National Pumps Corp. v. American Pumps, Inc.

The question here is whether the petition states a cause of action. The petition alleges the existence of a contract in which the determinative covenant is a promise by the defendant to pay “out of its net income” a twenty per cent installment of the plaintiff’s claim on June 1 of each year from 1937 through 1941. The petition further alleges that the defendant company failed to pay the installment of June 1, 1939, but it does not allege the existence of any net income. Does this omission make the petition demurrable?

The answer to this question depends on whether or not the words “out of its…