Burrell v. Bull.

Bull with the landlords. Burke had notice of Burrell's rights and claims before paying the purchase money.

Pine was discharged under the bankrupt law.

The bill claimed an account of the property and of the rents and profits from Burke, Bull and McKean, and payment of the value of Burrell's one-fourth of the refectory and its fitments, the good will of the concern, and the interest in the lease and renewal.

The answers of Bull and McKean denied the agreement to pay the arrears of rent, insisted that Burrell's interest was terminated by the sale under the distress warrants; and Bull alleged that there never was any valid or binding agreement for the renewal of the lease.

T. Hastings and Edward Sandford, for the complainant.

A. P. Man, for the defendant, Bull.

R. Lockwood, for H. S. McKean.

M. K. Burke, in person.

B. W. Bonney, for Waddell, the general assignee.

Messrs. Hastings and Sandford, for the complainants:

I. The testimony of J. H. Stewart, the husband of the complainant, L. M. Stewart, in the peculiar circumstances of this case, is competent for the purposes for which it was produced.

It can only be objected to on one or more of the following grounds: 1. Identity of interest between husband and wife; 2. A supposed conjugal bias; and 3. On the ground of public policy.

1. In this case there is no identity of interest whatever. The husband has no pretence of interest. The legal presumption of interest arising from the marriage, is fully rebutted by the marriage settlement and the testimony.

2. The objection on the gronnd of a supposed conjugal bias, goes to the credibility, and not to the competency.

Burrell v. Bull.

3. The question of public policy, as a reason for the rule of exclusion, is far more intricate.

(a) In some of the earlier English cases, the rule of exclusion is laid down very broadly, that neither a husband or wife can testify either for or against each other. (1 Phil. Ev. 81, 82; 4 Term Rep. 678.)

(b) Yet the rule of exclusion even in England, has been most essentially modified.

In a collateral suit between third parties, husband and wife may be called to contradict each other. (1 Phil. Ev. 79, 80.)

So the wife may testify against the husband, for an act of violence to her person.

On trial of the husband for a forcible marriage, the wife was admitted to prove a voluntary elopement. (McNally's Ev. 181; 2 Hawk. P. C. 46, § 76.)

In our own courts, see 1 Hill, 63; 2 Hill, 181.

(c) The rule deduced from the English cases is undoubtedly as laid down by Starkie. (2 Starkie's Ev. 399.)

"The husband and wife cannot be witnesses for each other, for their interests are identical; nor against each other, on the grounds of public policy, for fear of creating distrust and sowing dissensions between them, and occasioning perjury." (References to 2 Hawk. P. C. 46; 2 Hale, 279; 2 Str. 1095; Co. Litt. 6, 112, 187; 2 Vern. 79; Greenleaf's Buller, 286. See also 11 Mass. 288.)

By the rule thus laid down-which is the only rational oneStewart's interest being destroyed, he is admissible for his wife. He is not called against her.

(d) The rule is still further relaxed by American authorities. "Though the rule of exclusion may still exist to some purposes here, it ought very readily be made to yield to those cases which are exceptions to its application." (10 J. R. 37, 44.)

In the case of Barry v. Mercein, Chancellor Walworth says: "Whenever, therefore, the policy or necessity of admitting her, (the wife,) as a witness against the husband is sufficiently strong to overbalance the principles of public policy upon which the general rule of exclusion is based, she ought to be received as a witness, if she has no interest adverse to his." The Chancellor

Burrell v. Bull.

cites Monroe v. Twistleton, Norris's Peake App. 24; Swin. Just. Rep. 291; Syme's Just. Rep. 152.

The case of Fenner v. Lewis, (10 J. R. 37, 44,) already cited, treats the rule as one that must yield to circumstances. See also 11 Mass. 288.

In the case of Richardson v. Learned et al. (10 Pickering's Rep. 260, 269,) which was the case of an attachment suit by the wife and her trustee against their agent, the husband was sworn as a witness for the wife. Putnam, Justice, says: "The testimony of the husband was properly received. The recovery will not alter or affect his legal rights. It is altogether contingent whether the wife will make any appointment in his favor after the money shall have been recovered by the plaintiff, and without such new appointment the husband cannot touch the property."

(e) Stewart was the agent of the trust estate, and his testimony was therefore admissible on that ground. (1 Cowen & Hill, p. 96 to 98; 1 Hayw. 372, Curtis v. Ingham; 2 Vernon Rep. 289; Addison's Rep. 316, 319; 10 J. R. 37, 44; Strange, 527.)

II. The testimony of William Pine, objected to on the ground of interest, is competent; because,

1. He can derive no benefit from this suit whatever. Admitting that he has a claim against the defendants, Bull and McKean, it cannot in any way be drawn in question in this

case.

2. His interest, if he has any, is at least equally balanced. He made an absolute sale to Burrell, and his interest now lies in qualifying that sale, so as to leave as much as possible in the hands of Bull and McKean, who are alone responsible to him. He is in fact called against his interest. If he sustains any loss, it is by Bull and McKean, the mortgagees in possession, and not by complainant.

3. A decree in bankruptcy has passed against him, and all his interest is absolutely vested in the defendant Waddell, his assignee, who is a party to this suit.

4. Neither Pine, nor his assignee, can make any claim either under or against the complainants. If either of them has any claim it is of course subject to the right of the complainants to

Burrell v. Bull.

compensation for their one-fourth, and consists only in the right of redemption for the other three-fourths held by McKean and Bull.

III. The testimony of Burke, objected to on the ground of interest, is clearly competent.

1. He bought of Bull and McKean, and is therefore interested in maintaining their title adverse to complainants. He is called by complainants against his interest.

2. No decree can in this cause be made to promote his interest. If he should be made liable to complainants as the holder of the property with notice; still he bought the title of Bull and McKean, and he has his remedy over against them. But his testimony cannot form the basis of a decree for his benefit.

IV. When Bull and McKean made their respective loans to Pine, they knew that the complainants were the absolute owners of an undivided fourth of the lease for years then unexpired, and also of the fixtures and personal property on the premises; and that Pine, the owner of the other three-fourths, had covenanted in consideration of retaining one-eighth of the profitsthat is half of complainant's legitimate profits--to pay the whole of the accruing rent; which was a covenant running with the lease if not with the personalty, so far at least as parties and privies are concerned; and when they came into possession of the other three-fourths, as mortgagees in possession, they held subject to Pine's covenant to pay rent, &c., as they derived the advantage of the covenant, a release of one-eighth of the profits, and by suffering the complainant's title to be defeated by their negligence, while in possession, they are at least liable in equity for the amount received by them on their sale to Burke, especially as that amount was procured by taking advantage of their own wrong.

1. Suppose this property, prior to defendant's mortgages, had been seized and sold under a landlord's warrant, would not the complainants have been fully paid out of the surplus, before Pine could have received any thing?

2. As Bull and McKean took possession of their three-fourths under an express agreement with Pine, to protect complainant's interests, as testified to by Pine, they ought not to be permitted

Burrell v. Bull.

to gain an advantage which he could not have gained. The yielding of possession to them by Pine, was a good consideration for their agreement to him, especially as connected with the advantage of the enjoyment of one-half of complainant's profits as released by their covenant. Else it would work gross fraud upon him, and upon the complainants.

V. If the defendants, Bull and McKean, are to be regarded as absolute purchasers of their three-fourths; then, as they took under a full notice of complainant's rights under the covenant with Pine, without affording complainants any opportunity to object, either as to the making of the mortgages, or as to the surrender of the possession, they were equitably bound, even in the absence of the agreement, to provide for the accruing rent out of the fund provided by Pine for that purpose, to wit: one-eighth of the profits relinquished to him by the complainants, and his three-fourths. The defendants having by their neglect suffered the personalty to be sold in bad faith, and procured and disposed of the new lease for their exclusive advantage, they are equitably chargeable with the whole amount of the complainant's claim and reasonable interest, or profits.

VI. By their agreement at and about the time of the surrender, taking possession, as they did, under full notice of complainant's equities, the defendants, Bull and McKean, placed themselves in a relation to the complainants of a strictly fiduciary character. They will not, therefore, be permitted to advantage themselves by a breach of faith, and must account for at least that advantage, as well as for the consequences of their violated faith, even if the agreement itself should be deemed to be void under the statute of frauds. They have derived an advantage by violating a trust reposed in them by complainants, and if necessary to the ends of justice, they may be charged as trustees.

VII. But the agreement of Bull to pay rent, to reduce rent, and to procure a new lease for the joint benefit of himself, McKean, and the complainants, connected as it was with their several interests in the subject matter, and with the release to him by McKean of one-eighth of the entire three-fourths as a consideration therefor, was a legal and binding agreement upon