Portland National Bank v. Scott

Strahan, C. J. This record presents but two questions, both arising upon the plaintiff’s demurrer to the new matter contained in the defendant’s answer. The first separate defense pleaded presents the question whether or not, where there is no allegation of illegality or fraud, a contemporaneous parol agreement may be pleaded [424] as a defense to an action on these notes, which shows that by the terms of such agreement the notes were never to be paid by the maker — in other words, whether or not in such case it is competent to vary and contradict the writing by a separate parol agreement made at the time the notes sued on were signed. The law is too well settled in such case to admit of any doubt, at least in this court. (Hoxie v. Hodges, 1 Or. 252; Lee v. Summers, 2 Or. 260; Smith v. Caro, 9 Or. 278; Looney v. Rankin, 15 Or. 617; Beezley v. Crossen, 16 Or. 72; Stoddard v. Nelson, 17 Or. 417.) Under these authorities, it was not error in the trial court to sustain a demurrer to the defendant’s first separate defense. The second separate defense presents the question whether or not the contract made with William Reid, president of the plaintiff corporation, is sufficient to defeat the plaintiff’s action. This depends on the construction to be given to section 5200, Revised Statutes of the United States, which is as follows: “The total liabilities to any association, of any person or of any company, corporation or firm, for money borrowed, including in the liabilities of a company or firm the liabilities of the several members thereof, shall at no time exceed one-tenth part of the amount of the capital stock of such association actually paid in. But the discount of the bills of exchange drawn in good faith against actually existing values, and the discount of business or commercial paper actually owned by the person negotiating the same, shall not be considered as money borrowed.” This statute has been construed by the federal courts, and their construction is binding on us for the same reasons that our construction of the constitution and statutes of this state is binding upon the federal courts. In deciding the question presented, then, we have only to ascertain what construction this statute has received in the federal courts. In Wyman v. Citizen’s Nat. Bank of Faribault, 29 Fed. Rep. 784, it was held that when a bank organized under this statute violates this provision by lending to one person an amount in excess of the limit, such person cannot set up [425] the violation of the statute as a defense to his liability on the note. If a penalty is to be enforced against the bank, it can be done only at the instance of the government. A contract entered into by the bank in violation of this section is not void. And in Gold Mining Co. v. National Bank, 96 U. S. 640, in passing upon the identical question now before us, the court said: “We do not think that public policy requires or that congress intended that an excess of loans beyond the proportion specified should enable the borrower to avoid the payment of the money actually received by him. This would be to injure the interests of creditors, stockholders and all who have an interest in the safety and prosperity of the bank. We are of the opinion that this objection is not well taken.” The same construction prevails in the state courts. (O’Hare v. Second National Bank, 77 Penn. St, 96; Mills Co. Nat. Bank v. Perry, 72 Iowa, 15, 2 Am. St. Rep. 228.) And in cases strongly akin to these in principle the same doctrine has been applied. (Pangborn v. Westlake, 36 Iowa, 546; Vining v. Bricker, 14 Ohio St. 331.) We are therefore of the opinion that the court did not err in sustaining the demurrer to the second separate defense pleaded in the defendant’s answer. Finding no error in the judgment appealed from, the same must be affirmed.