Case Name: REED, for the use of MILLER, for the use of TROXELL, for the use of DUNCAN, against GARVIN and another, Executors of GARVIN
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1824-10-25
Citations: 12 Serg. & Rawle 100
Docket Number: 
Parties: REED, for the use of MILLER, for the use of TROXELL, for the use of DUNCAN, against GARVIN and another, Executors of GARVIN.
Judges: 
Reporter: Reports of cases adjudged in the Supreme Court of Pennsylvania (Sergeant & Rawle)
Volume: 12
Pages: 100–105

Head Matter:
[Chambersburg,
October 25, 1824.]
REED, for the use of MILLER, for the use of TROXELL, for the use of DUNCAN, against GARVIN and another, Executors of GARVIN.
IN ERROR.
Where a bond has been assigned, with a guarantee by the assignor for the pa}"ment of it, the guarantee runs with the bond, into whosever hands it may pass ; and the assignor is not a competent witness, in a suit brought by a subsequent assignee, to prove matters tending to show that the bond has been discharged.
Where one, on receiving an assignment of a bond given by two obligors, one of whom was a surety, agreed with the assignor, with the approbation of the obli-gors, that it should be set off against another bond given by himself to the principal debtor; but, instead of doing so, assigned it, before it became due, to a third person, and suffered judgment to go by default against him in a suit brought on his own bond, held, that the responsibility of the surety was discharged.
It seems, that, without any special agreement, the liability of the surety would be discharged in equity, since the creditor had in his own hands the means of satisfaction, out of the funds of the principal debtor.
The record of this case was brought before the court, on a writ of error to the Common Pleas of Adams county, where a suit was brought by the plaintiff in error against Phillip Sleutz and William Garvin, the latter of whom having died, his executors, the defendants in error, were substituted. It was an action of debt on a bond, given by the said Phillip Sleutz and William Garvin, to Thomas C. Reed, dated April 1st, 1816, conditioned fpr the payment of five hundred dollaars, on the 1st of April, ISIS. Thomas C. Reed assigned the bond to James H. Miller, by whom it was assigned to Abraham Troxell, under circumstances which will be explained hereafter,. and Troxell transferred it to John Duncan, to secure the payment of a loan of four hundred dollars.
The defendants pleaded payment, with leave to give the special matter in evidence; and, after having proved that Garvin was only surety in the bond, they offered, under their notice of special matter, to prove, by the testimony of the said James H. Miller, the following facts: That Abraham Troxell, who had purchased from Phillip Sleutz a half lot of ground, adjoining one owned by Miller, for the purchase money of which he had given to Sleutz his bond,, conditioned for the payment of one thousand dollars, proposed to Miller to assign to him the bond, on which this suit was brought, to enable him (Troxell) to set it off, as far as it would go, against his own bond, for one thousand dollars, held by Sleutz; as both bonds would become due at the same time. Sleutz and Garvin we re privy to this arrangement, and assented to it; and, accórd-cordingly, Miller, before the bond became due, assigned it to Troxell. The assignment was in these wdrds: “For value received, I assign this bond to Abraham Troxell, and guarantee the payment of it.”
The counsel for the plaintiff objected to the evidence; because, in consequence of his guarantee, the witness was interested in the event of the suit. But,
By the President. The record shows, that this suit is for the use of John Duncan, under a blank endorsement on the bond, by Troxell. The guarantee of Dr. Miller, is not, therefore, continued through Troxell to Duncan. Duncan, it would seem, from the from the endorsement, took the bond at his own risk. In this suit, therefore, it is the interest of Dr. Miller that the plaintiff should recover a verdict. It would afford a chance of payment by the defendants, and be a consequent release of Dr. Miller’s guarantee; but, if the judgment be for the defendants, still Miller would be liable, as the judgment would be evidence against him. The witness’s interest, is, at all events, equal either way, and he is a competent witness.
The only associate judge present dissented from the president, but, the objection not being sustained, the witness was sworn, and an exception taken, by the plaintiff’s counsel.
To April Term, 1818, a suit was brought on the bond, given by Troxell to Sleutz, for one thousand dollars, and a judgment by default having been entered, on the 12th of August, 1S18, a fi. fa. issued, under which, the money was made. In the mean time, Sleutz absconded, and on the 6th of April, ISIS, a domestic attachment issued against him.
At the close of the trial, the counsel for the plaintiff submitted several points to the court; which, together with its answers, are subjoined.
1st. That the agreement of Troxell with Sleutz, made after he gave the one thousand dollar bond, that he 'would set off the present bond of five hundred dollars, against the bond for one thousand dollars, when it became due, if made after Garvin had become surety, and before the bonds were due, would be no payment of the sum of five hundred dollars, on the one thousand dollar bond, nor would it discharge the defendants.
By the court. It might discharge the defendants, if there was a positive agreement between Troxell, Garvin, and Sleutz, that the five hundred dollar bond should' be transferred to Troxell; as it was part of the agreement, that it should go to its amount, in payment of the one thousand dollar bond, Troxell was bound by the agreement, and Garvin would be discharged, for it might have put him off his guard.
2d. That a promise by Troxell to set off the five hundred dollar bond, against a one thousand dollar bond held by Sleutz and Trox-ell, if made after the execution of the said bond of the defendant’s testator, and the one thousand dollar bond by Troxell, and if neither of the said bonds were executed with reference to the said agreement; and, if Troxell transferred'his bond before it was due to the plaintiff, and Sleutz sued Troxell on the one thousand dollar bond, and gave no credit for the said five hundred dollar bond, but recovered the whole of the said one thousand dollar bond from Troxell, then the defendants are not discharged.
By the court. Still they might be discharged.
3rd. That such agreement, if made without consideration, was not binding on the parties.
By the court. An agreement, without consideration, is not binding on the parties.
4th. That, if Sleutz agreed to credit the five hundred dollar bond, on the one thousand dollar bond, and Troxell agreed to it, but Sleutz failed to comply with the said contract, Troxeli would not be barred from recovering on the five hundred dollar bond, against the obligors.
By the court. It would be so, iff Troxell was in no fault, or if he could not have prevented it. But, if he connived at a recovery of the whole one thousand dollars, or neglected to claim his credit, and let judgment go by default, for want of appearance, it would not then better his condition. *
In this court, errors were assigned, in the admission of the testimony of James II. Miller, and, in the opinion of the court below, on the first, second, and fourth points, submitted for their decision.
Stephens, for the plaintiff in error.
Bobbin, for the defendants in error.

Opinion:
The opinion of the court was delivered by
Duncan, J.
An action had been brought on the bond against Phillip Sleutz, and William .Garvin, who were joint obligors. The debt is admitted to be the proper debt of Sleutz, and Garvin was only the security. The action was arbitrated, and a report of referees filed, in favour of the plaintiff, from which, an appeal was taken. The report of the referees, remains as a judgment, for the purpose of lien. During the pendency of the appeal, Garvin died, and this proceeding is instituted, in order to reach the real estate of Garvin. The plea, by the representatives of Garvin, was, payment, with leave, &e. and notice was given of the special mat ter, which alleged, that Troxell agreed, when the assignment of the bond was made by Miller, to set off against this bond, a bond Sleutz held on him, as they would become due about the same time. Sleutz agreed to this arrangement, but Troxell, in violation of their agreement, assigned this debt to Duncan. Sleutz absconded; and, on a domestic attachment, the bond of Sleutz to him, was attached. An action was brought, in Sleutz's name, against Troxell, who suffered judgment by default; and, on a ji.fa. the money was made. The assignment by Duncan to Troxell, was certainly in bad faith, but it put Duncan in no better situation, as to the recovery, than he stood in himself. If Troxell could not recover, Duncan could not. It would be against all conscience, that the surety of Sleutz should be compelled to pay, when Troxell had in his hands the fund, and means of the principal debtor, to pay himself; and which Sleutz and he agreed should be so applied. I do not know but this might be pleaded at law, by way of accord and satisfaction, but I have no doubt, that a court of chancery would interpose, and protect Garvin, the bail. It would be suffering Troxell to take advantage of his own wrong, in assigning the bond, and thus putting it out of his power to set off, as is said, and letting the judgment go by default; and this mala fide transfer ought not to operate to the injury of the bail. It will be a matter worthy of grave consideration, on the future trial of this cause, whether, without the proof of any special agreement to take one debt in discharge of the other, as Troxell could have retained, and in equity, could have set off, the holding the means of satisfaction in his otra hand, on an available fund, belonging to the principal, and which depended on his own act and will to apply, and having parted with it, a Court of Chancery would not have protected the bail. This point was not made below, nor any opinion given on it. The defendant relied on the special agreement, proved by Dr. Miller; and the charge of the court was founded on that, a:nd from that evidence, if the witness was competent, the defendant Garvin's responsibility was discharged, so that our inquiry is confined to a narrow ground: Was Dr. Miller a competent witness? The objection to his competency was on the score of interest, and arose from his guaranteeing the payment of the bond to Troxell. The guarantee was in these words: " For value received, I assign this bond to JTbraham Troxell, and guarantee the payment of it." The whole case, then, turns on the competency of this witness. I cannot agree with the Court of Common Pleas, that this warranty was not continued through Troxell to Duncan, or that Duncan took the bond at his own risk, if the guarantee had not been fulfilled by the acts and situation of Troxell and Sleutz, the principal debtor, by the agreement to set off one debt against the other. My opinion is, that the guaranty ran with the bond; and that, into whose-soever hands it came, the beneficial interest in the bond carried "with it the guarantee of payment; and, though Duncan might not, according to the technical forms of law, maintain an action in his own name against Miller, yet he could in Troxell's name, for his use. No case is to be found directly in point; but my opinion, proceeding on a principle of the law of evidence, is, that wherever a fact is to be proved by a witness, and such fact is favourable to the party who calls him, and the witness will derive á certain advantage, from establishing the fact in the way proposed, he cannot be heard, whether the interest be great or small. In this situation, stood Dr. Miller. The effect of his evidence, was to discharge him from his obligation of indemnity. The-result of this action would be, to protect him from having a demand ever made against him. It puts him in a better situation; for it is not so, that if the plaintiff recovered a verdict, he would be discharged. The obtaining of a favourable verdict would not discharge him; nothing but payment, or what is equivalent in equity, would free him from his warranty; he is not equally liable; non stat indifferenter.
The record, in this action, if the defendant prevailed on the statement of facts in the notice of special matter, would for ever bar Troxell and Duncan from any action on the guarantee. It amounted, in point of law, according to the practice of our courts, to a finding of payment at the day or after the day, .after the aster the assignment to Troxell, for, in truth, it was payment to Troxell. It would be different from a verdict on a different plea, and different facts, which went to prove that the bond in its origin was void or had been paid before the assignment; for that verdict would be evidence against Miller, and Miller might, if he did not object, be received as a witness to prove that defence; for though he would be swearing against his own interest, it would be to render himself liable to an an action on the guarantee, so far from discharging it. But his evidence here was to discharge him from all liability.* He would have been competent, if he had an interest inclining him as much to one side as the other; so as, upon the whole, to make him indifferent in point of substantial interest, on whichever side the verdict might be. But by extinguishing the debt, by proof of payment to Troxell, he eventually discharged himself, by proving that his guarantee was complied with. It has some resemblance to a case of joint and several bond, where one of the obligors is the security, and the principal debtor alone is sued. There the bail would not be competent to prove payment by the principal; for the fact of payment would discharge him from liability. It makes no difference, that Miller was not a party to the bond. He stood, quasi security, bound for payment. The verdict, on this issue, would be evidence in a suit brought by Troxell, or in his name for Duncan's use against Miller, because it found the performance of the promise by Miller. Miller could not have been a witness for the plaintiff, to disprove any alleged payment to Troxell, without a release; so the defendant cannot examine him, to prove the payment; his interest in both cases, being to produce a result favourable to himself.
Judgment reversed, and a venire facias de novo awarded.