Canda v. Zeller

The action was brought upon two promissory order of the plaintiffs. The making and delivery of the checks and notes were conceded, as were also the formalities as to presentation and demand, to charge the defendants with liability. The defense presented upon the trial was failure of consideration, and that there was an oral condition attached to the notes and checks, that the makers were not to he charged with liability unless one Mrs. Fitzpatrick performed a certain contract she had with the maker for the erection of some buildings, and that the time of payment was to be extended from time to time until she complied with her contract.

The learned justice submitted to the jury the question as to whether said oral contract concerning the notes and

The plaintiff moved for a direction in his favor; also, for a new trial after rendition of the verdict; both of which were denied.

We think the learned justice erred in receiving oral evidence tending to vary the terms of the contract, after good consideiation had been shown therefor; and also in submitting the question to the jury. He should have granted the plaintiff’s motion for a direction of a verdict in his favor. The checks and notes were absolute on their face, and paroi evidence was inadmissible to vary or contradict their terms. Daniels on Meg. Instruments, sec. 80: Willse v. Whitaker, 22 Hun, 242 .

Daniels, in the context to the rule, says that “it is not permissible to receive oral evidence to show that the notes or checks were not tobe paid until the amount was collected from certain sources.” Here evidence was received, showing that the notes were not to be paid until Mrs. Fitzpatrick had so far completed her contract as to be entitled to payments to the extent of the amount named in the instrument D or is it permissible to receive evidence of an oral agreement to prolong or vary the time of payment otherwise than the instruments themselves declare. This rule is so well engrafted upon our practice, that it seems a work of supererogation to do more -than state it, and when violated, to point out the error. In this case testimony was received in direct contradiction of the plain and unambiguous terms of the contract sued upon.

The testimony was, no doubt, received upon the assumption that it was a direct attack upon the consideration for the notes and checks, but such assumption has no place in this case.

While it is permitted in some cases to show by paroi that the instrument sued upon is not a valid existing obligation against the party impeaching it, as where the holder is not a bona fide one, or the defendant is an accommodation maker or indorser, it cannot be invoked in this case where the parties urging payment are holders for value or parted with value for the notes. The plaintiffs stand in the latter position. They surrendered to the defendants a paper writing, having the force and effect of a draft, which was accepted by defendant’s giving the' promissory notes of theii firm.

This transaction placed in their possession as owners an obligation which they could offset against a person with whom they had financial dealings and obligations.

Some evidence was offered showing that the checks were given to enable the defendant to take up a prior note made by his firm. As to these checks, it is claimed by plaintiffs that they were not subject to the defense set up, but inasmuch as it has been shown that the defense is not available for any purpose, it is unnecessary to comment upon the proposition advanced.

. The case of Ellison v. McCahill, cited by defendant as directly in point in support of the defense has no application to the facts developed here. In that case there was a written contract of acceptance, specifying the time of payment and the fund to be charged. The party giving the order never became entitled to the payment from which the amounts of the orders were to be reserved.

For the reasons stated, the judgment will be reversed and a new trial ordered, with costs to abide the event.

McAdam, Ch. J.. and Nehrbas, J., concur.