#### Jacob S. Isaacs, Appellant, *against*Lewis Jacobs, Respondent.

(Decided February 3d, 1890.)

In an action on a promissory note, oral evidence that the note was given at the time oí taking an assignment by the maker of an alleged claim, to the amount of the note, held by the payee against third parties, with the agreement that payment of the note should be enforced only out of the proceeds of such claim, if collected, is admissible; such evidence does not contradict or vary the terms of the note, but goes to show the contract under which it was made.

Appeal from a judgment of the General Term of the City-Court of New York affirming a judgment of that court entered upon a verdict rendered by direction of the court, and an order denying a motion for a new trial.

The facts are stated in the opinion.

*Adolph L.*Sanger, for appellant.

*Henry Grasse,*for respondent.

Larremore, Ch. J.

The amount claimed to be due by the complaint was admitted, and defendant relied on a counterclaim. It is founded upon a promissory note, made by-plaintiff to his own order, and by him indorsed to defendant. Upon the trial the plaintiff, while" admitting the making, indorsement, and delivery of the note, offered evidence to prove a contemporaneous understanding between the parties, to the effect that such note was given "at the time of the taking of an assignment by plaintiff, of an alleged claim for an amount equal to the face of said note, held by defendant against certain strangers to this action, with the agreement that payment of the note should be enforced only out of the proceeds of such claim, and that it should not be enforced at all unless plaintiff collected something out of such assigned claim. All *491evidence of this character was excluded by the trial judge one the ground that it tendedlo contradict or vary the note. We think this was clearly error, and the law upon the subject, as laid down by the Court of Appeals, is so explicit that extended discussion would be superfluous. *Bookstaver*v. *Jayne*(60 N. Y. 146) was a case closely analogous to the case at bar, in which the written instrument involved was, as here, a promissory note. In the opinion, at page 150, it is said that: “ An instrument not under seal may be delivered upon conditions, the observance of which, as between the parties, is essential to its validity; and the annexing of such conditions to the delivery is not an oral contradiction of the written obligation, though negotiable, as between the parties to it or others having notice *(Benton*v. Martin, 52 N. Y. 570, 574). While this parol evidence is not admissible to vary the effect of an undertaking, or merely to show that it was to be renewed, yet when the note does not contain the whole contract, and is made in pursuance of a contract, it is competent to show what the contract was and the purpose for which it was made” (See, also, *Juillard*v. *Chaffee,*92 N. Y. 529; *Reynolds*v. *Robinson,*110 N. Y. 654).

In the case at bar, the purpose of the excluded evidence was not to contradict or vary the terms of the note, but to prove that said note “ was made in pursuance of a contract and to show what the contract was.” Plaintiff was entitled to give evidence of the whole alleged contract, of which he claimed the note formed only a part, and for the error in entirely shutting him off from this line of defense, the judgment must be reversed and a new trial ordered, with costs to appellant to abide the event.

Bookstavjer and Bischoff, JJ., concurred.

Judgment reversed and new trial ordered, with costs to appellant to abide event.