Kressly v. District Bond Co.

SCOTT, J., pro tem. Defendant appeals from a judgment for plaintiff in an action for damages for breach of contract.

Prior to January 18, 1923, appellant corporation, being engaged in the business of buying and selling bonds for investment purposes, purchased a number of bonds of the Sunnyside Irrigation District of Washington County, Idaho, and offered' same to respondent for sale. About January 18, 1923, respondent purchased from appellant four one thousand dollar six per cent bonds of said district maturing February 1, 1933, interest payable semi-annually on February 1st and August 1st, paying therefor i$3,906.77. On [567]February 1, 1923, twelve days after they were purchased by respondent, said bonds defaulted in payment of interest.

The trial court found that appellant made certain representations to respondent to induce him to purchase said bonds, which were untrue and not warranted by the information of appellant, but which were relied on by respondent, and that in truth said bonds were then worthless; that appellant offered, if respondent would not rescind the sale or litigate any claim therefor, to repay respondent, on or before the due date of the bonds, the purchase price and to pay the interest when due; that thereupon respondent accepted said offer and took no legal action; that from February 1, 1923, to and including February 1, 1929, appellant paid the interest coupons when due; that appellant refused to pay the interest coupons when due on August 1, 1929, and denied the existence .of an agreement, notifying respondent that it would not pay either the price of said bond's or interest at any time. On February 25, 1930, this-action was instituted and judgment for respondent for the purchase price of said bonds and accrued interest was thereafter rendered.

Appellant contends that the evidence does not support the findings either as to the existence of an agreement to repay respondent’s loss or as to any consideration for such an agreement; that the action was prematurely brought, and that the agreement, if any, was' barred by the statute of frauds.

There is substantial evidence to support the findings of the trial court as to the existence of an agreement and a consideration therefor. From the evidence it appears that respondent, after the default in the interest payment on the bonds twelve days following his purchase thereof, demanded that appellant take the bonds back and return his money; that thereupon various officials of the corporation told him he “had nothing to fear about the bond's”, that the District Bond Company would protect him and the company “would take care of the interest and also of the principal of these bonds”, that he “would not have anything to worry about, that the District Bond Company would take care of those bonds”, and that “the District Bond Company is paying your interest when the coupons are due and we will also take care of the principal”. B. L.