Case Name: The Jamestown Business College Association, Limited, Appellant, v. Elva J. Allen, Respondent
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1902-10-21
Citations: 172 N.Y. 291
Docket Number: 
Parties: The Jamestown Business College Association, Limited, Appellant, v. Elva J. Allen, Respondent.
Judges: 
Reporter: New York Reports
Volume: 172
Pages: 291–304

Head Matter:
The Jamestown Business College Association, Limited, Appellant, v. Elva J. Allen, Respondent.
Evidence — Parol Evidence Inadmissible to Show that Note, Absolutely Delivered at Date Thereof, Was Not to Be Paid upon the Happening of a Subsequent Contingency. A promissory-note for a fixed sum, payable at a certain time and place, and actually delivered to the payee at the date thereof, although accompanied by a contract in writing showing that the note was given for a scholarship in a business college, the course of study to be entered upon by the maker of the note at or about the time the note became due, such scholarship to he transferable after payment therefor had been made and acknowledged, cannot be contradicted by parol evidence that the note was not to he paid if the maker should decide not to take instructions at the school and could not sell her scholarship, in which event the note was to be canceled and the maker released from the payment thereof, since the delivery of the note was not a conditional delivery, not to become complete and effective until the happening of some condition precedent, hut was an absolute delivery, which cannot he defeated by the happening of any subsequent contingency.
Jamestown Business College Assn. v. Allen, 59 App. Div. 627, reversed.
(Argued May 29, 1902;
decided October 21, 1902.)
Appeal from a judgment of the Appellate Division of the Supreme Oourt in the fourth judicial department, entered April 1,1901, affirming a judgment in favor of defendant entered upon a verdict and an order denying a motion for a new trial.
The action is upon a promissory note in the following form:
“ $90.00
Jamestown, N. Y., Aug. 17,1897.
“ August 1, 1898, after date, I promise to pay to the order of Jamestown Business College Ass’n. Ltd., Ninety dollars at the Jamestown National Bank. Value received.
“ELVA J. ALLEN.”
Contemporaneously with the execution and delivery of this note there was executed the following paper:
“ Single Scholarship.
“Jamestown Business College Association, Limited.
“ LI. E. V. Porter, President.
“ No.- .
“ Jamestown, N. Y., Aug. 17, 1897.
“ $90.00
“ I, Elva J. Allen, of P. O. Box 186, Cattaraugus, N. Y., have this day purchased a Two years Scholarship in Business Shorthand and English Department of Jamestown Business College, Jamestown, N. Y., for the sum of $ Ninety to be used by myself, who will enter upon the course of study about August 1, 1898, for which we, or either of us, promise to pay to the order of Jamestown Business College Association, Limited, $ Ninety as follows :
“ August 1, 1898.
“Name, ELVA J. ALLEN.
“ Witness, Julia Byrne.
“ Scholarship transferable upon the following conditions:
“ 1st. The above contract shall be paid in full and certified by the Treasurer.
“ 2nd. In case--has received instruction in his Scholarship it is understood and agreed that he shall pay for such time at the regular advertised rates of tuition, whereupon the party to whom this may have been transferred shall be entitled to instruction according to the terms of this agreement.
“H. E. V. PORTER,
“ President.”
This paper was made out in duplicate. One copy was kept by the defendant and the other, signed by her, was delivered to the agent of the plaintiff. When the note became due it was not paid. The complaint is in the usual form in actions upon promissory notes. The answer admits the making of the note, alleges want of consideration, and sets up an agreement by the terms of which the defendant was to be released from the payment of said note if she did not take any instructions at plaintiff’s school. Further facts appear in the opinion.
Alfred L. Furlow for appellant.
The attempt on the part of the defendant to vary and contradict the terms of a written instrument by parol evidence was squarely incompetent. (Gridley v. Dole, 4 N. Y. 486; Crater v. Bininger, 45 N. Y. 545; Irwin v. Saunders, 1 Cow. 249 ; Fitzhugh v. Runyan, 8 Johns. 375; Wills v. Baldwin, 18 Johns. 45 ; Frost v. Everett, 5 Cow. 497; Eaves v. Henderson, 17 Wend. 190; Lewis v. Jones, 7 Bosw. 366; Burhans v. Carter, 13 Hun, 153; Willse v. Whitaker, 22 Hun, 242.)
George J. Dikeman for respondent.
The note in question was delivered by the defendant to plaintiff’s agent upon the express condition that; if the defendant did not attend the school of the plaintiff or could not sell the scholarship, the plaintiff would surrender the note and defendant would not be liable thereupon. (Benton v. Martin, 52 N. Y. 570 ; Juilliard v. Chaffee, 92 N. Y. 529; Bookstaver v. Jayne, 60 N. Y. 146; G. N. Bank v. Colwell, 57 Hun, 169; Reynolds v. Robinson, 110 N. Y. 654; Persons v. Hawkins, 41 App. Div. 171; Higgins v. Ridgway, 153 N. Y. 130.) There was an utter lack of consideration for the note in suit. (McCrea v. Purmort, 16 Wend. 460; Wheeler v. Billings, 38 N. Y. 263; Arnot v. E. R. R. Co., 67 N. Y. 315 ; Wells v. Wells, 8 App. Div. 422; Peck v. Burwell, 48 Hun, 471; Sawyer v. Chambers, 43 Barb. 622.)

Opinion:
Webnek, J.
Under the unanimous affirmance by the Appellate Division of the judgment entered upon the verdict of the jury herein, the only question presented by this record that survives to reach this court is the single exception taken by the-plaintiff to the admission of parol evidence, given by. the defendant, in contradiction of the written instrument upon which the action is founded. I think that the exception referred to was well taken. The action is upon a promissory note. The complaint is in the usual form in such actions. The answer alleges want of consideration and an agreement that the note was not to be paid if the defendant did not take the course' of instruction at plaintiff's school, for which the note was given. Upon the trial, under these pleadings, the plaintiff introduced the note in evidence and rested its case. Thereupon the defendant, under the direction of the court, assumed the affirmative of the issue and introduced evidence in support of the allegations of her answer. Despite plaintiff's objection to any oral testimony tending to vary or contradict the written instrument, the defendant was permitted to testify that the note in suit was not to be paid if she should decide not to attend plaintiff's school and could not sell her scholarship. I think this ruling of the trial court was erroneous, and that the exception thereto requires a reversal of this judgment.
The general rule, that evidence of what was said between the parties to a valid instrument in writing, either prior to or at the time of its execution, cannot be received to contradict or vary its terms, applies to promissory notes and bills of exchange. (Thompson v. Ketcham, 8 Johns. 190; Norton v. Coons, 6 N. Y. 33; Read, v. Bank of Attica, 124 N. Y. 671.)
As stated in Thomas v. Scutt (127 N. Y. 133) and Stowell v. Greenwich Ins. Co. (163 N. Y. 305), there are two classes of exceptions to this general rule of evidence. The first class includes those cases in which parol evidence is received to show that a written instrument which purports to be a contract is in fact no contract at all. The other class " embraces those eases which recognize the instrument as existing and valid, but regard it as incomplete, either obviously or at least possibly, and admit parol evidence, not to contradict or vai*y, but to complete the entire agreement of which the writing was only a part. Receipts, bills of parcels and writings that evidently express only some parts of the agreement are examples of this class which leaves the written contract unchanged, but treats it as part of an entire oral agreement, the remainder of which was not reduced to writing. Two things, however, are essential to bring a case within this class: 1. The writing must not appear upon inspection to be a complete contract, embracing all the particulars necessary to make a perfect agreement and designed to express the whole arrangement between the parties, for in such a case it is conclusively presumed to embrace the entire contract. 2. The parol evidence must be consistent with and not contradictory of the written instrument."
I think the case at bar does not fall within either of these exceptions. In form, the instrument sued upon is a complete contract. This is equally true as regards the note alone, or the note and the certificate of scholarship together considered as parts of the same contract. If it is a contract at all, it is a complete contract. The oral evidence received over plaintiff's objection did not serve to amplify or complete the writing - it was radically contradictory thereof. The mere statement of this fact is the only argument necessary to show that the case is not in the class of cases in which oral testimony is received to complete contracts which are only partly reduced to writing. Does the oral testimony received over plaintiff's objection tend to show that the written instrument, which was a complete contract in form, was in fact no contract % This question suggests the distinction between this case and the cases upon which the defendant relies. According to the testimony of the defendant the delivery of the note in suit was not conditional upon the happening of some event before it was to become a binding obligation; on the contrary, it is said to have been complete and unconditional. The defendant says, in substance, that the note became effective at once and was to be binding upon her unless she should decide not to take instructions at plaintiff's school and could not sell her scholarship, in which event it was to be canceled and she was not to be called upon to pay it. Had the parties agreed that the note should not be regarded as completely delivered until the defendant should take such instructions, or until she could sell her scholarship, it would not have become operative until either of these events had transpired. The agreement which the parties did make was just the reverse of that. The note is stated to have been actually, and unconditionally delivered, and was to be and remain a note until the defendant should decide either to sell the scholarship, if that were possible, or to abandon the projected course of instruction. As the note was not payable until a year after its daté, and the course of instruction was not to begin until the note became due, the defendant's claim is, in reality, an assertion that the note was to be regarded as a valid and binding obligation until it became due,, when it was to be optional with the defendant to decide whether it should then be payable or not. This was not a conditional delivery which held the consummation of the contract in abeyance, but an absolute delivery which, as the defendant supposed, could be annulled in a certain contingency at her option. It is obvious, therefore, that there is a radical distinction between a conditional delivery, which is not to become complete and effective until the happening of some condition jwecedent, and a complete delivery, like the one at bar, which is sought to be defeated by subsequent contingencies that may or may not arise. In the one ease there is no contract until the condition has been complied within the other there is a binding contract, notwithstanding the happening of the contingency relied upon to defeat it. For. the foregoing reasons the cases of Seymour v. Cowing (1 Keyes, 532); Reynolds v. Robinson (110 N. Y. 654); Blewitt v. Boorum (142 N. Y. 357); Higgins v. Ridgway (153 N. Y. 130), and kindred cases, holding that conditions limiting and circumscribing the delivery of written instruments may be shown by parol, are not applicable to the case at bar.
This case seems to fall directly within the principle " that parol evidence of an oral agreement made at the time of the drawing, making or indorsing of a bill or note, cannot be permitted to vary, qualify or contradict, to add or to subtract from the absolute terms of the written contract." (Specht v. Howard, 16 Wall. 564; Forsyth v. Kimball, 91 U. S. 291; Brown v. Wiley, 61 U. S. 442; Brown v. Spafford, 95 U. S. 474; Read v. Bank of Attica, 124 N. Y. 671.)
For these reasons I think the parol evidence above referred to was erroneously admitted, and, therefore, the judgment herein should be reversed and a new trial ordered, with costs to abide the event.