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injury is not merely incidental to a purpose of benefiting the conspirators), may be actionable, although it would not be so if done by an individual alone. Allis-Chalmers Co. v. Iron Molders' Union (1906) 150 Fed. 155, modified on other grounds in (1908) 20 L.R.A. (N.S.) 315, 91 C. C. A. 631, 166 Fed. 45. And see cases cited in 12 C. J. 583.

In Coggey v. Bird (1913) 126 C. C. A. 527, 209 Fed. 803, it was held that while the fact that one was the owner of all the stock of a corporation would not render her liable for the fraud of the corporation in respect of a sale of a so-called de luxe edition of books to plaintiff, the jury might find that she knew of and participated in the fraud, upon evidence of her own sworn admission to the effect that her husband, who was the general manager of the corporation, "talked over

all business (with her) in relation (among other things) to all sales," she not having taken the stand to deny or qualify that admission; evidence that she kept herself advised about the business generally; and evidence which, the court said, was sufficient to warrant the jury in finding that the business was so rank a swindle that she could not have kept at all in touch with it without knowing of its crookedness.

Where a number of persons form two corporations, one to make contracts for goods and rents, and the other to take possession of the goods and rented premises, there is a conspiracy to defraud creditors, and in a suit for unpaid rent, etc., all of such persons may be held liable. BondReed Hardware Co. v. Walsh (1917) Tex. Civ. App. 193 S. W. 1148.



J. W. M.

C. H. STARKE, Respt.,



North Dakota Supreme Court - February 5, 1916.

(32 N. D. 617, 156 N. W. 494.)

Attorney and client-purchase by attorney- champerty.

1. Section 9412, Compiled Laws 1913, does not render illegal the purchase by an attorney of a promissory note, unless it is shown that it was purchased with intent to bring suit thereon.

[See note on this question beginning on page 173]

Trial jury conflicting evidence.

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2. Where the evidence on the questions of delivery and failure of consideration of a promissory note is in conflict, such questions are properly submitted to the jury.

Appeal denying motion for judgment non obstante.

3. An order denying a motion for

Headnotes 1-3 by CHRISTIANSON, J.

judgment notwithstanding the verdict is nonappealable.

failure to brief specifications abandonment.

4. Specifications of error not supported by argument in the brief may be deemed abandoned, although they are mentioned in oral argument. [See 2 R. C. L. 178-180.]

APPEAL by defendant from a judgment of the District Court for Stark County (Crawford, J.) in favor of plaintiff, and from an order denying a motion for judgment notwithstanding the verdict, in an action brought to recover the amount alleged to be due on a promissory note. Affirmed. The facts are stated in the opinion of the court.

Mr. F. C. Heffron, for appellant:

The purchase of the note, with the other evidence of indebtedness and choses in action by plaintiff, was a criminal act and void, and gives him no right to bring or maintain this action.

Galbraith v. Payne, 12 N. D. 164, 96 N. W. 258; Burke v. Scharf, 19 N. D. 227, 124 N. W. 79; Mann v. Fairchild, 14 Barb. 548, 2 Keyes, 106; Arden v. Patterson, 5 Johns. Ch. 48; Browning v. Marvin, 100 N. Y. 144, 2 N. E. 635; Maxon v. Cain, 22 App. Div. 270, 47 N. Y. Supp. 855; Dahms v. Sears, 13 Or. 47, 11 Pac. 891; Miles v. Mutual Reserve Fund Life Asso. 108 Wis. 421, 84 N. W. 159; Moses v. McDivitt, 2 Abb. N. C. 47.

When payment and delivery are concurrent, there is nothing to be done by either party, and if nothing is done by either, neither party is in default, and neither party can hold the other for breach of contract.

Hapgood v. Shaw, 105 Mass. 276; Bartlet v. Scott, 55 Neb. 477, 75 N. W. 1102; Haynes v. Brown, 18 Okla. 389, 89 Pac. 1124; Cole v. Swanson, 1 Cal. 51, 52 Am. Dec. 288; Barnard v. Houser, 68 Or. 240, 137 Pac. 227.

Messrs. Newton, Dullam, & Young also for appellant.

Mr. T. F. Murtha, for respondent: The denial of a motion for judgment notwithstanding the verdict is not an appealable order.

Turner v. Crumpton, 25 N. D. 134, 141 N. W. 209; Houston v. Minneapolis, St. P. & S. Ste. M. R. Co. 25 N. D. 471, 46 L.R.A. (N.S.) 589, 141 N. W. 994, Ann. Cas. 1915C, 529.

The note was not purchased with intent "to bring suit thereon."

Hall v. Bartlett, 9 Barb. 297; Moses v. McDivitt, 88 N. Y. 62; Wetmore v. Hegeman, 88 N. Y. 73; West v. Kurtz, 16 N. Y. S. R. 696, 2 N. Y. Supp. 110; Van Dewater v. Gear, 21 App. Div. 201, 47 N. Y. Supp. 503; De Forest v. Andrews, 27 Misc. 145, 58 N. Y. Supp. 358; Wightman v. Catlin, 113 App. Div. 24, 98 N. Y. Supp. 1071; Bulkeley v. Bank of California, 68 Cal. 80, 8 Pac. 643; Tuller v. Arnold, 98 Cal. 522, 33 Pac. 445.

The purchase of a bill or chose in action at a receiver's sale is not within the prohibition of the statute.

State Finance Co. v. Halstenson, 17 N. D. 149, 114 N. W. 724; 6 Cyc. 858, 874; Electric Lighting Co. v. Rust, 117 Ala. 680, 23 So. 751; Humes v. Bern

stein, 72 Ala. 546; Hoyt v. Thompson, 5 N. Y. 320; Bluefields S. S. Co. v. Lala Ferreras Cangelosi S. S. Co. 133 La. 424, 63 So. 96.

The question of champerty in the purchase cannot be raised by one not a party to the alleged champertous contract, to defeat a just debt.

Woods v. Walsh, 7 N. D. 376, 75 N. W. 767; Randall v. Baird, 66 Mich. 312, 33 N. W. 506; Isherwood v. H. L. Jenkins Lumber Co. 87 Minn. 388, 92 N. W. 230; Walsh v. Allen, 6 Colo. App. 303, 40 Pac. 473; Prosky v. Clark, 32 Nev. 441, 35 L.R.A. (N.S.) 512, 109 Pac. 493; Croco v. Oregon Short Line R. Co. 18 Utah, 311, 44 L.R.A. 285, 54 Pac. 985; Pennsylvania Co. v. Lombardo, 49 Ohio St. 1, 14 L.R.A. 785, 29 N. E. 573; Taylor v. Gilman, 58 N. H. 417; Million v. Ohnsorg, 10 Mo. App. 432; Hart v. State, 120 Ind. 83, 21 N. Ē. 654, 24 N. E. 151.

Christianson, J., delivered the opinion of the court:

This action was brought to recover upon a promissory note in the sum of $1,500, which it is alleged was executed and delivered by the defendant to the Missouri Slope Brick & Tile Company for a valuable consideration, on or about March 30, 1908, and thereafter sold and assigned to the plaintiff for a valuable consideration. The answer interposed the defenses of (1) want of consideration; (2) failure of consideration; (3) nondelivery of the note; and (4) that the plaintiff was an attorney at law, duly admit ted to practice and practising his profession in the state of North Dakota, and that he purchased the note, with other choses in action, from the said Missouri Slope Brick & Tile Company for the purpose of bringing suit thereon, and that hence the purchase was champertous, and plaintiff barred from maintaining the action. The latter defense was first tried to the court without a jury. The court held that the plaintiff's purchase of the note was not champertous, and that plaintiff had a right to maintain the action. A jury was thereupon impaneled, and the other issues were submitted to the jury, which returned a verdict in favor of the

(32 N. D. 617, 156 N. W. 494.)

plaintiff. Judgment was entered pursuant to such verdict. Defendant did not move for a new trial, but, some time subsequent to the entry of judgment, moved for judgment notwithstanding the verdict. The appeal is taken from the judgment and from the order denying defendant's motion for judgment notwithstanding the verdict.

Appellant makes no specification of insufficiency of evidence, but presents for our consideration certain errors of law. A number of such assignments, however, have been abandoned, and the only errors argued in appellant's brief, and, hence, the only ones which we shall consider, are: (1) Was the plaintiff's purchase of the note in question champertous and void under the laws of this state? (2) Was defendant entitled to a directed verdict upon the grounds of nondelivery of the note, or want or failure on consideration thereof? We will consider these propositions in the order stated.

(1) The note sued upon was given by the defendant to Missouri Slope Brick & Tile Company for fifteen shares of stock in such company. The stock was purchased through the agency of one Kalman. At the time the note was given, the defendant also purchased ten shares of stock in the same company, owned by Kalman. The defendant executed and delivered his two notes, one for $1,000, for the ten shares of stock purchased from Kalman, and one for $1,500, for the fifteen shares of stock purchased from the Missouri Slope Brick & Tile Company (the latter being the note involved in this action). Kalman testified that he sold the stock, prepared the note involved in this action, and that the defendant Wannemacher signed it in his presence.

He further testified:

Q. And what was that note given for?

A. For $1,500 worth of stock in the Missouri Slope Brick & Tile Company.

Q. Was there any understanding


or agreement as to what was to be done with the stock?

A. The stock was to be held as collateral on the note.

Q. That is, Mr. Wannemacher Iwas not to have the stock until he paid the note?

A. No, that says on the face of the note.

Q. I call your attention to some writing in the lower left-hand corner of the note as follows: "Secured by Mo. Slope B. & T. Company stock No. "and ask you in whose handwriting that is?

A. That's in my handwriting. Q. And when was that put on there?

A. At the time this note was made.

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The defendant paid the $1,000 note and received the canceled note and the ten shares of stock. Subsequently, in 1910, the Missouri Slope Brick & Tile Company became insolvent, and a receiver was appointed. On April 5, 1913, the receiver, pursuant to the order of the court, offered for sale and sold at public auction all the remaining assets of the company, consisting of twenty-four accounts, notes, and judgments against various parties, including the note involved in this action, and 16,850 miscellaneous bricks. All of such assets were pur

chased by the plaintiff at such receiver's sale.

Appellant contends that defendant's purchase of the note was champertous and void under the provisions of §§ 9412 and 9417 of the Compiled Laws of 1913. These sections read as follows: "Every attorney who, either directly or indirectly, buys or is interested in buying any evidence of debt or thing in action, with intent to bring suit thereon, is guilty of a misdemeanor." Comp. Laws 1913, § 9412.

"The provisions of §§ 9412, 9414, and 9416 relative to the buying of claims by an attorney, with intent to prosecute them, or to the lending or advancing of money by an attorney in consideration of a claim being delivered for collection, shall apply to every case of such buying a claim, or lending or advancing money, by any person prosecuting a suit or demand in person." Comp. Laws 1913, § 9417.

The only evidence on the question of champerty was the testimony of the plaintiff himself.

On being called by the defendant for cross-examination, under the statute, he testified in part as follows:

Q. How did you purchase this note?

A. I purchased this note at a sale which was advertised in the Dickinson Press, of the assets and uncollectable accounts of the receiver of the Missouri Slope Brick & Tile Company, at public auction at the front door of the courthouse in Dickinson.

Q. And was the note delivered to you at that time?

A. No.

Q. Did you buy any other choses in action at that time?

A. I bought a number of accounts at that time.

Q. And you expected to sue on them when you bought them, if necessary, for collection?

A. I expected that if I couldn't collect them otherwise, probably

suit would be necessary on some of them.

Q. And in pursuance of your intent to sue, if necessary, you brought this action?

A. Yes.

Q. Did you ever demand this of Mr. Wannemacher before bringing suit?

A. No, sir.

Q. You knew he was a responsible party?

A. Why, I knew he wasn't. Q. You knew he had considerable money in the bank here at that time?

A. No, sir. I knew just otherwise; that he wasn't a responsible party. Mr. Heffron, I'll tell you I knew that Mr. Wannemacher had no property in this country, and I thought the note was worth nothing, and I knew that all the property that he had was in his wife's name, and I didn't think the note was collectable. I also knew that he was a nonresident of this state.

Q. And that he was worth considerable money?

A. No. And I also knew that he had a number of legitimate debts around here which he had compromised, after getting his property out of his own hands, for a great deal less than half the face value of them.

Being called as a witness in his own behalf, he testified in part as follows:

Q. Did you buy this with the sole intent and purpose of suing Mr. Wannemacher?

A. No, sir. I had no idea of suing on any of the accounts at that time. My real inducement in making the purchase was the brick, which I knew to be of value. The accounts had been in the hands of Mr. McBride for a number of years, and he had attempted collection of them and had set them out as uncollectable, and I felt that they were of little, if any, value.

Q. Mr. Starke, had you any idea or purpose at the time you purchased these notes, or any other

(32 N. D. 617, 156 N. W. 494.)

time, of harassing or annoying Mr. Wannemacher?

A. Not at all. I knew Mr. Wannemacher not at all. Knew nothing of him.

It is not necessary to construe the statutory provisions invoked by defendant further than to say that this case is not within such provisions, or affected by them.

Attorney and
chase by attor-


statute is penal. If the purchase was made in violation of the terms of the statute, then plaintiff is guilty of a misdemeanor. The presumption is that he is innocent. The statute does not pretend to prevent attorneys from making investments, or purchasing securities or obligations. It only forbids such purchase "with intent to bring suit thereon." The offense rests in the intention. It is not the purchase, but "the intent to bring suit thereon," which converts an act otherwise lawful into crime. Such intent is the element which is criminal and vitiates the contract. See Woods v. Walsh, 7 N. D. 376, 75 N. W. 767; Tuller v. Arnold, 98 Cal. 522, 33 Pac. 445; Re Cummins, 143 Cal. 525, 77 Pa. 479; Bulkeley v. Bank of California, 68 Cal. 80, 8 Pac. 643; Moses v. McDevitt, 88 N. Y. 62; Wightman v. Catlin, 113 App. Div. 24, 98 N. Y. Supp. 1071; Van Dewater v. Gear, 21 App. Div. 201, 47 N. Y. Supp. 503.

There is no evidence in this case showing that plaintiff bought the note "with intent to bring suit thereon." But there is positive testimony to the contrary.

(2) The issues tried to the jury were in reality reduced to one,whether the defendant's purchase of the stock was conditional or unconditional. The defendant contended that such purchase was conditional,

"Now comes the defendant and re-
news the motion for a directed ver-
dict in his favor and against the
plaintiff, and calls the court's atten-
tion to the following grounds of de-
fendant's motion: That the evidence
in this case, having clearly shown
that the note sued upon was given
for stock in the Missouri Slope
Brick & Tile Company, and that
said stock was never tendered or de-
livered to the defendant; that this
section cannot be maintained for the
reason that no tender has been of-
fered in the pleadings, and could not
be offered by this plaintiff, the com-
pany being defunct. And, further,
that the stock could not be assigned
as collateral, because never de-
livered, and therefore never as-
signed; and, further, that this plain-
tiff could not tender the stock, for
the reason that it has no authority
and the company does not now ex-


counsel earnestly
contends that this motion should
have been granted. The difficulty
with the motion, as well as with
counsel's argument, is that it is
predicated solely upon defendant's
testimony, and ignores the evidence
offered by plaintiff. It is conceded
that defendant on the same day
executed two notes, one for $1,000,
and one for $1,500, for capital stock
in the Missouri Slope Brick & Tile
Company; the $1,000 note being for
stock owned by Kalman and as-
signed by him to the defendant.
That the defendant thereafter paid
the $1,000 note, and received the
canceled note and his stock certifi
cate for ten shares of stock.
notes were executed and delivered
March 30, 1908. The books of the
company, which were offered in evi-
dence by the plaintiff, show that on
March 31, 1908, two stock certifi-
cates were issued to the defendant,
-certificate No. 85. for ten shares


and that the note was given for originally issued to Kalman and

stock which was never delivered.
Defendant's contentions are
forth in the motion for a directed
verdict made at the close of the tes-
timony, which was as follows:

transferred by Kalman to the de-
fendant, and certificate No. 86 for
fifteen shares purchased by defend-
ant from the company. The cer-
tificate for ten shares was delivered

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