Matthews vs. Poythress. as swearing truly. But the preponderance is, unquestionably, to be given to the affirmative testimony; because, although not known to the negative witness, at some other time and place, he may have received a consideration. At the same time, evidence of a negative character, may, under peculiar circumstances, not only be equal, but superior to positive evidence. For example, two persons are placed in a room for the express purpose of ascertaining by their senses, whether a clock placed therein would strike-and they testify, that within a given time, it did not strike; whilst a third person testifies, that within the specified time, it did strike. In this case, reason could not attribute the variance in evidence, to inattention or mistake in the two. She must needs award the preponderance in favor of the negative witness. The case, however, before us, is stronger in favor of the positive tes timony, than any I have put. Here one witness swears directly to an affirmative fact, to-wit: that the plaintiff did receive a consideration for the note; the other swears that he did not, generally, without qualification as to the witness' knowledge, and without limitation as to time or place. To place the latter testimony upon an equality with the former, the witness must be invested with omniscience. He swears that the plaintiff never did receive a consideration for the note in question. How could he know that, unless from the time the note was made, until the moment he is sworn, he was present with the plaintiff, and all the time exercising the most intense observation, and the most unrelaxing vigilance. We are clear that the Court correctly instructed the Jury, that he was not to be believed in preference to the other witness. 1 Starkie on Evidence, 517, 518. [3.] The defendant tendered in evidence, the depositions of Mrs. Jones and her husband, John E. Jones, to prove that he gave a valuable consideration for the note, and that the plaintiff had himself transferred it to them, and received a consideration for the transfer; and at the same time, exhibited a release to the witnesses. The plaintiff demurred to the admissibility of this evidence, upon the ground that the witnesses were interested, notwithstanding the discharge, because they had sold the note to one Allen, who sold it to the defendant. And although the witnesses had been released by the defendant, yet, if the plaintiff succeeded, Allen would be liable to the defendant as his immediate vender; and they, the witnesses, would be liable over to Allen as his ven Matthews vs. Poythress. ders. They were therefore interested in favor of the defendant. The presiding Judge overruled the demurrer, and admitted the evidence, saying that if interested at all, the witnesses were interested to testify in favor of the plaintiff and that the interest growing out of their liability to Allen as his vendors, was too remote to exclude them. This decision is excepted to. The rule upon the subject of interest is thus laid down by this Court, in Bailey vs. Lumpkin, 1 Kelly, 405: "The disqualifying interest of a witness, must be some legal, certain and immediate interest, however minute, either in the event of the cause itself, or in the record as an instrument of evidence in support of his own claims, or against him in a subsequent action." 1 Greenleaf's Evid. Sect. 386. 1 Stark. Erid. 102. The test of his interest in the event of the suit, is, will he gain or lose by the direct legal operation of the judgment. 1 Greenleaf, Sect. 390. Gilbert's Erid. 225. 3 C. R. 27. East, 580. It is not pretended that these witnesses would be excluded by the former part of the rule —that is, it is not pretended that they are interested in the event of the suit. They could not gain or lose by the direct legal operation of the judgment. Whether the judgment be for the plaintiff or the defendant, they would not thereby make or lose, directly, one cent. If they are interested in the way claimed by the plaintiff's counsel, it is because the record of recovery for the plaintiff, would be evidence against them, in a suit against them by their vendee Allen. A judgment is conclusive only upon parties and privies. These witnesses are not in privity with the defendant. Nor could the judgment in favor of the plaintiff in this suit, be admitted as evidence, by way of inducement, in a suit brought by Allen against them. Whether it could or not be thus admitted, in a suit brought by this defendant against his vendor, Allen, I shall not now say; but am very clear it could not, in a suit by Allen, against them. The interest, by the rule, must be legal, certain and immediate in the record. Here, if at all interested in this record, it is not an immediate legal interest, but remote and contingent. It depends first, upon a recovery here against the defendant; and second, upon an after recovery by the defendant against Allen. It is neither a legal interest, a certain or an immediate interest. There is a class of cases analagous to this, in which the witness would be excluded, and to which this case might seem to belong, but to which it does not 38 VOL. IV. Matthews vs. Poythress. belong; where the event of the suit, if adverse to the party calling the witness, will render the latter liable either to a third person or to the party himself. In such cases the witness is incompetent, because the judgment is competent to prove the special damages of the party against whom it goes, in a subsequent action against the witness. Thus, in an action against the principal, for damages, occasioned by the neglect or misconduct of his agent or servant, the latter is not a competent witness for the defendant, without a release; because of his liability over to his master or employer, in a subsequent action to reimburse; in which action the record of the judgment in the first suit, will be received to prove the amount of the damages therein recovered. The rule applies to all cases where the same relationship exists between the witness and the party who calls him. In all such cases, the direct legal effect of the testimony must be to place the witness in a situation of security against a subsequent action. If the effect of the testimony is not direct, it does not disqualify. Not only so, but the liability of the witness must be direct and immediate to the party, "for, (says Mr. Greenleaf,) if the witness is liable to a third person, who is liable to the party, such circuity of interest is no legal ground of exclusion." 1 Greenleaf's Ev. Sec. 394. Clark vs. Lucas, Ry. & M. 32, which happens to be precisely the case in hand. We conclude then, that the liability over to their immediate vendee, who would be liable to the defendant if he failed in the action, is not such an interest as to disqualify these witnesses. This being conceded, how do the witnesses stand affected to the immediate parties? They cannot be liable to the defendant, because he has released them. If the plaintiff fails, it is possible he may go upon them for the fraudulent appropriation and sale of his note; and it may be considered that their interest is in favor of the plaintiff, and against the party calling them; and if so, they are competent. We do not find that this exception was well taken. [4.] The presiding Judge instructed the Jury, "that the loser of a negotiable instrument, when the same was proven to be in the hands of a purchaser for value, and before due, in order to recover said instrument from the possession of such subsequent purchaser, must prove that he purchased said instrument mala fides." And farther, "that mala fides is not a want of prudence, nor is it gross negligence, nor mere suspicion without reason for Matthews vs. Poythress. such suspicion, as to the honest character of the vendor; but it is a reckless disregard of, or indifference to the rights of all persons but himself in the transaction, which recklessness and indif ference the plaintiff must prove." And that "where a person, not the payee of a note, presents it for sale, negotiation, or discount, and the purchaser has suspicions only of the genuineness of the note, or the solvency of the makers, and not as to the character of the title, the mere fact of the person presenting a note not due, being a stranger, or even general suspicion, (without any reason existing to excite such suspicion in a reasonable mind,) are not sufficient to put the purchaser upon enquiry as to the title; and that a failure to make such enquiry under such circumstances, is not such mala fides as will enable the loser to recover." To all these propositions the plaintiff in error has excepted, and I understand him to maintain, as antagonistic propositions : 1. That in the case, as stated by the Judge, in order to the recovery, it is not necessary to prove mala fides in the holder, but it will be sufficient for him to prove that the holder took the note under circumstances which ought to have excited the suspicions of a prudent and careful man. 2. That if it be necessary to prove that the holder took the note mala fides, then one taking a note, with mere suspicion of fraud as to the title, is guilty of mala fides. 3. That gross neglect in the holder of a negotiable instrument, taken under such circumstances, is mala fides, and will defeat his title. 4. That a person receiving a note not due, from one who is not the payee, and having suspicion only as to the genuineness of the note and the solvency of the maker, is put upon enquiry as to the title, and if he fails to make enquiry, does not acquire a good title to it. I shall not undertake to consider all these specifications with separate particularity, but shall endeavor to establish such general rules, as will embrace them all. The note, in this case, was transferred to the defendant before maturity, and he gave for it a valuable consideration. The property in paper, payable, as this was to bearer, as a general rule, accompanies the possession.— Without such a rule, the ends to be accomplished in the mercantile world by them, could not be attained. They are negotiable securities, and are intended to enter into and constitute a part of Matthews vs. Poythress. the circulation of the country. The benefits of such a rule are well understood. The negotiability, and of course the availability of notes, as a medium of circulation, would be greatly limited if hindrances were thrown in the way of a good title. The Courts in England have been inclined to facilitate rather than impede the negotiability of such instruments. The doctrines of those Courts are liberal in favor of the title of the holder, as we shall see, and to my mind are well founded in commercial expediency. For one, I am not at all disposed to break down, but at the bidding of the Legislature, the wise and well considered rules of the Law Merchant. That it is occasionally necessary to accommodate them to our commercial and political system, and to the somewhat variant habits of our people, is admitted. But as a system, I question, whether, by frequent changes, we are likely to improve it. Nothing can be more desirable than permanency in those laws, which regulate the business of the country. And a rule which has the effect of destroying or restraining the circulating qualities of bills and notes, whether established by the Legislature or the Courts, is to be deprecated. At the same time, the rights of the loser of a note are to be protected, so far as they can be without violating general principles which long experience have proven to be salutary. Again, it is a well established rule of law, that if one of two innocent persons are to suffer loss, it shall fall upon him whose negligence, or credulity, or misplaced confidence has occasioned it. As to what shall be proven, in order to defeat the title of the holder of a note, which has been lost, or stolen, or otherwise put into circulation in fraud of the rights of the first owner, the English authorities, I am free to admit, are greatly in conflict. Notwithstanding, I do not hold it at all difficult to derive from those authorities the rule which must be obligatory upon this Court. The rule of the Common Law, which was established before, and in force at the time we adopted it, must control this tribunal, even if it was, as in this case it is not, adverse to our own views of what it ought to be. To state, then, our opinion of the history of this question: We believe, that at the date of our adopting statute, the Common Law was in accordance with the opinion of Judge Hill, that it subsequently was modified, in accordance with the first proposition of the plaintiff in error, and that at this time the old rule is of force. |