Grand Gulf Bank v. Archer

16 Miss. 151 | Miss. Ct. App. | 1847

Lead Opinion

Mr. Justice Clayton

delivered the following opinion :

This case brings up the question so often discussed in this court, as to the consequence of taking more interest by a bank than is allowed by its charter. The decision below was, that no part of the sum loaned, either principal or interest, could be recovered.

I shall enter upon no examination of the facts to show that the jury was justified in finding that the contract was usurious. I shall take it for granted, that the proof establishes the taking of more interest on the part of the bank, by the contract in this case, than the charter allowed. The consequences of such usurious contract, whether all recovery.is prevented, as was decided in the court below, or whether the principal sum may be recovered without any interest, under the provisions of our statute, is another consideration, to which this opinion will be devoted.

It may now be regarded as settled law, that an inquiry into a violation of its charter by a bank or other corporation, can only be had in a direct proceeding, instituted for the purpose by the government; and not in a collateral way, by individuals. This principle has been recognized by the supreme court of the United States, by many of the State courts, and most explicitly on more than one occasion by this court. Fleckner v. Bank United States, 8 Wheat. 388; Vidal v. Girard’s Executors, 2 How. S. C. R. 127; 16 Mass. R. 102; 3 Ran. 143; 4 Shepley, 224; Bank v. Hammond, 1 Rich. Law. R. 288 ; Commercial Bank of Manchester v. Nolan, 7 How. 508; Wade v. American Colonization Society, 7 S. & M. 663; Bank of Port Gibson v. Nevitt, 6 S. & M. 513. See Reg. v. Bomlin, 2 Gale & D. cited 5 Har. Dig. 385, tit. Corporation.

In the case last cited, this court was unanimous at least upon that point. In the opinion of the majority, the principle is thus stated: — “ Forfeiture or violation of charter cannot be enforced, or set up in defence by any third person, either directly or collaterally, to avoid compliance with the contract.” 561. In the dissenting opinion, it is thus laid down: — “The doctrine is well established, that a corporation is not to be deemed dissolved by reason of any misuser or nonuser of its franchises, until the fault has been judicially ascertained and declared, even if the charter declare that in default of fulfilling the conditions, the corporation shall be dissolved. Hence, such a defence could not be set up to an action of assumpsit upon a promissory note.” 580. Thus it would seem that with entire unanimity, this court has decided that a violation of charter, or a misuser of franchises by a bank, is no defence to an action upon a promissory note. It follows that the violation of charter by the bank in the contract in this case is to be laid out of view. That is a matter for which it is responsible only to the government which created it. This view extends asnvell to the cotton contract, as to the excess of interest; if either were a breach of charter, it can only be investigated at the instance of the state. For a violation of charter it is responsible only to the state ; for a violation of the general law of usury, it is answerable as any person would be.

Then if an investigation into the violation of charter is precluded in this cause, as a matter with which the defendant has no concern, it remains to ascertain the effect of the general law upon the contract.

It is not now to be doubted, that corporations are subject to the general laws of the land, so far as applicable to them. Louisville Railroad Company v. Litson, 2 How. S. C. R. 127; By the same court, it has been expressly decided, that-banks are within the statute of usury. Thornton v. Bank of Washington, 3 Peters, 42. A long list of cases to the same purport might be added from the state courts. Their charters may create particular exceptions, and exempt them from the operation of certain parts of the law, and from their very nature other portions are inapplicable to them. Yet where the general law may apply, it comprehends them, except so far as the charters take them out of its influence. Then the conclusion is attained, that the general law of usury applies to banks, except so far as it is modified by their charters. This charter does not provide that if the bank takes more than the rate of interest therein provided, the contract shall be avoided. If it does contract for more, we must look to the general law to ascertain the consequence. We have already stated, that the breach of charter is no defence to the action. The charter is its particular law.

The usual construction of the statute of this state in regard to interest and usury, as it stood when this contract was made, was, that on every species of contract of loan, interest at the rate of eight per cent, might be legally contracted for, and ten per cent, might be agreed on as conventional interest for money-loaned, if the agreement were expressed in the written contract. If these rates were exceeded no interest could be recovered, but the principal sum only. In the argument of this cause, however, it is insisted, that this construction is erroneous. That in regard to the loan of money, if there be not a written stipulation for ten per cent, that reservation or taking of more than eight per cent, avoids the whole contract. This result is thus worked out in the argument. The first section of the act, as it is found in Poindexter’s Revisal, it is said, provides exclusively for contracts of sale or loan, of other articles than money, and fixes the rate of interest at eight per cent. The second section provides that ten per cent, may be lawfully agreed on, as the rate of interest for loaned money, if inserted in the written agreement; in each of these sections, it is provided, that an excess of the rate of interest prescribed, shall work a forfeiture of all interest, but allows the principal sum to be recovered. As to the third section, the argument says, if it do not relate exclusively to contracts matured, then it must constitute the general law, and the two former sections the exceptions; and by this section, there being no penalty for a breach of it, any such breach must fall under the common law penalty, which was a forfeiture of both principal and interest. These sections stand as 14, 15 and 16, in H. & H. p. 374.

I cannot concur in this view of the statute. Its object clearly was to prescribe a rate of interest in every possible case, and to affix the consequences to be visited on the offender for a violation of its provisions. The first section for the sake of argument, may be conceded to have the limited construction contended for. But suppose on a bona fide loan of money, nine per cent, be agreed on as the rate of interest, but it is not inserted in the written agreement. According to the argument, the whole sum must be lost, though if the rate of interest had been expressed in the agreement, the principal sum and the interest, yea, even ten per cent, if agreed on, might be recovered. An exposition which leads to such results, ought not to be hastily adopted.

I will extract a few rules for the construction of statutes, and proceed to apply them. In construing a statute you must look to the old law — the mischief and the remedy which the legislature meant to apply.

The intention of the statute is to be deduced from a view of the whole, and of every part of it, taken and compared together. It is also a rule that several acts upon the same subject, and relating to the same matter, are to be taken and construed together and compared, because they are considered as having an object in view, and as acting upon one system. And this is the rule, though some of the statutes may have expired, or been repealed, or are not referred to in the other acts. Not that a repealed law has any force, but it may aid in construction. Dwarris, 47. Where a statute is special, but the reason is general, it is to be received in a general sense. A thing which is within the intention of the makers of the statute, is as much within it as if it were within the letter.

In construing acts or statutes, judges are to look at the language of the whole act, and if they find in any particular clause an expression, not so large a'nd extensive in its import as those used in other parts of the act; and upon a view of the whole act, they can collect from the more large and extensive expressions used in other parts, the real intention of the legislature, it is their duty to give effect to the larger expressions.” Dwarris on Statutes, 41-48; 1 Kent, 461, 463.

With these rules in view, we will consider the statute in question. The act of 1805 of this State, first introduced the principle, that in case of excess of the rate of interest allowed by law, no interest but the principal sum only should be.recovered. This continued to be the law until 1817, when the constitution provided, “ that the general assembly should pass no law impairing the obligation of contracts, prior to the year 1821, on account of the rate of interest fairly agreed in writing between the contracting parties for a bona fide loan of money. But they shall have power to regulate the interest, when no special contract exists in relation thereto.” The statute of 1818 carried out this provision, and as much as forty per cent, has been recovered, upon such contracts. Walker’s R. 207. Then came the statute of 1822, the same now under consideration. By each and all of these, the policy of this state is plainly manifested and declared, that in every case, the utmost penalty for usury shall be the forfeiture of the interest only, and that the principal shall be recovered. This is admitted in the argument to be the rule, in reference to every species of contract of bargain and sale, or the loan of anything but money ; and the rule for the loan of money too, where the rate of interest is reduced to writing; but if the rate be not inserted in the written agreement, then it is said, that a case of the loan of money is not within either of the first two sections of the statute, and the whole principal and interest must be forfeited.

There is nothing in this act of 1822 to indicate that the whole policy of the state, as exhibited in its previous legislation, was to be reversed in a case of a loan of money, .where the rate of interest was not agreed on in writing, and in no other; and that in such case, an agreement for more than eight per cent, should avoid the whole contract. There could be no possible motive for such distinction. The case is as much within the meaning and object of the statute as any other. Indeed, the main if not the whole purpose of the two first sections, is-to regulate and provide for interest upon money loaned. The provisions of the first are directed against those shifts and devices often resorted to by usurers to evade such laws, and to prevent a sale or loan of any articles but money, as a subterfuge or cover for usury. The bona fide loan of money, spoken of in the second section, was to distinguish that kind of coutract from those which were colorable only.

The enlarged expressions of these statuses may comprehend' the loan of money, where the rate of interest agreed on is not reduced to writing. The greater includes the less. The legal rate of interest in such cases is eight per cent.; it stands on the same footing with all other contracts of loan. Either this is the fact, or such case is not provided for at all — it is a casus omis-sus, wholly out of the law. We cannot think, that in legislating upon this subject, and with the declared intention in the preamble to regulate the rate of interest, it was the intention of the legislature to omit this large class of contracts. On the contrary it is our opinion, that the first two sections were intended to govern, and do govern every species of contract, in which there was a positive stipulation as to the rate of interest, whether upon a loan of money, or any other thing intended as a shift or device to cover a loan of money. The third section provides for the rate of interest in all cases, in which there is no contract for that purpose, and in those cases only. This construction is the more obvious, because the first two sections provide, that in the event of any contract for more than the legal rate of interest, the principal sum only, but no interest shall be recovered. The third section does not contain this provision, for the reason, that where there was no contract at all for interest, there could be no breach of the law, and consequently no penalty.

This construction of the law has heretofore prevailed in this state. The argument we have just been considering was urged in the case of the Planters Bank v. Snodgrass, 4 How. 616, by the same distinguished counsel who urged it in this case. It did not then prevail. True the opinion of the court turned on another point — that there was no usury — yet the court says very expressly, “ that the penalty prescribed by our statute, is the loss of the entire interest, legal as well as usurious. And it is not less a penal law, because it does not provide for the whole debt, or visit the offenders with fine and imprisonment.” The chief justice dissented in that case, holding that the transaction was usurious. The case of Forniquet v. West Feliciana Railroad Company, 6 How. 116, next came up. The question there was as to usury by the bank, and evidence was offered in support of the plea, which was ruled but by the court below. The chief justice, in delivering the opinion of the court, said, “ the testimony was improperly ruled out, for if more than legal interest was taken, the defendants, to say the least of it, were entitled to an abatement of something, either the whole or part of the interest.” But there is no intimation, that the principal was put in jeopardy. That opinion was unanimous. Next came the case of The Commercial Bank of Manchester v. Nolan, 7 How. 508, which underwent elaborate investigation. A majority of the court decided, that if usury existed, it did not avoid the whole contract, but prevented a recovery of any interest. The chief justice held that there was no usury in the transaction, and gave no opinion as to the effect of usury. Lastly, in the case of the Planters Bank v. Sharp, 4 S. & M. 75, the two judges who presided in that cause, concurred in the opinion, that the effect of usury on the part of the bank was to prevent a recovery of the interest, not of the principal. The chief justice yielded his previous impressions of the law, and acquiesced in the former decisions. I think, therefore, the matter may be regarded as res judicata, a question settled and at rest.

But it is said, the usury act can have no influence in this case, because the bank might take more than seven per cent., the amount allowed by its charter, and yet less than eight per cent., and thus not violate the statute against usury. If this were so, and if the defendant could not under these circumstances use it as a defence, and if the punishment of the bank for a violation of its charter, is to be left to the state alone; all this should not lead us to violate a rule of law that has been settled upon great consideration, — namely, that a breach of charter can only be inquired into upon a direct proceeding for the purpose. So far as the objection operates in this instance, it is in favor of the bank.

This point was not involved in the case of the Commercial Bank of Manchester v. Nolan, 7 How. 508, because the rate of interest allowed by that charter was eight per cent., the same with the general law. The case did not call for the consideration of the effect of a difference in the rate of interest between the charter and the general law. The opinion is there stated, that where a bank exceeds the rate of interest allowed by its charter, but does not transcend the general law, the contract is not void. This must be the rule. Where the charter prescribes a less rate of interest, than the general law, the general law is to that extent repealed and modified, as to such bank, and the charter takes the place of the general law. The rule is thus stated, in a case in Yirginia. “ The charter of the bank does not repeal the statute against usury expressly, and the repeal of statutes by implication is not favored. If by any reasonable intendment, both statutes can have effect, such construction is given them, and where they are inconsistent in some degree the one last passed repeals the former, to the extent of such inconsistency, and no further.” Stribling v. Bank of the Valley, 5 Ran. Any other rule of construction would deal out different measures of justice to different suitors, and prove a practical and melancholy exemplification of the evils of partial legislation.

The question of usury in this case, was a question of fact for the jury, under instructions from the court. If there were any, it probably exceeded eight per cent., so that after all there may be no room for the distinction.

In the charter of the Commercial Bank of Manchester there was no positive prohibition against exceeding the given rate of interest; in this charter there is. Yet the principle there established, that banks are within the general law of usury, protects the contract in this case, as well as in that, from a forfeiture of the principal sum lent. We confined the decision in that case to the facts before us, and therefore the restriction in the language employed. In either case the violation’of charter is not taken into view, but is left to the appropriate action of the state. If the charter had expressly provided that for the taking of more interest than was authorized, the contract should be void, no recovery could be had, because that would have shown an intention to repeal the general usury law, as to this bank.

The question as to the power of the bank to make this contract, may require a few words. Although the authorities are not uniform on this subject, in my view, the question of power of necessity involves the consideration of the breach of charter. To ascertain if the power exists, the charter must be looked to, and if it does not, the attempt to exercise it is a violation of charter, or an usurpation of powers not granted. For this the bank is responsible to the state, but not to those who have dealt with it.' This is .a question with which individuals have no concern. If they deal with a bank, and get all they contract for, and are not disturbed in its enjoyment, it is difficult to see on what ground, they can object a want of power in the bank to have granted it. This is the course of decision in the supreme court of the United States. In regard to the power of a corporation to take certain property upon trust, it thus speaks : “ If the trusts be in themselves valid in point of law, it is plain that neither the heir of the testator, nor any other private persons, can have any right to inquire into, or contest the right of the corporation to take the property, or execute the trusts; but this right would belong exclusively to the state in its sovereign capacity, and in its sole discretion, to inquire into, and contest the right of the corporation to take the property.” Vidal v. Girard’s Exr’s. 2 How. S. C. Rep. 191. See also, 8 Wheat. 355.

If the bank exceeds the powers granted to it, or makes contracts, or performs acts not german to the purposes for which it was created, it is certainly responsible to the government. But this of necessity involves the consideration of a breach of charter. If such act violates a general law, the bank is responsible for it, just as an individual would be.

Yet if the defendants be permitted to make the defence in this case, the result is the same. If an individual exceeds a power granted to him, the act is valid to the extent of the power, but void for the excess. See 7 How. 535, and authorities cited. If the contract be not legal, the measure and extent of the illegality must be determined by the law. The statute of usury comprehends the case according to the repeated decisions of this court, and my own deliberate convictions. By that statute the only penalty is a forfeiture of the interest. This is conceded to be the case, if the rate of interest be inserted in the written agreement, provided it do not exceed ten per cent. Nothing short of the express declaration of the legislature, could satisfy me, that it was their object and intention to exact a forfeiture of the whole principal and interest, where the rate agreed on upon a loan of money is not reduced to writing. There is no conceivable reason for such a distinction. The statute authorizes a conventional interest of ten per cent, under certain circumstances; but in the absence of those circumstances it is eight per cent. In either case a violation of the law is subject to the loss of all interest. I do not believe that there is any hiatus or omission in the statute, in regard to this class of contracts.

The charges given in the court below, not being in accordance with these views, the judgment is reversed and the cause remanded for a new trial. If on such trial the jury-should find, that the bank by its contract was to receive,. without putting the principal or any part of it to hazard, more than the rate of interest allowed by its charter, which in this instance took the place of the general law, as above shown, then they will be ’instructed to find for it, only the principal sum lent. But if they should find, that there was no contract for illegal interest, or that in regard to the cotton, no more than a just compensation for labor and trouble bestowed upon it, was stipulated for, and in regard to the exchange, that there was any real hazard, that the bank might receive less than its principal 5 then they should be instructed to find the principal sum with interest.

Judgment reversed, and'new trial granted.

Mr. Chief Justice Sharkey

delivered the following opinion.

This case originated out of a transaction which is commonly denominated a cotton contract, the nature of which is well understood, as all the banks in the state were, for a time, in the habit of making such contracts, and they have also given rise to much litigation between the banks and their debtors. The questions involved are not new in this court. The Grand Gulf Bank made a loan of money to the defendants, and was to receive and ship to-a foreign market, a quantity of cotton, on certain terms agreed on, and apply the proceeds in liquidation of the debt. This contract is said to be tainted with usury, because the bank reserved the domestic exchange over and above the legal rate of discount, by which is meant the exchange between the port of shipment, and the northern cities.

After a very careful examination and comparison, I am unable to perceive any material point in which this case differs from the case of the Commercial Bank of Manchester v. Nolan, reported in 7 How. 508, which grew out of a contract of the same kind. An effort has been made to draw a distinction, but it consists rather in the mode of presenting the questions, than in any difference in the questions themselves. In that case every feature and point was very fully considered by a majority of the court, after having heard arguments of counsel at great length and of uncommon ability. No new lights have been brought to bear on the points then decided, nor have any new questions been raised which could justify the application of a different rule of decision. We are now called on a second time to say whether the case of the Commercial Batik v. Nolan shall stand as authority, or whether it shall be disregarded and a new rule established. On a former occasion I expressed the reasons which induced me to regard this case as having finally settled all the questions decided by it. Planters Bank v. Sharp, 4 S. & M. 75. I then declared my determination to conform to the rule of decision established by the case of the Commercial Bank v. Nolan. I made this declaration after a full consideration, under a conviction prompted by a sense of duty, and I shall adhere to it. The same reasons which then induced me to acquiesce still exist, and the lapse of time has produced others no less pressing. The case of the Commercial Bank v. Nolan, was decided at January term, 1843. It was followed and approved at November term, 1844, in the case of the Planters Bank v. Sharp, and an assurance then given that it would be afterwards adhered to as furnishing the rule of decision. The community therefore had a right to consider the law as finally settled, and many of the transactions of that description were doubtless arranged by the parties in conformity with the construction which had been given to the law. We may well suppose too that much of the litigation which grew out of these contracts, has been brought to a close in the circuit courts in accordance with the decisions of this court. To alter the rule now would be attended by unfortunate, if not mischievous consequences. We should subject the same class of debtors to two different rules, by making the same description of contract valid as to one and void as to another, a course which is not very well calculated to inspire the confidence of the community in the tribunals of justice. We should give a flat denial to the theory that the law is permanent, uniform and universal. After the law has been so long settled and so well understood, I should regard it as a dangerous precedent to depart from it.

Without pretending to discuss the merits of this case, I will remark that a case of usury is not very clearly made out; but for the reasons already stated, I shall not attempt an investigation of that question.

I think the judgment ought to be reversed, and the cause remanded.

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Dissenting Opinion

Mr. Justice Thachek

delivered the following dissenting opinion.

The examination which I have been enabled to give to this case, has produced convictions in my mind different from those of the majority of the court.

|- The action was instituted upon the defendants’ promissory note, payable to the plaintiffs four months after its date. On the trial, it was contended for the defendants, that the bank had discounted the note and paid its amount, deducting at the rate of seven per cent, per annum, which was reserved for the interest ; that it was made a part of the contract that the defendants should deliver to the bank a certain number of bales of cotton, as additional security for the payment of the note, which were to be shipped abroad by the bank and there sold, the defendants paying “ every expense of whatever kind ; ” that the defendants were not to be credited with the net proceeds of the sales until the account of sales had been received by the bank, and that the p^ank should receive the profit to be made by the sale of domestic exchange between Grand Gulf and the northern cities, which was predicated upon the cotton. On the other hand, the profit derived from the sale of domestic exchange was claimed by the bank, not to have been a device upon its part to obtain more interest than its charter allowed, but as only a fair and reasonable compensation for its labor and trouble in shipping and selling the cotton. The jury found for the defendants, which, as the pleadings presented those questions, was a finding that the bank did make the contract of discount knowingly, corruptly, and with intent to take and receive a greater rate of interest than seven per cent, per annum, and did, in fact, upon the contract, take and receive a greater rate of interest than seven per cent, per annum, and thereby violate a prohibition of its charter.

The inquiries whether the agreement to take and sell the cotton for the account of the defendants’ note, and the agreement to reserve by the bank the profit on the domestic exchange were used to cover the intention of taking more than seven per cent, interest, and did effect that object; or, whether that agreement was simply for the purpose of obtaining collateral security for the payment of the note, and the profit on the domestic exchange was contemplated and taken only in the light of compensation for the trouble of the receipt and sale of the cotton, have been held to be proper questions of fact for the decision of a jury. Commercial Bank of Manchester v. Nolan, 7 How. 521. This is in accordance with a previous opinion that the quo animo with which a contract was made must be established by a jury. Planters Bank v. Snodgrass, 4 How. 623. See also Bartlett v. Williams, 1 Pick. 288.

The Bank is prohibited by its charter to take more than seven percent, per annum upon any of its loans upon promissory, notes payable within twelve months from their date. The first inquiry is, did the evidence warrant the finding of the jury? There is ample evidence in the record that the bank did intend to obtain for the loan of her money a greater rate of interest or profit than seven per cent., and that, especially by means of the domestic exchange, she did effect that object. It is admitted that taking domestic exchange does not necessarily constitute usury : but it is equally clear that it is a question -for the jury, whether taking exchange in addition to interest, is intended as a case for a usurious contract. Andrews v. Pond et als. 13 Peters, 65.

The issue presented to the jury, and the facts.bearing upon that issue aré these: The issue charged the plaintiffs with having made the contract of loan corruptly with intent to obtain a greater profit than at the rate of seven per cent, in violation of her charter. The proof is that at the time of the contract, the bank deducted her discount at the rate of seven per cent., being the full amount allowed by her charter, and made an additional stipulation in the contract, by which she was to have the benefit of the domestic exchange in New York or Philadelphia, together with the use of the money from the time the bills were sold at the north, until advices were received at Grand Gulf. Was not this exchange a probable profit to the bank at the time of the contract, and did not this probable profit constitute part of the consideration of the loan ? The answer of the bank admits that exchange was worth at the time of the contract from three to five per cent, premium in specie, and from fifteen to twenty per cent, in the notes of the bank. It is also stated in the bill of exceptions, that “ the defendants proved by several witnesses that at the time the above note was discounted, and at the time the arrangement and agreement were made, the rate of exchange between Grand Gulf and the northern cities was about from three to five per cent, against Grand Gulf in specie, and about from fifteen to thirty in Mississippi currency.” There was certainly then a probable profit in addition to the amount at the rate of seven per cent, already taken. It was then an agreement to obtain in payment of the loan, in addition to the discount, from three to five per cent, more than the amount of the loan in specie, and from fifteen to twenty per cent, more in Mississippi currency.

There is also, to my mind, ample evidence that the bank did actually make a profit out of the exchange. The answer of the bank states that “the funds arising from the shipments of cotton amounted to $624,720 41. The bank used in the payment of debts about $272,664 03, and drew for $16,790 48, at three per cent., and for $335,275 90, at the rate of five per cent, premium of exchange.” Again, the answer says, “ the bank, when settlements have been made, has always retained the domestic exchange, believing she had a right to do so.” This is an admission that the domestic exchange did amount to a profit in all cases, for how could the bank always retain it, if there were none to retain? Furthermore, Dr. Parirer proves that the bank sold about $350,000 of this exchange, at three and five per cent, premium. Thus, there is positive proof, besides the admission of the bank, that at the time the bank drew, the value of the domestic exchange was at least five per cent., and that the bank did make between $15,000 and $20,000 profit on the domestic exchange, besides using in payment of her own debts at the north a large amount, upon which it is reasonable to presume the same rate of profit might have been made, and which was therefore saved to the bank.

But was this profit upon the domestic exchange merely compensation for the trouble of the bank in acting as the agent of the planter for the sale of his cotton? Admitting that a reasonable compensation might have been retained for agency, although I am inclined to doubt this as to a bank, because I am at a loss to see where a banking corporation obtains the power to act as factor, and receive commissions as a mercantile agent; still, it was certainly a very proper question for the jury to decide, whether the compensation bargained for was a reasonable one, or whether it was a cover for usury and a violation of the charter. It is important to notice here, that by the agreement the cotton was to be shipped at the risk of the owner, and he was to pay “ every expense of whatever kind,” and “all charges and expenses of whatever kind.” These provisions include every kind of legitimate charge and expense, in which would properly fall charges for extra clerk hire, &c. The domestic exchange was therefore not received by the bank to meet any charge, or expense, or risk whatever; for all these were otherwise provided for in the contract.

For what then was the domestic exchange reserved by the bank ? The bank says, as compensation for her trouble; the jury says it was reserved as an additional profit on the loan, beyond the rate authorized by the charter. The bank’s answer to the bill of discovery, states that the reservation of the domestic exchange was not intended as a device or cover for usury, but was a bona fide transaction. Are the defendants estopped from denying any part of the answer 1 In the first place, the mere assertion of a respondent in a bill of discovery, as to his intention, cannot overrule the facts admitted by him, or otherwise legally proved. The answer admits the agreement to reserve the domestic exchange was a part of the contract. It further admits that between $15,000 and $20,000 profit was actually received by virtue of these agreements. It then goes on to state, that this profit was agreed on, not as a cover for usury, or a violation of the charter, but as a bona fide compensation for trouble, &c. The jury were certainly entitled, and it was their duty, to look at the facts admitted in the answer, and draw their conclusions from those facts, as well as from the mere assertion of intention, not made in respect to any question. The answer of the bank to the bill of discovery was made by John Lindsay, president, &c. In his answer to the seventh interrogatory, he states, that at the time this contract was made, James P. Parker was president of the bank. It does not appear, therefore, that Mr. Lindsay knew anything about the contract at the time it was made. He knew nothing except from the books of the bank. His answer respecting the intention of the contract is merely his opinion, and does not amount to a legal fact. Besides, as will be seen hereafter, it is very immaterial what the bank intended in a case of this kind.

Against this expression of opinion in regard to intention, how do the facts stand 1 The principal contract was entirely a contract of loan. The terms upon which the bank would loan, are distinctly stated in the “ extract from the board of directors of the bank,” and from the receipt given for the cotton.

By these written documents, it appears that the bank agreed to loan or advance money on several conditions or considerations. 1st. The borrower was to give his note, with the usual personal security. 2d. He was to place in the possession of the bank, as collateral security, cotton, at the rate of one bale for every fifty dollars loaned, — the cotton to be sold on account of the borrower, at his risk, he paying all expenses and charges of whatever kind. 3d. The bank was to retain the domestic exchange, which is proved to have been worth five per cent, premium, at least, at the time of the contract, and also at the time the bank drew on the proceeds of the cotton. 4th. It was further agreed that, although the payment was to be made to the bank at the north, it was not to be credited upon the note until advice was received here of its payment there, and thereby giving the bank the advantage of ten or twelve days. All these are written conditions of the loan, and form part of the contract of loan, but nothing is said, in any part of the contract, that the bank should reserve the domestic exchange, and have the temporary use of the money after actual payment, for her trouble as agent. If such were the intention, why was it not mentioned in the resolution of the board authorizing the contract, or in the cotton receipt, given when the contract was completed 1 The loan in this case was for four months, and the discount taken was therefore two and one-third per cent. The profit on the exchange was five per cent. The principal contract was that of loan, which was the legitimate business of the bank, whereas acting as agent or factor for cotton planters, was not its legitimate business. It took the cotton as collateral security, and was properly acting for itself as much as for the cotton owner.

But the bank says the five per cent, exchange was merely compensation for trouble, &c. It is not pretended that there was any contract that the exchange should be taken as compensation for agency in selling the cotton. All expenses and charges whatever were otherwise provided for in the contract. A fit compensation for trouble could properly come only under this clause of the contract, and to it only could it be charged. The bank, however, says that it intended to take the profit on the domestic exchange on the score of compensation for its trouble, and not as a consideration of the loan. How can the court or jury ascertain the intention of the contract, except from its terms, and the facts connected with it. It was a written contract, and bespoke its own intention.

From the written terms of the contract, and the facts attending it, the jury have drawn the conclusion that the five percent. exchange formed a part of the consideration of the loan, and that without it, the loan would not have been made. The evidence of Mr. Callender, cashier of the bank, proves that “ the bank was not loaning money in any other way, at the time she was making advances in cotton.” This conclusidft of the jury was not so against the weight of evidence, as that this court should set aside the verdict.

But, even admitting, what was not the case, that the bank had expressly stipulated that the exchange should be reserved as compensation for the bank’s agency in selling the cotton, still the jury might well have come to the same conclusion, on the ground that the stipulation was a shift and device to cover usury. The following is then the true statement of the contract. The bank proposes to the defendant thus: “We will loan you $10,000, for four months, at two and one-third per cent., provided you will give your note, -with approved personal security, and will also place in our hands two hundred bales of cotton, to be sold on your account, at your risk, you paying all charges and expenses whatever, and allowing us, in addition, for our trouble, the domestic exchange upon the proceeds of said cotton, which is worth five per cent., and the use of the amount of the account of sales, for ten days.” A jury might well say, that five per cent, brokerage on a loan, upon which the whole interest is only two and one-third per cent, is unreasonable, and bears intrinsic evidence of being a device to obtain more than two and one-third per cent, for a four months’ loan of money. After the payment of all expenses and charges, five per cent, might reasonably be deemed a heavy extra factorage. In short, from reading the evidence, I am irresistibly brought to the conclusion, that the main object and consideration in all these loans on cotton were to obtain the benefit of this exchange, and that, had exchange been at par, the loans would never have been made.

It has been before intimated that, as to the intention of the bank, it is wholly immaterial whether the bank intended to violate its charter, or the law of usury. The only question is, did the bank intend to make the contract it did make, and was that contract in violation of its charter ? It is of no consequence •whatever, whether the bank knew it was making an illegal contract, or not. This point, as to intention, however, is so elaborately and conclusively argued by Chief Justice Sharkey, in the case of The Planters Bank v. Snodgrass, 4 How. 623, that I refer confidently to that opinion, as covering the whole ground assumed in relation to this matter.

Upon the subject of the finding of the jury, it should be, noted that, by the contract, the payment, to the extent of the proceeds of the cotton, was made at the north; yet, by the express agreement of thé parties, the note here was not to be credited but from the timé of advice received here of such payment. The benefit of the use of the money, during that interval, is not pretended to be derived on the score of compensation for trouble, and is a clear, palpable, and undoubted evidence of a taking of interest greater than at the rate of seven per cent, per annum.

The principal amount of the note, in tiiis case, stood at no risk. The discount was taken at the time of the loan. The principal is secured by note, with sureties, approved by the bank; it is payable, at all events, and in constitutional currency.

■If the.con tract in this case were usurious, what is the consequence of that usury ? It is laid down that a bank is governed by the existing laws of a general nature, in force at the time of its creation, excepting so far as such laws are modified by its charter. It is thereupon contended that, if a bank exceed the rate of interest fixed by its charter, the contract is not consequently wholly void, but the bank forfeits all interest. The latter position rests upon the ground that the interest laws of this state constitute a general law of usury. But this position fails, if it can be shown that there was not in existence in this state, at the time of the grant of this charter, or at the' time of the making of this contract, any general law of interest or usury which can affect this contract.

The only laws upon the subject of interest will be found in How. & Hutch. 374, 375, sects. 14, 15, 16, and it will be seen that they have no reference to contracts in general, but are specifically limited in their operation.

The first (sec. 14) enacts that no person shall take directly, or indirectly, “ for any contract, bond or note for the payment of money, founded on any bargain, sale or loan of wares and merchandise, goods' and chattels, lands and tenements, or any use or occupation thereof,” interest at the rate of more than eight* per centum per annum, and that if it shall appear that more than that rate shall have been taken “upon any such contract, bond or note,” the principal only shall be recovered.

This section has no relation to contracts founded°upon a bare loan of money. The contracts designed to be controlled by this statute, must be “founded on some bargain, sale or loan of wares and merchandise, goods and chattels, lands and tenements, or some use or occupation thereof.” The word “ bargain,” in this sentence, grammatically considered, I conceive, has exclusive relation to “ wares and merchandise,” &c., and not to money. The meaning of the word, in its common acceptation, is “ an agreement between persons concerning the loan, exchange or sale of property.” The old law of this state provided a rate of interest “ for the loan of any 1 money,1 wares, merchandise, or other commodity whatsoever,” which the law, at the time of this contract, did not embrace. Act, March 1st, 1805; Toulrnin’s Dig. 404; Turner’s Dig. 312. The enactment of these sections, however, June 25th, 1822, repealed all previous laws upon the subject. Rev. Code, 8, sec. 8. Thus the first section of the act of March 5, 1805, entitled “an act against usury,” regulated the rate of interest to be allowed on contracts “/or the loan of any money11 as well as upon contracts for the loan of any wares, merchandise, and other commodity. By the constitution of 1817, A. 6, s. 10, the legislature was forbidden to pass any law, prior to the year 1821, controlling the rate of interest, when fairly agreed upon in writing between contracting parties, for a bona fide loan of money. The courts of the day held that rates of interest thus agreed upon were excepted out of the act of 1805, by this provision of the constitution of 1817. Walker’s R. 207. But in the act of June 25, 1822, entitled “ an act regulating the rate of interest,” which was enacted under the constitution of 1817, and which was the act in force at the period of the contract in this case, the legislature omitted to regulate the rate of interest upon contracts “ for the loan of any money,” excepting in instances of conventional interest upon the face of the note, in writing. As the legislature had before it the act of 1805, at the time of the enactment of the act of 1822, it is fair to presume that the omission to provide a rate of interest for general contracts for the loan of money, was by express design.

The fifteenth section enacts that the rate of ten per centum per annum interest, “ may be taken, allowed, and recovered, on all contracts, bonds or notes, in writing, signed by the debtor, for the bona fide loan of money, expressing therein the rate of interest fairly agreed upon between the parties, for the use of the money so loaned,” but that if it shall appear that more than that rate shall have been taken “ by any such contract, bond or note,” only the principal sum shall be recovered.

This section relates exclusively to contracts for the bona fide loan of money, and where the rate of ten dollars on one hundred dollars for a year, and at that rate for a greater or less sum, and for a longer or shorter period, is expressed upon the face of the contract.

The sixteenth section enacts, that the rate of eight per cent, interest shall be allowed “on all contracts, bonds and notes in writing, signed by the debtor, orders, bills of exchange, and accounts stated which ascertain the sum due, after the same is due and payable; and on all judgments and decrees, founded on contracts, debts or demands bearing interest, the raje of interest shall be the Same as that allowed by law on the contract, debt or demand, on which such judgment or decree shall be founded; and on judgments and decrees in all other cases, the rate of interest shall be eight per centum per annum.”

If this section has not exclusive relation to contracts matured, bonds and notes past due, and judgments and decrees, &c. then it must constitute the general law upon the subject of interest, of which the fourteenth and fifteenth sections form the excep-lions. Now no penalty being annexed to a breach of the sixteenth section, any such breach must fall under the common law penalty of usury, which is a forfeiture of both principal and interest. The fourteenth section applies alone to property contracts, and the fifteenth section to contracts for the bona fide loan of money, when the interest is agreed upon by the parties, and expressed in writing; and it is only to “ such contracts, bonds or notes,” that the penalty of the loss of the interest merely, can apply; for, certainly, the use of the term “ such contracts, bonds, or notes,” restricts that penalty to them alone. This construction of the law does not create a double rule in the same case; it simply marks the exceptions contained in the fourteenth and fifteenth sections. The sixteenth section contains expressions larger and more extensive in their import, than the others; it relates to “ all contracts, bonds and notes,” &c.; and this circumstance, according to the rule of the construction of statutes, would give this section generality. It is always the duty of the courts to give effect to the larger expression. Per Lord Tenterden, 7 B. & G. 643. How then can the penalty annexed particularly and exclusively to a violation of the fourteenth and fifteenth sections be applied to the sixteenth section, in the face of the well received rules for the interpretation of statutes? These rules, if regarded, must confirm the foregoing view of our interest laws. For “ when a general intention is expressed, and the act also expresses a particular intention, incompatible with the general intention, the particular intention is to be considered in the nature of an exception.” 5 Bing. 180 ; Dwar. on Stat. 658. Again, “ if in the same act of parliament, there be/me clause which applies to a particular case, and another which is conceived in general terms, the former shall not restrain the signification of the latter.” 2 T. R. 164. It seems to follow, therefore, that if there was any general penalty for usury in this state, which could govern this contract, it was one which demanded the forfeiture of both principal and interest.

It may here properly be added, that the lowest rate of interest allowed generally, in this state, was eight per cent, per an-num, while the rate of interest to which the bank was restricted by its charter, on contracts of the kind under consideration, was seven per cent, per annum. It is difficult for me to understand, even admitting the rule contended for, how a penalty, applying to contracts where eight per cent, interest was allowed, can be applied to contracts restricted to seven per cent, interest. In this case, for instance, although, in my view, it is manifest that the bank did take more interest than at the rate of seven per cent, the exact excess does not appear, and, consequently, as it might not have reached eight per cent, the general law might not, in point of fact, have been violated. It seems to me an anomalous decision, to say that, although the special law of a charter restricts its loans to seven per cent, per annum, the general law of the land will permit those loans to be made at seven and ninety-nine one-Hundredths per cent, per annum. Had the charter of the bank simply authorized loans of money, or had its rates of interest been the same as the general laws of interest, and had there been a general penalty in the state for usury, it then might, perhaps, have been contended with some show of reason, that the general penalty should govern the bank.

But the charter of this bank, (Acts 1833, c. 17, s. 13,) declares “ that the company shall not take more than seven per centum per annum upon any of its loans upon promissory notes, payable within twelve months from the date of such loans.” Here is an express prohibition, and with no penalty annexed. The question now arises : Had the bank a right to make the contract she did? Assuming the view I have taken of the facts to be correct, and comparing them with the above prohibition, and clearly the bank had no right to make such a contract. This must determine the case against the bank. Bank United States v. Osborn, 9 Wheat. 824. In the case of the Bank United States v. Owens et als. 2 Pet. 539, the same principle was decided, and in the words of the court, it is laid down that “ there can be no legal rights where there can be no legal remedy, and there can be no legal remedy for that which is itself illegal.” In the case of the Bank United States v. Owens et als. the point was directly made as to what was the effect of a bank’s taking interest forbidden by its charter, although the charter does not declare such contracts void, and it was decided that “ such contracts are void in law, upon general principles.” And upon a rigid examination of the case of the Bank United States v. Waggoner et al. 9 Pet. 378, where the case of Owens et als. was further considered, I agree with the chief justice of this court, in his opinion in the case of the Planters Bank v. Snodgrass, 4 How. 646, that “ so far at least as this question is concerned, the same decision was adhered to.”

The position is not assumed by me, in this case, nor do I understand it to be taken in any of the cases just referred to, that the defence is put upon the ground that the contract was an act of misuser by the corporation, or a violation of its charter, and, therefore, void, because the charter was thus annulled. I am not, indeed, prepared to say that the act of taking usury, by a corporation, is a valid cause of forfeiture of its charter. For if, at the time of the act, a general law of usury prevailed, to which all contracts were liable, such act might be subject to the penalty only of that general law, or if no general law existed by statute, or a corporation was not subject to it, then it might be liable only to the common law penalty for usury. But the points raised by the circumstances of the case, are, in this view of it, merely, was the contract legal, and such as the corporation had power to make 7 If not, then the contract was void upon those general principles of law, which apply equally to corporations and individuals.