First National Bank v. Gruber

Mr. Justice Gordon delivered the opinion of the court, [384] The evidence in this case establishes the fact that John Gruber was the beneficial owner of the notes produced on the trial, and that for him alone were they discounted by the bank. It hence follows that any claim that Henry Gruber might have set up to the penalty, growing out of the illegal discounts, was without foundation, and was properly disregarded. In like manner, the learned judge of the court below, properly ruled that the banks created by the several Acts of Assembly, given in evidence by the defendant, were not banks of issue. These acts specifically define the powers of the several corporations created by them, but among them is not found the power to issue circulating notes, commonly known as bank notes. But the rule is, that as corporations are purely statutory creatures, powers not specifically granted are to be taken as withheld, and cannot be raised by implication unless they are ancillary to, and necessary for, the proper exercise of those granted. The defendant, then, having failed to show that the banks referred to were banks of issue, it cannot, under the act of Congress, claim the right of those banks to take more than six per cent, interest on loans and discounts. All other points, put to the court below, were well answered, except the defendant’s tenth point and others involving the same principle. That point reads as follows: “ There can be no recovery, under the evidence, as to moneys claimed in this action, except as to the penalty.” The answer was: “ We think there can be recovery for such moneys as were paid by the plaintiff as interest or discount where such moneys so paid were in excess of six per cent.” By a recent decision of the Supreme Court of the United States this would seem to be error, but it is an error of this court rather than of the court below, for our decisions in Lucas v. The Bank, and kindred cases, were followed. The case to which we refer is Barnett v. The National Bank, 8 Otto 555, a case very much like the one under consideration. . The defence, inter alia, was that Barnett and Whitesides, the drawees and acceptors of the bill in suit, were borrowers from the bank as early as January 11th 1866; that the indebtedness was continuous and unbroken from the 8th of April of that year; that it was at. no time less than $4000, and at one period amounted to $36,000; that at the time of the assignment of the drawees to Barnett & Craig, who intervened and were made parties, th.e indebtedness was $28,000 on bills of exchange; that the bank had taken not less than $5000 in excess of the legal rate of interest; that for evasion the bills were arranged in series, and that each series was terminated, from time to time, by refusing to renew and discounting a new bill, the proceeds of which were applied in payment of the prior terminating one; that the bank had received satisfaction of all the bills but the one in suit, and that there was nothing due from the defendants. On demurrer, this plea was ovei’ruled by the [385] court below, and this ruling was affirmed by the Supreme Court. Mr. Justice Swayne, delivering the opinion of the court, in commenting upon the statute, says: “ Two categories are thus defined, and the consequences denounced:— “ 1. Where illegal interest has been knowingly stipulated for but not paid, there only the sum lent without interest can be recovered. “ 2. Where such illegal interest has been paid, then twice the amount so paid can be recovered in a penal action of debt, or suit in the nature of such action, against the offending bank, brought by the persons paying the same or their legal representatives.” And further on in the same opinion: “ In the first defence the payment of the usurious interest is distinctly averred, and it is sought to apply it by way of offset or payment to the bill of exchange in suit. In our analysis of the statute we have seen that this could not be done.” From this it appears certain that neither by set-off nor original action can interest, over legal rate, paid to a national bank, be recovered except by the way of penalty, as prescribed by the act of Congress of June 3d 1864. We have but to add, that the case of Bletz v. The Columbia National Bank, 6 Norris 87, rules that the courts of this state have jurisdiction of suits to recover twice the amount of illegal interest, under the provisions of the national statute above referred to. The judgment is reversed and a new venire awarded.