Nash v. Manufacturers & Traders' Bank of Buffalo

Headnote

Banking corporations — usury—person setting it up must allege pa/yment of usurious interest.

Appeal from a judgment in favor of defendant, entered upon the report of a referee.

This action was brought under the act of 18YO (chap. 163), amending the act, entitled “An act to authorize the business of banking,” passed April, 1838, to recover for money usuriously exacted and received upon the discount of plaintiff’s paper in the defendant’s bank..

The statute provides that the knowingly taking,- receiving and reserving or charging a rate of interest greater than seven per cent per annum, “ shall be held and adjudged a forfeiture of the entire interest which the note, bill, or 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 twice 'the amount of the interest thus paid from the association taking or receiving the same.”

The referee found that the defendants discounted the plaintiff’s paper, as alleged in his complaint, and upon such discount charged a rate of interest upon the several notes, checks and drafts, exceeding seven per cent per annum in advance for the time such notes, checks and drafts had to run ; and that the same was so charged intentionally and for the purpose of obtaining such greater rate of interest on the discount of such paper. But he did not find that any of such paper had ever been paid by the plaintiff.

The court held^ that the action was given to the person or persons paying such interest. That it was essential, to make out the cause of action given by this statute, that the plaintiff should have averred and proved, in fact, that such interest had been paid by him, and that upon this ground, for want of such proof, the referee might, and the court presumed he did, dismiss the plaintiff’s complaint.