184 N.W. 265 | S.D. | 1921
Lead Opinion
'Action to recover on a promissory note. At the close of the testimony the court directed a verdict for the defendant, and from the judgment entered thereon and from an order denying a new trial plaintiff appeals.
The execution of the note by the defendant is admitted, but he claim's that he was induced to sign the same by the false and fraudulent representations made by the party to whom he delivered the note, and that there was a lack of consideration for the same. The fraudulent representations claimed to have been made by the party who induced defendant to sign said note are alleged in defendant’s answer in the following language:
“For further answer, by way of defense to the claim of the plaintiff herein, this defendant alleges that on or about the 2d day of November, 1917, one O. W. Bucklin visited this defendant, and requested and urged this defendant to subscribe for some*467 shares of the capital stock of the Britton 'Co-operative Milling Company; the said O. W. Bucklin claiming to 'be the agent and representative of the Britton Co-operative Milling Company, a corporation, and in order to induce this defendant - to subscribe for the capital stock in said, milling" company, falsely and fraudulently and for the purpose • of deceiving and defrauding this defendant, made to the defendant, in substance,. the following statements and promises, to wit: That the said Britton Co-operative Milling 'Company had bought and was about to take over the flouring mill located at Britton, S. D. That the said Britton Cooperative Milling Company 'had at said time arrangements entered into with the Great Northern Railway Company wherein and whereby a branch or spur railroad line would, shortly be constructed by said railroad company from Burch, S. D., a distance of about four miles, and that upon completion of said branch railroad this defendant, if he became a stockholder in said Britton Co-operative Milling Company, and other stockholders residing on the line of the Great Northern Company near which this defendant resided, could and would be able to ship the grain raised by them directly over the Great Northern Railway to such mill at Britton, S. D., and that said Britton Co-operative Milling Company could, by reason of its being a manufacture', pay and would pay to stockholders therein a substantially higher price for grain, especially wheat, raised by them, than could be secured elsewhere.
“The said O. W. Bucklin further- promised and represented to this defendant, as an inducement for him to buy stock in said Britton Co-operative Milling Company, that the said company would, promptly thereafter ship and send to the Farmers’ Elevator Company at Plana, S. D., near which this defendant resided, flour, bran and feed for stock, and that said milling company would sell such feed to those subscribing for stock in the Britton Co-operative Milling Company at cost and for a substantially less sum than it could be purchased for elsewhere. And the said Bucklin, in order to induce this defendant to subscribe for, the shares of capital stock of the said Britton Co-operative Milling Company, further offered and promised this defendant that, if he would subscribe for five shares of such stock of the par value of twenty-five dollars each and pay therefor one hundred and fifty*468 dollars ($150), twenty-five dollars ($25) thereof to be then paid in cash and the remaining one hundred twenty-five dollars ($125) thereof to be represented by a note to the Britton Co-operative Milling Company, payable January 1,. 1919, bearing interest at the. rate of 8 per cent, per annum, that such five shares of stock would be, by said Britton Co-operative Milling Company, issued to him at once, and .that such stock certificates shomd and would bear and entitle the defendant to 8 per cent, annual interest, and that the interest accruing to this defendant by virtue of the stock certificates would pay all interest accruing on or to accrue upon the note above referred to, and that the dividends accruing on said stock would be sufficient to pay the principal of said note when the same became due, and further promised and agreed that the stock to be issued to him, this defendant, should be the capital stock of the Britton Co-operative Milling Company and that the twenty-five dollars ($25) cash would be paid to the Britton Co-operative Milling Company, and the note for one hundred twenty-five dollars ($125), which this defendant was asked to execute, would be the property and payable to the Britton Co-operative Milling Company.
“And the said O. W. Bucklin at said time, further promised and agreed with this defendant that, unless the sum of forty thousand dollars ($40,000) worth of the capital stock of said Britton Co-operative Milling Company was taken and subscribed on or before December 1, 1917, his subscription for stock therein should be void. That, relying upon such statements, promises, and agreements so made by the said O. W. Bucklin, and believing them to be true, and not otherwise, this defendant, on said 2d day of November, 1917, paid to the said O. W. Bucklin the said sum of twenty-five dollars ($25), and the said O. W. Bucklin prepared at said time a note for $125, which was agreed to be payable to the Britton Co-operative Milling Company, but which said defendant now ascertained was by said Bucklin wrongfully and fraudulently made payable to Britton Milling Company, this plaintiff, delivered the same to said Bucklin.”
It is then alleged that all the promises and agreements made by the said Bucklin were false and untrue, and were made for the purpose of deceiving defendant, and thereby inducing him
This disposes of the case, so far as this appeal is concerned;
“A holder in due course is a holder who has taken the instrument under the following conditions:
“1. That it is complete and regular upon its face.
“2. That he -became the holder of it before it was overdue, and without notice that it has been previously dishonored, if such was the fact.
“3. That he took it in good faith and for value.
“4. That at the time it was negotiated to him he had no-notice of any infirmity in the instrument or defect in the title of the person negotiating it.”
Under the first three subdivisions of this section appellant would -be a holder in “due course,” because there is no question that when the note came into plaintiff’s possession it was complete and regular ujpon its face, that it was not overdue and had not been dishonored, and that it had been taken in good faith and for value.
The judgment and order appealed from are reversed.
Dissenting Opinion
I dissent from that portion of the opinion which directs a reversal. I think the judgment should be affirmed. We fully sustain the views of the trial court and of respondent as to the law of the case. Appellant in its brief treats the questions before us as pure questions of law. It does not contend that the trial court erred because it did not submit to the jury the question whether the representations were made and the question whether respondent relied upon the representations. It contends that the court erred in directing a verdict, because in legal effect the representations made were, not representations on which respondent had the right to rely. Indeed, it contends that a verdict should have been directed for it, if a request therefor had been made. In my opinion the reversal is based upon a ground not assigned as error.