Thompson v. Murphy

• Decision Date: 06 July 1931
• Docket Number: No. 5897.,5897.
• Citation: 237 N.W. 653,61 N.D. 134
• Parties: THOMPSON v. MURPHY.
• Court: North Dakota Supreme Court

61 N.D. 134

237 N.W. 653

THOMPSON

v.MURPHY.

No. 5897.

Supreme Court of North Dakota.

July 6, 1931.

Syllabus by the Court.

In an action on a promissory note, defendant pleaded a counterclaim for damages on account of the breach of a contract whereby in January, 1922, he purchased certain bank stock in consideration of the plaintiff's agreement to save him harmless from any and all loss and damage that he might suffer or be put to as the result of the purchase of said stock, either on account of diminution in the value thereof or on account of depreciation or loss of the investment therein from any cause whatsoever; that thereafter the assets of the bank decreased and diminished in value, so that in 1924 the bank was closed by order of the banking board; that to reopen the bank it was necessary to levy and raise additional capital amounting to an increase of 150 per cent.; that notwithstanding the assets of the bank continued to diminish, and in 1927 a portion thereof was removed and charged off as worthless; that the defendant was required to pay the book value thereof; that thereafter the assets of the bank continued to decrease and diminish in value, and in 1928 the bank was finally closed by the banking board as insolvent, and the stock thereof became and was of no value; that thereby the defendant was damaged in the amount of the purchase price paid for the stock. The plaintiff demurred to the counterclaim on the ground that it failed to state facts sufficient to constitute a cause of action in that:

(1) The contract pleaded is so indefinite as regards both time and terms as to render it unenforceable.

(2) The counterclaim fails to allege the extent of the loss and damage, if any, sustained by the defendant.

(3) It appears that the defendant by his conduct with respect to the matter waived any rights he might have had under the contract.

(4) It affirmatively appears from the allegations of the counterclaim that the defendant was guilty of such laches as to deprive him of any remedy, if any he had, for the breach of such contract.

Held, for reasons stated in the opinion, that the counterclaim is good as against demurrer interposed on the above grounds.

Appeal from District Court, Cass County; A. T. Cole, Judge.

Action by T. A. Thompson against J. J. Murphy. From an order sustaining a demurrer to a counterclaim for damages for breach of contract against loss on account of purchase of bank stock, defendant appeals.

Reversed.Pierce, Tenneson, Cupler & Stambaugh, of Fargo, for appellant.

Richardson, Thorp & Wattam, of Fargo, for respondent.

NUESSLE, J.

This action was brought to recover upon a promissory note for the sum of $3,500. The note was given on January 9, 1922, in payment for the purchase price of ten shares of the capital stock of the Farmers' State Bank of Page. The defendant, in his answer, admitted the execution and delivery of the note, and set up a counterclaim predicated upon an agreement made by the plaintiff as an inducement to the defendant to purchase the stock. The counterclaim sets forth that the plaintiff agreed to “indemnify the defendant and save him harmless from any and all loss and damage that said defendant might thereafter, or at any time, suffer or be put to as a result of the purchase of said stock by the defendant, either on account of the diminution in the value thereof or on account of depreciation or loss of the defendant's investment therein from any cause whatsoever.” The defendant further alleges that, after the purchase of said stock, the assets of the Farmers' State Bank of Page decreased and diminished in value, so that in 1924 the bank was closed by order of the state banking board, and that to reopen the bank it was necessary to levy and to raise additional capital amounting to an increase of 150 per cent.; that, notwithstanding this was done, the assets of the bank continued to diminish, and in 1927 the state bank examiner on that account required that a portion of such assets be removed and charged off as worthless; that to meet such requirements the defendant paid the bank the book value thereof; that thereafter the assets of the bank continued to decrease and diminish in value, and in the year 1928 had become worthless, and the bank was finally closed by order of the banking board as insolvent; and that the stock thereof became and was of no value, and defendant asks damages in the amount of $3,500, the purchase price of the stock.

To this counterclaim the plaintiff demurred on the ground that it failed to state facts sufficient to constitute a cause of action. The trial court sustained this demurrer, and the defendant appeals from the order made accordingly.

On this appeal plaintiff contends that the allegations of the counterclaim fail to show a valid and enforceable contract, for the reason, first, that the alleged contract is so indefinite as regards both time and terms as to render it unenforceable; second, that it fails to show the amount of loss and damage, if any, sustained by the defendant; third, that it appears that the defendant abandoned the alleged contract and waived any rights he might have...