Hackett v. Martin

The cause was submitted without argument by H. Williams for the plaintiff, and H. Warren for the defendant; and the opinion of the Court was delivered at the ensuing June term in Washington, by Parris J. The defendant relies upon a release from Hackett executed subsequent to the commencement of this suit, in which he admitted that the note had been paid, and thereby discharged the action. To rebut this, the plaintiff relies upon the fact that the note, before it became due, was assigned for a valuable consideration to one Pratt, by delivery only, not having been endorsed by Hackett, and that it passed in the same manner into the hands of Lord, for whose benefit this suit is prosecuted, and that the defendant had notice of the assignment before the execution of the release. Although, as a general principle, a chose in action or a right in one to sue another to recover money or property in a court of law is not assignable, so as to enable the assignee to sue in his own-name, yet it has long been settled by repeated decisions, not now to be doubted, that the law will protect the equitable interest, of an assignee for a valuable consideration, and that the promissor shall not be permitted to avail himself of any payments made to the promissee subsequent to his having notice of the assignment, and that any release made to him by the promissee, after such notice, would be a fraud upon the assignee, and would not defeat an action brought for his benefit in the name of the assignor. Jones v. Whitter, 13 Mass. 304; Eastman v. Wright, 6 Pick. 322; Andrews v. Beecker, 1 Johns. Cas. 411; Raymond v. Squire, 11 Johns. 47. The assignee is to be recognized as the owner, and all acts of the assignor subsequent to the assignment, and affecting the validity of the contract are fraudulent. He has no more power over it, than a stranger; but until the promissor has notice of the assignment all payments made by him, and all acts of the promissee in respect to him are good. Thayer v. Havener, 6 Greenl. 212. [79] From the exceptions il appears, that the defendant knew that the note was in the hands of Pratt, more than eight months before it became duo. Up to this time he might well presume Hackett to be the owner of the note, and whatever payments he made, if not endorsed, would be a legal offset, and so the court below decided ; for the jury were instructed to allow so much of the defendant’s account, filed in offset, as accrued previous to the assignment. But whatever payments were made after the defendant had knowledge of the transfer of the note were properly rejected. He knew it was in Pratt’s possession, and from that circumstance it was to be presumed that it had become his property. Anderson v. Van Allen, 12 Johns. 343. If the defendant continued his payments to Hackett, he did it upon Hacketts responsibility, and not in prejudice to the rights of the assignee. The law upon this point is well settled, and it comports with honesty and fair dealing. Neither can there he any doubt of the correctness of the ruling in excluding the admissions of Hackett made after the assignment, and when he had no interest in the note. It is a general principle that the admissions of a party in interest are competent evidence. But Hackett had no interest in the note, or legal control over it, at the time when it is said he admitted the payment. He had parted with the debt and the evidence of il. It had become the property of Pratt i and as well might Hacketfs admissions be introduced in any other suit as in this. Packer v. Consalus, 1 Serg. & Rawle, 526. Crayton v. Collins, 2 McCord, 457. So also as to the admissibility of Hackett as a witness. He had indeed no interest in the event of the suit, except that he might be liable for the costs in the first instance, and that interest was adverse to the defendant by whom he was offered. But the objection to a party in the suit being sworn as a witness is not placed on the ground of interest j it arises from considerations of policy. The common law rule is that a party to the record cannot be a witness, unless in actions of tort. In no other case can a party to the record give evidence to go to the jury on the merits of the cause. Schermerhorn v. Schcrmerhorn, 1 Wend. 119; Supervisors of Chenango v. Birdsall, 4 Wend. 453; Cantey v. Sumter, 3 McCord, 71 note; Vineyard v. Brown, 4 McCord, 24. [80] As to the admissions of Hackett and his admissibility as a witness, the case of Frear v. Evartson, 20 Johns. 142, is direct authority. At the trial of that case, the plaintiff proved his demand against the defendant for goods sold and delivered. The defendant then offered to set off his demand against the plaintiff, and called a witness to prove that the plaintiff, since the commencement of the present suit, had admitted and confessed that the items of the account, offered as a set off by the defendant, were due to him from the plaintiff as stated in the bill of particulars. The counsel for the plaintiff objected to the evidence, and to the admission of any confession from the plaintiff, on the ground that he had previously assigned his demand against the defendant; and on proof of the assignment and notice to the defendant, the admission of the plaintiff was rejected. The defendant then offered to call the plaintiff to prove the account of the defendant, and that the samo was due before the assignment was made, and before the suit was commenced; but the witness was rejected. A verdict having been returned for the plaintiff, a motion was made, and argued, to set it aside. In giving their opinion, the court say, “ The questions in this case are 1st, whether the admissions of the plaintiff after he had assigned his interest to another, could be given in evidence for the defendant who had notice of the assignment. 2d. Whether the plaintiff could be a witness for the defendant when objected to by the plaintiff’s counsel, after proving the assignment and notice. The Judge, at the trial, excluded the evidence and rejected the witness, and we see no ground to doubt the correctness of his decision. Having assigned his interest in the chose in action, the plaintiff could not impair that interest by any confessions made by him to the prejudice of his assignee. As to his being a witness, that he was a party to the record was enough to exclude bim unless by consent of the real parties in interest. The case of Bauerman v. Radenius, 7 D. & E. 663, is clearly distinguishable from the present case.” See also Mandeville v. Welch, 1 Wheat. 235; 5 Wheat. 277. The general doctrine relating to choses in action is this, that after the assignment and notice to the debtor, the debt and the [81] evidence of its being the property of the assignee, no act or declaration of the assignor can discharge or modify it; neither can he control a suit prosecuted to enforce its payment ; — that the promissor remains unaffected by the assignment until be has notice of it, and any payments which he may make before notice, are as available in his defence, as if no assignment had been made. But upon notice, his relations are changed. Be becomes the debtor of the assignee, and any subsequent payment to the assignor, or receiving a discharge from him, would be attempting a fraud upon the assignee, which the law will not sanction. The exceptions are overruled.