President of Ticonic Bank v. Johnson

Tenney, J. It is contended in behalf of the plaintiffs, that they have not received more interest, than that to which they are entitled, according to the established rules of banking; and that the instructions of the Judge, restricting the jury to the rate of six per cent, after the notes taken from time to time, became payable, was, erroneous. Banks are prohibited by statute from taking any greater rate of interest or discount on any note or draft or other security, than at the rate of six per cent, a year; but such interest or discount may be calculated and taken according to established rules of banking. R. S. c. 77, § 49. The taking of interest in advance upon loans made b.y banks, has been regarded as proper, according to well established rules of banking; and when notes given for such loans are taken up at maturity, by the substitution of new ones, the interest being advanced on the latter, it is treated as a new loan, and within, the principle of the same rule, notwithstanding it may in the end afford to the bank a greater amount' of interest for a year, than they would otherwise receive. Maine Bank v. Butts, 9 Mass. 49; Agricultural Bank v. Bissell & al. 12 Pick. 586. But after a note given to a bank has become payable, and in no manner taken up or renewed, it is subject to the rule, in reference to interest applicable to individuals, and the rate cannot legally afterwards exceed six per cent. Upon this point the instructions are not objectionable. [417] The jury have found, that the note in suit was for a balance arising from the notes given in satisfaction of the execution, recovered in 1842 in favor of the plaintiffs against Levi Johnson, the defendant, including interest computed from time to time upon notes renewed at the rate of seven per cent, a year. The verdict was for the amount of the note in suit, after deducting the excess over six per cent, included in the note, and also in the sums, which had been previously paid on notes taken up. This finding of the jury was authorized by the instructions of the Judge, “ that if they should be satisfied, that in the notes given on the settlement of the execution, more than six per cent, interest was reserved, and that the note was given in payment of any balance of the notes growing out of that transaction, they would deduct such excess from the amount apparently duo on the note.” It is insisted for the plaintiffs, that the whole execution and interest thereon, at seven per cent., having been paid, excepting the sum, for which this note was given, this note is to be treated as containing only such proportion of the excess, as the note bears to the whole amount received. In the case of Darling v. March, 22 Maine, 184, the sum of $3000 including usurious interest, was settled by anote of $1000, which was paid, and the note of $2000 in suit; and it was held that the latter would be considered as containing only two thirds of the illegal interest. In Pierce v. Conani, 25 Maine, 33, a part of the whole sum found due, including interest exceeding that of the legal rate, was paid by the transfer of certain notes secured by mortgage, and the balance was embraced in a note given by the debtor. It was decided, that the part discharged by the transfer of the notes was a payment, and comprised its proportion of extra interest. The case at bar is not perceived to differ in principle, from the cases referred to; and the jury were required by the instructions, to deduct a larger excess, than the law authorizes. Exccp tiotis sustained.