A $33,000 loan that one South Dakota man gave another 16 years ago did not have to be repaid under a state law that voids loans involving gambling debts, a split state Supreme Court ruled Thursday.

In a 3-2 ruling, the high court reinstated a jury's 2007 finding that the loan included consideration of a gambling debt that late insurance agency owner Donald L. Davis made to sewer-cleaning business owner Gerald Neve.

The ruling in effect means Neve did not have to repay Davis the loan.

Neve's lawyer, Rollyn Samp of Sioux Falls, said the case is unusual because Davis died after the appeal was filed and Neve settled with Davis' estate. However, the Supreme Court still ruled in the legal issues involved in the case.

Court documents indicate that the two Sioux Falls men met in the early 1990s as members of the Elks Club in Sioux Falls, where they gambled in card games. Neve said he lost $1,500 to Davis one evening in 1992 and that Davis said they would work something out, according to the court documents.

Neve said Davis loaned him $33,000 in September 1993 and that it included consideration of the earlier gambling debt. Neve had financial troubles at the time and owed money for business expenses, medical expenses and taxes.

In 2005, Neve sought a court order to have the promissory note declared invalid. South Dakota law provides that notes given in full or partial consideration of gambling debts are absolutely void. The 1907 law has been updated so the ban does not apply to debts from legal gambling in casinos or lottery games.

Davis, who also was a lawyer, had countered that he was owed $83,156 in principal and interest, minus some payments that had been made. He denied that Neve ever owed him a gambling debt.

A trial in 2007 dealt only with the two men's differing testimony on whether the loan involved a gambling debt.

The jury found that the loan was made in partial consideration of a gambling debt, and Circuit Judge Kathleen Caldwell declared the note void.

However, Caldwell later set aside the jury verdict, ruling that there was insufficient evidence to support the jury's verdict.

The Supreme Court majority said Neve's testimony was enough for the jury to find the loan involved a gambling debt.

Even though the law can lead to harsh results in cases where a gambling debt is only part of the consideration for a loan, the law clearly prohibits a contract to repay a gambling debt, Justice Steven Zinter wrote for the court majority.

The two dissenting justices said they believed the loan should be enforced. A weak connection to gambling should not be used to avoid repaying a legitimate loan, they said.