Opinion
June, 1904.
Hector M. Hitchings, for the appellant.
Alexander S. Bacon, for the respondent.
The plaintiff appeals from an order vacating a judgment, setting aside an execution issued thereon and a levy made thereunder.
The defendant is a domestic corporation and the action is brought to recover upon a certificate of ten shares of its guaranteed six per cent stock. The complaint alleges that the certificate sued upon is a duplicate of one of the same number issued on the 3d day of February, 1897; that the original, upon its purchase by the plaintiff, was surrendered to the defendant and the one sued on issued in its place; that the duplicate so issued was, by an error, made to bear date December 1, 1899 — the date of the transfer — instead of February 3, 1897 — the date of the original certificate; that the certificate upon its face stated that the plaintiff is the owner of ten shares of such stock and that it "is issued and accepted subject to the articles of association, by-laws and terms and conditions expressed on back hereof and is transferrable only on the books of the association after its surrender properly assigned." The complaint further alleges that on the back of the certificate appear the following articles of association, by-laws, terms and conditions: "This certificate is guaranteed against any assessments. As to payment of dividends of $1.50 per share on the first days of January, April, July and October of each year. As to payment of principal sum in United States gold coin of standard weight and fineness or its equivalent, on thirty days' written notice given by the holder to the secretary at the principal office of the association at any time after 72 months from date hereof;" that the seventy-two months mentioned expired on the 3d day of February, 1903; that on the 18th day of January, 1904, the plaintiff filed a written notice of withdrawal in the form prescribed by the defendant, coupled with a demand for payment of said principal sum; that the defendant failed to pay as promised in the certificate and judgment was demanded for the principal sum, with interest from the date of the demand. A copy of the summons and complaint was served on the defendant's secretary on the 25th day of March, 1904. On the 7th day of April following the defendant served an answer which put in issue the material allegations of the complaint. The plaintiff retained the answer, but at the expiration of twenty days, exclusive of the day of service of the summons and complaint, entered judgment against defendant for the relief demanded as by default upon the ground that an order was not served with the answer as provided in section 1778 of the Code of Civil Procedure directing that the issues be tried. Subsequently an execution was issued upon the judgment and a levy made thereunder when the defendant learned for the first time that judgment had been entered. It thereupon applied for and obtained the order from which the present appeal is taken.
The plaintiff claims that the certificate sued on is an evidence of debt for the absolute payment of money at a particular time and, therefore, he had a right to enter the judgment inasmuch as no order was served with the answer in compliance with the section of the Code of Civil Procedure above referred to. That section provides, in substance, that 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 at a particular time the plaintiff may take judgment as in case of default in pleading at the expiration of twenty days after service of a copy of the complaint, unless the defendant serves with a copy of his answer or demurrer a copy of an order of a judge directing that the issues raised by the pleadings be tried.
The conclusion at which we have arrived renders it unnecessary to determine at this time whether the certificate is of the character claimed by the plaintiff, because if it is the plaintiff was not entitled to enter judgment inasmuch as he was bound to prove, in addition to it, facts which did not appear thereon, viz., that it should have been dated February 3, 1897, instead of December 1, 1899. It is only where the instrument upon its face shows that the plaintiff is entitled to the amount sought to be recovered that judgment can be entered as by default if an order is not served directing that the issues be tried. It has been held that this provision of the Code of Civil Procedure has no application to an answer served by a corporation in an action brought against it as indorser of a promissory note ( Shorer v. Times Printing Publishing Co., 119 N.Y. 483) or to an insurance policy, though the policy has become due by the death of the insured, and that "it is to be confined strictly to actions upon instruments which admit on their face an existing debt payable absolutely." ( New York Life Ins. Co. v. Universal Life Ins. Co., 88 N.Y. 424.)
Here this certificate, even if of the character claimed by the plaintiff, did not entitle the plaintiff to recover until he had proved, independent of it, that there was a mistake in the date and that by reason thereof the seventy-two months had expired before the notice was given.
I am also of the opinion that the retention of the answer precluded the plaintiff from treating it as a nullity. Defendant had a right to assume when the answer was not returned that it had been properly served. If the plaintiff intended to treat it as a nullity, then he should have promptly returned it to the defendant at the same time stating his reasons therefor. Fairness and good practice at least required this.
The order appealed from, therefore, should be affirmed, with ten dollars costs and disbursements.
O'BRIEN, INGRAHAM, HATCH and LAUGHLIN, JJ., concurred.
Order affirmed, with ten dollars costs and disbursements.