Peterson v. First & Sec. State Bank of Crosby

• Citation: 236 N.W. 722,61 N.D. 1
• Decision Date: 26 May 1931
• Docket Number: No. 5874.,5874.
• Court: United States State Supreme Court of North Dakota
• Parties: PETERSON v. FIRST & SECURITY STATE BANK OF CROSBY.

61 N.D. 1

236 N.W. 722

PETERSON

v.FIRST & SECURITY STATE BANK OF CROSBY.

No. 5874.

Supreme Court of North Dakota.

May 26, 1931.

Syllabus by the Court.

The complaint in the instant action is examined, and it is held, for reasons stated in the opinion, that the allegations thereof show an accord as defined by section 5825, C. L. 1913, and a satisfaction thereof as defined by section 5827, C. L. 1913.

Syllabus by the Court.

Where a judgment is paid and extinguished, and the judgment creditor fails and refuses to satisfy it of record within a reasonable time after demand, the judgment debtor has a right of action to compel such satisfaction.

Syllabus by the Court.

Where a judgment is paid and satisfied, and the judgment creditor fails and refuses within a reasonable time after demand therefor to satisfy the judgment of record, the judgment debtor has a right of action for the damages incurred by reason of such failure and refusal.

Appeal from District Court, Divide County; George H. Moellring, Judge.

Action by Edwin Peterson against the First & Security State Bank of Crosby, formerly Security State Bank of Crosby. From an order overruling a demurrer to the plaintiff's complaint, defendant appeals.

Affirmed.

George P. Homnes, of Crosby, for appellant.

Thos. C. Jepsen, of Crosby, and C. E. Brace, of Minot, for respondent.

NUESSLE, J.

This is an appeal from an order overruling a demurrer to the plaintiff's complaint.

The complaint alleges that on the 4th of September, 1923, defendant docketed its judgment against the plaintiff for the sum of $1,696.23; that thereafter on September 9, 1926, plaintiff and defendant entered into an agreement, whereby the defendant agreed to forthwith satisfy of record its judgment against the plaintiff in consideration of the plaintiff releasing defendant from an accounting for payments made upon certain notes held as collateral to the judgment, surrendering to the defendant all claims to said collateral, and executing and delivering his note for $715.35, together with interest at the rate of 9 per cent. per annum, payable on January 3, 1927; that the plaintiff, pursuant to the terms of said agreement, released defendant from an accounting for payments made on the collateral, surrendered all claim that he had thereto, and executed his note to the defendant; that defendant has neglected and refused to satisfy the judgment of record, though demand has been made upon it to do so, and that it has caused executions to be issued and levies made thereunder on the plaintiff's property; that thereby plaintiff has suffered damages on account of the loss of the use of the property so levied upon, loss of time, and other items of damage, stating the amount thereof; and for relief plaintiff demands that the defendant be required to satisfy the judgment of record, and that he recover of the defendant the damages sustained by him. To this complaint the defendant demurred on the ground that the same does not state facts sufficient to constitute a cause of action. The court overruled the demurrer. Whereupon the defendant perfected the instant appeal.

[1] The defendant first urges in support of this appeal that the allegations of the complaint disclose merely an unexecuted accord, so that the original obligation remains and the plaintiff is not entitled to any relief. On the other hand, plaintiff insists that it appears from the allegations of the complaint that the transaction resulted in the substitution of his note, a new obligation, for the existing one, the judgment, with the intent to extinguish the latter, and that therefore it amounted to a novation.

The statute, section 5825, C. L. 1913, provides: “An accord is an agreement to accept in extinction of an obligation something different from or less than that to which the person agreeing to accept is entitled.” “Acceptance by the creditor of the consideration of an accord extinguishes the obligation and is called satisfaction.” Section 5827, C. L. 1913. A “novation is the substitution of a new obligation for an existing one.” Section 5829, C. L. 1913.

This matter is before us on demurrer to the complaint, so all the intendments are in favor of its sufficiency. Section 7458, C. L. 1913; Weber v. Lewis, 19 N. D. 473, 126 N. W. 105, 34 L. R. A. (N. S.) 364. Thus reading the complaint we think it reasonably appears therefrom that the defendant held a judgment against the plaintiff; that it also held certain notes belonging to the plaintiff as collateral to this judgment; that it made collections on account of this collateral for which it was bound to account to the plaintiff; that it failed to do so; that an agreement was entered into whereby the plaintiff released defendant from its obligation to account for collections made upon the collateral, surrendered all his claims to the collateral, and, in addition, executed his note to the defendant for an agreed amount much less than the amount of the judgment, payable in the future; that in consideration of the doing of these things the defendant agreed to satisfy the judgment forthwith. It seems to us that this resulted in an accord as defined by the statute, supra, and an acceptance of the consideration of the accord in satisfaction thereof. Clearly it appears from the allegations of the complaint that the plaintiff agreed to and did give to the defendant something different from...