Covode v. Farmers' Bank

1 Ohio St. (N.S.) 206
CourtOhio Supreme Court
DecidedJanuary 15, 1853
StatusPublished

This text of 1 Ohio St. (N.S.) 206 (Covode v. Farmers' Bank) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Covode v. Farmers' Bank, 1 Ohio St. (N.S.) 206 (Ohio 1853).

Opinion

Bartley, J.

Several questions are presented by the assignment of errors; but it will be sufficient to notice the following:

1. Were Brooks and Dellenbough,” competent witnesses for the plaintiff, on the trial in the court below ?

2. Did the court err, in the charge to the jury, as to the sufficiency of the notice of the dishonor of the bill?

The first question involves the constructio'n to be given to the third section of the statute of March, 1850, to improve *the law of evidence, which provides that “ no person offered as a witness shall be excluded by reason of his or her interest in the event of the action; but this section shall not apply to a party to the [181]*181action, nor to any party for whose immediate benefit such action is prosecuted or defended,” etc.

This statute, being remedial in its nature, is entitled to a liberal construction. The tendency of legislation has been of late to throw wide open the door for the admission of testimony, and, in the administration of justice, to repose rather upon objections to the credibility, than to the competency of witnesses.

A stockholder in a private corporation is interested in the event of any suit to which the company is a party. His interest is not immediate or direct, yet it is that legal interest which would render him incompetent as a witness on behalf of the corporation, without the provision of the statute above mentioned. The interest of a stockholder, in the absence of any special liability, is not increased by his becoming director. The directors of a corporation are simply agents in directing the management of its business, and this agency does not render their personal interest any more immediate or direct than that of other stockholders, when not coupled with a special individual liability of the directors for the debts of the corporation. So far, therefore, as the testimony of these witnesses was objectionable on the ground of interest, the objection went to their credibility, and not to their competency.

Were these witnesses, then, incompetent on the ground of being parties to the action, or parties for whose immediate benefit the action was prosecuted? A party to the action is a person whose name appears upon the record in the case, either as party plaintiff, or defendant. They were not, therefore, actual parties to the action ; but were they parties for whose’ immediate benefit the action was prosecuted ? The statutory exception of “ any party for whose immediate benefit such action is prosecuted or defended,” has an evident reference to that class of cases where the real party, not named upon the record, prosecutes or defends through the medium *of a mere nominal party in the action. The requisite qualification to bring a person within the exception is, that ho be not simply interested in the event of the suit, but the object of immediate consideration in the suit, or the real beneficiary for whom the suit is prosecuted or defended. To constitute this, the interest of such person in the suit must be direct and immediate, and not contingent, indirect, or remote. A stockholder, and the corporation •of which he is a member, are separate and distinct persons in law, and their interests are always distinct, and sometimes adverse. A [182]*182person may either sue, or be sued by a corporation of which he is a member. A judgment against the Bank of Salem would reach the property of the corporation, but could not bind the separate property of the stockholder, in his individual capacity. And a judgment in favor of the bank would not inure to the immediate benefit of any of the stockholders, but their interest in such judgment would be indirect and depend on contingencies. The immediate benefit contemplated by the statute to create the ineompetency, is an interest or advantage resulting to him personally, as the immediate and necessary consequence of the judgment itself, and not such as might reach him indirectly, through the medium of another person, and dependent upon a contingency.

The statute of Ohio above referred to is very similar to Lord Den-man’s act, 6 & 7 Yict. c. 85, so far as it relates to the interest' of witnesses and the incompetency of parties. And the language of the exception in the English act is “for whose immediate and individual benefit,” instead of “for whose immediate benefit ” the suit is-prosecuted or defended. Numerous decisions have been made in England, giving a construction to this act similar to that which we-have here given to the Ohio statute. In the case of Black v. Jones, 3 Eng. L. and Eq. 559, it was decided that a creditor for whose benefit an assignment has been made to a trustee by the debtor, is-a competent witness for the trustee in an action brought by him against an execution creditor of the debtor, who had levied upon the goods, when the very ^question was as to the validity of the deed. Also, in the case of Harding v. Hodgkinson, 4 Eng. L. & Eq. 462, it was held that a person entitled to a share in the proceeds of land devised to another, in trust for sale, is a competent witness in an action brought by the latter to establish his right to the land for the purpose aforesaid.

The court of exchequer in England is reported as saying that “ the test whether a witness is a person in whose immediate and individual behalf an action is brought or defended, either wholly or in part, is, whether his declarations would be admissible against the party on whose behalf he is called to give evidence.”

In the case before us a majority of the court hold that the court of common.pleas did not err in their ruling on the subject of the admissibility of the testimony in question.

Touching the second question, then, did the court of common pleas err in charging the jury, that, if the notice to the indorsers [183]*183of the demand and non-payment of the b'ill was deposited in the post-office at Pittsburgh, at any time during the day after the day of dishonor, without regard to the time of the departure of the mail for that day, it would be sufficient notice; and, moreover, that if it was found inconvenient to deposit the notice in the post-office in time for the mail of that day, it was in proper time -if the notice •faas deposited in time to be sent off by the next mail of the day next after tho day following the day of the dishonor of the bill?

This involves a very important question of the law merchant,, and it is not a little surprising t.hat there should remain any doubt or uncertainty, at this late day, upon a question of such vital importance to the interest of commercial countries respecting the duties and liabilities of holders and parties to dishonored paper. And it is a matter of no small moment, that a question which enters so largely as does this into the every-day business transactions of different commercial states and countries, should be settled, not only upon a certain and unvarying, but also upon a uniform basis.

*The liability of the indorser is strictly conditional—dependent both upon due demand of payment upon the maker or acceptor, and also due and legal notice of the non-payment. The purpose and object of such demand and notice is to enable the indorser to look to his own interest, and take immediate measures for his indemnity. The demand and notice being conditions precedent to the indorser’s liability, it is incumbent on the holder to make clear and satisfactory proof of them before he can recover.

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Cite This Page — Counsel Stack

Bluebook (online)
1 Ohio St. (N.S.) 206, Counsel Stack Legal Research, https://law.counselstack.com/opinion/covode-v-farmers-bank-ohio-1853.