
    William G. Pennypacker, Jr., Plaintiff, v. Thomas R. Levis and Company, Defendant.
    (Supreme Court, Brie Special Term,
    May, 1909.)
    Corporations —Actions against corporations —Answer — Service with answer of order for trial of issues — When not required.
    The provisions of section 1778 of the Code of Civil Procedure, that, in an action against a foreign or domestic corporation to recover damages for the nonpayment of a promissory note, unless the defendant serves with a copy of Ms 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, do not apply to a case where the note is admitted, but the defendant sets up a counterclaim.
    Motion to vacate a judgment.
    Carnahan, Adams, Jameson & Pierce, for motion.
    William H. Daniels, opposed.
   Wheeler, J.

The plaintiff sued the defendant upon a certain promissory note made and executed by it. The defendant answered. In its answer the defendant denies none of the allegations of the complaint, but sets up by way of counterclaim a cause of action growing out of an alleged breach of contract by the plaintiff to deliver at a specified point a certain quantity of cooperage stock.

The answer was served within time, but was not accompanied by an order directing the issues to be tried as provided by section 1778 of the Code of Civil Procedure. Therefore, the plaintiff’s attorney entered judgment against the defendant “ as in case of default."

Motion is now made to set aside the judgment so entered. We think the motion should be granted, for the reason that no order directing the issues to be tried was necessary in this case. No issue has in fact been made by the answer in this case. The making and liability on the note are admitted; but, by way of offset, the defendant sets up an alleged counterclaim. No proper issue can be said to be joined until the plaintiff replies to the counterclaim. It was the manifest purpose and intent of the section in question that, when an answer is interposed to a note made by a corporation in which the note itself is involved and defended, a judge shall look into the issues tendered sufficiently to determine whether the issue has sufficient merit to entitle it to be tried. No such question is presented in this case.

We, therefore, are of the opinion that the judgment was improperly entered, and must be vacated.

Judgment vacated, without costs.  