Haseltine v. Central Bank of Springfield
| Decision Date | 02 December 1901 |
| Docket Number | No. 63.,63. |
| Citation | 183 U.S. 132 |
| Parties | HASELTINE v. CENTRAL BANK OF SPRINGFIELD, MISSOURI (NO. 2). |
| Court | U.S. Supreme Court |
ERROR TO THE SUPREME COURT OF THE STATE OF MISSOURI.
Mr. S.A. Haseltine and Mr. James Baker for plaintiffs in error.
Mr. John Ridout for defendant in error.
The only question involved in this case is whether, in an action upon a note given to a national bank, the maker may set off usurious interest paid in cash upon renewals of such note, and of all others of which it was a consolidation.
In this case, defendants sought to show that they had paid to the plaintiff bank within two years prior to the execution of this note, upon other notes of which this was a consolidation, and also upon this note, usurious interest aggregating $580; which they asked to have deducted from the principal sum of $2240, represented by this note, thereby reducing the plaintiff's claim to $1660.
We understand it to be conceded that, as the note in question was given to a national bank, the definition of usury and the penalties affixed thereto must be determined by the National Banking Act and not by the law of the State. Farmers' & Mechanics' Bank v. Dearing, 91 U.S. 29. In that case it was held that a law of New York forfeiting the entire debt for usury was superseded by the National Banking law, and that such law was only to be regarded in determining the penalty for usury.
That part of the original National Banking Act which deals with the subject of usury and interest is now embraced in sections 5197 and 5198 of the Revised Statutes, the first one of which authorizes national banks to charge interest "at the rate allowed by the laws of the State," and when no rate is fixed by such laws, a maximum rate of seven per cent. The next section is as follows:
Two separate and distinct classes of cases are contemplated by this section: first, those wherein usurious interest has been taken, received, reserved or charged, in which case there shall be "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;" second, in case usurious interest has been paid, the person paying it may recover back twice the amount of the interest "thus paid from the association taking or receiving the same."
While the first class refers to interest taken and received, as well as that reserved or charged, the latter part of the clause apparently limits the forfeiture to such interest as the evidence of debt carries with it, or which has been agreed to be paid, in contradistinction to interest actually paid, which is covered by the second clause of the section. Carrying this perfectly obvious distinction in mind, the cases in this court are entirely harmonious.
That of Brown v. Marion National Bank, 169 U.S. 416, arose under the first clause. The facts are not stated in the report of the case, but referring to the original record, it appears that plaintiff sued the bank to recover twice the amount of certain usurious interest paid to it. Another action was consolidated with this in which plaintiff sought to enjoin defendant from proving certain notes against the estate of which he was assignee, in which a large amount of usurious interest had been included.
In the opinion, a distinction is drawn between usurious...
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...law preempts state law in the area of regulation of interest rates chargeable by national banks. Haseltine v. Central Bank of Springfield, 183 U.S. 132, 22 S.Ct. 50, 46 L.Ed. 118 (1901); Farmers' & Mechanics' Nat'l Bank v. Dearing, 91 U.S. 29, 23 L.Ed. 196 (1875); American Timber & Trading ......
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