Shorer v. Times Printing & Publishing Co. — 29 N.Y. St. Rep. 786

Majority

p. 786

Sebastian Shorer, App’lt, v. The Times Printing & Publishing Company, Resp’t.^[1]

(Court of Appeals,

Filed March 4, 1890.)

Headnote

Cobpobations—Judgment—Code Civ. Pbo., § 1778.

Section 1778 of the Code does not apply to an action against a corporation as endorser of a promissory note; the contract of endorsement not being one “for the absolute payment of money, upon demand, or at a particular time."

Appeal from order of the supreme court, general term, fifth department, reversing order of county court denying motion to-vacate judgment.

Fanning & Williams, for app’lt; D. C. Feely, for resp't.

The plaintiff’s action was on a promissory note-made by one Merrill to the order of and endorsed by the defendant, and upon which it was claimed that the liability of the defendant had become fixed by demand and notice.

The defendant within the twenty days served an answer to the-complaint which the plaintiff disregarded and entered judgment-as in case of default. The defendant then made a motion in the court where the action was brought to vacate the judgment, which was denied, and the general term has reversed this order and granted the motion.

The plaintiff claims that the answer was a nullity, inasmuch as the order prescribed by § 1778 of the Code of Civil Procedure was not procured and served with it; and if that section has any application to an action of this kind his contention is correct.

The language of the section referred to, so far as material to the question raised by appeal, is as follows: “ In an action against a foreign or domestic corporation, to recover damages for the nonpayment of a promissory note, or other evidence of debt, for the absolute payment of money, upon demand, or at a particular time, * * * unless the defendant serves, with a copy of his answer or demurrer, a copy of an order of a judge directing that the issues presented by the pleadings be tried, the plaintiff may take judgment, as in case of default in pleading, at the expiration of twenty days.”

We think that this provision has no application to an answer served by a corporation in a suit brought against it as endorser. This court has held that “ it is to be confined strictly to actions upon instruments which admit on their face an existing debt payable absolutely,” and that it had no application to an answer

p. 787

served by an insurance company in a suit upon a life insurance policy, though the policy had become due by the death of the insured. New York Life Ins. Co. v. Universal Life Ins. Co., 88 N. Y., 424 .

The defendant’s contract of endorsement, upon which the action is brought, is not one “for the absolute payment of money, upon demand, or at a particular time.” The defendant, by its endorsement, undertook to pay the note of the holder only in case that when due it was duly presented to the maker for payment and payment demanded and refused by him, and then notice given of this refusal to the endorser. Its agreement to pay was essentially conditional in' its character. This statute, in a proper case, permits a plaintiff to disregard the sworn answer of the defendant and to proceed to judgment as if no answer had been served. There is no good reason for extending it to cases not within its terms. The defendant was not subject to its provisions in this case and, therefore, the judgment entered against it was without authority. N. Y. Life Ins. Co. v. Universal L. Ins. Co., supra; Moran v. Long Island City., 101 N. Y., 489 ; Anonymous, 6 Cow., 41 ; Tyler v. Ætna Fire Ins. Co., 2 Wend., 280 .

The order appealed from should be affirmed.

All concur.