National Bank v. Taylor

Citations

• 5 S.D. 99
• 58 N.W. 297
• 1894 S.D. LEXIS 38

Syllabus

<p>1. S., the president and active manager of a bank, sold a number of shares of its capital stock to T. under representations of fact relied upon by T., and afterwards claimed by him to be fraudulent and false. The bank, by its directors, had full and actual knowledge of such representations, and with such knowledge, consented and arranged that T.’s notes given fin partial payment for said stock should be made directly to the bank, and take the place of notes held by it against S. and others. Held, that, in an action by the bank against T. on such notes, he might make the same defense, founded on such alleged false and fraudulent representations, as he could have made if the notes had been given to S., and the action brought by him.</p> <p>2. In such purchase of stock, T. had the right to rely solely upon the representations of fact by S., and if S., conscious that T. was so relying, knowingly deceived him, nothing’ would condone the wrong as between them, or estop T. from asserting it, but his acquiescence in it with knowledge of the facts.</p> <p>3. A party who thus deliberately deceives another to his prejudice cannot complain that the sufferer has not been vigilant in finding it out.</p> <p>4. The right of such sufferer to rescind may be qualified by intervening interests of innocent parties; but, so long as the question is between the original parties solely, he may continue to rely upon the representations upon which the contract was made, and by which it was induced, and loses no rights, as against the wrongdoer himself, by failure to diligently discover the fraud.</p> <p>5. The fact that, soon after such purpose, T. became, and for a number of months was, the cashier of the bank, would not alone, and as matter of law, make him chargeable with a knowledge of the condition of the bank; and bO of the falsity of the representations under which he bought, as against evidence that he was, for a considerable portion of the time, absent from the bank and the city w