Opinion ID: 1745473
Heading Depth: 1
Heading Rank: 3

Heading: Bad faith refusal to extend additional credit.

Text: Olson claims the trial court erred in dismissing his claim that the Bank was liable for its bad faith refusal to extend additional credit to Olson. He claims the Bank is equitably estopped from raising the statutory loan limitation of SDCL 51-24-2 because a portion of his outstanding loans were amounts misappropriated by Pulse. However, the trial court determined that [a]t all times in 1986 and 1987, the unpaid principal amount of loans to Olson always exceeded the bank's lending limit by more than the amount misappropriated by Pulse. Consequently, the Bank could not legally extend further credit to Olson even if the misappropriated funds were disregarded. The Bank cannot be charged with bad faith when they refuse to do something they may not legally do. Furthermore, authority to perform an illegal act cannot be supplied by estoppel. Dupree v. Moore, 227 N.C. 626, 44 S.E.2d 37 (1947).