Bletz v. Columbia National Bank

• Decision Date: 20 May 1878
• Citation: 87 Pa. 87
• Parties: Bletz <I>versus</I> The Columbia National Bank.
• Court: Pennsylvania Supreme Court

Page 87

87 Pa. 87

Bletz versus The Columbia National Bank.

Supreme Court of Pennsylvania.

May 7, 1878.

May 20, 1878.

May 7th 1878.

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 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; 1 Kent's Com. 403-404; Miss. Tel. Co. v. First National Bank, S. C. of Illinois 1875; 7 Chicago Leg. News 158; and see 8 Id. 293; 1 Kent's Com. 403; 3 Story's Com. on Constitution, sect. 1750.

It is not in the power of Congress to confer upon a tribunal, which is exclusively of state creation, jurisdiction to try offences against the United States. Notwithstanding the decision in Buckwalter v. The United States, 11 S. & R. 193, which was an action for penalties declared to be recoverable as other debts, the doctrine seems a plain one that Congress cannot vest any of the judicial power of the United States in the courts of any other government or sovereignty: Martin v. Hunter, 1 Wheat. 304, 330; Ely v. Peck, 7 Conn. 242; Scoville v. Canfield, 14 Johns. 338. It is a fundamental principle of the common law that the courts of the state do not take cognisance of any case of penalty or forfeiture, unless such penalty or forfeiture be inflicted by its own statute law: Scoville v. Canfield, supra; United States v. Lathrop, 17 Johns. 9.

Chief Justice AGNEW delivered the opinion of the court, May 20th 1878.

The question before us is, whether a state court has jurisdiction in "an action of debt" (in the language of the National Bank Act) "to recover back twice the amount of the interest thus paid, from the association taking or receiving the same;" that is to say, when illegal interest is taken contrary to its provisions. The 30th section of the Act of Congress of June 3d 1864, allows national banks to charge and take interest at the rate allowed by the laws of the state where they are located, and no more, and then proceeds: "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."

Bearing in mind the words of the act, that a right of action, in debt, is given to the debtor and those who represent him only, and not to the government or the public, let us see what reason would prevent the action from being brought in a state court, to recover back money paid to the extent of twice the interest paid. The question is most important to the people who are citizens alike under both state and national governments, for if they are driven into the federal courts, the evil will be a monstrous one. The national banks are intended to do the business of the country in the midst of the people, just as others lending money and discounting paper do, whose places they have filled everywhere. They can sue and be sued in the state courts on all business done by them, secure themselves, and purchase under state laws for the sale of property, and enjoy the advantages of state laws as fully as our own citizens. Therefore, unless the federal jurisdiction is exclusive it is clear that even in a doubtful case our decision should be favorable to our own jurisdiction, leaving the doubt to be solved by the federal judiciary; for if our judgment be against it, the citizen has no appeal to the federal courts. If, however, the federal jurisdiction be clearly exclusive, it is our duty so to declare, for the laws of the United States are our laws, and are "the supreme laws of the land, and the judges in every state shall be bound thereby." The relations of the states and the United States are so clearly defined in two recent decisions, none others need be cited: Farmers' and Mechanics' Bank v. Deering, 1 Otto 29; Claflin v. Hauseman, 3 Id. 130. Justice Swayne says in the former, "that this law is as much a part of the law of each state, and as binding upon its authority and people as its own constitution and laws." In the latter, Justice Bradley, quoting Alexander Hamilton, says: "When in addition to this we consider the state governments and the national government, as they truly are, in the light of kindred systems, and as parts of one whole, the inference seems to be conclusive that the state courts would have concurrent jurisdiction in...