German American State Bank of Ritzville v. Lyons

Citation149 N.W. 658,127 Minn. 390
Decision Date27 November 1914
Docket Number18,828 - (91)
CourtSupreme Court of Minnesota (US)

Action in the district court for Hennepin county to recover $2,500 upon defendant's promissory note. The defense is stated in the opinion. The case was tried before Booth, J., and a jury which returned a verdict in favor of plaintiff. From an order denying his motion for a new trial, defendant appealed. Affirmed.


Promissory note -- title of indorsee -- case followed.

1. Rosemond v. Graham, 54 Minn. 323, to the effect that an indorsee of negotiable paper, taken before maturity as collateral security for an antecedent debt, in good faith and without notice of defenses, holds the same free from such defenses, followed and applied.

No error.

2. The record presents no reversible error.

Booth & McDonald, for appellant.

Koon Whelan & Hempstead, for respondent.



On June 9, 1910, defendant made and delivered his promissory note to one McLean for the sum of $2,500, due and payable on December 24, 1911. McLean was indebted to plaintiff bank in a sum exceeding the amount of this note, and before the maturity thereof and in the usual course of business transferred the note to plaintiff as collateral security to that indebtedness. Plaintiff thereafter brought this action to recover upon the note. Defendant interposed in defense that the note was obtained from him by McLean by fraud and fraudulent representation; that it was delivered upon certain conditions which were never complied with; that plaintiff took the note with notice and knowledge of the terms and conditions upon which it was delivered to McLean, and was not a bona fide holder of the same. Upon the issues so presented the cause went to trial, resulting in a verdict for plaintiff. Defendant appealed from an order denying his motion for a new trial, based in part upon the ground of newly discovered evidence.

The assignments of error challenge the sufficiency of the evidence to support the verdict, the refusal of certain requested instructions, and two or more rulings on the admission of evidence.

The defense of fraud and fraudulent representations interposed by defendant was available to him only in the event plaintiff was not a bona fide holder of the note. If plaintiff was such a holder, the note being negotiable, then, under the authorities, here and elsewhere, the defense fails. Roach v. Halvorson, supra, p. 113, 148 N.W. 1080, and authorities there cited. So the primary inquiry is whether the evidence supports the verdict affirming such bona fides in plaintiff's title. Our examination of the record leads to an affirmative answer to the question. We find ample evidence to support the conclusion that no officer or agent of plaintiff having the transaction in charge had any notice or knowledge of the alleged fraud or fraudulent representations, and that the bank acquired the note in the usual...

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