Bletz v. Columbia Nat. Bank

• Decision Date: 20 May 1878
• Citation: 87 Pa. 87
• Parties: Bletz v. The Columbia National Bank.
• Court: Pennsylvania Supreme Court

87 Pa. 87

Bletz v. The Columbia National Bank.

Supreme Court of Pennsylvania.

May 20, 1878

May 7 1878

1. The state courts have jurisdiction where a borrower in an action of debt seeks to recover back twice the amount of illegal interest received by a national bank, contrary to the provisions of the 30th section of the Act of Congress of June 3d 1864.

2. The form of action is within the jurisdiction of the state court and the right claimed in this form is private, belonging to the borrower alone. It is, therefore, immaterial whether the source of the right is a state or a federal law. In either case, it is a law binding upon the state, which has given birth to the right.

3. The jurisdiction of the state courts is to be affirmed when it is not excluded by express provision or by incompatibility in its exercise, arising from the nature of the particular case.

Before AGNEW, C. J., MERCUR, GORDON, PAXSON, WOODWARD and TRUNKEY JJ.

SHARSWOOD J., absent.

Error to the Court of Common Pleas of Lancaster county: Of May Term 1877. No. 193.

This was an action of debt brought by Frederick S. Bletz against the Columbia National Bank, to recover from it $6678.66 together with interest from December 3d 1873. This amount of $6678.66 was double the amount of interest or discount paid by Bletz to the bank on one hundred and sixty-five notes discounted for him within two years prior to the bringing of this suit, each and every of sad discounts being at a higher rate per annum than six per cent. namely at the rate of from seven and a half to twelve per cent. per annum.

This suit was based upon the provisions of the 30th section of " an act to provide a national currency, secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof approved June 3d 1864." After bringing the suit a declaration was duly filed, plea of payment entered by the defendant, and the case being at issue it was for trial at several terms, and continued for various reasons, when, on the 24th day of January 1876, an additional plea " that this court have no jurisdiction" was entered. To this a replication was filed by the plaintiff, and the court below entered a judgment pro forma in favor of the defendant, in order that this court might decide the question of jurisdiction.

Section 30 of the Act of June 3d 1864, reads as follows: " That every association may take, receive, reserve and charge on any loan or discount made, or upon any note, bill of exchange, or other evidence of debt, interest at the rate allowed by the laws of the state or territory where the bank is located, and no more, except that where by the laws of any state a different rate is limited for banks of issue organized under state laws, the rate so limited shall be allowed for associations organized in any such state under this act. And when no rate is fixed by the laws of the state or territory, the bank may take, receive, reserve or charge a rate not exceeding seven per centum, and such interest may be taken in advance, reckoning the days for which the note, bill or other evidence of debt has to run. And the knowingly taking, receiving, reserving or charging a rate of interest greater than aforesaid shall be held and adjudged a forfeiture of the entire interest which the note, bill or other evidence of debt carries with it, or which has been agreed to be paid thereon. And in case a greater rate of interest has been paid, the person or persons paying the same, or their legal representatives, may recover back, in an action of debt, twice the amount of the interest thus paid from the association taking or receiving the same; Provided, That such action is commenced within two years from the time the usurious transaction occurred. But the purchase, discount or sale of a bona fide bill of exchange, payable at another place than the place of purchase, discount or sale, at not more than the current rate of exchange of sight drafts in addition to the interest, shall not be considered as taking or receiving a greater rate of interest."

And section 57 reads as follows: " That suits, actions and proceedings, against any association under this act, may be had in any circuit, district or territorial court of the United States, held within the district in which such association may be established; or in any state, county or municipal court in the county or city in which said association is located, having jurisdiction in similar cases."

J. F. Frueauff, Samuel Reynolds and George M. Kline, for plaintiff in error.-- There is no doubt that the court below has jurisdiction in an action of debt, whether for penalties or otherwise, and the question is, can it entertain jurisdiction in a case where the right of action arises under the laws of the United States? The right of action given by the statute is a private and personal one, which can only be asserted by the party aggrieved. The government or the public is not concerned with it. It is a private right pursued by a private civil action, and the section of the act upon which the action is founded is remedial as well as penal, and is to be liberally construed: Farmers' National Bank v. Dearing, 1 Otto 29. Congress may give exclusive jurisdiction to the federal courts, but if an Act of Congress gives a private right, and does not either expressly or by implication give exclusive jurisdiction to the federal courts to enforce it, the state courts having jurisdiction in like causes may enforce such right. It was manifestly the design of Congress that the state courts should take cognisance of actions like the present as well as any other civil actions against banking associations; and that if it had been the design to exclude the state courts in such cases, appropriate terms would have been employed to express such intention, as in other Acts of Congress, when conferring jurisdiction. Without an express provision to the contrary, the state courts will have a concurrent jurisdiction. It is true Congress cannot create a jurisdiction in the state courts, but it does not follow that the state courts, authorized by state laws to try actions of debt, are precluded from trying such actions merely because the right to bring them arises under the laws of Congress: The Federalist, No. 82; Jordan v. Downey, 40 Md. 410; Chesapeake Bank v. First National Bank, Id. 269; Cook v. State National Bank, 52 N.Y. 96; Farmers' and Mechanics' Bank v. Dearing, supra; Tiffany v. National Bank of Missouri, 18 Wallace 412; Cooke v. Whipple, 55 N.Y. 150; Stevens v. Mechanics' Bank, 101 Mass. 109; Ward v. Jenkins, 10 Metc. 583; Buckwalter v. United States, 11 S. & R. 193; Ordway v. The Central National Bank of Baltimore, 47 Md. 217. But the question is raised whether the court must take jurisdiction in a case brought before it. It is urged that while the state courts might take jurisdiction they are not obliged to do it. We contend that where they may take jurisdiction, they must take it unless prohibited by their own laws; it is not a matter within the discretion of the court. An action which gives a remedy only to a party aggrieved is not to be considered a penal act. State courts have jurisdiction of actions brought by informers against collectors for the charge of the money received under the United States statutes: Lapham v. Almy, 13 Allen 301. And the same principle has been held in Morrell v. Fuller, 8 Johns. 218; Hitchcock v. Munger, 15 N.H. 97; White v. Comstock, 6 Vt. 405; Webster v. The People, 14 Ills. 365. There is a distinction between an action given by statute to the party aggrieved and an action given to any one who will sue, the former being remedial and the latter penal: Moore v. Jones, 23 Vt. 739. This principle has been sustained in our own courts: Commonwealth v. Bennett, 16 S. & R. 243; Mevay v. Edmiston, 1 Rawle 457; Spicer v. Rees, 5 Id. 122; Commonwealth v. Betts, 26 P. F. Smith 465.

H. M. North, for defendant in error.--That the exaction of twice the amount of interest which has been received is a penalty seems too clear to be questioned. The Act of Congress in terms declares the interest if unpaid shall be adjudged a forfeiture. The recovery back of twice the amount of interest when it has been paid is still more a penal infliction: Burrell's Law Dictionary, Penalty; Curtis's Com., sect. 247; First National Bank of Plymouth v. Price, 33 Md. 487. The Supreme Court of the United States, interpreting this section, have declared that an action of this kind under it is brought to recover what is substantially a statutory penalty; and that therefore the statute must receive a strict construction: Tiffany v. National Bank of Missouri, 18 Wall. 410.

The proposition for which we contend is, that the Congress of the United States cannot constitutionally give to state courts jurisdiction over cases of penalties inflicted solely by the laws of the United States. To confer such jurisdiction requires at least the concurrent legislation of the United States and the state: Jackson v. Rose, Gen. Court of Va., 9 Niles Reg., sup. 173; 2 Va. Cas. 34; Commonwealth v. Feely, 1 Id. 321; United States v. Campbell, Tappan, J., in Ohio, 10 Niles Reg. 405; Tappan 29; State v Rutter (Almeida's case), Balt. Co. Court, 12 Niles Reg. 115, 231; United States v. Lathrop, 17 Johns. 4; Teall v. Felton, 1 Comst. 537 (aff'd 12 How. S.C. 284); Ely v. Peck, 7 Conn. 239; Davison v. Champlin, 7 Id. 244; State v. Tuller, 34 Id. 280; Haney v. Sharp, 1 Dana (Ky.) 442; Ward v. Jenkins, 10 Metc. 587; Martin v. Hunter's Less., 1 Wheat. 337; Gelston v. Hoyt, 3 Id. 312, 328, 334; State v. McBride, Rice S.C. 400; Priggs v. Pennsylvania, 16 Pet. 617, 618, 664; Sims's Case, 7 Cush. 302, 303, 308; Moore v. People of Illinois, 14 How. 20, 22; 3 Story Const., sect. 1750;...