No. 25 | Kan. Ct. App. | Dec 7, 1895
The opinion of the court was delivered by
This is an action brought in the district court of Harvey county, Kansas, by J. H. Turner, as plaintiff, against the First National Bank of Newton, Kansas, as defendant, ,to recover twice the amount of usurious interest paid by said Turner to said bank. The action is brought under sections 5197 and 5198 of the Revised Statutes of the United States, being a part of the national banking law. Said section 5197 provides that a national banking association cannot charge a greater rate of interest than is allowed by the laws of the state in which the bank is located.
“Sec. 5198. The taking, receiving, reserving, or charging a rate of interest greater than is allowed by the preceding section, when knowingly done, shall be deemed a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or which has been agreed to be paid thereon. In case the greater rate of interest has been paid, the person by whom it has been paid, or his legal representatives, may recover back, in an action in the nature of an action of debt, twice the amount of the interest thus paid from the association taking or receiving the same; provided such action is commenced‘within two years from the time the usurious transaction occurred.”
The record shows that on October 1, 1885, said Turner was indebted to said bank in the sum of $111.70 ; that for the purpose of extending the time of payment of said indebtedness of $111.70 until March 1, 1886, said bank charged Turner the sum of $9.50, and took 'his note for $121.20 drawing interest at 12 per cent, per annum from maturity. The record also
By the provisions of section 5198, supra, the entire interest upon the. above notes was forfeited. The bank was entitled to the principal sum and no more. The said principal sum is $111.70, $24.40, and $82.80, being a total of $218.90. Upon the 15th day of March, 1886, said Turner paid said bank the sum of $82.15. This sum must be credited upon the indebtedness of Turner and not upon usurious interest. This leaves the said Turner indebted to the said bank in the sum of $136.75. The record also shows that-on March 15, 1886, and at various other times, the indebtedness of said Turner was extended, and that upon each extension a usurious rate of interest w,as charged. On May 12, 1887, the bank loaned to the said Turner the further sum of $175, which was, together with the then valid indebtedness of $136.75, put into a note, and a usurious rate of interest was charged thereon until the 2d day of September, 1887,
It is contended that the court erred in not sustaining the demurrer to the petition, for the reason that no demand is alleged to have been made prior to the commencement of this action. No demand is necessary. No authority is cited to us showing that such demand is required. Section 5198, supra, does not require a demand. It says the person may recover back in an action in the nature of an action of debt. The only proviso is that the action must be commenced within two years from the timé the usurious transaction occurred. The statutes of Kansas nowhere require a demand prior to the commencement of such an action.
It is also contended that the court erred in including in the judgment against said bank interest from the time of the payment of the usury until the rendition of the judgment. Section 5198, supra, says that the person who has paid the usurious interest may recover back twice the amount of the interest thus. paid. It does not authorize the recovery of such an amount
The judgment of the district court is modified to correspond with this opinion. The case is remanded to the court below with instructions to reduce the amount of the judgment rendered herein to the sum of $158.30, and it is ordered that said judgment so modified bear interest at the rate of 6 per cent, per annum from June 13, 1890, and when so modified the judgment is affirmed. The costs in this case will be divided between the parties.