#### The Equitable General Providing Co., Appellant, *v.*Henry T. Eisentrager, Respondent.

(Supreme Court, Appellate Term,

June, 1900.)

1. Guaranty — Of conditional sale of bicycle, evidenced by two separate instruments, for rent and for passing title — Liability of grantor who was to have title if he paid on the vendee’s default.

A company rented a bicycle to one Alfred Becker under stipulations for the immediate payment by him of one dollar in cash and monthly payments during one year thereafter, and further that the failure to perform any condition of the contract should make the whole purchase price become due and authorize the company to retake the bicycle. By a separate paper the company agreed that when Becker had paid the whole rent it would execute and deliver to him a full title and bill of sale. At the same time the defendant guaranteed the said payments, in writing, “ with the understanding ” that if the *708' defendant made the payments the bicycle should become his personal property. Becker paid nothing beyond the one dollar in cash, used the bicycle for more than a year, and then surrendered it to the company, which accepted it.

Held, that the lease to Becker and the agreement to give him a bill of sale, upon full payment, constituted a single contract for a conditional sale.

That,, upon his default, the title passed directly from the company to the defendant, as upon a conditional sale made by it to him, and that he had not been prejudiced by the fact that the company had accepted the bicycle from Becker.

That it had become the personal property of the defendant, and that the company properly tendered it to him and demanded payment of him.

2. Municipal Court of the city of Hew York — Denial of knowledge or information sufficient to form a belief unauthorized.

A denial of knowledge or information sufficient to form a belief is not authorized in the Municipal Court of the city of New York, and allegations thus denied must be deemed to be admitted.

Appeal from a judgment in favor of the defendant, rendered in the Municipal Court of the city of New York, first district, borough of Manhattan.

Louis L. G. Benedict, for appellant.

Warren S. Burt, for respondent.

Beekmah, P. J.

On March 29, 1899, one Alfred Becker came into possession of a bicycle belonging to the plaintiff, under a written agreement by which he in terms “ rented ” the same from the plaintiff for a term of twelve months, and “for the use and depreciation of said property” agreed to pay to the latter fifty-three dollars for the whole term as follows: One dollar in cash and four dollars and thirty-four cents on the twenty-ninth day of each month thereafter until the full amount was paid. Among other stipulations which the paper contained is one to the effect that if the said Becker should fail to perform any of the conditions and agreements therein, “ then such part of the whole sum of $53 provided to be paid under this instrument as shall at the time of such failure be still unpaid shall be due and payable without demand.” In case *709of any such failure Becker agreed that at the option and upon the request of the plaintiff he would immediately deliver said bicycle to it, and in case of his failure so to do the company was authorized to take possession of the same. Simultaneously with the execution and delivery of this paper, another signed by the plaintiff was made, which provided that upon receiving the full sum of fifty-three dollars, pursuant to the terms of the paper so executed by Becker, the plaintiff would execute and deliver to him “ a full title • and bill of sale ” of the property in question. It has been held in this court in a similar case that these two papers are to be read together, and, taken together, are to be considered as a single contract for a conditional sale of the property therein mentioned. Equitable General Providing Co. v. Potter, 22 Misc. Rep. 124.

At the time the above papers were executed and as a part of the the same transaction, the defendant made, executed and delivered to the plaintiff an instrument under seal styled a guarantee, bearing even date with the papers above mentioned, and which reads as follows: *“*In consideration of one dollar ($1), to me in hand paid, the receipt of which I hereby acknowledge, I hereby guarantee the within payments, with the understanding that in the event of my being called upon to pay the final payment or payments, the said bicycle shall become my personal property.” This agreement is indorsed on the back of the paper above referred to, which was executed by Becker. The bicycle was accordingly delivered to Becker, who. thereupon paid the sum of one dollar as required by his agreeihent. He continued in possession of the same until about October, 1899, when it was surrendered by him to the company pursuant to the stipulation in that regard contained in the contract, he having failed to make any of the payments required of him under his contract, except the one dollar above referred to.

This action has been brought to recover on the so-called guarantee which was executed by the defendant. It appears that a tender of the bicycle was made to the defendant and the amount remaining unpaid thereon demanded of him, but he refused either to accept the bicycle or to pay the amount so demanded. His defense seems to be that the acceptance of the bicycle by the plaintiff from Becker operated as a discharge of any claim against the latter for the unpaid rental or purchase money, and as a necessary consequence relieved him ■ (the defendant) from any liability as guarantor. The trial justice seems to have adopted this view, in*710asmnch as he rendered judgment dismissing the complaint. We think this .was error calling for a reversal of the judgment.

At the time the bicycle was surrendered by Becker, the whole amount of the rental or purchase money had become due and ■payable by reason of his default, and a condition then existed which brought the case within the decision of this court in Equitable General Providing Co. v. Potter, *supra,*where the court under ■similar circumstances held that (p. 125): “The plaintiff when it accepted a return of the property, had an existing right of action against the defendant for the sum sued for, which the return of the property did not discharge, as the defendant was to pay the amount unconditionally, whether he took a bill of sale or not. The bicycles were to remain the property of the plaintiff until paid for, and their possession was a mere security for such payment, not inconsistent with the right to enforce the promise to pay according to the agreement.” But apart from all this, the so-called contract of guarantee ¿ontemplated the resumption by the plaintiff of the possession of the bicycle, inasmuch as by its very terms the title thereto was to vest in the so-called guarantor upon payment by him of the balance of the rental or purchase money remaining unpaid under the contract with Becker. The contract was inconsistent with the retention by Becker of the property after he had made default. As soon as the defendant was called upon to fulfill his agreement, or at least upon the payment by him of the amount which he had obligated himself to pay, the title to the bicycle was vested in him, and his right to the immediate possession of it became fixed. It was, therefore, quite within the line of plaintiff’s duty to the defendant that it should repossess itself of the bicycle in order that the rights of the defendant should be properly protected, and the terms of his contract properly carried out. It will be observed that the contract with the defendant was something more than one of guarantee. It involved a conditional sale to the defendant of the bicycle in question because it proceeded upon the assumption of a default on the part of Becker which would prevent title from vesting in him, The title to the property, then, contemplated by the guarantee, was one which should pass directly from the plaintiff to the defendant, and the condition upon which such title was to pass was in effect the failure on the part of Becker to acquire title thereto by reason of his default. When that took place and when the defendant was *711called upon to make the payments which he had guaranteed, and such payments were made the condition upon which the title was to pass to him had been satisfied, and he became absolutely entitled to the property as the plaintiffs vendee. It is obvious that the plaintiff has in no way whatsoever prejudiced its right to recover by reason of its resumption of the possession of the bicycle. ■

The defendant questions- the sufficiency of the proof of Becker’s default in payment. ¡No motion, however, was made by the defendant to dismiss the complaint at any stage of the case on that ground, and, furthermore, the allegations in that regard contained in the complaint must be deemed to be admitted, in view of the fact that the defendant has sought to put them in issue under a denial of knowledge or information sufficient to form a belief. He has failed to do so, however, inasmuch as this form of pleading- is not authorized in actions brought in the Municipal Court. Steinam v. Bell, 7 Misc. Rep. 319.

Judgment reversed and a new trial ordered, with costs to the appellant to abide the event.

Giegerich and O’Gorman, JJ., concur.'

Judgment reversed and new trial ordered, with costs to appellant to abide event.