
    The East River Bank, Plaintiff and Respondent v. Archibald G. Rogers, Defendant and Appellant.
    1. Where a defendant, hy a valid written guaranty, undertakes, unconditionally, to pay a sum loaned on the security thereof to a third person, on his failure to pay within a stipulated time from the date of the guaranty, and after thirty days’ notice of the principal’s default, it is not essential to a right of action that payment was demanded of the principal.
    2. It is enough that the principal failed to pay, and that the defendant was notified of the default thirty days before suit brought.
    3. Where the complaint, in an action on such a guaranty, alleges a loan on the day of its date, to the person and of the amount thereby authorized and on the security of such guaranty, non-payment of it by the principal and due and proper notice of such failure to the defendant more than thirty days before suit brought, and the answer denies none of these allegations, except by averring that the only notice given óf such default, and the only demand of payment made of the defendant, are contained in a written notice served on him, which he sets forth, and which states that a note made by said borrower on the day of the date of said guaranty, and for the alleged amount payable to the plaintiff at the time stipulated hy the guaranty, and “ secured by him” (the defendant,) is protested for non-payment, and that the plaintiff looks to him for payment thereof, and by also averring that when said notice was served, his guaranty was shown to him, and he was asked if the signature to it was his, to which he assented, and replied “ that he did not owe the plaintiff anything;” such answer does not raise a material issue, as it does not allege that the defendant did not understand the notice so served, when served, as a notice of the non-payment of the sum alleged, (and by not being denied,) admitted to have been loaned on the faith and security of said guaranty, and on the day of its date.
    4. The indebtedness of the plaintiff to the defendant's principal, in a sum equal to or greater than the sum loaned, cannot he set-off, or availed of as a counter-claim, by such guarantor in an action against him, the principal not being alleged to be insolvent.
    6. In a suit by a plaintiff, with which the defendant has contracted as being a corporate body, the plaintiff cannot be required to prove the fact of its incorporation, merely because the defendant states in his answer that he “ is informed and believes” the plaintiff is not a corporation.
    6. On an appeal from a judgment rendered against a defendant on account of the frivolousness of his answer, the question is, whether the judgment is right on the merits of the case made by the pleadings, and not whether the answer is frivolous.
    
    (Before Boswoeth, Oh. J., and Woodruff and White, J. J.)
    Submitted November 7,
    decided December 29, 1860.
    Appeal by the defendant from a judgment rendered against him on a motion before Mr. Justice Woodruff therefor, made on account of the frivolousness of the answer.
    The complaint alleges that the defendant, on the 4th of February, 1860, made an agreement and guaranty, in writing, with the plaintiffs and sets forth a copy of it. This recites that the plaintiff is “ah incorporated institution, doing business in the city of New York,” and has* agreed to loan $1,000 to George K. Chase on the execution and delivery of the defendant’s guarantyto become answerable for the repayment thereof, with interest, sixty days from that date, and that the plaintiff has advanced and loaned that sum to Chase simultaneously with the delivery of such guaranty, and by it the defendant promises that if Chase should fail to repay that sum, with interest, within the sixty days, “that then, and in such case, the defendant will become answerable to the plaintiffs for such repayment, after thirty days’ notice of such default.” The complaint then alleges the making of the loan of $1,000 on the day of the date of the agreement, and simultaneously with the delivery of it to the plaintiffs; the failure of Chase to pay any part of the loan within the sixty days; “ due and proper notice ” of such default to the defendant more than thirty days before suit brought; demand of payment of Chase, and his refusal to pay anything; due performance of conditions on the part of the plaintiffs, that the $1,000 and interest from February 4, 1860, is wholly due and unpaid, and prays judgment therefor. The action was commenced May 18th, 1860.
    The defendant, in his answer,
    
      First. Avers “that he is informed and believes that no demand of payment, whatever, was ever made” of Chase.
    
      Second. He alleges that he never received any notice of the default of Chase, and that no demand of payment was ever made of him, except such as are contained in a notice served on him April 9th, 1860, and reading thus, viz:
    “New York, April 9, 1860.
    “ Please to take notice that a promissory note made by George K. Chase for 1,000 dollars, dated New York, Feb. 4, 1860, payable 60 days after date, to the East River Bank or order, secured by you, is protested for non-payment, and that the holders look to you for the payment thereof.
    “Your ob’t serv’t,
    “FRANCIS S. BANKS,
    “ Notary Public.
    
    I! To A. G. Rogers, Esq.,
    “ Í8 Broadway.”
    That when said notice was served on him, his said guaranty was shown to him, and he was asked if the signature to it was his, to which he assented, and replied “that he did not owe the bank anything.” There has been no performance by the plaintiffs of the conditions on their part, and no refusal on his part to pay, except as above state.
    
      Third. “That he is informed and believes "that plaintiffs were indebted to the firm of George E. Chase ¿f Company (composed of said Chase and William H. Beebe) when this suit was brought, in the sum of $5,000, for that amount of moneys deposited with the plaintiffs by that firm; that said Beebe, on the 16th of May, 1860, sold and assigned to George K. Chase such indebtedness, to the extent of one-half thereof, and all his interest therein. That Chase thereby became, and now is, the owner of the whole of said indebtedness, and the plaintiffs now justly owe him that sum by reason of its being so deposited with them and remaining in their hands. That, before this suit was commenced, Chase notified the defendant not to pay anything to the plaintiffs, and -forbade, and continues to forbid him from paying anything to them.
    
      Fourth. “ That he is informed and believes the plaintiffs are not an incorporation, or an incorporated association, and have no right or authority to use, or sue in a corporate name, and that they or he is not a natural person.”
    Judgment having been given for the plaintiffs on account of the frivolousness of the answer, the defendant appealed to the general term. The case was submitted on printed points.
    v2. G. Rogers, Appellant, in person.
    
      Francis S. Banks, for Respondent.
   By the Court. Bosworth, Ch. J.

—The defendant promised, unconditionally, that if Chase failed to pay the loan, with interest, within sixty days from the date of the promise, he would pay it after thirty days’ notice of such default. A demand of the principal need not be made before bringing suit against the defendant. (Mann v. Eckford, 15 Wend. 508.) The answer does not deny that Chase failed to pay within the sixty days. (Douglass v. Howland, 24 Wend. 48 ; Whitney v. Groot, Id. 82 ; Smith v. Dann, 6 Hill, 543 ; Curtis v. Brown, 2 Barb. 51.)

The complaint alleges, and the answer, by not denying it, admits that the plaintiffs, on the security of the defendant's guaranty, loaned to Chase $1,000 on the 4th of February, 1860, and that on the 9th of April, 1860, the defendant received written notice that Chase had failed to pay his note for the $1,000, and that the plaintiffs looked to him, as such guarantor, for payment thereof.

The answer does not suggest that the note named in the notice was not given for the loan, but, on the contrary, avers that at the time such notice was served, his guaranty was exhibited to him. And besides, the notice served, states that the note is “'secured” by the defendant. Assuming the note to have been given for the sum loaned, 1 and the answer does not deny it, the notice was sufficient.

The fact that the plaintiffs were indebted to George K. Chase when this suit was commenced, in a sum exceeding the amount of the note, is not a discharge of the defendant’s liability.

The demand in favor of Chase does not belong to the defendant, and he cannot set it off in this action. (La Fargo v. Halsey, 1 Bosw. 171.)

The fact that Chase forbade the defendant to perform his contract, neither discharges it, nor affects the defendant’s liability by reason of it.

The defendant’s written guaranty recites, that “the East River Bank ” is “ an incorporated institution,” and the fact “that he is informed and believes the plaintiffs are not an incorporation,” though averred in his answer, does not amount to a plea “that the plaintiffs are not a corporation.” (2 R. S. 458, § 3.)

If the defendant desired to litigate that question, he should have pleaded the fact expressly. (The Bank of Genesee v. the Patchin Bank, 3 Kern. 309 ; The Union Mu. Ins. Co. v. Osgood & Allen, 1 Duer, 707.)

The answer does not allege it to be true, in point of fact, that the plaintiffs are not a corporation. It states that the defendant “ is informed and believes ” that they are not. Proof that he was so informed, and believed the information to be true, would establish the truth of his “ fourth ” allegation, or head of his answer, but would not subject the plaintiffs to the necessity of proving that his information was erroneous and his belief unfounded.

But the defendant, in his printed points, does not suggest that this part of his answer raises a material issue.

The question on this appeal is, whether the judgment is right on the merits; whether the answer contains a defense, by stating new matter constituting one, or by putting material allegations of the complaint at issue, and not whether the answer is frivolous. (Griswold v. Laverty, 12 Leg. Ob. vol. 12, 316.)

The judgment must be affirmed.

Ordered accordingly.  