Tomlinson v. Spencer

Bryan, J., delivered the opinion of the Court. Murray, C. J., concurred.

It appears from the record in this cause, that C. II. Stanton, claiming to be a secret copartner of Spencer, the appellant, in the transaction of business at Union—the business being conducted in the name of Spencer,—negotiated a promissory note for $500, drawn by him as Spencer’s authorized agent, in the name of Spencer ás maker, payable to himself, and endorsed to respondent, Tomlinson. The Court below finds that Stanton was a secret partner of Spencer in the mercantile business. That Spencer attended to the sales at Union, and that Stanton remained at San Francisco for the purpose of purchasing goods, with which to supply the trade at Union; and that the note in question was given for money borrowed of plaintiff, and that a large share of the money so borrowed, was actually paid out by said Stanton for merchandise, which was forwarded by him to Spencer, at Union, and was there sold for the benefit of said parties.

It is objected, that Stanton, who was introduced as a witness, after being released upon his endorsement by the plaintiff below, was incompetent to testify as to his copartnership with Spencer; and incompetent, for the purpose of establishing his authority, to bind Spencer by [293]the making of the note, upon the ground of his interest in the transaction.

The general rule as laid down in Chitty on Bills, p. 669, is thus stated: “ That it is no objection to the competency of a witness, that

he is also a party to the same bill, or note, unless he be directly interested in the event of the suit, and be called in support of such interest, or unless the verdict, to obtain which his testimony is offered, would be admissible evidence in his favor in another suit.”

In this State the rule has been much enlarged; and no person shall be excluded as a witness on account of interest in the event of the action or proceeding, unless he may be a party to the proceeding, or one for whose immediate benefit it is prosecuted or defended. Cal. Laws, 1851, pp 113 and 114. The endorser in this cause is not a party, nor does it appear that the action is prosecuted for his immediate benefit. From the necessities of commercial and business transactions, it has been found necessary to admit an agent to testify as to his authority in the performance of acts for his reputed principal. That the agent, as in this case, should subsequently appear, by his own testimony, to be a secret partner in business with the party for whom he acted, would make no difference in the application of the rule as to third persons. If it was intended as a partnership transaction, the remedy of Spencer is against his partner.