
    Solomon Rice, Respondent, v. Joseph Eisler, Appellant.
    Second Department,
    April 26, 1907.
    Bills and hótes — evidence — when maker may show lack of consideration as against holder.
    In an action upon a promissory note given in part payment for the assignment of a contract to convey lands the title to which proved to be defective, which note' was transferred. by the payee to his father, the defendant is entitled to show what occurred between the seller, the buyer' and the transferee who met to pass title. Such evidence is competent to slioXv that, the title was bad and was rejected, that the parties agreed that the title was bad, that the earnest money . was paid .back to the selle!, and that the transferee acquired the note with-knowledge of these facts and hence- subject to the defense of failure of consideration. • ■
    Such evidence is not hearsay with respect to the plaintiff,' who was not present, but is" direct-evidence of competent and "necessary facts.
    Appeal by the defendant, Joseph Eisler, from a judgment of the Municipal Court of the city of Mew York in -favor of the plaintiff, rendered, upon the decision of,the court after a trial without a jury
    
      W. II. Hurby,.iov the appellant. .
    
      M. Hallheimer, for the respondent."
   Gaynor, J.:

This action is on a promissory note- for $400. -The defendant made it to’:the plaintiff’s son, and lie endorsed' it to the plaintiff; The plaintiff’s son assigned to ;the defendant for;- $700 a contract which he had for the conveyance! of real estate to.him. The defendant paid $.300 of this in cash, that being the amount which the’soni’had paid "oh account when the contract was made, and for the balance of $400 this note was given, payable to the said soil’s order on a ’date subsequent . to the,-date -fixed .for the passing- of title. At the same- time the said son gave to the defendant a written agreement that if the title proved to be defective and unmarketable, he would -pay back to "the defendant $400. This with the. $300 paid on account and which the seller of the real estate would have to pay back to him on the failure to give a good title would leave the defendant whole.

The answer pleads as a defense that the title to the land was defective and was not conveyed,.that the consideration for the said note-thereby failed and that the plaintiff took the -said note of his son with knowledge thereof. The learned counsel for the defendant therefore tried by a series of questions to get in evidence what occurred on the contract day when the parties, viz., the seller, the buyer (the plaintiff’s son) and this defendant met to pass the title, but general objections to them were sustained. He wanted to .prove the conversation of the parties in order to show that the title was rejected. This evidence was of course competent, as the defendant could not prevail without proving as a first step that the title was rejected. It was also competent as proving that the title was bad. It might have shown, as alleged in the defense, that all. of the persons concerned-(including the buyer, the said son) agreed that the title was bad, the defect therein being that the house encroached upon the street, and that the $300 paid on account was paid back by the seller, and that he was released; and if the plaintiff acquired the note with knowledge of all this, he took it subject to the defense of failure of consideration, or that it could not be collected by the son owing to liis said agreement with the defendant. The proposed evidence was not hearsay in. respect of the" plaintiff, who was not present, but direct evidence of a competent' and necessary fact. After being prevented from proving this there was no reason for the defendant to persist further for lie could not prevail without it.

The record of the trial in this case is a. most deplorable one. The counsel for the plaintiff persisted in continuous objections which were without foundation or merit, and vexatious to the last degree, but the justice who-tried the case upheld them.in an arbitrary and technical manner. Instead of deprecating such a course of conduct-lie'gave every encouragement to it. ■ If there was ever a casé which needed to be tried .with a purpose to see that a wrong should not be done, this is one. ■ Instead, however, the defendant was perplexed and baffled by all sorts'of technical and unfounded objections and rulings, and now finds himself with- a judgment against him for a note for which he has derived no consideration. The defendant succeeded in getting some evidence into the case in. the midst of all kinds of unreasonable difficulties and perplexities which would support a finding of fact that the son was the mere dummy of the father in the whole transaction, which would of course, charge the latter , with knowledge of each step in the transaction as it occurred.

'The judgment should be.reversed.

Hieschbeeg-, P. J., Jenks, Hooker and’Dich, J'J., concurred.

. Judgment of the Municipal Court reversed and new trial ordered, costs to abide the event. ' ■ " '  