Opinion
Submitted February 24, 1890
Decided March 4, 1890
Fanning Williams for appellant. D.C. Feeley for respondent.
The plaintiff's action was on a promissory note made by one Merrill to the order of and indorsed by the corporation 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 section 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 this appeal, is as follows: "In an action against a foreign or domestic corporation, to recover damages for the non-payment 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 indorser. 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 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. ( N.Y.L. Ins. Co. v. U.L. Ins. Co., 88 N.Y. 424. )
The defendant's contract of indorsement 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 indorsement undertook to pay the note to 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 indorser. 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.L. Ins. Co. v. U. Ins. Co., supra; Moran v. Long Island City, 101 N.Y. 439; Anonymous, 6 Cow. 41; Tyler v. Ætna Fire Ins. Co., 2 Wend. 280.)
The order appealed from should be affirmed
All concur.
Order affirmed.