1

1829.

rious consideration: and so long as these decisions remain in Feb. Term, force, the rule must be considered as settled in favor of the competency of the witness.

The Fulton Bank of the ci

But another objection was taken to Keeler as a witness, on the ty of N. York.

ground of interest. To sustain this objection, the plaintiffs introduced the two assignments mentioned in the case, from Keeler & Rogers, and Keeler & Mather, by which the whole of the property of the assignors was assigned to trustees to secure their creditors, who, with the exception of the makers of the $50,000 note, were arranged into two classes (the one preferred to the other) for the payment of their debts, the assignors reserving to themselves the residue, if any there should be. The first assignment was of part of the property for the exclusive benefit of the makers of the note for $50,000, and the second assignment gave that note the preference to both classes of their creditors. And it appeared, and was admitted, that the note in question was one of the debts secured by the assignment, and entitled to the preference given to the note for $50,000, which was to be first paid. On these facts the plaintiffs insisted that Keeler was interested in the event of the suit. To obviate the force of the objection, the defendant offered to prove that the whole of the property covered by the assignment was insufficient to pay the first class 'of creditors by $40,000. This evidence was rejected, and an exception taken to the opinion of the judge on the point. The defendant then offered a release from Keeler, acknowledged in open court, granting and releasing to the trustees named in the assignment, all his interest in the assigned property, and in the residue reserved to the assignors. The counsel for the plaintiffs still insisted on their objection to his competency, on the ground that his interest could not be released; but the judge was of opinion that he was admissible, and overruled the objection. To this opinion, the counsel for the plaintiffs excepted; and our next inquiry in order, will be, whether the exception taken by the defendant to the decision of the judge against the relevancy of the testimony offered by him, or that taken by the plaintiffs to the admission of the witness, upon his release to the trustees, can be sustained.

v. Benedict.

Feb. Term, 1829.

The Fulton Bank of the ci

v.

Benedict.

First, was the proof offered by the defendant, that the property embraced in the assignments was insufficient to satisfy the first class of creditors sufficient or material to show that the wit

ty of N. York. ness had no interest by reason of the residuary trust? It is difficult to conceive how the answer to this question, considering the course the cause took, can be material to the defendant: for the witness released his interest in the residuary trust, and was on that ground admitted to testify. The defendant has had the full benefit of his evidence; and the notion, that the credit of the witness suffered by the imputation of an interest, to which the Court gave its countenance, by requiring a release to extinguish it, appears to me too refined and unsubstantial to form the basis of a judicial decision. And even if the Judge erred in excluding the proof, and thereby sustaining an objection to the witness which that proof would obviate, yet the objection being removed by other evidence, and the witness admitted to testify, the error became harmless, and it would be against the settled rules of the Court to disturb the verdict for that cause. But the Judge was right; for the testimony offered by the defendant did not obviate the objection. It might have shown in a striking point of view. the apparently remote and illusory prospect of a residuary fund, and the seemingly forlorn hope of benefit to the witness from that source; and from these premises, a cogent argument might have been drawn against the probable influence of such a valueless and mere nominal interest upon the witness to swerve him from the truth. But the fact of the interest, such as it was, would still remain. It was a direct interest in a fund which was contemplated as possible, at least, to exist, and which the witness himself had reserved as a substantial or expected benefit, we are to presume, to him. The general rule of evidence is to exclude a witness having a direct interest in the event of the suit, as incompetent, without regard (except in special and peculiar cases) to the value and importance of that interest to the witness; and this case does not come within any exception to the rule. We are not at liberty to speculate upon the influence which a greater or less degree of interest might have upon the witness. It is sufficient to exclude him that he has a direct interest which may be available to him.

Here the objection to the witness was the interest he had in Feb. Term,

1829.

the contingent residue of the trust funds reserved to the assignors, which his testimony tended to disencumber of the charge of the note in question. The assignments were sufficient prima facie ty of N. York. evidence of the residuary interest of the witness in the trust-premises, to disqualify him until the objection was removed. The most obvious and effectual course was to extinguish that apparent interest by release. It would be dangerous, and withal most

The Fulton Bank of the ci

v.

Benedict.

inconvenient in practice, to allow the party calling the witness to repel the evidence of interest resulting from the assignments which are his own acts, and speak his own language, by an exposition of the property and debts embraced in the deeds, and proofs, and estimates of the values of that property, in order to ascertain the probable results of the trusts, and the chances of a surplus. Such an ordeal for testing the interest of a witness in a surplus fund, would partake too much of an ex parte inquiry to be consistent with even-handed justice. It would, moreover, be open in every stage of it to exception, and lead to interminable and vexatious controversies, and it would seldom end in any satisfactory result. The items composing the stock in trade, which mercantile houses, on the eve of insolvency, assign for the security and benefit of those they wish to favour, usually consist of merchandise more or less unsaleable, and outstanding demands against debtors of different degrees of responsibility. The actual values and probable avails of such items, seem to be mere matters of opinion, and with the exception perhaps of flagrant cases, approaching to fraud, the estimates of them will seldom be satisfactory or sufficiently certain to exclude all chance of a surplus in every possible turn of events.

This may be a strong case; but even in this case, the sources from whence the residuary fund was to flow, had not been exhausted. The assigned property was still in the hands of the trustees, and desperate as the defendant represents the hope of a surplus to be, the witness may have been under very different impressions. It is not unusual for the insolvent, who is familiar with the property he assigns, and too apt to be sanguine in his hopes and expectations of favourable dispositions and avails, to retain

1829.

Feb. Term, his confidence in the full payment of the debts he secures, long after his trustees and creditors have lost all hope of satisfaction from The Fulton the trust estate. Yet the insolvent, if he believes in the sufficiency ty of N. York. of the fund to yield him a surplus, will be governed by that supBenedict. posed interest, as being a real and substantial benefit to him.

Bank of the ci

v.

But again: why resort to an argumentative refutation of the charge of interest from the inadequacy of the fund, or the insufficiency of sources to create it, when a far more simple, direct, and satisfactory answer would be given by the release of the witness on the stand? When a witness is called to testify, and the tendency of the evidence will be to create, disencumber, or increase a fund of which he may be entitled to partake, it must be conceded that the best and most satisfactory answer to the objection to him on that ground, is a release of his interest in the fund. It effectually extinguishes all possibility of benefit to him from that source, and silences all his hopes and pretensions, whether well or ill founded, to any present or future advantages to himself from the result of the fund, in any possible turn of events or change of circumstances. And it seems to me to follow, from this acknowledged operation of the release, which it is always in the power of the witness to give, that the defendant, who showed no obstacle in the way of attaining it, was bound, if in his power, to produce such a release from this witness, and could not substitute for it the proof he offered. It is manifest that he had the power to produce the release, for in the sequel he did produce it. Yet he chose to put himself upon the weak ground of an offer of proof to show a deficiency of the assigned premises to satisfy the debts, as conclusive against all possible interest in the witness.

The considerations to which I have referred, satisfy me that the resort to that species of proof to repel the charge of interest, was inadmissible. It was an argumentative and inconclusive answer to the objection, substituted without necessity, for the more efficacious and decisive refutation by the release of the witness; and the proof, moreover, which was offered, however clear and convincing it might be to others, could not divest the witness of any interest or possibility of interest he might have, or suppose and believe himself to have, in the trust estate under the residuary

1829.

The Fulton

trust in his favour, and the consequent avoidance of the note in Feb. Term, question, as a charge upon that estate. These interests, real or imaginary, would be reached by the general release of the witness Bank of the cihimself, and could not be otherwise extinguished. The exception ty of N. York. of the defendant to the exclusion of the proof he offered, is of course untenable.

But, secondly: Did the release itself fully restore the witness to competency to testify, or were the plaintiffs still well founded in the objection to which they adhered? The object and operation of the release was to restore the competency of the witness, by removing all temptation to diminish the debts, for the purpose of increasing the residuary fund in which he was to participate. It did extinguish all the interest he could possibly have in any such residuary fund, and so far it operated to remove the objection to his competency. It did not exonerate him from his liability to the plaintiffs as endorser of the note in question. But his engagements, as endorser, did not expose him to the objection of interest; for the endorser is not answerable over to the makers of the note in case of a recovery against them; and if his testimony should defeat the suit of the holders against the makers, the record in that suit would not be evidence for him in a subsequent action against himself; and the holders in such subsequent action (his oath no longer standing in the way) would recover against him, unless he could establish the usury by other proof. But this was an accommodation note, created by the makers at the request and for the accommodation of Keeler & Rogers, the endorsers, and negotiated by them for their own benefit. It was to be paid by them. They, by their assignment, recognised it as a debt of their own; acknowledged their obligation to pay it, and made provision for such payment. They stand, therefore, as regards liabilities between them and the defendant, on the footing of makers, and the testimony of Keeler tends directly to the discharge of a debt which he was bound to provide for and to pay. He was bound to defend the makers of the note in the suit of the holders upon it, and to indemnify them against its results. He would consequently be answerable over to the defendants in an action adapted to the case, for the amount of the recovery against him, in the event of

v.

Benedict.