Tiffany v. National Bank of Missouri

Decision Date01 October 1873
Citation18 Wall. 409,21 L.Ed. 862,85 U.S. 409
PartiesTIFFANY v. NATIONAL BANK OF MISSOURI
CourtU.S. Supreme Court

ERROR to the Circuit Court for the District of Missouri.

Tiffany, trustee of Darby, a bankrupt, brought an action of debt in the court below against the National Bank of Missouri, a corporation organized under the National Banking Act of June 3d, 1864, to recover under the provisions of the thirtieth section of the act twice the amount of interest paid by the said Darby, on certain loans made by the bank to him before he was adjudged a bankrupt. The ground of the action was, that the interest reserved and paid was 9 per cent.; a rate averred to be greater than the amount allowed by law, to wit, 8 per cent.

The provisions of the thirtieth section of the act, under which the suit was brought, are as follows:

'Every association organized under this act, may take, receive, reserve, and charge on any loans . . . 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 liited for banks of issue organized under State laws, the rate so limited shall be allowed every association 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 7 per centum. . . .

'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 any action of debt, twice the amount of interest thus paid from the association taking or receiving the same.' . . .

In Missouri, the banks of issue, organized under the State laws, are limited to 8 per cent., but the rate of interest allowed by the laws of the State generally is 10 per cent. As already signified, this bank had taken 9 per cent.

On demurrer the question was, whether the National banks in Missouri were allowed to charge more than 8 per cent. The court below adjudged that they were.

Mr. S. Knox, for the appellant; Mr. J. O. Broadhead, contra.

Mr. Justice STRONG delivered the opinion of the court.

In an action like the present, brought to recover that which is substantially a statutory penalty, the statute must receive a strict, that is, a literal construction. The defendant is not to be subjected to a penalty unless the words of the statute plainly impose it. The question, therefore, is whether the thirtieth section of the act of Congress of June 3d, 1864, relative to National banking associations, clearly prohibits such associations in the State of Missouri from reserving and taking a greater rate of interest than 8 per cent., the rate limited by the laws of that State to be charged by the banks of issue organized under its laws. It is only in case a greater rate of interest has been paid than the National banking associations are allowed to receive that they are made liable to pay twice the interest. The act of Congress enacts that every such association 'may take, receive, reserve, and charge on any loan or discount made, or upon any note, bill of exchange, or other evidences 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 the act.' What, then, were the rates of interest allowed in Missouri when the loans were made by the defendants that are alleged to have been usurious? It is admitted to have been 10 per cent. per annum, allowed to all persons, except banks of issue organized under the laws of the State, and they were allowed to charge and receive only 8 per cent.

The position of the plaintiff is, that the general provision of the act of Congress that National banking associations may charge and...

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125 cases
  • Meadow Brook National Bank v. Recile
    • United States
    • United States District Courts. 5th Circuit. United States District Court (Eastern District of Louisiana)
    • April 28, 1969
    ...with state banks. Daggs v. Phoenix National Bank, 177 U.S. 549, 20 S.Ct. 732, 44 L.Ed. 882 (1900); Tiffany v. National Bank of Missouri, 85 U.S. (18 Wall.) 409, 21 L.Ed. 862 (1873). The purpose of § 85 is thus subserved only by limiting the effect of the section to loans made in the state w......
  • Smiley v. Citibank, S041711
    • United States
    • United States State Supreme Court (California)
    • September 1, 1995
    ...supra, 439 U.S. at p. 315, 99 S.Ct. at p. 549)--"in part," as it had earlier stated in Tiffany v. National Bank of Missouri (1874) 85 U.S. (18 Wall.) 409, 413, 21 L.Ed. 862 (hereafter sometimes Tiffany ), to "provid[e] a currency for the whole country, and in part to create a market for the......
  • Video Trax, Inc. v. Nationsbank, N.A.
    • United States
    • United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
    • December 10, 1998
    ...literal construction" to avoid subjecting banks to double interest penalties under the Bank Act. See Tiffany v. National Bank of Missouri, 85 U.S. (18 Wall.) 409, 410, 21 L.Ed. 862 (1873). Interest has been understood to include any compensation allowed by law or fixed by the parties for th......
  • Watters v. Wachovia Bank, N.A.
    • United States
    • United States Supreme Court
    • April 17, 2007
    ...L.Ed.2d 1 (2003) (national banking system protected from “possible unfriendly State legislation” (quoting Tiffany v. National Bank of Mo., 18 Wall. 409, 412, 21 L.Ed. 862 (1874))). Federally chartered banks are subject to state laws of general application in their daily business to the exte......
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1 books & journal articles
  • The puzzle of complete preemption.
    • United States
    • University of Pennsylvania Law Review Vol. 155 No. 3, January 2007
    • January 1, 2007
    ...of state law usury claims against national banks. See Beneficial Nat'l Bank v. Anderson, 539 U.S. 1, 10 (2003) (quoting Tiffany, 85 U.S. at 409). But it does not follow from the fact that national banks might be subject to unfriendly state legislation that state courts are likely to exhibit......

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