Blake v. Buchanan

The opinion of the court was delivered by Poland, J. The first question in this case is as to the admissibility of Cobb as a witness. He was a member of the firm of Cobb, Rollins & Co., to whom the note, upon which the suit was founded, had been assigned by the plaintiff, and for whose benefit the suit was brought and prosecuted. We do not discover any reason, why the releases, from Cobb to the other members of the firm, of all his interest in the note, or suit, and of the debt of the firm against the plaintiff, which the note was assigned to secure, and their release to him, did not discharge him from all legal interest in the suit and render him a competent witness. This very question seems to have been directly decided by this court in the case of Moore v. Adm’r of Rich, 12 Vt. 563. Cobb being admissible as a witness, the referee reports, that he finds, that the plaintiff, in September, 1842, assigned the note to the firm of Cobb, Rollins & Co., to secure a debt due to them from himself for the sum of $112, and that notice was soon after given of such assignment by Cobb, Rollins & Co. to the defendant, who acknowledged the note to be due and promised to pay the note to [552] them. After this notice of the assignment of the note to Cobb, Rollins & Co., and of their equitable interest in the note, the defendant could not pay the note to Blake, or take any discharge, or release, from him, which would operate to defeat the interest, which Cobb, Rollins & Co. had acquired in the note. This principle has been so long and so well settled, that authorities need not be quoted to sustain it. The notes given by the defendant to the plaintiff were supported by a sufficient consideration, viz., the conveyance of the land and the contract to convey, and there was no such partial failure of consideration, as would have enabled the defendant to set it up as a defence, either in whole or in part, to an action upon the notes, under the plea of the general issue. It does not distinctly appear, that the written contract in relation to the land had ever been broken at all by the plaintiff; but if it had been, the only mode of making it available as a defence was by pleading it in offset, as a distinct claim against the plaintiff. Whether this could have been done by the defendant, after notice that the note had been assigned and a promise on his part to pay it to the assignee, may well admit of doubt ; but it is not necessary now to decide that question. In this case the general issue alone was pleaded by the defendant, which would exclude this defence, even if the suit had been for the benefit of Blake, the party of record. The discharge from Blake to the defendant of this note, long after notice of its assignment to Cobb, Rollins & Co. and the defendant’s promise to pay it to them, was a clear fraud upon their equitable right in the note, and, upon the plainest principles of law and common honesty and justice, could not be set up and made available to bar a recovery for their benefit, to the extent of their interest under the assignment. The note being assigned by the plaintiff to Cobb, Rollins & Co., to secure a debt of $112 only, the balance of the note remained the property of Blake, and to that extent we think he might settle or discharge it. The subsequent increase of the debt of Cobb, Rollins & Co. against the plaintiff, by the costs of a suit against him to enforce the collection of it, did not give them any greater interest in the note against the defendant, than they took by virtue of the original assignment; and therefore the discharge from the plaintiff to [553] the defendant would be operative as a defence to the balance of the note, above the amount of the debt, which it was assigned to Cobb, Rollins & Co. to secure. These views render it unnecessary for us to examine the remaining questions submitted by the referee in his report. The judgment below, having been in accordance with the views above expressed, is affirmed.