Court Opinion

ID: 7128027
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:15:47.495221+00
Date Added: 2024-06-11T16:14:21.346412
License: Public Domain

Chief Justice Robertson
delivered the Opinion of the Court.
The only question in this case is whether, in an action by an assignee against the obligors, the assignor of a promissory note made payable to order in any of the banks of the City of Louisville, is a competent witness to prove that the note was executed without any good or valuable consideration.
If the note be not deemed negotiable paper, in the technical sense of the mercantile law, modern adjudications, as well as the principles of the more ancient common law, indisputably establish the competency of such a witness when his interest is equiponderant, and especially when, as in this case, it seems to preponderate against the defence he is called to sustain by his testimony.
In Walton et al. vs Shelly, (1 Term Rep. 161,) it was decided by the Court of King’s Bench, in England, that the “endorser of anote, independently of any question “ of interest, could not be permitted to prove a note void “which he himself had endorsed.”
In that case Lord Mansfield, admitting that the witness had no interest, said however: “But what strikes me is “•the rule of law founded on public policy, which I take “tobe this — that no party who has signed a paper or “deed shall ever be permitted to give testimony to inval- ‘ ‘ idate that instrument which he hath so signed.” — ‘ ‘The “civil law says, nemo allegans suani turptudinem est *297“audicndus;” and upon that assumption the case was decided.
The later adjudications in England.
The adjudications in N. York and Pennsylvania, Yiiginia and Tennessee contra.
The doctrines of evidence in Jordaine vs Lash-brook approved.
The maxim, both of civil <y common law, ‘that no oneshallbeheard alleging his own turpitude,’ is applicable to parties not witnesses.
In Bent vs Baker, (3 Term Rep. 27,) Lord Kenyon then being Chief Justice, tiie case of Walton et al. vs Shelly, was shaken in its principle, if not altogether overruled — Butter, however, suggesting that Lord Mansfield’s argument should still be applicable to negotiable paper.
But, in the still later case of Jordaine vs Lashbrook, (7 Term Rep. 335,) the doctrine, as held for the first time in Walton et al. vs Shelly, was entirely overruled as an unauthorized and injurious innovation upon the common law, which recognized no other , causes of iucompetency to testify as a witness than interest, infamy, and want of understanding or of consciousness of future accountability, and left all other objections as applying to the credit only. And this case of Jordiane vs Lashbrook seems to have been adhered to in England ever since; for in Jones vs Brooks, (4 Taunton,) it was conceded by the Court and all the counsel on both sides to be the then settled law of England, that an endorser of even a bill of exchange, if not interested, was a competent witness to prove that the consideration was illegal and void.
In Massachusetts, New York, and Pennsylvania, the rule in Walton et al. vs Shelly, as restricted to mercantile paper by Butter, in Bent vs Baker, has been recognized by the local judiciary. Butin Tennessee and Virginia, the case of Jordaine vs Lashbrook has been followed as being the more rational and authoritative.
In Kentucky this question has never been decided by this Court. But whether we regard the common law, or principle, analogy, policy, or the intrinsic authority of adjudged cases, we are strongly inclined to the conclusion that the true rule of law is recognized in the case of Jordaine vs Lashbrook, supra, and in that of Taylor et al. vs Beck, (4 Randolph’s Va. Rep. 416.)
The comprehensive principle assumed in Walton et al. vs Shelly was never recognized before or since the decision that case, either in England or America; for that ‘ ‘no one should be heard alleging his own turpitude,” was a maxim of both the civil and common law, applicable to parties, not to witnesses; and no rule of evidence is more *298universal than that which admits accomplices as competent witnesses to testifiy against their associates in guilt— subscribing witnesses to loills and deeds to prove the invalidity of those documents in consequence of incapacity or fraud in the execution of them, although accredited by their own attestations as genuine and valid — and even parties to conveyances, bonds, and other specialties not mercantile, to invalidate them by their testimony as witnesses for others ■who might bo injuriously affected by them. And neither in England nor in any of the states of this Union has this doctrine of Lord Mansfield been, so far as we are informed, applied by any Supreme Court to any other class of cases than that of mercantile paper, negotiable and upheld by a peculiar code of law in every commercial country.
It is a gen’l rulo that fraud, or want of considerationcannolbe pleaded to ail action on a bill of exchange against a iona fide holder — but whenever one party to a bill of exchange may lawfully pi’d any fact in his exoneration, any other party to the bill may prove that fact, who is not interested in establishing the defence.
But is there any consistent reason for applying such a rule even to such a class of cases?
To assure credit and circulation to bills of exchange, as a species of useful currency, the law merchant, in most cases, forbids a party to such a bill, when sued by a iona fide holder for a valuable consideration without notice, to plead either fraud or want of consideration as between himself and the party with whom he directly contracted; and of course, if one party to a bill cannot, when sued, plead a particular fact, another parly to the same bill could not, as a witness, prove the same unavailing and irrelevant fact; not however because the witness is incompetent to prove an admissible defence, but because the fact to be proved is inadmissible and could not, therefore, be proved by any witness. But when the law permits one party to a bill to plead a fact in bar of an action against him, why may he not prove the fact by another parly who has no interest in his defence? If it be consistent with public policy, in any excepted class of cases, to permit a party defendant to invalidate a bill to which he has given a delusive credit by his name, can it be inconsistent with the same plicy to allow another and a disinterested parly to the bill to testify to the invalidating fact? surely not; for, in such a case, the only reason ever assigned for the assumed incompetency of the witness does not exist; and if the witness be incompetent because *299his name was on the bill a fortiori, the defence which he is called to sustain could not be made by a defendant whose name had also helped to give circulation to the paper. If, for example, the law, for the purpose of repressing usury and unlawful gaming, permit a party to a negotiable bill, when sued, to plead that the consideration was usurious or gambling, can it be possible that the same law could be so inconsistent and even suicidal as to prohibit the defendant from proving his plea by another party to the bill who has no interest in the event of the suit?
Decisions of Supreme Court of U. S. according with the case of Walton vs Shelly, (1 Term JRep. 161.) cited, and modern adjudications of England and Virgin* ia, contra, referred to and approved by the Ct. upon reason, analogy, and principle.
Wantof consideration nota good plea to action on hill of exchange hy assignee.
If it be consistent with the policy of the law to permit one party to a bill to plead a particular fact in bar of an action against him, it cannot be inconsistent wilh the same policy to admit, as a competent witness, another party to the bill to prove the fact lawfully pleaded.
In the case of The Bank of the United States vs Dunn, (6 Peters, 56,) and in that also of The Bank of the Metropolis vs Jones, (8 Ib. 16,) the Supreme Court of the United States said, that “it is a well settled principle that no person, who is a party to a negotiable instrument, shall be permitted, by his own testimony, to invalidate it; ” and referred to Walton et al. vs Shelly, as being “still held to be law.” But this is not “still held to be law” in England, as we believe. Nor can vve perceive any sufficient ground of authority, reason, or policy, for holding it to be law in tbis state, where it has never been so adjudged. It has been “well settled” in Massachusetts, New York, and Pennsylvania: but the converse has been as “well settled” in England and Virginia, and upon reasons not only cogent but, to our minds, conclusive. Uncontrolled as this Court is upon this question, by the authority of adjudged cases, our decision must be governed by reason, analogy, and principle; and these are, in our judgment, all with the cases of Jordaine vs Lashbrook, 7 Term Rep.; Jones vs Brooks, 4 Taunton, and Taylor et al. vs Beck, 4 Randolph.
If however, the note in this caso be a bill of exchange or negotiable paper, in the technical and commercial sense, the defence pleaded, that is, that it was given with*300out any good or valid consideration, was inadmissible as against the plaintiff in the action, who is an assignee.
Note sued on is not a bill of exchange , and is assignable only under our statute, vesting the light of action in the assignee— plea of want of consideration was good, and assignor a competent witness to establish the defence.
Pirile for plaintiffs: Duncan for defendants.
But we are of the opinion that the note is not, in the mercantile sense, negotiable paper, but assignable merely under our local statute, authorizing the assignment of promissory notes and bonds, so as to vest in the assignee the legal right of the obligee, and no other or greater right as against the obligor. The note does not appear to have been ever negotiated in Bank, or to have been intended as a bill of exchange, or in any way to have acquired that legal character and effect.
The plea was therefore admissible; and as the obligor had a right to plead a want of consideration against the assignee, an assignor, whose interest, if he have any, is on the side of the assignee, was, in our opinion, a competent witness, to prove the fact which was legally pleaded in bar of the action.
It is, therefore, considered that the judgment of the Circuit Court, which was inconsistent with this opinion, be reversed, and the cause remanded for a new trial.