Steele v. Phoenix Ins. Co.

• Citation: 3 Binn. 306
• Parties: WILLIAM and JAMES STEELE v. the PHœ NIX INSURANCE COMPANY.
• Decision Date: 05 January 1811
• Court: United States State Supreme Court of Pennsylvania

3 Binn. 306

WILLIAM and JAMES STEELE v. the PHœ NIX INSURANCE COMPANY.

Supreme Court of Pennsylvania.

January 5, 1811

A plaintiff who after the commencement of the suit, has made a voluntary assignment of all his property to creditors, and has also executed a release to the assignees, of all his interest in the money which may be recovered in the action is a competent witness in the cause, provided all the costs are paid before he is sworn.

THIS cause came before the court upon a point reserved by his honour Judge Brackenridge at the trial in October last.

It was an action upon a policy of insurance to recover a total loss which the defendants resisted upon the ground of concealment. The cause was first tried before the Chief Justice, where a verdict was found for the plaintiffs, which was afterwards set aside as being against the weight of evidence. Upon the second trial, the plaintiffs' counsel shewed to the court that the suit was brought to March term 1805; that on the third of June following, the plaintiffs assigned all their property to assignees for the benefit of creditors, from whom they received a release in November 1805; and that on the morning of the trial a paper had been filed in court, declaring that the suit was for the use of the assignees, by whom, all the costs including the whole costs of trial, were then paid. They produced also a release from both the plaintiffs to the surviving assignees, dated the day of the trial, of all money to be recovered on the policy in question, for the use and benefit of the creditors mentioned in the assignment of the 3d June 1805; and they then offered William Steele, one of the plaintiffs, as a witness in the cause.

The witness was objected to; but Judge Brackenridge admitted him, reserving the point for consideration in bank.

Levy and Ingersoll for the plaintiffs. There is no difficulty in the case, unless the court will now overrule a series of decisions. In Calhoun v. The Insurance Company of Pennsylvania, the plaintiff, having no interest, and the costs being paid, was admitted as a witness by the late Judge Smith, who said it had frequently been done. In Kerr for the use of Taylor et al. v. Hawthorn Taylor, who was merely a trustee, was admitted, the costs being paid. In Vansant v. Boileau FNa the only objection to the admission of an executor, who was plaintiff in a feigned issue, was his liability for costs. And in M'Ewen v. Gibbs, ^[a] which is in point, it appearing that the assignees of the plaintiff carried on the suit, and had entered into security for costs, and that the plaintiff was a certificated bankrupt, the court upon the authority of a former decision, directed him to be sworn. Upon what principle can a plaintiff circumstanced like William Steele, be held incompetent? The most general, and by far the most reasonable objection to competency, arises from interest. He had no interest whatever in the suit. He could neither gain nor lose. The benefit of the verdict was transferred to his assignees by the general assignment, recently confirmed, and extended to any possible surplus by this release; and the penalty of his failure in the cause, the payment of costs, was removed by the unconditional payment of them before he was sworn. In what respect does the case differ from a suit by a nominal plaintiff, for instance, the assignor of a chose in action, who is a mere name on the record, whom the court will not suffer to discontinue, M'Cullum v. Cox, ^[b] and who has been uniformly admitted upon the payment of costs. In fact it is his case precisely; and the court seeing who the real party in interest was, would have gone so far as to compel the assignees by attachment to pay the costs, in case of necessity. Is it contended that he was interested at the commencement of the suit, and that no subsequent event should restore his competency? What is more common than for persons to release an obvious interest at the very moment they are going to be sworn? Nay further, if a release be tendered, though it be not accepted, the witness is competent. Peake's Ev. 166. It is of no importance what his interest has been, if it be removed before he gives evidence. Can a distinction be taken between the effect of a voluntary assignment like this, and an assignment by a bankrupt? For there is no doubt that in England, as well as in this state, a certificated bankrupt, who has released his interest in the surplus of his estate, is a good witness. Butler v. Cooke. ^[c] As to this point there can be no difference. The principle is the removal of interest, which is done with the same effect by either kind of assignment. Is there any rule of law then, which precludes a plaintiff from being a witness, merely because he is plaintiff? No such rule can be shewn. It is negatived by a decision in our own state; M'Ewen v. Gibbs. Peake states it only as a general rule, Peake's Ev. 157. And inasmuch as there can be no doubt that the real party in interest might, if there were a court of equity, inforce his equitable right against the defendant, without introducing the name of the legal plaintiff, in which case he certainly might have the testimony of the latter, it would be a severe rule upon equitable plaintiffs, if the necessary introduction of a name should deprive them of important testimony. In fact, no objection can be urged against the admission of such a witness, except what is founded upon suggestions of possible fraud, perjury, colourable assignments and the like, which either go to the credit of the witness when sworn, or suppose a very different case from the present. If there is fraud, there must be a remaining interest. If there is a temptation to commit perjury, the witness must be observed closely by the jury. If the assignment is fictitious, the witness is still the real plaintiff. All these are solid objections in particular cases; but they have never been made the foundation of such a general rule as will exclude a plaintiff, who has honestly parted with all his interest by a general assignment in satisfaction of his debts, and is clear of liability to costs when he comes to the book.

Rawle contrà. What has passed at Nisi Prius, or has been ruled without argument and consideration, should have but little weight. Very dangerous innovations in the law of evidence, have been made in Pennsylvania since the revolution. No other country regulated by the same code, has gone as far; and if this court cannot overthrow past decisions, still, if they trench too deeply upon the fundamental rules of evidence, at least the court may limit their application and authority to cases of precisely the same kind. There has never yet been an instance in which a plaintiff who has made a voluntary assignment after action brought, has been permitted to give evidence in the cause and this is sufficient to open the case for the application of general principles. The point has probably never occurred before; perhaps because under such circumstances a plaintiff has never before been offered to testify; and the inevitable tendency to injustice which such an admission has, is quite sufficient to justify the court in excluding the plaintiff in the suit, under all circumstances whatever. The system of evidence adopted by the common law, is an admirable body of rules, all of which are calculated, in the first place to aid in attaining the truth, by making a most judicious selection of the channels through which it shall be sought, and in the next place to preserve the peace and integrity of society, by excluding either the witness or the evidence in cases where its admission would be followed by a sacrifice of those important interests. The law of evidence cannot be justly estimated without contemplating it under both of these aspects. Under both, the influence of principles of public policy may be distinctly recognised in a variety of what at first may strike as artificial rules, without any better authority than precedent, but which upon close examination appear to be deeply laid in a knowledge of mankind, and in a regard for the great interests of the community. Hence an attorney cannot disclose the communications of his client. Husband and wife cannot testify either for or against each other. A mother cannot bastardize her issue by proving non-access of her husband. Peake 183. A man who apprehends himself to be interested, cannot, whatever may be the fact, be heard as a witness. M'Veaugh v. Goods. ^[a] One who lays a wager to disqualify himself, shall still be competent. And a party to negotiable paper shall not be heard to impeach it. Coleman v. Wise ^[b] , Allen v. Holkins ^[c] , Churchill v. Suter ^[d] , Baring v. Shippen ^[e]. These are all cases in which the principle of interest does not shew itself; but on the contrary a motive of policy to prevent those sacrifices of professional honour, of domestic peace, and of truth, which most generally would follow from permitting such parties to testify, or such testimony to be given. It is no answer to say, that when the court discover the fraud, they may reject the witness. The difficulty of detecting the fraud, or rather the universal tendency to fraud which the practice of admitting the witness has, is a foundation for a general rule of exclusion. What principle of public policy applies to any of these cases, which does not apply to the case of a plaintiff like the present? He institutes the action with a strong sense of his personal interest in it; he finds in the progress of the cause, perhaps upon the first trial, where is the pinch, and voluntarily transfers his interest to a third person, under some covert agreement which certainly a court of law cannot detect, in order to meet the difficulty. This is not only possible, but bad men will often do it,...