Iowa Nat. Bank v. Sherman & Bratager

• Decision Date: 04 April 1905
• Citation: 19 S.D. 238,103 N.W. 19
• Parties: IOWA NATIONAL BANK OF OTTUMWA, Plaintiff and respondent, v. SHERMAN & BRATAGER, Defendants and appellants.
• Court: South Dakota Supreme Court

19 S.D. 238

103 N.W. 19

IOWA NATIONAL BANK OF OTTUMWA, Plaintiff and respondent,

v.

SHERMAN & BRATAGER, Defendants and appellants. South Dakota Supreme Court Appeal from Circuit Court, Minnehaha County, SD Hon. Joseph W. Jones, Judge Modified Joe Kirby Attorneys for appellants. Boyce & Warren Attorneys for respondent. Opinion filed April 4, 1905 (See 17 SD 396, 97 NW 12)

FULLER, J.

The facts in this case, now before us on rehearing, are stated in 17 SD 396, 97 NW 12, where it appears that the action is upon a promissory note executed by appellants to the Janney Manufacturing Company, and transferred to the respondent bank, before maturity, in the due course of business. As a complete defense appellants pleaded the breach of an express warranty, failure of consideration, and fraudulent representations as to certain farm machinery in settlement for which the note was executed, and the last two paragraphs of the answer are as follows:

“That the said Janney Manufacturing Company, at the time it entered into said contract with these defendants, knew that said machines were defective, and not suited for the purpose for which they were manufactured, but wrongfully and fraudulently and for the purpose of defrauding these defendants did make such representations and statements, and thereby induced these defendants to execute to it their note as aforesaid; that said plaintiff ad full knowledge at all times that said note had been obtained from these defendants by fraud and without consideration therefor; that the alleged consideration therefor had wholly failed; and that, if the plaintiff has said note it has the same only as the agent of the said Janney Manufacturing Company, and as parties to said fraudulent transaction, and for the further purpose of harrassing these defendants and enable the said Janney Manufacturing Company to better carry out the purpose of its fraudulent design.”

Upon the theory that respondent is a bona fide purchaser of the note for value, and before maturity, as shown by the uncontroverted testimony of its president and cashier, the trial court directed a verdict in its favor for the full amount claimed. In appellants’ former brief there is a cursory statement to tho effect that the case should have gone to the jury on account of the interest of such witnesses in the result of the action, but the point was not argued by counsel, and we failed to consider the same as thoroughly as some other questions more confidently relied upon for a reversal. Now, all the testimony relative to this vital issue of bona fides was adduced by interested bank officials, and the fact that its cashier was a stockholder and secretary of the Janney Manufacturing Company, and its president the manager of the fiscal affairs of such corporation, acting in the capacity of treasurer, director, and stockholder, when considered with the other circumstances in the case, might be sufficient to justify the jury in discrediting their testimony on the ground of interest, and in that event the evidence offered by appellants and rejected by the court would constitute a complete defense. According to the daily custom of these closely related corporations, this note, duly...