46 Neb. 381 | Neb. | 1895
This action was brought in the court below on the 5th day of August, 1889, by Peter Schwenk & Co. under the provisions of section 5198 of the Revised Statutes of the United States to recover the penalty therein prescribed for taking and receiving usurious interest. The petition contains thirty-eight counts, which are substantially alike, excepting as to the date and amount of the loans made by the defendant to the plaintiffs, and the date and amount of illegal interest paid on such loans.
The first count alleges, in effect, that on the 5th day of August, 1889, the plaintiffs, as principals, and T. H. Eghert, as surety, executed and delivered to the Norfolk National Bank their promissory note, therein set forth, payable to the order of said bank, calling for the sum of $582.80, due in sixty days, with interest at ten per cent per annum from maturity; that at the same time plaintiffs paid to the defendant and the defendant unlawfully and wrongfully received as interest upon said note, from the date thereof until its maturity, the sum of $11.65, the same being interest at the rate of twelve per cent per annum in advance, and that by reason of the premises defendant became and is justly indebted to plaintiffs in the sum of $23.30, no part of which has been paid. The amount of usurious interest alleged in the other thirty-seven counts of the petition to have been paid by the plaintiffs, and unlawfully and knowingly received by the defendant, aggregate the sum of $1,046.25. The plaintiffs pray judgment for double the amount of interest alleged to have been paid, to-wit, the sum of $2,139.10. The defendant answered denying each and every allegation
Upon a trial of the' issues to a jury, the following verdict was returned:
“We, the jury impaneled and sworn in the above entitled cause, do find as follows:
“1. We find for the plaintiffs P. Schwenk & Co. on the several causes of action set out in their petition, the sum of $2,139.10.
“2. We do further find.for the defendant the Norfolk National Bank, on its several causes of action set up in the answer, the sum of $3,500.
*384 “3. We do further find for the plaintiffs P. Schwenk & Co., on the several counter-claims or offsets set up in the reply, the sum of $802.50.
“And we further find that there is due from the plaintiffs to the defendant (the balance) the sum of $538.40.”
Prom a judgment for the defendant entered on the verdict for $538.40, and from an order denying the motion for a new trial, the bank prosecutes a petition in error to this court. The evidence introduced on behalf of the plaintiffs below tended to sustain the averments contained in the several counts of the petition, and the jury found for the plaintiffs for the full amount claimed.
The main ground urged for a reversal of the judgment, and the only one decided, is that the plaintiffs, were allowed, as a set-off against the notes described in the answer, the sum of $802.50, on account of usurious interest paid by the plaintiffs to the bank on the loans evidenced by said notes. It appears from the pleadings and evidence that the bank made the plaintiffs below loans upon the dates and for the amounts following: January 14,1886, $1,000; June 16, 1885, $1,500; and May 11, 1886, $1,500. Plaintiffs at the same time executed their promissory notes for the respective sums, which were renewed from time to time, the notes set up in the answer being the last renewals thereof. On the making of the several loans and upon each renewal note, the plaintiffs paid the bank interest exceeding the lawful rate, all of said payments having been made more than two years prior to the bringing of this suit. The question is squarely presented whether the amount of interest paid a national bank on a usurious loan of money can be applied as a payment on the note given for the sum lent in an action brought to recover the principal sum? Section 5, chapter 44, of the Compiled Statutes of this state declares: “If a greater rate of interest than is hereinbefore allowed shall be' contracted for or received or reserved, the contract shall not, therefore, be void;
It is contended that the statute of this state above quoted does not apply to national banks in so far as it allows all sums paid as usurious interest to be credited as a payment upon the principal debt, but that section 5198 of the Revised Statutes of the United States alone determines the penalties that shall be imposed upon national banks for exacting illegal interest. This section provides: “ 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 and which has been agreed to be paid thereon. In case a 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 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 foregoing section has more than once been under consideration by this court. In construing its provisions in the case of Hall v. First Nat. Bank of Fairfield, 30 Neb., 99, it was said: “It is apparent that this section covers two classes of cases. The last clause
Which statute should govern and control in this case? If the only remedy afforded the borrower, and the only penalty imposed upon a national bank, is that prescribed by said section 5198, it is clear that the plaintiffs below were not entitled to recoup from the face of the three notes set up in the answer any sum whatever on account of usurious interest paid thereon to the bank. It has been held in some of the sister states that national banks are not exempt from the penalties imposed by state laws for exacting usurious interest by such banking institutions. In other words, where a national bank makes a usurious loan and the statute of the state where the bank is located declares that the lender in such case should forfeit all interest, credit must be given for all the interest which has been paid on the contract. This court, likewise, without considering the point whether national banks are amenable to state laws relating to usury, has applied the interest paid on a loan of money tainted with the vice of usury as an offset
It is insisted by counsel for defendants in error that congress, by the removal act of March 3, 1887, as corrected by the act of August 13,1888, has subjected national banks to the laws of the respective states where they are located, so far as remedies are provided for the wrongs they may perpetrate. In the first subdivision of the act mentioned above it is provided: “That all national banking associations established under the laws of the United States shall, for the purposes of all actions by or against them, real, personal, or mixed, and all suits in equity, be deemed citizens of the states in which they are respectively located.” This language cannot be construed as making national banks liable to the penalties fixed by a state for exacting unlawful interest. The object and purpose of congress was to prevent the removal from the state to the federal courts of causes in which national banks are parties.
Whatever may be our own views of the question under consideration, we feel bound to keep in line with the decisions of the highest court of the land — the supreme court of the United States — upon all matters of which it is the final arbiter. It follows that the district court erred in allowing the plaintiffs below to offset against the three notes set up in the answer the amount paid the bank as interest on the usurious transactions. For the error pointed out, the judgment is reversed and the cause remanded.
Reversed and remanded.