#### Jacob S. Isaacs, App’lt, *v.*Lewis Jacobs, Resp’t.1

*(New York Common Pleas, General Term,*

*Filed February 3, 1890.)*

Evidence—Admissible to show contract or condition on which note IN SUIT WAS GIVEN,

In an action on a promissory note evidence is admissible to show that it was given in exchange for an assignment of a claim against a third person and in pursuance of an agreement that it should be enforced only out of the proceeds of such claim. Such evidence does not contradict or vary the terms of the note, but proves the whole contract of which the note is only a part.

Appeal from judgment of the general term of the city court of New York, affirming judgment entered on verdict in favor of defendant.

*Adolph L.*Sanger, for app’lt; *Henry*Grasse, for resp’t.

1

 Reversing 26 N. Y. State Rep., 96.

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 endorsed to defendant. Upon the trial, the plaintiff, while admitting the making, endorsement 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 evidence of this character was excluded by the trial judge *146on the ground that it tended to 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 vitality; 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 paroi 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 *Juilliard*v. Chaffee, 92 N. Y., *529; Reynolds*v. *Robinson,*110 id., 654; 18 N. Y. State Rep., 235.

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.

Bookstaver and Bischoff, JJ., concur.