
    Benjamin F. Watkins, Appellant, v. Augustus W. Peters, Respondent.
    (Supreme Court, Appellate Term,
    November, 1897.)
    Bills and notes — A defense that notes were to be paid in a particular manner cannot be proved under a pitea of want of consideration.
    Under a plea of want of consideration for notes sued upon, it is error to allow evidence of a collateral agreement that the notes were to be paid in a particular way or out of a particular fund; namely, out of the avails of a sale to be, made of stock loaned by the defendant (the maker) to plaintiff (the payee) when that stock should be returned.
    Watkins v. Peters, 20 Misc. Rep. 655, reversed.
    Appeal by the plaintiff from an affirmance by the General Term of the City Court of a judgment in favor of the defendant, entered upon the verdict of the jury.
    Robert L. Harrison and Alfred H. Byrd, for appellant.
    J. W. & C. W. Ridgway, for respondent.
   Daly, P. J.

The plaintiff sought to recover upon four promissory notes made by the defendant to plaintiff’s order, all dated March 8, 1885, at three, six, nine and twelve months, respectively;. the first for $329.-98, the second for $334.96; the third for $339.90; and the last for $344.17; each of these sums representing $325 principal, with interest.

The defense to the notes was want of consideration, and the jury rendered a verdict in defendant’s favor. It is claimed by plaintiff that defendant’s evidence tended to'prove, not want of consideration, but a-counterclaim or set-off, which was not pleaded. The evidence was duly objected to when offered, and being admitted by the court on the ground that it might tend to show that there was no consideration for the note, by reason of the transactions between the parties, the plaintiff, after such evidence was in, moved to strike it out !as not being within the issues raised by the pleadings. Upon exceptions taken by plaintiff to -the 'ruling of the court against him on this question, the appeal is now before us.

The notes were admittedly renewals for notes Originally given for money advanced by plaintiff to defendant by. way of loans, so that there was undoubted consideration for the. notes. The evidence, however, disclosed that these advances of money were made against loans of stock from defendant to plaintiff, the transactions ■being substantially" as follows: In 1889, tire defendant, at, the plaintiff’s request, and for his accommodation, lent him, first 100 and then 60 shares .of the stock of the American Gotten Seed Go., and afterward, in 1893, 40 additional shares, and 40 shares of other stock. The loans of money were made from time to time, partly in 1.889, and partly afterward, and were made in consideration of-the loans of stock, and there is evidence of an understanding or agreement, that when the stock should be returned, the defendant should sell it,- and with the proceeds repay the plaintiff the loans, and take up the notes. ’ ’ ' ’ '

The transactions in question, the loan of stock by the defendant to the plaintiff, and the loan of money by the plaintiff to the defendant were independent, except that the loans of money were made in consideration of the loans of stock, and that the alleged agreement to provide for the notes out of the stock, when returned, was founded upon that consideration. This agreement was, however, collateral to the loan of money, and in no wise justified the finding that the notes were without consideration, for the fact- remains that they were given for actual loans of, money. The defense to the enforcement of the notes was, therefore, not that they were made without consideration, but they were to be paid in a particular way, or out of a particular fund, to-wit: by the sale of the defendant’s stock, when plaintiff returned it. This was not a counterclaim, hut an affirmative defense, and was not pleaded. The exception of the plaintiff, therefore, to the denial of his motion to strike out the evidence, which had been taken under his objection, presents error for which the judgment should be reversed and a new trial ordered. This will give the defendant ample opportunity to seek by amendment to set up his true defense.

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

McAdam and Bischoff, JJ., concur.

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