The First National Bank of Newton v. Turner

• Decision Date: 01 October 1895
• Docket Number: 25
• Parties: THE FIRST NATIONAL BANK OF NEWTON, KANSAS, v. J. H. TURNER
• Court: Kansas Court of Appeals

42 P. 936

3 Kan.App. 352

THE FIRST NATIONAL BANK OF NEWTON, KANSAS, v. J. H. TURNER

No. 25

Court of Appeals of Kansas, Southern Department, Central Division

October 1, 1895

Opinion Filed December 7, 1895.

MEMORANDUM.-- Error from Harvey district court; L. HOUK judge. Action by J. H. Turner against The First National Bank of Newton, Kansas, to recover penalty for alleged usury. Judgment for plaintiff. Defendant brings the case to this court. Modified. The opinion herein, filed December 7, 1895 states the material facts.

Judgment affirmed.

Willard Kline, for plaintiff in error.

Hess & Johnson, for defendant in error.

DENNISON J. All the Judges concurring.

OPINION

DENNISON, J.:

This is an action brought in the district court of Harvey county, Kansas, by J. H. Turner, as plaintiff, against the First National Bank of Newton, Kansas, as defendant, to recover twice the amount of usurious interest paid by said Turner to said bank. The action is brought under sections 5197 and 5198 of the Revised Statutes of the United States, being a part of the national banking law. Said section 5197 provides that a national banking association cannot charge a greater rate of interest than is allowed by the laws of the state in which the bank is located.

"SEC. 5198. The taking, receiving, reserving, or charging a rate of interest greater than is allowed by the preceding section, when knowingly done, shall be deemed 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. In case the greater rate of interest has been paid, the person by whom it has been paid, or his legal representatives, may recover back, in an action in the nature of an action of debt, twice the amount of the interest thus paid from the association taking or receiving the same; provided such action is commenced within two years from the time the usurious transaction occurred."

The record shows that on October 1, 1885, said Turner was indebted to said bank in the sum of $ 111.70; that for the purpose of extending the time of payment of said indebtedness of $ 111.70 until March 1, 1886, said bank charged Turner the sum of $ 9.50, and took his note for $ 121.20 drawing interest at 12 per cent. per annum from maturity. The record also shows that on September 1, 1885, said Turner was indebted to said bank in the sum of $ 24.40; that for the purpose of extending the time of payment of said indebtedness of $ 24.40 until March 1, 1886, the said bank charged said Turner the sum of $ 4.60, and took his note for $ 29 drawing interest at 12 per cent. per annum from maturity. The record also shows that on November 4, 1885, said Turner was indebted to said bank in the sum of $ 82.80; that for the purpose of extending the time of payment of said indebtedness of $ 82.80 until March 1, 1886, the said bank charged the said Turner the sum of $ 7.20, and took his note for $ 90 drawing 12 per cent. per annum from maturity. Upon the indebtedness represented by each of these notes the said bank had charged the said Turner a rate of interest greater than that allowed by the laws of Kansas.

By the provisions of section 5198, supra, the entire interest upon the above notes was forfeited. The bank was entitled to the principal sum and no more. The said principal sum is $ 111.70, $ 24.40, and $ 82.80, being a total of $ 218.90. Upon the 15th day of March, 1886, said Turner paid said bank the sum of $ 82.15. This sum must be credited upon the indebtedness of Turner and not upon usurious interest. This leaves the said Turner indebted to the said bank in the sum of $ 136.75. The record also shows that on March 15 1886, and at various other times, the...