18 Wis. 102 | Wis. | 1864
By the Court,
That the $1,500 loan was made by the bank, the evidence leaves no room for doubt. It also clearly appears that the papers were executed to Lander as a mere cover for the violation of the law in the rate of interest. The note was therefore void for usury, if the usury law was applicable to determine the effect of a contract made by a bank in violation of the banking law. In the case of Rock River Bank v. Sherwood, 10 Wis., 230, the question was considered, and we there held that the usury law then in force was so applicable. The respondent’s counsel now contends that the question was not involved in that case. But whether it was so or not, it was supposed to be, and was fully considered. . And as it is in this case, we deem it necessary only to say that we are satisfied of the correctness of the conclusion there arrived at upon this point. That conclusion is said to be irreconcilable with our decision in Reedsburg Bank v. Hastings, 12 Wis., 47. But we are unable to see any conflict.
In that case it was held that the provision of the constitution concerning the rule of taxation was designed as a limitation on the legislative power established by the constitution, and not on the power of the people acting in their primary sovereign capacity; and that it could not be applied to invalidate the
Other instances might be referred to illustrating the correctness of this position. Thus, if a bank should refuse to discharge a mortgage which had been paid, it would be liable to the penalty given by the law upon that subject. And that law might be changed and it would be still liable. If it should maintain a nuisance on its premises, or create one on the premises of another, it would be subject to the appropriate remedies.
The question involved here falls strictly within this distinction. In applying the usury law to a contract made by a bank in violation of its charter, there is no attempt to amend or interfere in any way with the banking law. It is only allowing the legislature to say what shall be the effect if the bank violates that law and the general law of the state, and that in respect to a matter where the banking law itself made no attempt to regulate it. That this is fully within the province of the legislature there can be no room for doubt.
But the respondent’s counsel further contends that even though it was correctly decided that the usury law of 1856 was applicable to the usurious contract of a bank, yet the same cannot be held of chapter 160, Laws of 1859, which was in force when this contract was made. This is claimed in consequence of section 9 of that chapter, which says: “ This act shall not in any manner affect the operation of an act to authorize the business of banking, approved April 19, 1852.” It is argued that this is equivalent to a provision excepting banks from the operation of the act. But the language will not bear that interpretation. It is only a disclaimer by the legislature
But it seems to be immaterial, so far as the right to maintain the action on this note is concerned, whether the usury law of 1859 or the banking law is held applicable. In the case of the Rock River Bank v. Sherwood the counsel contended for the application of the usury law of 1856, under which a usurious contract was good for the principal, so as to avoid the effect of a class of decisions which hold that where a corporation makes a contract in violation of its charter, it is totally void for mere want of power to make it, independent of the question of usury. These cases are referred to in the opinion of Justice Cole, 10 Wis., 237, and their applicability was only denied by holding, as we then did and now do, that the effect of such contracts made by a corporation was to be determined by the general law as to the effect of all usurious contracts. But in this case it seems immaterial, as the law of 1859 made the contract void, the same conclusion which must have been arrived at if that law was held inapplicable, and the question determined by the charter.
The right of the sheriff to sue on the account was disposed of by the decision of this court in Brower v. Smith et al, 17 Wis., 410. He could not sustain the action.
The judgment is reversed, with costs, and the cause remanded with directions to enter judgment for the defendant.