Court Opinion

ID: 6692422
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:39:23.16243+00
Date Added: 2024-06-11T16:01:09.042748
License: Public Domain

SHERWOOD, J.
(dissenting). I cannot agree to that part of the majority opinion which holds the Reliance Savings Bank was the agent of respondent. This record shows that on October 23, 1923, the rural credit board of South Dakota made the Reliance Savings Bank of Reliance, £>. D., its agent to pay the Jerry Green mortgage and obtain a satisfaction thereof. Thereafter, and on November 6, 1923, the Reliance Savings Bank and defendant Schmitt, through their conspiracy and fraud, induced him to send his mortgage andi satisfaction to the Reliance Savings Bank for payment. The rural credit board was not a party to this fraud; but knowledge of the fraud must be imputed to it through the knowledge of its agent, Reliance Savings Bank. Speaking of this fraud, the majority opinion says:
“It further appears very plainly that appellant Schmitt conspired with Reliance Savings Bank to lead Green to believe that it was necessary to send his release of mortgage to Byman county, S. D., for collection, and that Schmitt and Reliance Savings Bank fraudulently conspired together to get the release of the Green mortgage in the Reliance Savings Bank to the end that Schmitt *24might get both the release of the mortgage and the money to pay the same under the control of himself and his fellow conspirators, procure the satisfaction of the mortgage to be recorded, convey the land, and cause other incumbrances to be placed thereon, and then tie up the money by his so-called garnishment proceeding, and take advantage of the situation thus created to extort money from Green upon a highly fictitious claim.”
This so-called agency obtained by fraud, knowledge of which must be imputed to the rural credit board, cannot now be used by them to obtain an interest in this land, either equal or superior to that of respondent.
In Burch v. Odell and Wagner v. Spaeth, cited in the majority opinion, to sustain the proposition of agency, the court in both cases specifically say: “No question of fraud 'was involved in either case:”
And in Burch v. Odell the North Dakota court say at page 795 of the opinion: “In the absence of fraud or bad faith the relation between the plaintiff and the Ruso bank must be held to be that of principal and agent”; clearly indicating they would not have held such appointment an agency if it had been obtained by fraud and deceit. In my view, the lower court was right in holding that the Reliance 'Savings Bank was not an agent of respondent. The apparent agency of the Reliance Savings Bank was in effect no agency because obtained through conspiracy and fraud.
In my view the case should not be turned on the question of agency, but on the question of fraud, knowledge of which must be imputed to the rural credit board.
The judgment of the lower court should be affirmed.