On appeal from the Essex County Circuit Court.
For the appellants, Milton M. Unger.
For the respondents, Edwards, Smith & Dawson.
The opinion of the court was delivered by
LLOYD, J. These two cases were tried together in the court below and are argued together on the appeal to this court. The actions were on promissory notes made by one Enrico Casabianca, three to the order of Rose Donahue for the sum of $2,050 each and one to the order of Louise E. Pearce in
the sum of $2,050. Recovery was sought for the sum of $2,000 only on each note. There was a direction of a verdict in each case for the defendants, the executors of the estate of Casabianca, and the plaintiffs appeal.
The grounds upon which we are asked to reverse are that certain testimony which had been received was improperly stricken out and that the direction of verdicts was erroneous.
The notes were originally in the sum of $2,100 and by reduction resulted in the notes as above stated. The defense in each case was that the notes were New York contracts and that they were usurious to the extent of $50 each and that under the law of that state there could be no recovery of any part of the principal. To meet this defense the plaintiffs called George S. Milazzo, one of the defendants, who testified that the deceased, whom he had known for many years and done business with, approached him for a loan and that he suggested that Miss Donahue had means and that he would ask her. This he did and Miss Donahue refused except upon condition that the witness would guaranty payment of the loan. This the witness agreed to do if he were paid the sum of $100. Instead of the amount being actually paid it was incorporated in the note. The same testimony was given as to the remaining notes subsequently borrowed on from Rose Donahue and Louise E. Pearce.
This testimony was objected to on the ground that it varied the written agreement and on the further ground that it was inadmissible under paragraph 4 of the Evidence act which prohibits any party to an action to give testimony as to any transaction with or statement by any testator or intestate represented in the action. The learned trial judge received the evidence as already indicated and later, on motion, struck it out upon the ground stated in the first objection and directed verdicts as already indicated.
It clearly appeared we think that the notes were New York contracts and governed by the law of that state, and if usurious in any degree the severe penalty of loss of the principal followed, and to this extent we agree with the conclusion reached in the trial court, and if the court was
right in striking out the evidence already referred to, the direction of verdicts in favor of the defendants was proper. We think, however, there was clear error in thus dealing with the evidence adduced. An exception to the rule which forbids the offering of parol proof to alter or vary a written contract is universally acknowledged to exist respecting the ...