Not trusting a friend is more dishonorable than being deceived by one.
Literal
Friend [by-に] be-deceived [than-よりも] friend [object-を] not-believe thing [possessive-の] side [subject-が] dishonorable is.
A formal comparative using ~よりも~の方が: the side of not trusting is more dishonorable than being deceived. 欺かれる is the passive of 欺く ('to deceive'). 不名誉 (ふめいよ) uses the negative prefix 不-. Proverbial in tone — a philosophical claim about the ethics of trust.