Case Name: CITIZEN'S STATE BANK OF NEWTON, IOWA, Respondent, v. ROWE et al., Appellants
Court: South Dakota Supreme Court
Jurisdiction: South Dakota
Decision Date: 1915-11-19
Citations: 36 S.D. 349
Docket Number: File No. 3681
Parties: CITIZEN’S STATE BANK OF NEWTON, IOWA, Respondent, v. ROWE et al., Appellants.
Judges: WHITING, J, not sitting.
Reporter: South Dakota Reports
Volume: 36
Pages: 349–350

Head Matter:
CITIZEN’S STATE BANK OF NEWTON, IOWA, Respondent, v. ROWE et al., Appellants.
(154 N. W. 816.)
(File No. 3681.
Opinion filed November 19, 1915.)
1. Bardes and Banking — Bank Endorsee, Notice of Voidness of Note —Officer of Endorse© and Endorser Coi'poration, Effect as Notice.
Where a bank purchased a note void in its inception, held, that the fact that the president of the -bank at the time of the purchase was also president of the corporation from which thei note was purchased, and endorsed it as president of the latter corporation, did not charge the bank, nor its president, with constructive notice of the irregularity of the note; it appearing that such -officer was not the president of the corporation endorsor at the time of the execution of the note. Former opinion modified.
S. Negotiable Instruments — Endorsee of Void Note — Burden of Proof of Bona Eide Purchase — Question for Jury.
Where a note was void in its inception, held, that the burden of proof is upon the purchasing bank to show that it was a bona fide purchaser of thei note for value before maturity; and this question was one for the jury.
Appeal from Circuit Court, Minneaha County. Hon. Joseph W. Jones, Judge.
On petition for rehearing.
Petition denied.
For former opinion, see 36 S.'D. 151, 153 N. W. 939.
Hanten & Hanten, and Perrett P. Gault, for Appellants.
Joe Kwby, for Respondent.

Opinion:
POLREY, J.
In the preparation of the -opinion, in this case (153 N. W. 939) the writer inadvertently assumed that E. R. Maytag, who was president of the plaintiff bank at the time it purchased the note involved, was president of the International Mausoleum Company at the time of the execution of the said note, and that, for that reason, he had knowledge of the infirmity of the note at its inception. In a petition for a rehearing respondent calls our attention- to the fact that in this assumption we were mistaken, as the -said F. L. Maytag did not 'become president of the said company until -some time after the execution of said note, though prior to the transfer thereof to plaintiff. This being the case, neither the said Maytag n-o-r the plaintiff -can be charged with constructive notice of the illegality of the note. But, as the note was void in its inception, -the burden of proof is cast upon plaintiff to show that it was -a bona fide purchaser of -the note for value and before maturity; and this question should have been submited to the jury a-s requested by appellant. Landauer v. Sioux Falls Implement Co., 10 S. D. 205, 72 N. W. 467; Tredick v. Walters, 81 Kans. 828, 106 Pac. 1067; Kniss v. Holbrook (Ind. App.) 40 N. E. 1118; Horstman et al. v. Zimmerman et al. (Pa.) 4 Atl. 171; Kirby v. Berguin, 15 S. D. 444, 90 N. W. 856.
For the refusal to submit this question to the jury, a new trial must be awarded. To this extent the opinion of the court is modified, and the rehearing denied.
WHITING, J, not sitting.