Nevada-Douglas Consol. Copper Co. v. Berryhill

• Decision Date: 05 February 1938
• Docket Number: 3206.
• Citation: Nevada-Douglas Consol. Copper Co. v. Berryhill, 58 Nev. 261, 75 P.2d 992 (Nev. 1938)
• Parties: NEVADA-DOUGLAS CONSOLIDATED COPPER CO. v. BERRYHILL. [*]
• Court: Nevada Supreme Court

75 P.2d 992

58 Nev. 261

NEVADA-DOUGLAS CONSOLIDATED COPPER CO. v. BERRYHILL. ^[*]

No. 3206.

Supreme Court of Nevada

February 5, 1938

Appeal from Second Judicial District Court, Washoe County; B. F Curler, Judge.

Action on promissory note by James G. Berryhill against the Nevada-Douglas Consolidated Copper Company. From a judgment on the pleadings for plaintiff, defendant appeals.

Affirmed.

Hawkins Mayotte & Hawkins and Grant L. Bowen, all of Reno, for appellant.

A. A Heer, of San Francisco, Cal., for respondent.

DUCKER Justice.

This is an action on a promissory note. For convenience of reference we will speak of the parties as plaintiff and defendant. Pursuant to a motion, judgment on the pleadings was rendered in favor of plaintiff for the principal sum, with interest thereon and costs, from which defendant appeals.

The complaint alleges that defendant is and at all times therein mentioned was a corporation, organized and existing under and by virtue of the laws of the state of Utah. That on the 1st day of September, 1925, at Salt Lake City, state of Utah, in consideration of money theretofore loaned by plaintiff to defendant, defendant made and delivered to plaintiff its promissory note, in words and figures as follows, to wit:

"$31,517.37. TR Salt Lake City, Utah,

"September 1st. 1925.

"On demand, after date, for value received, Nevada-Douglas Consolidated Copper Company, promise to pay to the order of James G. Berryhill at Salt Lake City, Utah, thirty-one thousand five hundred seventeen and 37/100 dollars in lawful money of the United States, with interest thereon in like lawful money from date until paid at the rate of eight per cent per annum, payable at maturity, and if said interest is not so paid as it becomes due it is to be added to the principal sum and become a part thereof, and thereafter bear interest at the same rate.

"Nevada-Douglas Consolidated

Copper Company.

"Henry I. Moore, President,

"F. M. Orem, Treasurer.

"[Corporate Seal]"

The complaint further alleges that as a part of the same transaction the defendant then and there made and delivered to plaintiff the following corporate agreement in respect to said note:

"And as collateral security for the payment of note, interest thereon, and expenses that may accrue concerning same, Nevada-Douglas Consolidated Copper Company, have deposited with James G. Berryhill the following property, to-wit:

"Bonds of the Nevada-Douglas Consolidated Copper Company, as follows:

#4406 to #4425--20--@ $1,000.00==$20,000.00

#3309 to #3238--30--@ 1,000.00==30,000.00

"And should the said note, or any part thereof, or interest, remain unpaid after it should have been paid, according to the terms of said note, the Nevada-Douglas Consolidated Copper Company hereby irrevocably authorizes said James G. Berryhill, or his assigns, to sell the above described property, or any part thereof, at public or private sale, with or without previous notice to the Nevada-Douglas Consolidated Copper Company of such sale, and apply the proceeds thereof in payment of the costs and charges of such sales, all interest due upon said note, and the unpaid principal; the balance, if any, to be paid to Nevada-Douglas Consolidated Copper Company, or its representatives, upon demand.

"In case of fall in the market value of any of said securities ___ promise to reduce the amount of said note, or to increase the security in proportion to such decrease of value, in default of which said note shall be considered and treated as immediately due and payable, anything in said note to the contrary notwithstanding. In case of the payment of the above note, principal and interest, according to the terms thereof, the above described securities shall be returned to the Nevada-Douglas Consolidated Copper Company.

"Nevada-Douglas Consolidated

Copper Company

"Henry I. Moore, President,

"Attest: F. M. Orem, Secretary.

"[Corporate Seal]"

The complaint also alleges that no demand for payment of said note was made upon the defendant before or until the 4th day of August 1932; that on that date plaintiff made demand upon the defendant for the payment of said note, together with interest thereon; that neither the principal of said note, interest thereon, nor any part of either thereof has been paid, but the same now remains wholly due, owing, and unpaid from defendant to plaintiff.

Defendant interposed a demurrer to the complaint on the ground, among others, that the alleged cause of action is barred by the statute of limitations.

The demurrer was overruled and defendant answered. The answer admits the execution and delivery of the note and collateral agreement; that plaintiff is the owner and holder of the note; that it is unpaid in either principal or interest, but denies the alleged demand; and that the principal or interest or any part of either is due, owing, and unpaid from defendant to plaintiff.

The answer alleges that the cause of action alleged in the complaint is barred by the statute of limitation. As a further defense, the answer alleges that the said note is secured by the bonds described in the complaint and that plaintiff has a lien upon said bonds, which bonds in turn are secured by a trust deed upon the real property of said defendant. That said bonds are of a greater amount than the amount of said note and interest thereon and that therefore plaintiff is barred and precluded from bringing any action except in accordance with the provisions of section 9048 of the Compiled Laws of Nevada. No reply was filed.

Defendant assigns as error the overruling of the demurrer. The ground insisted on is that it appears on the face of the complaint that the action is barred by the statute of limitations of this state. The facts claimed to disclose that the action is so barred are that the note sued on is payable "on demand after date" made on September 1, 1925 and the complaint filed on August 5, 1932. It is argued that such a note is payable the day after the date of its execution and not from the date of demand. The right to raise such a defense by demurrer when it appears on the face of the complaint must be conceded. N.C.L. § 8596; State v. Yellow Jacket S. M. Co., 14 Nev. 220. But in this case it also appears on the face of the complaint that defendant is a foreign corporation. The demurrer admits this allegation. It is the settled rule in this state that a foreign corporation may not avail itself of the statute of limitations. N.C.L. § 8532; Robinson v. Imperial S. M. Co., 5 Nev. 44; State of Nevada v. Central Pac. R. Co., 10 Nev. 47; Barstow v. Union Consol. S. M. Co., 10 Nev. 386; Sutro T. Co. v. Segregated Belcher M. Co., 19 Nev. 121, 7 P. 271. An exception to this rule provided by statute will be hereinafter discussed.

As it appeared on the face of the complaint that the defendant was a foreign corporation and not within said exception, the demurrer was properly overruled.

Defendant also assigns as errors the granting of the plaintiff's motion for judgment on the pleading, and in entering judgment. One of its contentions in this regard is that the plea of the statute of limitations set up in the answer as an affirmative defense was admitted to be a bar to the action by the failure to reply. In support of this contention we are referred to N.C.L. § 8614, which reads in part:

"If the plaintiff fails to demur or reply to the new matter, contained in the answer, constituting a defense, the same shall be deemed admitted."

The statute of limitations to be effective as a defense must be well pleaded. The answer merely alleges the bar of the statute and refers to the sections of N.C.L. relied on. This is not sufficient, at least in the instant case. The complaint alleges and the answer admits that defendant is a foreign corporation. But before such defense could have been completely set up, the defendant must have shown by appropriate allegations compliance with the provisions of an act of the Legislature enacted in 1907, N.C.L. § 1848. This act, as amended, reads:

"Every foreign corporation doing business in the State of Nevada is, and shall be, entitled to the benefit of the laws of this state limiting the time for the commencement of civil actions; provided, such corporation shall maintain and keep in the state a resident agent, who may be either an individual or a domestic corporation, upon whom process may be served, and also shall file a certified copy of its articles of incorporation, and any amendment or amendments thereto, as required by the laws of this state; and provided further, that the benefit of this act shall be suspended during any period or periods when said corporation is in default in complying with the said requirements; nor can any such corporation maintain any action or proceeding in any court of this state while so in default." Chapter 28, Stats. 1933, p. 24.

The right of foreign corporations to avail themselves of the statute of limitations is subject to the conditions prescribed in the foregoing act.

The failure to prove compliance with a similar statute was held fatal to the right of a foreign corporation to make such defense in Pierce v. Southern Pacific Company, 120 Cal. 156, 47 P. 874, 875, 52 P. 302, 40 L.R.A. 350, and in O'Brien v. Big Casino Gold Mining Co., 9 Cal.App. 283, 99 P. 209. In the former case the court said:

"It being admitted that defendant was a corporation organized under the laws of another state, compliance with the foregoing statute became a necessary fact to be proven as a predicate to its right to avail itself of the benefit of the statute of limitations."

A fact necessary to be proven is equally necessary to be alleged.

The question here presented was passed upon in ...