellor, awarding a new trial of the feigned issue. The pleadings and proofs being now before us, the counsel, according to the course and practice of this court, have argued the cause at large upon the merits. Independently of the objections to the particular order appealed from, the appellants insist, that a feigned issue was unnecessary ; and that they are entitled to a decree in their favour, for the following reasons : 1. Because the judgment of Wardell was satisfied on record, when the appellants fairly, and for a valuable consideration, obtained theirs ; and that they, therefore, have a prior and superior right to satisfaction.
2. Because the right of Olcott, and the assignees of the judgment in favour of Wardell, was extinguished by the payment of the consideration for which it was given ; and,
3* Because the payment by Eden was before he had notice of the assignment of the judgment.
If either of these grounds be tenable, it will be unnecessary to decide upon the objections to the form of the order tor anew trial. My observations will be confined to the first and second points, both of which I consider as conclusive, in favour of the appellants.
The consideration of Barlow's judgment was not impeached by the answer of the respondents, and it was not incumbent, therefore, upon the appellants to go' into evidence of it. But if such evidence were necessary, it may be collected from the pleadings and testimony. The bill avers a consideration—the answer does not deny it; and the testimony of Eden, uncontradicted upon that point, explicitly proves it.
It will not be denied, that if any fraud were practised by Eden and Wardell, against the bank, in the acknowledgment • of satisfaction, and the appellants were apprise'd of it when their judgment was obtained, tire first point relied upon, by them, cannot be maintained. It is, however, alleged in the bill, that Barlow's judgment was obtained, when that in favour of Wardell was satisfied on record, and upon a supposition that nothing was due thereon. Should it be essential, therefore, to aver in the bill want of notice, the above allegation substantially amounts to it. In my opinion, however, an averment of notice is necessary in those cases only where the party possessing an equitable right, applies for relief against such persons as have obtained a legal right. In such cases, to obtain the relief sought, it is essential to aver, that the legal estate was acquired with notice of the equitable right. There it is an affirmative allegation, and susceptible of proof; in this case, it would have been the averment of a negative, which could not have been proved, and, therefore, ought not to be required.
The fact of notice xvas indispensable to support the defence of the respondents, and it, therefore, became requisite for them to set up and prove that the appellants had notice of the equitable claim. Accordingly, in the answer, they insist that Wardell, Eden and the appellants, combined to deprive the i\ spondents of their security under the judgment to Wardr-¡I. This charge necessarily implies, that Bebee and Barlote had notice of the assignment to the bank. The replication put that fact in issue; and had it been established by-proof, the appellants could not have maintained their first-point. What evidence is afforded to establish the fraudulent combination imputed, by the answer, to the appellants ? The answer itself is not evidence of notice, because it is not verified by oath, and because, if it had been, it could not be received as proof of matter in avoidance, which can only be established by testimony aliunde. Exclusive of the answer, there is nothing in the cause having the remotest tendency to prove the notice or combination charged in it ; unless the particular relief, sought for by the bill, is construed into an admission of notice. The relief prayed for is, that an injunction issue, and that the judgment in favour of War-dell may stand as a security for such sum only as may appear to be really due thereon from Eden. The specific relief prayed, is not set forth in the case presented to this court; nor have the counsel for the respondents argued the cause upon the ground that an. admission of notice is thereby implied. Had the respondents entertained an opinion, that notice was conceded by the bill, it is to be presumed that they would have relied and insisted upon it in their answer, as a conclusive defence. But, whatever might have been their impression on that point, it is sufficient to say, that admissions which will conclude a complainant, are only to be sought for in that part of the bill which contains the state of the case, or title, upon which he relies for relief. Even a mistake in the special prayer of the bill, provided there be a general prayer for such other relief as the nature of the case may require, as there is in this bill, will not deprive the party of that relief to which the nature of his case entitles him. (Mitford, 38. 2 Mod. 91-2.) If, therefore, in this case, the appellants, when they filed their bill, were advised that the particular relief solicited by them, was the utmost they could obtain, in conseHuence °f the order of the supreme court, in relation to WardelPs judgment, that misapprehension of their rights ough^ not to prejudice them. They are, therefore, in my opinion, to be regarded as bona fide incumbrancers, without notice,, for a valuable consideration, and their prior right to satisfaction is evident, unless the proceedings of the supreme court, in vacating the satisfaction of the judgment to Warded, deprives them of that right. The effect of those proceet i :gs will now be considered.
The respondents being assignees of a chose in action only, never possessed a legal lien upon the property of Eden. Subsequent to the entry of satisfaction, they surely had no such lien ; and it is equally indisputable that Barlow's judgment, obtained prior to the order to vacate the satisfaction, did give him a legal lien. When the supreme court interposed its authority, it assumed equity powers i and the proceedings there cannot be deemed to have any greater operation than a similar interference of the court of chancery would have had. It is an invariable rule in equity, that where one party has obtained a legal advantage, and equity is equal, not to disturb the legal right. In this case the appellants had not only fairly obtained a legal superiority, but appear to me to have had the equity on their side, inasmuch as they loaned their money, expressly upon the security of their judgment, whereas the bank obtained their assignment to avert, if possible, the loss of a previously existing debt, created by the imprudence of their agent. Under such circumstances, it is not to be presumed that the court of chancery would have postponed the legal lien of a party, not before the court, having no notice of its proceedings, and not heard. Both the counsel, and the supreme court, seem to have viewed the effect of the order to vacate the satisfaction of WardelPs judgment in the same light in which I have considered it ; because, a leading reason assigned to induce that court summarily to interfere. was, to prevent the intervention of new liens. But it would not have been material to press an immediate vacatur oí the satisfaction, if such new liens would not have been enti - titled to prior satisfaction. The court intended to place Eden, Warded, and the assignees of WardelPs judgment, who were the only parties before them, in statu quo ; and to give their order a greater operation, or to conclude third parties by it, would produce manifest injustice. They surely never intended to decide upon the rights of persons who were without notice of the application, and unheard.
. With respect to the second point, it is observable, that OlcotPs answer admits the truth of WardelPs testimony as to the object of the assignment to Olcott. The judgment was to be held by him as collateral security only. Neither this fact, nor the fact of payment by Warded to Olcott, of the debt intended to be secured, will be affected by the determination of the feigned issue. We must, therefore, decide them upon the proofs as they now stand. I have before observed, that Warded and Olcott unite in saying, that the assignment was made for a specific purpose only. But they are at variance in regard to the sum intended to be secured, and with respect to the payment of that amount. Upon this point, however, Warded is clearly entitled to credit. He not only specifies the particular notes, which the assignment was intended to secure ; but, in his account with Olcott, states to whom they were transferred and paid. This enabled the opposite party to detect the falsehood, if any, in the relation of Warded. On the other hand, OlcotPs answer contains a mére averment of a conjectural balance, at the time of the assignment to Roe, without referring to any accounts, admissions of Warded, notes, or other documents, to support the truth of his statement. Besides, to gloss oyer his conduct in regard to Roe, must have been a powerful motive operating on his mind. If he had admitted, that nothing was due from Warded to him, when he assigned the judgment, he wpuld thereby have charged himself with a gross imposition upon Roe,.
To avoid this imputation, he introduces his belief, at that time, which belief is not, afterwards, fortified by any documents, or proof.
The purpose of the assignment, and the payment of the consideration of it by Wardell, are, to my mind, satisfactorily established.
In Davies v. Austen, it is laid down, by the lord chancellor, as an universal rule, that a purchaser of a chose in action, must always abide the case of the person from whom he buys. If, then, the consideration, for which the judgment was signed to Olcott, were satisfied, all his right was extinguished ; and, therefore, Roe and the respondents, according to the rule laid down in the above case, acquired no right by the assignments, if they were made after payment by Wardell; and if the notes were paid, subsequent to those assignments, that payment extinguishes their right.
I am, therefore, of opinion, that a feigned issue was unnecessary ; and that, as the respondents have, by their answer, admitted the receipt of the proceeds of Eden's real estate, they are to be regarded as trustees for the appellants, for the amount due upon the judgment, in favour of Barlow, and ought to account for the same accordingly ; and that the order of his honour the chancellor, awarding a feigned issue, must be reversed.
Spencer, J.
I forbear to repeat the facts and circumstances of this case ; they have been so often mentioned, that no member of the court can be unacquainted with them.
The supreme court, in vacating the satisfaction of the judgment of Wardell against Eden, exercised a jurisdiction, until very recently, within the acknowledged province of a court of equity alone. The protection of the rights of an assignee of a chose in action by courts of law, is perhaps essential to the administration of justice ; it certainly avoids great expense and delay to suitors,- and it, therefore, as far as this case goes, meets my decided approbation. But, when a court of common law does interpose, to protect a party vested only with an equitable right, and such interposition affects the rights of third persons, some known standard must be resorted to, to test the effect of their proceedings. There is none so appropriate as that furnished by considering the proceeding as having taken, place in a court of equity. It is an universal and established principle, as well in that court, as indeed in all others, that no man is to be condemned unheard ; the rights of no one can be immediately affected by a judicial proceeding, to which he is not a party. This proposition is so just and essential, that I should think it weakened by citing authorities in its support. It comes home to the common sense of every man ; it is, and it must be, a first principle. The appellants, or those they represented, were never called on by any citation or process, to defend their rights before the supreme court when the satisfaction was vacated. The respondents' counsel, unable, and, I trust, unwilling, to assert, that the order of that court affected a party not before it, resorted to reasoning to induce this court to believe the appellants guilty of laches, in not appearing, and as thereby forfeiting their rights, because they might have heard of the pendency of the motion to vacate the satisfaction. It would, I think, be extravagant in this court, to suppose a fact, which, if it were material, and could be proved, has not been made out. It would be introducing a new principle in judicial proceedings, to require of a party to volunteer his appearance. This objection is so obviously untenable, as to require no further notice.
As it regards the appellants, then, I consider the satisfaction of the judgment as unaffectedbythe proceedings between the bank and Eden. It follows, that the appellants have the legal lien on the real estate of Eden. It then remains to be examined, whether the appellants have equal or superior equity to the respondents. If it should appear that they have either, their right to the proceeds of the real estate of Eden, to the extent of their judgment, necessarily results. It has been urged, that the circumstance of Barlow's lending money to Eden, on the very day the satisfaction was entered, affords suspicion. I agree, that it is a circumstance somewhat extraordinary ; but I do not think it warrants me in imputing to (¡hem an act of fraud on the party : fraud is odious, and not to be presumed. Had there been no proof of the money advanced by Barlow, I should consider the giving the bond, and confessing judgment, as prima facie evidence of the fairness of the debt; but when we recur to the evidence, we find Joseph Eden testifying expressly, that Barlow lent him $8,000 in cash, and his notes and checks to the amount of $12,000 more. This testimony is uncontradicted, and it being an important fact in the cause, the respondents, if they would have controverted it, should have gone into adequate proof. In vain are we told, that Barlow and Bebee were men of bad characters, and incompetent to advance to Eden to that amount. These are facts which must be proved, before they can produce any effect; whilst they rest on suggestion, they can have no influence.
It is to be observed, that the bank got hold of the assignment of WardelVs judgment against Eden, as a plank by which to save themselves from the losses sustained from Roe, who obtained it to mitigate the loss occasioned by Olcott. Neither the bank nor Roe made any advances on the faith of that assignment. As it regards the appellants, it was not until after search at the proper office, that they advanced their money, on the faith of the security afforded by the real estate of Eden. When the appellants gave credit to Eden, they had a lien on his real estate. This lien has been taken away, but in such a manner only as to change the remedy ; it still exists in the-view of a court of equity. The appellants having equal, and, I think, superior equity to the respondents, and having the legal preference, I consider them entitled to the proceeds of the real estate of Eden, on every principle of justice and equity- And here I might' terminate my inquiries ; but the importance ofthe cause, both as to principle and value, demands of me the examination of some other points.
It is material, in ascertaining the rights claimed by the bank, to consider the nature and effect of the assignment by War dell to Olcott, that by him to Roe, and by Roe to the bank.
It is an incontrovertible proposition, that the assignee of •a chose in action, takes it, subject to all the equities it was liable to in the hands of the assignor ; or, in plainer language, the " purchaser must abide by the case of the seller."
The reason and justice of this rule is obvious ; the holder of a chose in action (excepting such as are made negotiable for the advancement of commerce) cannot alienate any thing but the beneficial interest he possesses ; he cannot vest the legal right to sue for, and enforce, in the name of the assignee,: the payment of a debt, secured by a bond or judgment. When, therefore, Wardell made the assignment to Olcott, he took the judgment, subject to all equities existing between Eden and Wardell; and when the subsequent assignments were made, Roc and the bank, respectively, assumed the situation, and stood in the place of Olcott, as related both to Wardell and Eden. It would be absurd to pretend, that because the assignment to Olcott was general in its terms, he could, therefore, transfer a greater interest than he held in the judgment. Had Roe and the bank, instead of taking the assignment for better or worse, and with the hope of realizing something, which they clearly did, made advances to the whole amount, the legal consequence would be the same. In. the present case, they have not the pretext for saying they were imposed on by the generality of the assignment to 01-cott, because they gave no new credit. A bond on which there are no indorsements, carries on its face strongpresumption, if it be a recent one, that it is unpaid ; still, an assignee must abide by the case of his assignor, if it has been paid. If it be illegally obtained, the obligor will avoid it. It becomes necessary, then, to inquire, for what purpose the assignment was made to Olcott, and whether that purpose had been satisfied.
Wardell is the only witness who speaks directly to these facts ; he says, that the judgment was assigned to secure to Olcott the payment of §25,500, he then owed him, and for which he also gave three promissory notes ; that these notes Olcott negotiated, and that they have been paid, or, at all events, Olcott is not responsible on them, as an indorsor. In support of the fact, that the judgment was assigned only as a security for the notes, he presents an account current with Olcott, by which there appears a balance due to Wardell
To oppose these facts, Olcotf s answer is resorted to. It admits the fact, that the assignment was made to secure the notes, and that they have been negotiated; but it asserta? that it was also to secure to hint future advances and responsibilities ; and he adds, that Wardell, being indebted to him, as- he believed, at least, in 020,000, and he being indebted to Roe, he made the assignment, as a security to him* If Olcotfs answer receive all the credit due to the deposition of a witness, and his character and conduct had been fair, still I think Wardelfs testimony entitled to superior credit. He furnishes his data for saying that he owed Olcott nothing beyond the three notes. On the other hand, whether Olcott, in stating the debt from Wardell, includes in his estimate the notes, or on what grounds he made the assertion, we know not. He has produced no books, no documents, to support him ; but is vague and indefinite. Wardelfs competency, as a witness, has been questioned ; I perceive no reason to doubt either his competency, or his disinterestedness; his interest, if any, is to uphold the judgment, and his testimony goes to destroy it. He then swears against his interest, and this, instead of invalidating, strengthens his credit. It is alleged, that he fraudulently entered satisfaction of the judgment. This depends on the verity of his evidence, as to the nature of the assignment to Olcott; if it was, as he states it, then, on, the payment of the notes, he alone was entitled to acknowledge satisfaction.
Feeling myself constrained to yield the greater credit to Wardell, it follows, that the object of his assignment to Olcott was fulfilled by the payment of the notes ; and from the principles I have before laid down, Olcotfs interest in the judgment ceased, and those deriving title under him, being invested with no other or greater right than he had, can, neither on legal, or equitable principles, pretend to a right emanating from one who had ceased to have any. I will only observe, that by the assignment to Olcott, he acquired an equitable interest, commensurate with the object for which it was made. His transfer of the assignment, vested his assignee with his equitable interest and no more. The assignment of an assignment, acquires no negotiable quality, and the last assignee cannot, it appears to me, be clothed with a greater title than the first assignor. On either, and both of these grounds, I am fully of opinion, the appellants are entitled to the decree of this court, fo1- the money produced by the sale of Eden's real Restate. It necessarily follows, that the issue, to try whether Eden had notice of the assignment to Olcott, and what sums were paid by him to Warded, and the periods of those payments, was irrelevant and immaterial
I am, nevertheless, disposed to bestow some consideration on the order appealed from. After the first order for the trial of the feigned issue, and a verdict for the appellants, which affirmed the payments by Eden, and negatived the notice to him, of the assignment by Olcott, a second trial was ordered, on the ground, that Olcott was a material witness, and through the mistake or inattention of the respondents' counsel, had not been struck out of the bill. If his name's being in the bill, did really incapacitate him as a witness, I think the respondents concluded by their mistake or inattention.
The rule, both at law and in equity, is to refuse a second trial, where the propriety of the verdict is not impeached, as against law or evidence, though there be material evidence for the party, against whom the verdict-.has passed, which was not adduced ; unless it be shown to have been discovered after the trial,- or unless the .verdict has been obtained by fraud or surprise. If mistake in practice, or inadvertence in attention, furnished reasons for a new trial, it would encourage litigation, and reward ignorance and carelessness, -at the expense of the -other party.
The materiality of Olcott's testimony was well known before the trial, because, in his answer, he alleges, that soon after .the assignment, he gave notice to Eden. The respondents cannot pretend, that by fraud or surprise they were prevented from having his name struck out of the bill. I am inclined, however, to think, that, notwithstanding his name was in the bill, he was a competent witness. Most clearly Olcoit had no interest in the cause $ his contingent right in the surplus of his estate, he released to his assignees ; no decree could possibly pass against him ; but he might, it has been said, have possibly been punished in costs. From the time of lord Htfl-chvicke, courts of law have been liberal in the admission of witnesses ; and where the interest is not immediate or certain, they admit the witness as competent, and suffer the objection of a remote, contingent, or possible interest, to go to his credit. On the score of authority, I think Olcott a good witness ; the cases of Cotton v. Lutterell, of Piddock and Brown, and Man and Ward,j are strongly in favour of his admission.
Did the cause rest, therefore, on the propriety of a new trial, I should be for affirming the decree. The other points on which I have observed, render any investigation of the facts forming the feigned issue, unnecessary and superfluous.
From a suggestion made by an honourable member of the court, I have taken the trouble to examine the bill and answer, having, in forming of my opinion, presumed that the parties would present every fact in their respective cases most favourable for themselves. The bill, it is true, states all the circumstances attending the transa action, and particularly the various assignments of the judgment in War deli's favour against Eden, and it concludes with a special prayer, that that judgment may not be deemed a lien beyond the balance due on it from Eden to War dell. It also contains a general prayer for such relief, as in equity and good conscience, the party is entitled to. In the whole course of the very elaborate and ingenious arguments submitted by the respondents' counsel, So stress was placed on either of these points. It wag. not pretended that the appellants had notice of the sitúa- . r . _ , . , , , , , tion of War dell s assignee, or that they knew, when they lent their money, that the bank was interested in the • . judgment. Most clearly there is no evidence to warrant such arguments. I do not think that we are called upon to be astate in finding out formal objections, which never occurred to the counsel, to deprive the party of a just right, or to turn them round ; but since they have been stated, I will briefly proceed to discuss them. It by no means follows, that because the appellants, when they filed their bill, knew the situation of the bank, that they had that knowledge when they lent their money and took their judgment. Neither does their omission to state their ignorance of those facts, at the time of the loan, justify a presumption of such knowledge, especially, after the bank had, in their answer, charged them with collusion, with Wardell and Eden, to injure them, and to deprive them of their security, under WardelPs assignment, and have wholly failed to substantiate the charge. This allegation of collusion, made by the bank, was put in issue by the appellants' replication, and the onus probandi was thrown on the bank. If, therefore, it would have been more technical to have denied notice in the bill, substantially, that point has been at issue, and is found for the appellants. It may be true, that if A contract in writing with B, for the purchase of land, and C takes a conveyance subsequently, and a bill be filed against him for a specific purformance, charging collusion with B, C must, in his answer, not only make out that he is a fair bona fide purchaser, for a valuable consideration, but without notice of A's interest. The distinction is manifest between a bill and answer. Every complainant has a right to a full answer to the facts charged, and when charged, and not denied, it may be deemed an admission of the facts. The complainant's bill is no evidence for him, and his omission to state a fact, cannot furnish evidence of the fact, especially when insisted on as a defence, and not established.
With respect to the prayer for a specific relief, it is to be observed, that probably the appellants' counsel, in drawing the bill, might have had full confidence in the fact of Eden's paying off the judgment, or nearly so, without notice, and he might, and, probably, did suppose the vacatur entered by the supreme court, conclusive on the appellants. It would be rigorous, when a party had proved himself entitled to the decree of a court, to say to him, " yóu ought to be relieved, but yon have put your right on a false basis." Fortunately, for the justice of the case, this is not the law. " It is usual (says Mr. Mitfofd in his excellent system of chancery proceedings) to add to the prayer of the bill, a general prayer, for that relief which the circumstances of the case may require, that if the plaintiff mistakes the relief to which he is entitled, the court may yet afford him that relief to which he has a right." Mr. Hinde confirms this, in nearly the same words. In the case of Hollis v. Carr, the court decreed a relief under the general prayer, distinct from . the special relief, prayed. I conclude, therefore, that there exist no objections in this cause, which might entangle justice in the net of form.
Various judgments of this court, establish the precedent, that on appeals from chancery, and where the merits are fairly before the court, they will pronounce a final decree ; this case falls within those precedents. It is therefore, my opinion, that the appellants be decreed to receive the nett proceeds of the sale of Joseph Eden's real estate, under the execution in favour of Warded.
Thompson, J.
1 hough the argument of the present appeal has embraced a great variety of questions, I shall not examine all of them, since, according to the view which I have taken of the subject, I think the substantial merits of the case, confined to a narrow compass. In order, justly to estimate the rights and claims of the parties, we must examine the situation in which they respectively stand, and the relief sought for, and which can be afforded, under the pleadings before this court. Both parties claim to be judgment creditors of Joseph Eden. The judgment under which the respondents claim, is oldest, in point of time ; but satisfaction thereof, was entered'on record, when the appellants' judgment was entered up. This satisfaction was, however, adjudged by the supreme court, to have been fraudulently acknowledged, and was, of course, vacated. The respondents being assignees of the judgment under which they claim, one part of the appellants' allegation in their bill, is payment by Eden, to Warded, the original plaintiff on record, without notice of assignment. After the vacatur of satisfaction, as before mentioned, the respondents took out execution, and were proceeding to enforce it. To stay the proceedings, the appellants filed their bill, and the relief particularly prayed for is, that the respondents may be restrained from further proceedings at law, upon the judgment assigned to them, or upon the execution issued thereon ; and, that an account may be taken of the monies paid on the said judgment; and, that the said judgment may be decreed to stand as security for such sum only, as may be really and truly due thereon, by Joseph Eden ; concluding with a general prayer for such other and further relief in the premises, as shall seem meet. A part of this particular relief prayed for, being to have the benefit of all payments made by Eden to Warded, and that the judgment should stand as security for the balance, would seem, in some measure, implicitly to admit, that the judgment under which the respondents claim, is entitled to priority. But, according to the course of chancery proceedings, a party is not confined to the particular relief asked for in the bill, but under the general prayer, is entitled to such relief as the circumstances of the case may require. The reason of inserting the general prayer is, that if the party mistake the ' relief to which he is entitled, the court may afford him that to which he has a right. The relief, however, must be agreeable to the case made by the bill, ('Mitford,s Pleadings, 38) and the court will not, in all cases, permit a bill, framed for one purpose, to answer another, especially, if the opposite party may be thereby surprised, or prejudiced ; neither of which has been pretended in the present case. I the more readily avail myself of' the general prayer, in order to enter into the merits of the case made by the bill,' because, such has been the course pursued by the counsel on both sides, without claiming to be confined to the particular relief prayed for. But a part of the particular relief prayed for here, is, that the respondents may be restrained from further proceeding on the judgment assigned to them. Full relief, according to the existence of facts, at the time the bill was filed, would have been afforded the appellants, by decreeing a perpetual injunction. In the bill, filed in the court below, no notice is taken of the $14,076 54 cts. acknowledged by the respondents, in their answer, to have been received by them. This is to be accounted for only on the supposition, that it was received between the time of filing the bill, and the coming in of the answer ; which is rendered probable by recurring to dates. It is not stated in the answer, when the money was received ; but it appears, that the execution could not have been issued, until after April term, 1801 ; and the bill was filed on the second of June,, following. If the respondents were not entitled to recover this money, under the judgment assigned to them, they must, in equity, be deemed to hold it as trustees for the appellants. Here, then, arises what I consider the material question in this, case, namely, which judgment shall be entitled, to priority ? Admitting the appellants to have been ignorant of the assignment of the first judgment, and ignorant of the fraudulent satisfaction entered on record, at the time they loaned their money, and took their judgment, I cannot entertain much doubt that they must be considered as having the first legal lien. The satisfaction entered on record, must, as to all persons who stand in the situation of innocent purchasers, for a valuable consideration, be deemed valid and effectual; and the restoration of the judgment, as it respects their rights, can only be considered as forming a lien from the time it was so restored. Unless such be the legal operation, it would lead to the greatest injustice, and render insecure and uncertain the lien of judgments on real property j and in vain would resort be had to our public records, to ascertain intyimbrances. There is nothing in the rule of the supreme court, ordering a vacation of the entry of satisfaction, from which it can be inferred, that the court intended to express any opinion, as to the effect such proceedings Would have on the rights of third persons. This was, doubtless, intended to be left open to subsequent determinations, as cases might arise, probably, not being apprised of any intermediate judgments between the entry of satisfaction, and the restoration of the judgment. It never could have been intended to conclude the rights of parties, without giving them an opportunity of being heard. If the appellants have a prior legal right, and the equity between the parties be equal, it is not denied that, according to sound and well established principles, the legal right must be preferred. It appears to me, that not only the legal, but equitable right, is on the side of the appellants. They loaned their money expressly on the faith of the security arising from the lien created by their judgment, having taken the precaution first to examine the record, and ascertain that no prior judgment existed that would impair their security. The respondents took their assignment, as collateral security for a debt, not created on the faith of any lien arising from the judgment. The assignee of a judgment usually requires, and takes from the assignor, covenants to secure himself against the latter's doing any act to invalidate the security: such appears to have been the case in the present instance. And if the covenant of the assignor be not sufficient, it is in the power of the assignee to require some other security, or he may refuse to take the assignment. No such opportunity to guard against loss is offered to those who are strangers-to the assignment; their knowledge of parties interested in judgments must be-derived from the record, unless actual notice be given by the assignee, or a knowledge of the assignment is brought home to the opposing claimant in some other way. Can it be doubted, that if the assignors, from, and through whom the respondents' claim, were responsible persons, resort would and ought to be had to them for indemnity ? I have thus far examined this question, on the supposition that the appellants are to be viewed in the character of bonf fide purchasers, without notice of the assignment of the judgment under which the respondents claim. It remains to be inquired, whether-the appellants, according to the case presented to the court, are entitled to such character. Because, if they had notice of the assignment, they ought, perhaps, to be considered as conniving at the fraudulent satisfaction, and their lien, on that account, be postponed.
It is not pretended that the appellants are chargeable with express notice from the assignees ; nor can I see how they can be by implication. No negligence is imputable to them ; there was no record of the assignment to which they could have resorted for information. Nothing is stated to have come to their knowledge, which ought to have put them on inquiry. It is true, they have not alleged in their bill, a want of notice ; and this, perhaps, may afford some grounds for an inference against them. I am inclined, however, to think that no such allegation was necessary. They certainly would not have been required, neither was it practicable, to. prove a negative. Where the object of the bill is to set aside the legal esiate, on some equitable grounds, it may be necessary to allege want of notice, because this is the very foundation upon which the claim to equitable relief is built. But, in the present case, as I have endeavoured to show, the appellants are in possession of the legal right, and we are to examine the claims of the respective parties, in the same manner as if the respondents had been complainants in the court below. But, a. mitting that a want of notice of the assignment ought to have been alleged in the bill, it appears to me this defect" cured by the subsequent pleadings and acts of the parties. The respondents, in their answer allege, that Warded, combining with Eden and the appellants, to deprive them of their security under the judgment, acknowledged satisfaction of it, and caused the satisfaction to be entered on the record. This allegation is denied by the replication ; the question of notice was thereby put in issue between the parties, the affirmative of which is on the part of the respondents, and which they are bound to prove, if they are to avail themselves of it for the purpose of avoiding the legal estate, or lien. It was not pretended on the argument that, according to the case presented to the court, the appellants were chargeable with notice of the assignment. The controversy was put on totally distinct grounds, which I construe into a waiver of the objection, as it respects the pleadings.
If 1 am correct, then, in the propositions which I have endeavoured to establish, that the appellants must be considered as in possession of the legal right, and that they are not chargeable with notice of the assignment of the judgment under which the respondents claim, then no issues were necessary. There was no contrariety of evidence on those questions. The equity was, at least, on the side of the appellants ; and having the legal right with them, they were entitled to a decree in their favour, restraining the respondents from ah. further proceedings on the judgment under which they claimed, and directing them to pay over the money which they, in their answer, acknowledged to have received ; and which, according to the circumstances of the case, they, must be considered, in equity, to hold as trustees for the appellants. Although the immediate object of the bill could not have been the recovery of this money; because, as I have endeavoured to show, it had not been received by the respondents when the bill was filed ; yet, if the bill partakes of a double aspect, and such a case is presented, as entitles the appellants to relief, I see no good reason why it should not now be granted, without turning the parties round to litigate anew, and bring forward their claim in a different shape, especially, as no surprise or prejudice is alleged by the respondents to arise to them, by adopting this course, it not being pretended that any new light, on this point, can be given. The verdict of the jury, one way or the other, upon the issues ordered to be tried, would not, according to my view of the case, alter the rights of the parties, before this court. Those issues extend only to an inquiry respecting the notice which Eden had, of the assignment of the judg ment, and to the payments which he had made thereon prcvjous t0 receiving such notice, and not to any knowledge which the appellants had of such, assignment. Without, therefore, examining any more of the points which have been raised in this case, and very elaborately argued, I am of opinion that the order, or decree of the court of chancery, ought- to be reversed.
[Livingston, J. having been formerly concerned as counsel, gave no opinion. ]
Kent, Ch. J.
I shall be obliged to differ from my brethren, who have preceded me. This I do, with deference and reluctance, but under the pressure of superior duty, to pursue and declare the conclusions of my own judgment. The most important question which has been raised in this cause, is, whether the appellants are to be considered as having a priority to the respondents, in respect to the judgments against Eden. This pretension ought first to be examined and settled. If the appellants are entitled to a preference, all the other points in the cause become immaterial, for, as between two contending judgment creditors, he who has the prior judgment, must be first paid.
The manner in which this question is brought before the. court, -is a little singular, and deserves attention. The appellants filed their bill in the court below, on no other ground of complaint, than that the respondents were proceeding, at law, to collect the amount of WardelPs judgment, after it had been once paid. It was their only grievance, that the judgment was likely to be twice collected, and that as Eden was insolvent, the judgment of the appellants must remain unsatisfied. The cause proceeded to a hearing, and an issue was awarded on the single question of payments by Eden.t before notice of the assignment. In the awarding of this issue, the appellants acquiesced, and the point raised in this court was undoubtedly an after-thought, as it is not so much as once suggested in the bill, and as it formed no part of the litigation below. But, after contending so long, under the limited claim of subsequent, judgment creditors, the appellants come with a suspicious countenance before us, at this late hour, and under the same bill, to claim the benefit ofprior judgment creditors. In most cases, such conduct would justly be deemed a waiver, or abandonment of the latter claim ; for, if the present pretension of the appellants be well founded, then all the examinations and trial below, about notice to Eden, and payments by him to War dell, were idle and nugatory, and an abuse of the time of the court. If, however, the appellants be not absolutely concluded from setting up this new ground of title, yet their conduct forms a powerful reason why this court should listen to it with caution and distrust. So prominent a point, in a cause, could not have slumbered so long, without a diffidence in tfie facts, that were requisite to maintain it. The proofs of their pretension to be bond fide judgment creditors, without notice, ought, at least, to be of the most positive kind, without any shadow of doubt or ambiguity.
The acknowledgment of satisfaction, by Warded, was vacated by the supreme court, on the ground that, as Warded had previously assigned over his right and interest in the judgment, his interference in cancelling that judgment, without the knowledge and consent of the assignee, was an act fraudulent and void. After he had parted with his interest in the judgment, he had no more power over it, than if he had been a stranger to it; and his attempt to vacate it, was a violation of right. The supreme court, however, never meant to decide on the claims of an intervening creditor, who had obtained a regular judgment in the interval between the time of the entry of the satisfaction, and the subsequent vacatur of it. Such a case was not then before the court; but such a case is now urged in the present cause, and, under the circumstances in which it is presented, it merits our most serious consideration, because, it touches on some of the soundest and best settled principles in our equity system. If this intervening judgment creditor, should come before us, without any knowledge, at the time, that the satisfaction had been granted, by a man unauthorised to make it, he would, undoubtedly, have a very good claim not to be disturbed by the court. For, if a creditor who takes a judgment, or mortgage, should previously in* sPect the records, and find all antecedent judgments, and mortgages cancelled, and should have no knowledge how they came to be cancelled, beyond what the record speaks, a court of equity would, in that case, refuse any aid against notwithstanding it should afterwards appear, that the prior judgment, or mortgage, had been fraudulently can-celled. But I am warranted, by the uniform current of the chancery decisions, in saying, that in such a case, the court would refuse to interfere between the two creditors, and would leave him, who had any legal advantage, to retain it. The court would not act against either, because the equity of the parties would be equal. A creditor who comes in with his lien, after all antecedent incumbrances appear to be satisfied, has, no doubt, a strong claim to our protection. But the prior creditor, whose judgment, or mortgage, has been cancelled fraudulenthq and without his knowledge, has a claim equally strong and inviting. They are creditors equally innocent, and equally to be favoured ; and I am satisfied, that the court of chancery could not, consistently with its established principles, help the one, to the prejudice of the oilier. Its answer would be, that where the parties stand equal before us, he who has the advantage at law, shall be left to enjoy it, or, according to the lively allusion of Sir M. Hale, the party that has been fortunate enough to seize a plank in the shipwreck, shall not have it torn from him by the court. If, therefore, the appellants did really stand before us, as judgment creditors, without notice of Wardell's assignment, we should be obliged to dismiss them, without affording them, on that ground, any aid or assistance against the bank. Allow them all that they now pretend to be, we could do no more than this, without introducing principles, and precedents, unknown to our jurisprudence. I have supposed, that in case of no notice, the equity of the parties might stand equal. This ought not to be denied by the appellants. There is no doubt, but that the bank took the assignment from Roe, for a full consideration,- and to save themselves from a grievous loss. and without knowledge of any antecedent transaction, calculated to defeat it. They cannot be deemed guilty of negligence, in not recording the assignment, because it was not an act required by law, to consummate their title. There Was no office that was bound to record it. It is never done in practice, and there were, indeed, but four days between the assignment and the new judgment. It is idle, therefore, to impute any neglect to the respondents, in diminution of their equal equity. On the other hand, I forbear to dwell on the fact, that $512,000 of the appellants' demand, arose from notes and checks, and that weare left wholly without explanation, whether those notes and checks proceeded from the appellants themselves, or whether they were not notes and checks of Eden, which had been purchased up at a speculating discount in the market. If the latter was the case, then, indeed, I should agree that the equity of the parties was not equal, because, the one side would be struggling to avoid a loss, whilst the other would be striving to gather in, and secure the harvest of his speculations.
I have hitherto considered the appellants as if they had come here, in the character of bona fide purchasers, without notice, and, even then, they could have no relief from us ; all we could do, would be to dismiss their bill, or to decide the cause on the grounds litigated in the court below. But the fact is, that the appellants do not come before us in that character. They are to be considered as acting xvith notice, that Wardell had assigned over his interest in the judgment, at the time he acknowledged satisfaction. This inference appears to me, to be the inevitable conclusion of law, from the 'silence of the appellants in their bill, as to the fact of their want of notice. If a party will claim a benefit, resulting from the want of notice, and the truth of the fact is within his own knowledge, he shall be presumed to have had notice unless he denies it. §>ui facet consentiré videtur. The appellants, from their own shewing, prove the acknowledgment of satisfaction, by War dell, to have been a nullity, and a fraud ; for they state his, and the subsequent assignments of the judgment, but they omit to state when they first came to the knowledge of these assignments, and for aught that this court can know to the contra-' ry, it may as well have been before, i as after the date of '•heir judgment. They content themselves with saying merely, that their money was loaned, after satisfaction had been entered, and upon a supposition that nothing was duet, This supposition is perfectly consistent with a knowledge of the assignments, and may have proceeded from a credulous reliance on the assurances of Warded and Eden. It is a rule' in chancery, not to aid a cestuy que trust against a purchaser from a trustee, if he be a purchaser for a valuable consideration, and without notice of the trust. (2. Fonb. 151--2. 3 Bro. 264. Williams v. Lambe, 2 Vezey, jun. 454. Jerrard v. Saunders. 3 Vezey, jun. 222. Strode v. Blackburne.) But no instance is to be found, in which such purchaser is protected, unless he aver himself to be a purchaser, without notice of the trust. He is bound to state, affirmatively, in his plea, that he had no notice, and whether he claims the benefit of the purchase in the character of complainant or defendant, it can make no difference in the case. The general rule of pleading in chancery, is, that whatever is essential to the rights of the plaintiffs, and is .necessarily within his knowledge, must be alleged positively, and with precision. (Mitford, 40.) This rule is too reasonable and logical, not to command the assent of every understanding. In the case of Jerrard v. Saunders, (2 Vezey, jun. 454.) the defendant pleaded a purchase for a valuable consideration without notice ; but as the plea did not deny the facts charged, from which notice was to be inferred, the plea was overruled, and he was called upon to answer the facts, which might raise a constructive notice ; and lord Loughborough, in that case, required, that the purchaser should fully, and in the most precise terms, deny every circumstance, from whence notice could be inferred. If, then,- the appellants knew, at the time of taking their judgment, that Warded had assigned his judgment, and that he was but a nominal party to the record, they acted at their peril; and they were bound to have inquired of the cestuy que trust, whether he was knowing and consenting to that satisfaction. If they did not choose to make that inquiry, but Were willing to rely upon the declarations of Wardell and Eden, they ought justly to bear the consequences of their supineness. We are not to help a party in setting out his ti-tie. It is incumbent on him to state a valid pretension. The appellants ask us to help a title, which they challenge as superior, by reason of Wardell's fraud ; but to raise any equity in their favour, they ought, at least, to purge themselves of any knowledge of that fraud. It would be a proceeding contrary to all rule and salutary precedent, for us to presume that the appellants acted without knowledge of War dell's assignment, when they do not pretend to deny it in their bill, and when the truth of the allegation, that they had or had not notice, remained in their own breasts. This is, probably, the first instance ever heard of, that a person claiming to be a purchaser, without notice, came into a court of equity, in the character of plaintiff; and the reason that there has been no such case, is the one already mentioned, that where the equity of the parties is equal, chancery will not interfere. I do not ask the appellants to do, what they cannot do, prove anegative» They cannot prove no notice. But they can tell us by their bill in what character they claim relief. If they claim it as purchasers, without notice, let them say so ; then they raise some equity on the face of their bill, and it would lav with the respondents to rebut it, and to prove affirmatively that they had notice. My proposition has, at least, the merit of plainness and simplicity. It is, that the court will never presume that a party's case is better than he states it; and if he does not state that he is a purchaser, without notice, we will not presume him to be one.
But the bill furnishes still more positive and- conclusive proof on the subject. The appellants state, as their grievance, that the bank had levied an execution against Eden, when nothing was due from Eden thereon, and that thereby the appellants were deprived of their security. They then called upon the bank, to discover, whether Eden had not fully paid the judgment to Wardell, and they pray, " that the judgment of the bank may be decreed to stand as a security for such sum only as may appear to be really and truly due thereon by-Eden." The bill, therefore, contains a very explicit acknowtadgment, that the judgment of the bank ought to have prefcrence for the balance honestly and truly due thereon ; and to give the appellants a priority in their judgment, is to force upon them a right which they do not ask for, or pretend to. And although, under the general prayer in a bill for relief, you may give a party greater, or different relief than that specifically prayed for ; yet, when such specific relief net cssarily implies the non-existence, or relinquishment of a claim, it would be altogether unprecedented to depart from the special relief, and under the general words of form in, the bill, to enforce such- claim..
I conclude, therefore, 1st. That if the appellants were bona fde judgment creditors, without notice of War dell's assignment, they would have no more equity than the respondents ; and this court would not interfere with their claims at law. 2d. That the appellants are not to be deemed such creditors, because, they do not state themselves to be such in their bill, and because, the whole complaint and prayer in the bill are founded on the non-existence, or relinquishment of such claim.- The parties stand exactly as they would have stood, if Warded had never made his fraudulent acknowledgment of satisfaction, and the appellants, as subsequent judgment creditors, have an undoubted right to establish, by proof, the payment of the first judgment. If Eden paid Warded before notice of the assignment, the payment was valid, and his estate ought not to be charged- with a second payment. The real merits of the cause will, therefore, turn upon this single point, what payments, and to what extent, were made by Eden to Warded, previous to notice. But be-* fore we come to consider this part of the cause, it will be requisite to take notice of another objection which has been raised by the appellants' counsel tq any claim on the bank, as derived from the assignment.'
It is urged, that; the assignment of the judgment of Olcott. was not absolute, but was made and intended to be merely as a collateral security for a special purpose, which purpose was afterwards accomplished ; that the consideration for that assignment was only §25,500, andthat shortly after, Olcott received of War dell three promissory notes for that' purpose, which he transferred to different persons, and that thev have since been paid ; that by the payment of the notes, the right of Olcott to hold the judgment became extinguish-fed, and the interest in the. judgment reverted back to Warded ; that Olcott could not transfer any greater interest in the judgment than tvhat he himself held, and that every assignee of a chose in action, talus it, subject to all equity; and that, for these reasons, the bank has no interest in the judgment, all the interest which remained in it having reverted to War-dell
This is the substance of the argument on the part of the appellants, and, to my apprehension, it is easy to perceive and detect its fallacy.
in the first place, it is to be observed, that the assignment of the judgment is, upon the face of it, absolute, and not conditional. It is by a long and solemn instrument under seal, drawn with technical skill, declaring the consideration to be §50,000, and fortified with every provision and covenant, which are requisite to show that Warded parted absolutely with all his interest in the judgment, and that he had received a full consideration. Proof that the assignment was intended by the parties, to be different from what is expressed, is altogether inadmissible. It is a sound rule of evidence, that you cannot alter, or substantially vary, the effect of a written contract by parol proof. This excellent rule is intended to guard against fraud and perjuries, and it cannot be too steadily supported by courts of justice. Ex-pressum Jacit cessare taciturn ;—vox emissa volat;—-litera scripta manet, are lav/ axioms in support of the rule ; and law axioms are nothing more than the conclusions of common sense, which have been formed and approved by the wisdom of ages. This rule prevails equally in a court of equity and a court of law ; for, generally speaking, the rules w>i evidence are the same in both courts. If the words of a contract be intelligible, says Lord Ch. Thurlow, (Shelburne v. Inchiquin, 1 Bro. 341.) there is no instance pidiere parol proof has been admitted to give them a different sense. Where a deed is in writing, he observes, in another place, (Jonham v. Child, 1 Bro. 93.) it will admit of no contract which is not part of the deed. You can introduce nothing onparol proof that adds to, or deducts from, the writing. If, however, an agreement is, by fraud or mistake,va^dt to speak a different language from what was intended, then, in those cases, parol proof is admissible, to show the fraud or mistake. These are cases excepted from the general rule. But the allegation of fraud, or mistake, must be made in the bill, before evidence to those points, can be received. (Cripps v. Jee, 4 Bro. 472.) In the present case, there is no allegation or pretence, that the assignment was made absolute, by means of fraud or mistake ; and on no other ground was parol proof admissible, to alter it. If it were to be admitted that the assignment might be varied by parol proof, yet, the proof offered, in the present case, was not of a competent nattíre. The witnesses to this point, are Olcvtt and Warded. Olcott, the original assignee, admits, in his answer, that the assignment was given for a collateral security. That confession, however, is no evidence against the respondents, who were co-defendants, because they had no opportunity to cross-examine him. This court so decided two years ago, in the case of Grant v. The Bank of the United States. The testimony of Warded, to this point, was wholly improper j for he ought not to be heard in opposition to his own solemn act and deed. The supreme court,- in July term, 1803, in the case of Winton v. Saidlcr, did recognise and adopt the English decision, in Walton v. Shelly, that no man should be. permitted, even as a witness, to-invalidate a negotiable paper which tie had signed.' The case there arose on a promissory-note, but, from the reasoning of some of the judges, I understand them as adopting the general principle of the English pase, that no person was a competent witness to impeach a deed, or security, which he had given, and that he was estopped, as well in the character of witness as that of party, by Ms own act and deed. This nil- ', that a written contract shall Slot be contradicted by parol proof, witboút showing an original fraud or mistake, at the time, applies as well where the contract is introduced in a controversy between third persons, as where the litigation is between the original parties to the contract. It was so understood by the court of K. B. in the case of The King v. the Inhabitants of Laindon. (8 Term. 379.) It is-reasonable that this should be the case, in order to protect the rights-of strangers, who may have become.interested in the contract, and to prevent fraudulent collusions between the original contracting parties, in setting up secret meanings, to impair or destroy their own solemn engagements. It appears to me, therefore, that we must consider the assignment from Wardell to Olcott as an absolute, unconditional assignment, and that we are bound to judge of the nature of the assignment, from the instrument itself, and not from the suggestions of Olcott, in his answer, or of WardelU in his deposition.
But, even admitting that the operation of, the assignment was impeachable, and that the witnesses offered, for that purpose, were competent, and made out the fact, that Olcott took the assignment, as a collateral security merely, and for a much less consideration than jt states, still there remains another objection to surmount, and that is, that in the hands of a subsequent assignee, without notice of any private agreement, dehors the instrument, the assignment must be regarded, what it purports to be, absolute and unconditional. This is a rule of a court of equity, perfectly well settled. When it is said that an assignee of a chose in action takes it, subject to all equity, it is meant only, that the original debtor can make the same defence against the assignee, that he could against the assignor ; the rule has never received any other application. A purchaser without notice, from a purchaser with notice of a trust, is not considered in equity, as bound by that trust. (2 Vern. 384. 2 Fonb. 153.) If one affected with notice, says Lord Ch. Hardwicke, in the case oí Mertins v. Jolliffe, (Amb. 313.) conveys to one without notice, the assignee, in case he has the legal es« tute, shall protect himself against prior incumbrances. -*-11 t^e present case, the bill does not charge the bank with any notice of a conditional assignment, and if it did, the answer of the bank denies any ; for they declare, that the original assignment to Olcott, was for the full consideration of $50,000, expressed in the deed, and that they were wholly ignorant, that it was made for any other consideration, or for any other particular purpose. They further state, that the assignment from Roe to them, was for the like consideration. Indeed, it is not suggested, in any pleading, proof, or argument in the cause, that the bank took the assignment from Rae, with any knowledge' of the parol agreement between Wardell and Olcott, and the chief objection to Olcotfs testimony, is on the ground that he did not disclose to Roe the private understanding between him and Wardell. In every view, therefore, in which the subject presents itself, the state of the accounts between Wardell and Olcott, and the secret conditions, which they attached to the assignment, are perfectly irrelevant to the present controversy. Those accounts and agreements must be left to be settled between Wardell and Olcott. They ought nbt to obtrude themselves upon our present attention.
I have thus faithfully endeavoured to clear this cause of all the preliminary difficulties which have been thrown in its way by the ingenuity of counsel ; and though I always feel a well-grounded diffidence in my own judgment, when I am not supported by my brethren ; yet the positions I have taken appear to my mind to be so hemmed in by authority, that, step which way we will, we cannot escape from their conclusions, without trampling upon precedents which we ought, perhaps, to revere.
I shall very briefly examine the remaining questions in the cause.
The real question is that which I have already stated, viz. to what extent has the judgment which the bank possess, been legally paid ? Upon this question there is contradictory proof in the case, and it was for the information of the court below upon this matter of fact that the issue was awarded. The chancellor had an undoubted right to have decided this question upon the proofs before him, without calling in the aid of a jury. But where the question is doubtful, and especially where it turns upon the credit of opposite witnesses, it is the usual and prudent course of the court to refer it to a jury, which is the common law tribunal for the trial of facts. The payment of this judgment, if made at all, was made to Wardell; for it is agreed that no payments were made to any of the assignees of the judgment; and it is a principle equally agreed to, that all payments made to Eden by Wardell before Eden had notice of the assignment, were valid, and that all payments by Eden, after notice, were made by him in his own wrong, ánd are not available against the assignees. The question then is, when was notice of the assignment given to Eden P On the one hand, Eden testifies that he bad no notice till the 9th of October, and on the other hand, Olcott says, he gave notice to Eden shortly after the assignment; which was made on the 17th of July. This testimony of Olcott is objected to, but as against the appellants, who called for that answer, it may be read in chancery ; it is certainly not more objectionable than the testimony of Eden, who had never duly released his interest in the surplus of his estate. But, putting Olcott's answer entirely out of view, there was the testimony of Wilkins, who seems to be admitted as a disinterested, and very credible witness, and he swears, that Eden confessed to Mm that he knew of the assignment, at the time it was made. Thus stood the testimony before the chancellor, and if the balance of it does not incline in favour of the bank, it must at least, be deemed tobe doubtful, and to form a proper case for a jury. It was, therefore, the exercise of a sound discretion, in the court below, to award an issue.
The issue was tried, and the jury found that Eden did not recieve notice till the 9th of October, and the judge certifies, in the usual form, that he was satisfied with the verdict. This verdict, would then, probably, have been acquiesced in, and have put an end to the cause, if the judge, upon the trial, had not excluded Olcott, who was a witness, on the part of the bank. On this ground, a new trial was moved for, and granted. The cause is, then, at last, narrowed" down to this single point, wa? Olcott a competent witness ? If he was, it will scarcely be pretended but that a new trial was proper ; for a verdict, founded upon the exclusion of legal testimony, never can give satisfaction to the conscience of any court. It is impossible for us to say, what weight the jury might have given to the testimony of -Olcott, and whether a critical attention to it, might not have turned the scale. The case of Stace v. Mabbott, (2 Vezey, 553.) is in point. Lord Ch. Hardwicke granted a new trial, and observed, " that the judge has declared he is well satisfied with the verdict, and, if nothing appeared to me but what appeared to him thereon, I think I should have been of the same opinion. My opinion, therefore, in granting a new trial, is grounded upon new evidence, which was not before the jury, and which is material."
The objections to the competency of Olcott, are, 1. That his name stood as defendant in chancery. 2. That he had been guilty of fraud in assigning to i?oe, absolutely, a judgment, whichhe took only as a collateral security, and that he might, in consequence thereof, be liable to costs in the suit in chancery. The reason assigned by the chancellor, against the first objection, appears to.me to be very-forcible. He considered it as an objection to a point of form merely, and that to conclude the party by it, would be rigid. If a co-defendant disclaim, or-have no interest in, the event of the cause, he may, by an order of the court of chancery, be examined as a witness, though his name be not struck out of the bill. (2 Ch. Ca. 214.) It is a motion of course, says lord Hardtvicke, (Man v. Ward, 2 Atk. 228.) to examine such a defendant. In another case, ( Vern. 230.) it is said, that a co-party, who has no interest, or disclaims it, is a good witness, and it makes no mention about the order. I believe, however, it is the practice of the court, to make such an order, and yet, as it is a matter of form, and granted of course, it would be most unreasonable to deprive a party, forever, of the benefit of testimony, from so trifling an inattention. I am yet to believe, that the judge might not even have dispensed with the order, and, I am sure, that the appellants ought not to receive the countenance of this court, in. availing +themselves of so frivolous an objection.
The second objection is of a more plausible kind, but, I think, equally destitute of any solid foundation. It is said, that Olcott may possibly be made chargeable with costs, for his fraud, and that, therefore, he has an interest in the cause. If this position be granted, it will not disqualify him; for, notwithstanding the strictness of some old cases, the rule is now well settled, that it must be a present, vested, or certain interest, and not a remote, possible, or contingent interest, that will disqualify a witness. (Peake Ev. 93. 1 Term, 163.) On this ground, it has been held, (4 Term, 1.) that a parishioner, who was liable to be rated in the poor rate, but was not, in fact, rated at the time, was a competent witness, to prove the rateability of others. Of late, the inclination of the courts, has been, to confine the question of interest within strict and precise boundaries, and, to let objections go more to the credit, than to the competency of witnesses. The case cited by the appellants, was that of Barret v. Gore and Umfreville, (4 Atk. 401.) where the court is made to say, that, if one defendant, who is offered as a witness, for another, may, by possibility only, be liable for costs, he shall be excluded. But this is directly contrary to the .more recent and rational principle: which I have mentioned ; and it is impossible, that it can be correct, to the extent there laid down. It can be shown, by several cases, that unless there can be a decree against a party, he cannot be made liable for costs. In Piddock v. Brown, (3 P. Wms. 288.) which was a bill to impeach some bonds, as obtained by fraud, one of the co-defendants was offered as a witness, ar>8 was objectedto,on the ground, that though there could heno decree agains6 him, yet, his answer being falsified in many parts, he might be liable for perjury, but lord Ch. Talbot laid down this general rule, that if a plaintiffhas no equity, er, in other words, no ground for a- decree against a defendant, he is.a good witness ; else it would be in the power-of a plaintiff, to take off all the defendant's witnesses, by naming them as defendants in the action. Again, in the case of Cotton v. Luttrell (1 Atk. 451. 2 Vezey, 223.) the bill was filed- against Lutlrell and lady Cheshire, to be relieved against a settlement,- said to be obtained by fraud, and also to have a conveyance and account of profits, and lady Cheshire was equally charged with the fraud. But her deposition was allowed to be read, and the chancellor said, that it was necessary to make her a- defendant, for the purpose of discovery ; but she could not be brought to a hearing, as she was no ways concerned in interest, in the event of the suit, and, consequently, no decree could be made against her. And if there be no decree against her, he observes, how is it possible that costs could be given against her. The charge of fraud against ker, went, therefore, only to her credit, and not to her competency. It would be difficult to find a case more applicable to the present, or, where the reasoning is more conclusive. In Barrett v. Gore, the bill stated a breach of trust in one 'defendant, and prayed a specific performance against the other, and it appeared, that the defendant, who was offered as a witness for the other. Lad grossly misbehaved in the trust, and a decree might, perhaps, be had against him, by compelling him to reassume his trust. But, let that solitary and loosely reported case read as it may, it appears, that subseo1uent to all these cases, (2 Jezey, 284.) the decision in Cotton v. Luttrell, was quoted and confirmed, and the court held, that where nothing could be prayed against a co-defendant, he should be dismissed without costs, for, that a person should not be brought before the court, merely to pray costs against him. I think I have, therefore, abundantly proved, that as Olcott had no concern or interest, in the present cause.; that, as he was not brought to a hearing, and no decree was prayed, or could be had against him, he was not liable to be amerced in costs, and was, consc= quently, a competent witness for the bank, and ought .to have been received at the trial.
There was an objection, also, made to the form of the order for a new trial, that it did not state, that the chancellor had decided, that Olcott was to be deemed a competent witness, notwithstanding both objections. This is a criticism almost too idle to'deserve notice, and has no foundation, in -fact. The order does state, that Olcott shall be admitted to be sworn, as a witness, notw ' h-standing his being a party in the cause, which reaches equally to both objections, for both arise from his being a party.
I am, accordingly, upon the whole view of the case, of opinion, that the interlocutory order below ought to be affirmed, and the cause remanded.
Woodworth, Attorney-general. I concur in the opinions which have been delivered, for reversing the order, and that judgment be given in favour of the appellants.
Nicholas, senator. Í concur in the opinion delivered fey his honour the Chief Justice.
The majority of the court having declared their opinions in favour of a reversal; it was thereupon ordered, decreed and adjudged, that the order and decree cq;w» plained of, be reversed ; and that the appellants are entitled to receive the nett proceeds, of the sale of Joseph Eden's estate, on the fieri pdas, in favour of John War- dell, against Joseph Eden, and the costs in the court of chancery; and that the proceedings be remitted to that court, to be carried into execution, with directions also, to the chancellor to decide, whether, under the facts and circumstances of the case, the appellants are entitled to interest, on the sum above decreed to the appellants,
Judgment of reversal,
1 Vesey, jun. 249.
2 Vernon, 192 1 Eq. Ab. 45. 1 Vesey, jun. 249.
1 Vesey, jun. 134.
1 Atk. 451. 3 Pr. Wms. 289. 2 Atk. 228.
Hinde's Practice, P. 17.
2 Mod. 91.
1 Term, 296.
Lister v. Mundell, 1 Bos. & Puller, 428. Chief justice Eyre says it is the piactice to interpose in a summary way, in all cases where the party would be entitled to relief, by audita querela. This is, no doubt, true, if it be ascertained that the party is entitled to relief.