First National Bank v. Lyons Exchange Bank

Citations

• 100 Kan. 194
• 164 P. 137
• 1917 Kan. LEXIS 293

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Draft —■ Fraudulently Procured —• Indorsed ly Payee Without Consideration — Indorsee Not an “Innocent Holder in Due Course.” A debtor of one bank fraudulently procured another bank to issue to him a draft payable individually to the president of the bank to which he was indebted. The president took the draft from the debtor and delivered to him the evidences of his indebtedness and securities, at the same time indorsing the draft individually and delivering it to the bank. He had paid nothing for the draft and received no consideration for indorsing it. Held, the bank was not, under these circumstances, a holder in due course.</p> <p>2. Same. When the creditor bank learned that the draft had been protested, it negotiated with the debtor and secured from him a restoration of the securities and evidences of debt which it had surrendered. Held, that in any event, having' lost nothing by the transaction, it could not claim the protection afforded a holder in due course.</p>