Dunn v. National Bank of Canton

Citations

• 15 S.D. 454
• 90 N.W. 1045
• 1902 S.D. LEXIS 52

Syllabus

<p>1. In an action against a bank on a certificate of deposit for $695, brought by tbe bolder, tbs payee intervened, and claimed that it bad been obtained from him by fraud by a gambler, who indorsed it to plaintiff for $50. Plaintiff was acquainted with such gambler to tbe extent that he went on the latter’s appearance bond when he was arrested two days later on intervener’s complaint. The jury returned a general verdict in favor of intervener and against plaintiff, but in answering special interrogatories stated .that plaintiff, at the time he took the certificate of deposit, did not have any notice or knowledge that his indorser, the gambler, had obtained it by fraud and without consideration. Held, that under Comp. Laws, § 4739, providing that good faith consists in an honest intention to abstain from taking any unconscientious advantage of another, together with an absence of all information or belief of facts which would render the transaction unconscientious, the plaintiff was not a bona fide purchaser of the certificate, notwithstanding the special verdict that plaintiff was without knowledge of the fraud, and hence was not entitled to recover.</p> <p>2. One who has been defrauded out of a certificate of deposit by a gambler is not estopped from denying the title of the indorsee of such gambler (the indorsee not being a bona fide purchaser) by the fact that he was present when the transfer was made and made no objections; his presence being merely an incident to the scheme to defraud.</p>