Oswald v. Moran

• Decision Date: 11 November 1898
• Citation: 8 N.D. 111,77 N.W. 281
• Parties: OSWALD et al. v. MORAN et al.
• Court: North Dakota Supreme Court

8 N.D. 111

77 N.W. 281

OSWALD et al.

v.MORAN et al.

Supreme Court of North Dakota.

Nov. 11, 1898.

Syllabus by the Court.

Construing section 7621, Rev. Codes, relating to the traffic in intoxicating liquors: In an action upon a joint promissory note, the defendants answered jointly, setting up a claim against plaintiffs for moneys paid on account of illegal sales of intoxicating liquor made by the plaintiffs to one of the defendants; but the answer omitted to allege any demand for the return of the money so paid to plaintiffs. Plaintiffs demurred to such answer upon the ground that the same failed to state facts sufficient to constitute a counterclaim or defense. The trial court overruled the demurrer. Held error. The demurrer should have been sustained, inasmuch as the action arises under a statute which makes a demand a condition precedent of recovery.

Appeal from district court, Stutsman county; S. L. Glaspell, Judge.

Action by John C. Oswald and another against Patrick Moran and others. From an order overruling a demurrer to the answer, plaintiffs appeal. Reversed.Charles G. Laybourne, for appellants. Conklin & Murphy, for respondents.

WALLIN, J.

This action was brought upon a promissory note executed and delivered to the plaintiffs by the defendants Patrick Moran and Margaret Moran on the 16th day of January, 1895. Said note was made and delivered in payment or in renewal of a previous note which had been given in settlement of an account which the plaintiffs then had against said Patrick Moran. The execution and delivery of said note is admitted by the defendants Patrick Moran and Margaret Moran, who answer the complaint jointly. Said answer further embodies an itemized statement of divers sums of money alleged to have been paid over by Patrick Moran to the plaintiffs on account of intoxicating liquors sold by the plaintiffs to said Patrick Moran at divers times since the existing statute known as the “Prohibitory Liquor Law” went into effect, to wit, since July 1, 1890. The answer further states that said sums of money were paid to the plaintiffs by said Patrick Moran for intoxicating liquors sold to him, and smuggled into this state, with the express view and intention on plaintiffs' part of aiding and assisting said Patrick Moran in his business of selling intoxicating liquor illegally within this state. The defendants plead said payments of money, with interest thereon, as a counterclaim in favor of Patrick Moran against the cause of action stated in the complaint, and demand judgment in favor of Patrick Moran for the amount due him on account of said payments, after deducting the amount found to be due on said note. To this answer plaintiffs interposed a demurrer upon the ground that the same does not state facts sufficient to constitute a defense or counterclaim. A hearing was had before the district court upon the issues of law joined by said demurrer, and that court entered its order overruling said demurrer. Plaintiffs appeal to this court from the order.

The principal question for this court to determine is whether the affirmative matter set up in the answer constitutes a cause of action in favor of the defendant Patrick Moran and against the plaintiffs, which existed at the commencement of this action. See Rev. Codes, § 5274. The alleged counterclaim manifestly would not constitute a cause of action at common law, and no such claim is made. Avowedly, the claim is strictly of statutory origin, and arises under the following provisions of the prohibitory liquor law of this state, now found within section 7621 of the Revised Codes: “All payments and compensations for intoxicating liquors sold in violation of this chapter, whether such payments or compensation is in money, goods, land, labor or anything else whatsoever, shall be held to have been received in violation of law and against equity and good conscience and to have been received upon a valid promise and agreement of the receiver, in consideration of the receipt thereof, to pay on demand to the person furnishing such consideration the amount of said money or the just value of such goods and labor or other things.” The demurrer admits the fact that the payments of money by Patrick Moran to the plaintiffs were in fact made as stated in the answer, and the pivotal question arising upon such admission is whether such payments constitute a cause of action; and the solution of this question, if decided adversely to the defendants, does not necessarily require this court to determine whether, in a case like this, where the suit is upon a joint demand, a cause of action in favor of one defendant may be set off against such joint demand. It is clear that, if the answer does not state a defense or a cause of action in favor of anybody or against anybody, the demurrer should have been allowed. In our opinion, the answer fails to state a cause of action, in this: that it omits to allege that a demand such as the statute requires was made. We hold that such demand is an essential prerequisite, and that no cause of action arises on account of such payments of money until the demand is made. Under the statute a counterclaim upon contract can arise only upon a cause of action existing in favor of a defendant at the commencement of the action. Rev. Codes, § 5274, subd. 2. The provision of the statute under which the defendant's claim arises (Id. § 7621) is copied literally from the liquor law of the state of Iowa, and was enacted in that state several years prior to its passage by the legislature of the state of North Dakota. See 1 McClain's Code Iowa, § 2407. The particular provision of the statute we are here discussing has been frequently considered and construed by the supreme court of the state of Iowa; and that court, in a case decided in the year 1888, and prior to the enactment of the statute by the legislature of this state, has squarely met and passed upon the identical question involved in the case at bar. See Schober v. Rosenfield, 75 Iowa, 455, 39 N. W. 706. Upon the question of demand the court in its opinion in that case uses the following language: “The second question certified is as follows: ‘Can a suit be brought for the purchase price of liquors unlawfully sold, without first making a demand for the money thus paid for the liquors by the plaintiff, and is the...