Merchants' Bank v. Sassee

Bates, Judge, delivered the opinion of the court. The plaintiff sued the defendants on a note of the defendants which the plaintiff acquired by discounting the same at its branch at Brunswick, in Chariton county, Missouri. The note was by its terms payable at the Merchants’ Bank of St. Louis, at the city of St. Louis. The plaintiff, in discounting the note, deducted from the amount of it and in that way received the interest permitted by law to be received, and also in adddition thereto a sum for premium on exchange. The defendants set up this fact as a defence to the suit. This is a common and well known trick of the banks for increasing their profits, and seems to have been intended by the Legislature. The 33d section of the first article of the “ Act to regulate Banks,” &c., (Sess. Acts, 1856-7, p. 22,) is as follows: “ No bank shall directly or indirectly receive or demand, by way of interest or discount, more than six per cent, per annum, on paper not having over one hundred and twenty days to run until due, and seven per cent, on all paper having one hundred and twenty days and not more than six [353] months to run until due; the interest to be computed according to the ordinary rules of banking’ institutions; and nothing in this act shall be construed so as to prevent any bank from demanding and receiving a reasonable premium on exchange in addition to interest upon all notes, bills or obligations payable beyond the limits of the county -where the bank is located.” The third chapter of the fourth article of the same act enacts that “ a banking company is hereby established in the city of St. Louis, to be known by the name and style of The Merchants' Bank of St. Louis.” The court below, in this case, held that the premium received by the plaintiff could not be lawfully received, and gave judgment for the plaintiff for the amount of the note less the amount of the premium paid to it. The plaintiff appealed. The only question for consideration is whether the note was payable beyond the limits of the county where the bank is located. The act evidently intends that the bank shall be located in some county, and that it is not located in some other counties, and it establishes it in the city of St. Louis, and provides that it shall establish a branch at Brunswick in the county of Chariton. Primarily the location of the bank is at the city of St. Louis, in the county of St. Louis, and in strictness the note was not payable beyond the limits of the county where the bank is located ; but it appears to us to be obvious that the intention of the Legislature was to enable a bank to charge a premium for exchange when the note should be payable in a different county from that in which it should be discounted. In this view the court below erred in deducting from the amount of the judgment the premium which had been received by the plaintiff. The suit was originally brought in the name of the branch at Brunswick as a distinct corporation. A demurrer was sustained to that petition, but the plaintiff amended by substituting its own corporate name, and we are not therefore [354] called upon to review the decision of the court below upon that demurrer. Judgment reversed and cause remanded. Judges Bay and Dryden concur.