
    Rowland Ellis and another vs. Nicholas Bervellier.
    An indorser of a Bill of Exchange, whose interest is equally balanced, is a competent wiiness to prove a prior indorsement, claimed to have been forged.
    The interest is so balanced, where the recovery by the Plaintiff or Defendant will £ subject him to the suit of the one or the other, in an action where the recovery, by either, must be for the same amount.
    This is a Writ or Error directed to the Court of Common Pleas of Hamilton County.
    The' original action was trover, by Nicholas Bervellier, against the plaintiffs’ in error, Ellis & Vallette, to recover the value of a bill of exchange, which, it was alledged, belonged to Bervellier, and in which he recovered the sum of $668 damages, and the costs of suit.
    
      In Bank.
    Dec. Term, 1846.
    During the progress of the trial, a bill of exceptions was taken, from which it appears that the draft in controversy was dated at Metz, Nov. 3, 1841, drawn by Dorr & Brothers upon Rogers & Co., in New York, for $544, payable to the order of Bervellier at two days sight.
    The bill of exceptions further shows, that Ellis & Vallette are brokers, and purchased this draft, in the usual course of business, of one Jesse Justice. It was proved, that a Mr. Maltitz and the plaintiff below, Bervellier, as the witness believed, came to his father, Jesse Justice’s office; that Maltitz acted as interpreter for the plaintiff, who was a German, and proposed selling the draft in question to Jesse Justice. The latter said be had no correspondents in New York, but he would see if he could sell it for him; that his father, Jesse Justice, went out, and came back and told the parties that Ellis would take the draft and pay $200 down and the balance as soon as he could get advice of its payment in New York; that he had received the $200 of Ellis, and told Maltitz the plaintiff, Bervellier, must indorse the draft; that, after conversation between Maltitz and the said Bervellier, in a language which the witness could not understand, Maltitz signed Bervellier’s name on the draft, the plaintiff being then standing close by the said Maltitz. After the name was signed, Jesse Justice asked if it was all right, to which the plaintiff nodded assent, and the money was counted out to the plaintiff, but whether he or Maltitz took the money out of the office, he could not tell. He says Jesse Justice was not to charge any thing for his services in the business.
    The defendants below, now plaintiffs’ Jm error, then offered Jesse Justice as a witness to prove that he sold the draft in question to Ellis for the plaintiff, and at his request, and as his agent; that he did not and was not to charge any thing for his services, but merely did it as a friendly act.
    The introduction of Jesse Justice was objected to, because he had put his own name on the draft and was, therefore, liable' to Ellis as indorser. The witness was rejected by the Court, although Ellis & Vallette executed a release to Justice from all liability to them for costs incurred or to be incurred by the suit.
    The error assigned is, that the Court of Common Pleas erred an rejecting the testimony of the witness.
    
      Charles Fox, for Plaintiffs’ in Error.
    I maintain that Justice stood perfectly indifferent in this case. Having indorsed the draft to Ellis, he would, it is said, be liable to Ellis, on his indorsement, as a warrantor in case the suit went against him; but, if Bervellier lost the suit, he would have had the right to recover against Justice, so that the latter stood perfectly indifferent as to the result of the suit. He could neither gain nor lose by the event. The record, in this case, could not be used for or against Justice in a suit by Bervellier v. Justice; and there can be no doubt but what Bervellier could maintain a suit against Justice and against all parties who converted the draft, if he could maintain it against Ellis & Vallette — so that, according to my apprehension, Justice stood perfectly indifferent, as to interest, and this, I take it, is the test as to the competency of a witness. The case of Canal Bank v. Bank of Albany, 1 Hill’s Rep. 289, cited by Messrs. Brough & Zinn, establishes the principle for which I contend.
    As to the liability of Justice, as an indorser merely, the Court perceive Justice is not even liable at all in that capacity, because the bill was paid. He could only be made liable indirectly, by a protest and notice. The only interest, therefore, which he could possibly have in the matter, is on account of the implied warranty of title.
    In 9 Pick. Rep. 182, it is held, a party is not incompetent on the ground of his liability as a warrantor, if he would be liable to others, to the same extent, notwithstanding the result of the suit.
    
      In 5 Pick. Rep. 447, in an action against an- attorney for money collected, the debtor was admitted as a witness to prove he had paid the debt to defendant, because he was liable to the plaintiff whether he succeeded in that suit or not.
    In the case of Larbalestier v. Clark, 1 B. Adol. 899; 20 Com. Law. Rep. 899, a witness, who had sold the wine to the defendant, was excluded on the supposed ground of his liability as warrantor, but afterwards a new trial was granted because of the error of the Court in excluding the witness. The argument was, that, if the plaintiff recovered, the witness would be liable to pay not only the value of the goods, but, also, the cost of the action; but the Court said, he would not be liable for costs unless he had been guilty of fraud, and they say such has been the law since Jones v. Brooke, 4 Taunton Rep. 460 ; cited, also, in Greenleaf’s Ev. note to 444.
    Now, the Court will perceive the reason why a warrantor, like a surety, is rendered incompetent, is because he is liable, not only to the value of the article sold, but, also, to the costs of the suit. Hence, if this liability is removed by a release for the costs, he stands perfectly indifferent; for he is as much liable to the real owner as he is to the person to whom he has. warranted, and where the interest is balanced, the witness is competent. Greenleaf s Ev. 445, sec. 399.
    Where the witness was liable for costs, but said he was indemnified for the costs and considered he had ample security, he was held competent; so where he has funds to indemnify him. Greenleaf’s Ev. sec. 420; 7 Cow. Rep. 358.
    Now, in this case, all right to recover any costs for which ■ Justice could bo liable in this case, was released by Ellis & Yallette, so that he was as much liable to the plaintiff as to the defendants, and the witness stood as liable to one party as to’ the other, and was, therefore, disinterested.
    In Cutter v. Rathbun, 3 Hill, 577, a person had bought goods, representing himself to be the agent for Bonnet, and made a noté in Bennet’s name without authority. In an action of replevin for the goods, Bennet was held a competent witness. to show he gave no authority, because the record could not be «sed by him as a bar, or used in a suit against the witness on the note.
    So, in 4 Taunton, 18, a witness was held competent to prove that he received the property from the plaintiff, as security for money due, and that, according to an agreement with the. plaintiff, he sold the property to the defendant, because the verdict could not be used for or against him. This is a case directly in point. 4 Barn. & Aid. 410.
    So, in this case, Justice was a mere agent for the plaintiff. He sold the bill for the plaintiff, and as his agent, without any compensation, or expectation of any; and the plaintiff confirmed the sale by receiving the money, or part of it. This was the fact offered to be proved.
    The Court also erred in supposing Justice was liable as indorser. There was not, and could not be any liability as indorser, because the draft was paid. The liability as indorser, •originally, was contingent, depending on the fact whether the draft was paid. In this case the draft was paid, and this was the ground of the action, that Ellis & Valleite had obtained the money for the draft, which was the conversion complained of. He could not be liable as indorser, because to be liable in that capacity the draft must have been protested, and he notified of the fact.
    But even admitting that Justice was liable on the draft, and this had been an action , on the draft by the holder, and there had been affirmative proof that he had been made liable by notice, still, I maintain, the mere fact of his being liable as indorser would not have prevented him from being a competent witness. This doctrine is now well settled, both in England and America. This doctrine is reviewed and settled, in The Farmers’ and Mechanics’ Bank of Michigan v. Griffith, 5 Hill, 476. The Court say: “ Perhaps it might be doubted 1 whether the witness ought to be excluded, even if his liability * as indorser had been shown, for, by fixing the debt upon the * defendant, he does not discharge himself. If he is liable, the 
      ‘ plaintiff may prosecute him, as well as the defendant, and £ prefer to take execution against him; or the maker may be £ insolvent, so that his interest would be contingent.” 5 Wendell, 181; 19 Com. Law Rep.- 256; 3 Hill, 577.
    Again : Is it certain that an indorser of a draft does, in fact, warrant all the previous indorsements not to be forgeries ? I know it is held that the indorser does, in fact, guaranty the bill shall be paid by the acceptor. But is there any guaranty operating after the bill is, in fact, paid ? I know it is in general laid down, in the elementary books, that the indorser guaranties the genuineness of the previous indorsements; and yet, I believe, this question is not so well settled as is sometimes supposed. On the contrary, in the East India Co. v. Tritton, 3 Barn. & Cress. 280; 10 Com. Law Rep. 82, the Court held that an indorser does not warrant the genuineness of the previous indorsements; and, in this case, they decided there could be no recovery, by the acceptor, against the party who had indorsed the bills and received the money, as they only acted as agents of their principal, although their name was, in fact, on the back of the bill. The bills had been paid in that, as in the present case. If this decision is a correct exposition of the law, there could be no recovery at all against Justice, by Ellis & Yallette, and of course he was a competent witness.
    
      Brough Zinn, for Defendant in Error.
    In the language of the bill of exceptions, the witness was offered to prove ££ that he sold the bill in question to the de- £ fendant Ellis, for the plaintiff, and at his request, and as his £ agent.” We submit that he was clearly incompetent' for this purpose; for that,
    First: The indorsement of the witness being unconditional — the fact of agency no where appearing upon the paper— and there being no ambiguity, parol testimony is inadmissible to vary the legal import of the instrument. Stackpole v. Arnold, 11 Mass. Rep. 27; Shmkland v. Corporation of 
      
      Washington, 5 Peters’ Rep. 390, 394; Stone v. Vance et al., 6 Ohio Rep. 246.
    Second: That a party to a negotiable instrument, though he may be called to prove facts subsequent to the indorsement, and which destroys the title of the holder, is not competent to prove any circumstance preceding or concurrent with the indorsement, in order to work such a result. Stone v. Vance et al., 6 Ohio Rep. 246.
    Third : That the witness was incompetent from interest.
    He is an unconditional indorser of a bill of exchange; and, therefore, a new drawer — a warrantor of title in himself, and impliedly so of the genuineness of all preceding indorsements. Chitty on Bills, 636; Story on same, 247, sec. 225.
    It is scarcely necessary to multiply authorities to a point so well settled, and to shake which the counsel for plaintiff has cited but a single case, The East India Co. v. Tritton, 3 Barn. & Cress. 280; 10 E. C. L. Rep. 82. And this case, the Court will observe, is widely different from the one at bar. It was an action of assumpsit, by the acceptors, to recover of the party to whom money was paid, upon the ground that the indorsement to the payee was not regularly made. That indorsement had been made by virtue of a power of attorney, which was subse quently adjudged insufficient for the purpose. In deciding a case where money was paid under a mistake of law, a doubt is expressed as to the liability of preceding indorsers, and nothing more. This will scarcely suffice to unsettle the general principle, which the plaintiffs’ counsel admits runs through all the elementary books.
    It is claimed, however, that if such liability exists, it is terminated by the payment of the bill, and that such payment, in this case, has been made. It is true that Rogers & Co. paid the bill, and to that extent, as between Justice and Ellis & Vallette, the undertaking of the former is performed. But his warranty of title, and of the genuineness of Bervellier’s indorsement, is not thereby released. The counsel for plaintiff appears to overlook the fact, that the bill has been paid on a forged indorsement; that it is therefore not a legal payment] and that, instead of releasing the indorser upon his implied warranty; it - is the very thing that goes to fix it upon him." The books hold but ■ one language on this, subject; Chitty oh Bills, 286, and cases cited ; 32 E. C. Law Rep. 94'; 1 Hill, 287,'
    If the' principle for which counsel contends be true, as between Ellis & Vallette, it is equally so between the latter and Bervellier; and, in that event, the plaintiff below had no right to maintain his action against the defendants. The argument-requires only,to be-stated to demonstrate its absurdity. . ■
    If, then,. the witness was.liable to the defendants below, in the event of á recovery against them, was he incompétent, from ■ interest, to testify in their behalf? • , . 1
    We adopt the general, and well settled principle, that the-true .test of- the interest of the witness is, that he will either lose or gain by the direct legal operation or effect of the judgment', or that the same will-be legal evidence for or against him in any other action. 1 .Greenleaf’s Ev. 434, and cases cited; 5 Ohio Rép. 283.' ' ' ' . ' ,
    It is not proposed to review at. length the cases, cited by plaintiffs’ counsel. They are all .cases in' contract; and this being an action of tort, they are not applicable to it. .In this case the witness occupies a very different position from any that is put in the authorities quoted — one that excludes him, as well from interest as upon.sound principles of legal policy.
    The' servant is not a witness for his master, in a case for damages caused by the negligence or misconduct of the former. 4 Mass. Rep. 349; 12 Ibid, 163. ( ■
    The pilot cannot be called for the captain, who is sued for-running down a vessel. 3 Car. & Payne, 305. -
    The guard of a coach is incompetent, in a like charge, against the proprietors. 4 Car. & Payne, 383.
    A broker cannot be called by his principal, in an action for misconduct, in the purchase of goods made through the broker;
    6 Esp. 71 ¿- -See, also, the general rule, and cases cited in- 1 Greenleaf’s Ev, 439, sec. 394,
    
      ,The action here proceeds:upon the ground,'that defendants below committed a tort to the plaintiff. They reply not guilty, If they be guilty, Justice is liable to them,;, and the record in this case, if it went no farther, would be, evidence io' fix the amount of that liability, and for that reason,- by the .whole current of authority, he is excluded.
    But further: The liability of Justice to Ellis & Vallette is to be determined by a recovery against them in this action, and that rests upon the fact, whether the' signature, of the .'plaintiff below, which Justice has impliedly, warranted, is forged or. genuine. If the former, his liability is fixed; if the-latter, it is removed: and, to determine this point, he is called as a witness. ' • ' . ' .
    . In Herrick v, Whitney, 15 Johns..Rep; 244, the payee of a promissory note was held incompetent in an action against the maker, although he had transferred it without recourse, and' for the reason’,- as the Conrt'say, that he wás liable upon his warranty'that the note was not forged. '“.He has-.a’direct interest in .establishing the fact which he is called to prove.” '5 Wend. Rep. 184; 6 Cow. Rep. 471.; .Ibid.,484; 16'Johns. Rep. 201; and 3 Cow. Rep. 252, are cited. •
    Equally so has-Justice a “direct interest--” in this case to prove that the signature of Bervellier is genuine, pr.attached in such manner as to be binding upon him.
    It is claimed, however, that the witness being released, as to costs, has' a balanced interest; that he stands perfectly indifferent between the parties, which,- if it is the fact,-renders him .competent, and the plaintiffs’ counsel goes into an'elaborate examination of authorities to sustain this position. The gen eral principle is not controverted, but the assumption that the witness is within it, is denied. “ Justice having indorsed the • c draft to Ellis,” says the counsel for plaintiffs, “would, it is' ‘ said, be liable to Ellis on his indorsement as a warrantor; but 1 if Bervellier lost the suit, he would have the right to recover ‘ against Justice.” Not so. If Bervellier recover against 'Ellis and Vallette, he may, aliso, have his action and recover against Justice; but he can have but one satisfaction. But if he fail in this action, his right to recover of Justice fails with it.
    The action is trover, and the defendants below put in issue the title of the plaintiff to the bill of exchange, claiming that he was legally divested of it, and that it was in themselves. A verdict for the defendant, upon the pleadings and the testimony, must find this fact if it find any thing. It must find that the indorsement of Bervellier, if not made by himself, was put there in his presence, and with his knowledge and consent, in such a manner as legally to pass his title, to the property; for this is the fact in issue.
    What then would be the effect of the record in this case, in a subsequent action by Bervellier against Justice, as a prior indorser of the same bill ? Would it not, either pleaded or offered in evidence, effectually estop the plaintiff?
    “ If the title to the property was set up by the defendant in ‘ the first action, and it was found for him, it is clearly a bar to c a second action for the same chattel, even though brought ‘ against one not a party to the former suit, but an accomplice c in the original undertaking.” 1 Greenleaf’s Ev. 571, sec. 533, and cases cited.
    “ It is not necessary t.o the conclusiveness of the former ‘ judgment, that issue should have been taken upon the precise ‘ point which is controverted in the second trial; it is sufficient ‘ if that point was essential to the finding of the former verdict.” 1 Greenleaf’s Ev. 572, sec. 534; See, also, same authority, page 568, note 1, and authorities cited.
   Birchard, J.

Our first inquiry is, was the interest of Jesse Justice such as to render him an incompetent witness for the plaintiff? To solve this, it is necessary to consider whether he could derive any advantage from a determination of the suit in favor of Ellis & Vallette. As he was an indorser.of the obligation to them, the most that can be claimed on behalf of defendant is, that he might be made liable in the event of a recovery against Ellis & Vallette, for the amount of the bill of exchange, and for no more. The release which was executed and delivered to him, would exhonerate and discharge him from any claim for costs by the plaintiff in error.

How stands the interest in the event of a recovery by them ? If Jhe position assumed on behalf of Bervellier be correct, (and he was not at liberty to deny its correctness,) his failure to recover of Ellis & Vallette would not defeat his right to recover the amount of the bill against Justice. He was the indorser, had negotiated the paper, and if the name of Bervellier was a forgery, the act of Justice was an unlawful conversion, for which trover against him could be maintained, and the recovery would still be the amount of the bill. This state of the case so placed him, that he could neither gain or lose by the event of the suit, and shows that his interest was equally balanced, and that he ought to have been permitted to testify, unless there shall be found some other obstacle. What, then, are the remaining reasons offered to sustain the ruling of the Court of Common Pleas ? The first, in point of importance, is, that the indorsement by Justice being, on its face, unconditional and unambiguous, parol evidence is inadmissible to vary or contradict -the legal import of the instrument. In answer to this, it is sufficient to say that his testimony was not offered to vary or alter the effect of his indorsement. The object was not to change the contract made and supposed to subsist between him and Ellis & Vallette. A like answer may be given to another position, which counsel insist upon, that he could not give evidence to destroy the title of the holder, by proving facts or circumstances preceding or concurrent with the indorsement. We reply, that he was not offered to establish a fact inconsistent with his indorsement, and which tended to destroy its force. On the contrary, the evidence sought from him was perfectly consistent with and tended to sustain it.

Another argument is, that in a suit by Bervellier against the witness, the record in this case, showing a recovery against Bervellier, would be a bar. It would be strange, indeed, if one having á good cause of action in trover against A, should lose it entirely by attempting and failing .to recovér of B, against whom he had no right of action. The only authority cited' in support of this singular doctrine, is from Greenleaf’s Evidence, which., is misapplied, and by no, means 'sustains it,-as. will be seen by recurring to and carefully examining the reported cases referred to by- that author. • ,

Judgment reversed and cause-remanded.  