Evarts v. Palmer

By the Court, Gridley, J. The questions arising on the bill of exceptions in this cause depend on the construction to be given to the 351st and 352d sections of the code of 1848. These sections are in the following words: “ § 351. No person offered as a witness shall be excluded by reason of his interest in the event of the action. § 352. The last section shall not apply to any person for whose immediate benefit it is prosecuted or defended, nor to any assignor of a thing in action assigned for the purpose of making him a witness.” After a preliminary examination of Jesse Thompson, a witness offered by the. plaintiff, the defendant’s counsel objected to his competency, on the ground that the action was prosecuted for his immediate benefit; and also on the ground that he had assigned the note on which the suit was brought, for the purpose of making himself a witness. I. The first inquiry is whether the action was prosecuted for the immediate benefit of Thompson. If Thompson is to be believed, he assigned the note to Evarts, and received a note made by Evarts, of the same date and amount and payable at the same time, as a consideration of the transfer; and without any understanding that his right to enforce the payment of Evarts’ note should depend on a recovery upon the note now in suit. In other words, it was a bona fide exchange of notes. And the consequence of that exchange was that Evarts became the absolute owner of the note which Thompson assigned to him. Evarts, therefore, and not Thompson, was the beneficial as well as the legal and nominal owner of the note. If this be so, it can not be maintained that the action was prosecuted for the “ immediate benefit” of Thompson. To satisfy the words of the act, I think a person must be the party, beneficially interested, who owns the note, bond, or chose in action, which forms the foundation of the action. The assignee, who owns a bond on [181] which a suit is instituted in the name of the obligee as the nominal party, is an instance of a party for whose “ immediate benefit” a suit is prosecuted. So too, the owner of the note in the case of Mauran v. Lamb, (7 Cowen, 174,) is another instance illustrative of the difference between a mere witness who is beneficially interested in the event of the suit, and a party, who is beneficially interested in the subject matter of the action. A person thus situated was, in the case cited, adjudged to be the real party in the suit, and, like the party on the record, not subject to be called as a witness by the adverse party. That this is the true interpretation of the phrase under consideration is apparent from the 350th section of the code, which subjects a person “ for whose immediate benefit the action is prosecuted” to an examination as a party to the action, though he be not the party on record. We have seen that the party beneficially interested could not be compelled to testify against himself, The legislature, therefore, when they deemed it proper to subject the party to the action to an examination by his adversary, enacted the 350th section, with the view of placing the party in interest on the same footing. If we are right in this conclusion, then Thompson was not, within the meaning of the act, the “ person for whose immediate benefit the suit was prosecuted,” and he was therefore not incompetent under that provision of the act. I have said that, on the question of competency, the judge was bound to regard the exchange of notes as a valid and bona fide transaction, for the reason that Thompson testified that it was so, and that on this question he was the defendant’s witness. But, we are bound to say, that there was much in the testimony of the witness, if it had come out on cross-examination, to lead a jury to suspect that the transfer was a mere cover, never intended by the parties to it to change the title to the note, or to affect the interest of Thompson in it. Upon such a conclusion, Thompson would be responsible to the defendant for his costs as the real party; and that interest could not be divested by any releases executed between Thompson and the plaintiff. II. It remains to inquire whether the witness wats incoifipe [182] tent on the ground that he had assigned the note in question for the purpose of becoming a witness. It is not claimed, that after the execution of the releases, he remained interested in the event of the suit, unless he could be regarded as the real party in the suit. If he had no interest in the event of the suit, then the assignment of the note on which the suit is brought, though made with the view of making himself a witness, does not affect his competency. The code does not declare such an assignor incompetent; but only that the 351st section shall not apply to him. That section merely provided that interest should no longer disqualify a witness. If that section is held not to apply to this case, then the witness, having no interest in the event of the suit, is competent upon general principles. The code was intended to enlarge, and not contract, the rule respecting the competency of witnesses. I have heretofore had occasion to examine this question in the Hamilton and Deansville Plank Road Co. v. Rice, (1 Code Reporter, 108,) (a) and see no reason to change the opinion there expressed. A new trial must be granted. New trial granted. Footnotes [(a)] <z.) See Ante, p. 157; S. C. at the General Term.