Dakota Nat. Bank v. Kleinschmidt
| Decision Date | 12 January 1914 |
| Parties | DAKOTA NAT. BANK v. KLEIN-SCHMIDT. |
| Court | South Dakota Supreme Court |
On rehearing. Affirmed.
For former opinion, see 139 N.W. 348.
Hazle & Huntington, of Aberdeen (Gaffy, Stephens & Fuller, of Pierre of counsel), for appellant.
Theo. Quale, of Thief River Falls, Minn., and Sutherland & Payne of Pierre, for respondent.
On August 11, 1910, the Northern Casualty Company was a corporation doing business in the city of Aberdeen. One M. E Felty was solicited by a financial representative of the corporation to subscribe to its capital stock. On August 11 1910, Felty signed a stock subscription, the material part of which is as follows: "I, M. E. Felty, of Blunt, S. D., hereby subscribe for fifty shares of the capital stock of the Northern Casualty Company, fully paid and nonassessable, and agree to pay therefor the sum of twenty dollars ($20.00) per share."
In consideration of said stock subscription, and as a part of the transaction, Felty executed and delivered to the representative of the Casualty Company his promissory note as follows:
As a part of the same transaction, the representative of the Casualty Company executed and delivered to Felty a receipt or paper in the following form: "No. 207. $20.00 per share.
On the 2d day of December, 1910, the Northern Casualty Company, for a full and valuable consideration, sold, indorsed, and delivered said promissory note to the plaintiff, Dakota National Bank. At the time of the indorsement and transfer the secretary of the Casualty Company informed the cashier of the plaintiff bank that the note had been given by Mr. Felty for a purchase of stock in the Casualty Company. It appears undisputed that the plaintiff bank had no actual knowledge of the clause in the receipt given by the financial representative of the Casualty Company stipulating that, "in case Mr. Felty can't pay this note, it is to be extended or canceled at his pleasure," and was an innocent purchaser in due course, unless the indorsement at the foot of the note, "No. Receipt 207," when considered in connection with the information communicated to the bank, that the note was given by Mr. Felty in purchase of stock of the corporation, was sufficient to put the bank upon inquiry, and charge it with notice of any facts which might be legitimately inferred therefrom.
It is undisputed that the stock subscription contract and the note were delivered by its agent to the Casualty Company on or about August 13, 1910, and accepted and entered on the stock records of the company, and a stock certificate thereafter issued in the name of Felty. This stock certificate appears not to have been delivered to Felty, but to the plaintiff bank, along with the note. The record is silent as to the reason why the stock certificate was delivered to the bank. The record further shows that on or about December 14, 1910, and after the transfer of the note to the plaintiff bank, Felty caused a letter to be written to the Casualty Company, advising them that he desired to cancel his stock subscription, and would surrender the receipt upon return of his note. No action appears to have been taken on this request. There is no evidence showing that the Casualty Company had actual knowledge that Davis, their financial agent, had inserted in the receipt the clause permitting cancellation of the note at the pleasure of Felty; but we do not consider this fact material upon this appeal, because it cannot affect the rights of appellant bank, if an innocent purchaser for value before maturity.
Felty died in January, 1911, and Kleinschmidt was appointed administrator of his estate. On or about May 8, 1911, plaintiff presented the note to Kleinschmidt, as administrator, for payment, accompanied by an affidavit of Collins, cashier of the bank, which affidavit is sufficient to comply in all respects with section 171 of the Probate Code, except that it does not state that there are "no offsets to the same to the knowledge of claimant or affiant." The claim was rejected by the administrator, as appears by an indorsement thereon, "for the reason that the said note was obtained by fraud and misrepresentation from the deceased during his lifetime; that there was no consideration for said note; that the said note is now and at all times has been the property of the Northern Casualty Company; and that any assignment which may exist has been entered into for the purpose of defrauding the estate of the deceased, and that the said claimant and the Northern Casualty Company have entered into a conspiracy to defraud this estate."
The complaint sets out in full the affidavit accompanying the claim, together with the indorsement of its rejection, as above stated. At the opening of the trial, the defendant objected to the introduction of any evidence under the complaint, for the reason that the claim as presented to the administrator was not supported by the affidavit required by statute, and therefore did not state a cause of action, which objection was overruled. Later in the trial the claim accompanied by the affidavit was offered by plaintiff, and received in evidence, without objection.
At the close of all the evidence, plaintiff entered a motion for direction of a verdict as follows: "Comes now the plaintiff at the close of all testimony in this case, and moves the court to direct a verdict for the plaintiff for the full amount of its claim in this case, on the ground that the undisputed evidence in this case shows that the decedent, Murwin E. Felty, gave his promissory note for a valuable consideration, that the same was transferred in due course of business for value received without any notice of any defense to the plaintiff, that said note is past due and wholly unpaid, and that the same has been presented to the defendant as a claim against the estate and rejected."
The overruling of this motion is assigned as error. Verdict and judgment for defendant. From the judgment and order overruling motion for a new trial, plaintiff appeals. Numerous errors are assigned; but, in the view we take of this case, none of them show prejudicial error.
If appellant bank, upon its own pleadings and evidence, could not recover, regardless of any affirmative defense interposed, it certainly cannot be deemed to have been prejudiced in its substantial rights by reason of alleged errors arising from the attempt of defendant to interpose an affirmative defense. The burden was on appellant to allege and prove in the trial court every fact essential to maintain its action. The allegation and proof of legal presentation of its claim was a necessary condition precedent to its right to maintain the action. Lichtenberg v. McGlynn, 105 Cal. 45, 38 P. 541; Barthe v. Rovers, 127 Cal. 52, 59 P. 310; In re Smith, 13 N.D. 513, 101 N.W. 890. The allegation of the complaint and...
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Detroit Automatic Scale Co. v. Torgeson
... ... following language: ... "State of South Dakota, County of Lincoln ... W. E. Gantt, agent for the Stimpson Computing ... Vail, 31 ... Hun, 204, 4 N.Y.S. 324; Cross v. Nat. Fire Ins. Co., ... 53 Hun, 632, 6 N.Y.S. 84; [1] Pach v. Geoffroy, 65 ... waived. Such is not the rule in this state. Bank v ... Kleinschmidt, 33 S.D. 132, 144 N.W. 934 ... ...