| N.D. | Feb 27, 1923
Plaintiff bank, in its complaint, has alleged the making of a promissory note by defendant to plaintiff. In an answer, defendant alleges, for a first defense, that he did not receive any consideration whatsoever for the promissory note; for a third defense, that the note was obtained by fraud and misrepresentation that it was necessary for plaintiff to secure such note from defendant before the plaintiff would extend credit to the United Consumers Stores Company in which defendant was interested; that defendant relied upon such false representations and thereby made the note; that, in fact, the loan to the Stores Company had been made several weeks prior to the time of the making of said defendant’s note; that nothing was furnished by plaintiff in reliance upon defendant’s note; that such note did not create any obligation at the time it was given or at any time and was wholly lacking in any consideration whatsoever; for a fourth defense, that the note was made upon the understanding that it was never to he effective or to bo enforced; that plaintiff had previously made a loan of $18,000 to the Stores Company and represented to defendant that
Plaintiff separately demurred to each of the three defenses upon the ground that each failed to state grounds sufficient to constitute a defense. It has appealed from an order overruling its demurrers.
. Plaintiff contends that want of consideration must be specially pleaded as a defense in an action upon a promissory note and that the first defense is insufficient in that regard; concerning the third defense, it is maintained that the acts of fraud and deceit pleaded are insufficient, through lack of specific averment and of representations not within the knowledge of defendant, to constitute a defense; concerning the fourth defense, it is further contended that the alleged oral agreement for nonliability and nonenforcement expressly contradicts the terms of a valid written contract and therefore is invalid.
Decision.
First defense' The rule of liberal construction applies to allegations admitted by a demurrer. In such case allegations of fact sufficient to
Third defense: This alleges fraud and deceit as well as lack of consideration. If it constitutes a defense upon any ground as alleged it will be upheld as such. Kautzman v. National Union F. Ins. Co. 48 N.D. 1229" court="N.D." date_filed="1922-03-06" href="https://app.midpage.ai/document/kautzman-v-national-union-fire-insurance-6739906?utm_source=webapp" opinion_id="6739906">48 N. D. 1229, 189 N. W. 325.
If, however, tbe fraud and deceit alleged are to be considered as forming tbe basis for tbe lack of consideration alleged we are nevertheless of tbe opinion that if tbe note was so secured, pursuant to tbe allegations made, without tbe extension of any credit or tbe parting by plaintiff with anything of value, a valid defense is asserted. Sec Collins v. Townsend, 58 Cal. 608" court="Cal." date_filed="1881-07-01" href="https://app.midpage.ai/document/collins-v-townsend-5440411?utm_source=webapp" opinion_id="5440411">58 Cal. 608, 616; 8 C. J. 930.
Fourth defense: It is unnecessary, to express any opinion upon tbe validity of tbe oral agreement concerning nonliability and nonenforcement in connection with tbe express written terms of tbe note and tbe obligations that would flow therefrom. Further, upon tbe question whether tbe oral agreement made to deceive tbe bank examiner, as alleged, constitutes a defense, we express no opinion. It is sufficient to state that otherwise a defense is asserted, if, through fraudulent representations and false pretenses the note was secured without any consideration whatsoever therefor and as a pure accommodation to tbe bank. See Kautzman v. National Union F. Ins. Co. supra.
Tbe order of tbe trial court overruling tbe demurrer is affirmed.