This action is brought to recover on two promissory notes executed by defendant, and in which plaintiff is named as payee. At the close of the testimony both sides moved for a directed verdict. Thereupon the court discharged the jury and made findings of fact and conclusions of law favorable to defendant. From a judgment entered thereon, plaintiff appeals.
• The notes in question were given in lieu of two other notes of equal amounts executed by defendant and payable to the Midland Cattle Loan Company, and were acquired by plaintiff in the following manner: The original notes, were executed by defendant at his home in Charles Mix county on the 28th of November, 1919, payable six months after date, and.given to Kritzer & Pat*451terson, agents for the sale of the capital stock of the 'Midland Cattle Loan Company,. in payment for 200 shares of the capital stock of that company, subscribed for by the defendant at the time of the execution of the said notes. About the 17th day of December following, defendant received a letter from plaintiff in words and figures as follows:
“We have made arrangements to purchase two of your notes, one of $2,500.00, and another one for the same amount. We would like to have you call at this bank at once and we wish to ask you a few questions regarding them before we pass over the money.”
Defendant paid no attention to this letter. On the 23d day of December an officer of the plaintiff bank telephoned to defendant to the effect that plaintiff was negotiating for the purchase of said notes and asked defendant to come to the bank at once. In response to this message, defendant went immediately to the bank. A conversation occurred between defendant and the officers of the, bank relative to the manner in which the notes had been obtained! Defendant told plaintiff of a number of false and fraudulent representations that had been made to defendant by said agents in order to procure said notes, and also called plaintiff’s attention to the fact that the notes had been altered by some person unknown to him after they left his hands by the insertion of the words “Sioux ¡City, Iowa,” immediately before the words and figures, “November 28, 1919.” Defendant further told plaintiff that the deal looked crooked to him and' that he would give plaintiff $1,000 to get him out of it. No certificates of stock in the Midland Cattle Doan Company were ever delivered to or tendered to defendant, and, so far as appears from the evidence, no certificates of stock in that company were ever, issued to defendant nor to any person for him. At the close of this conversation, the president of the bank told the defendant that he would help defendant resell the stock he had subscribed for in the Midland Cattle Loan Company. The officers of the bank then proceeded to make out two notes for $2,500 each, payable to plaintiff. Each was dated November 28, 1919, and payable six months after date. At plaintiff’s solicitation these notes were signed by defendant and turned over to plaintiff. Plaintiff then made out certificates of deposit amounting to $5,000 payable to the Midland Cattle Loan *452Company, payable on the 28th day of May, 1920, the same day on 'which the notes were due. The certificates were then turned over to the agent of the Midland Cattle Loan 'Company, who was there for the purpose of negotiating defendant’s notes of November 28, 1919, who in turn delivered said notes to plaintiff, who turned them over to defendant. Defendant never received anything of value from either plaintiff or the Midland' Cattle Loan Company . for any of the notes he had signed. Some time during the month of May, 1920, defendant paid plaintiff the interest due on the notes held by plaintiff.
[1] Plaintiff claims it is entitled to recover $5,000 either as a holder in due course on the original notes, or that it is entitled to recover $5,000 as a loan on the new notes. It is not entitled to recover on either ground. Plaintiff took the notes sued upon as payee from defendant and therefore cannot be a holder in due course. Britton Milling Co. v. Williams (S. D.) 187 N. W. 159. Neither did plaintiff loan defendant $5,000 .or any other sum whatever. What plaintiff did was to purchase the two original notes executed by defendant' from the Midland Cattle Loan Company, but not under circumstances that made plaintiff a holder in due course of those notes.
[2, 3] In addition to the matters above set out relative to the making of the original contract between the Midland Cattle Loan Company and respondent, it is a fact that said company was a foreign corporation but had not complied with the foreign corporation law of this state; neither had it complied' with the requirements of the so-called “Blue Sky Law” of this state (Rev. Code 1919, § 10127 et seq.), which facts, however, were not known to respondent until after the execution of the notes sued upon in this action.
[4] Section 8902, R. C., provides that, with certain exceptions that do not include the Midland Cattle Loan Company, no foreign corporation shall transact business or acquire, hold, or dispose of property in this state until it shall have filed in the office of the Secretary of State a certified copy of its articles of incorporation, and shall also have filed in the office of the Secretary of State an appointment creating such Secretary of State the agent of such corporation for the service of process. And section 8909 provides, with certain exceptions not material to this case, that any contract *453entered into in this state before the above provisions of law have 'been complied with shall be wholly void on behalf of such corporation and its assigns. It is contended by respondent that under the provisions of this law the original notes were void, that appellant had sufficient knowledge at the time it purchased said notes to have put it upon inquiry that would have disclosed said facts, and that therefore the notes given in lieu of the original notes are void in the hands of appellant. On the other hand, it is contended by appellant that the transaction involved was only an isolated transaction and did not constitute the “doing of business” as defined by this court in Walters Co. v. Hahn, 43 S. D. 153, 178 N. W. 448. That case is not decisive of the question. The Midland 'Cattle Loan Company not only took the subscription for stock, but accepted promissory notes, and later on was engaged in negotiating and indorsing such notes. This constituted more than an isolated transaction. But a single transaction constitutes the “doing of business” under the terms of section 1909, unless for some reason such transaction falls within some exception to the law, and the party claiming the benefit of the exception has the burden of showing such fact. ' This appellant has not attempted to do. The original notes were void' in the hands of the payee, and the notes given in lieu thereof are also void in the hands of the payee named therein. The payee in a promissory note is charged with knowledge of the circumstances under which the same was executed and is bound to know that the payer has received a valuable consideration therefor. McCormick H. M. Co. v. Taylor, 5 N. D. 53, 63 N. W. 890, 57 Am. St. Rep. 538.
The notes being void on the above ground, it is not necessary to consider the other defenses interposed by the respondent.
The judgment appealed from is affirmed.