Case ID: ohio-st_9/html/0022-01.html
Source: Caselaw Access Project
Author: {"author": "Scott, J. Sutlife, J.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Nelson Vanatta v. The State Bank of Ohio.
    Banks organized under the “ act to incorporate the State Bank of Ohio and other banking companies,” passed February 24, 1845, have no power, by reason of the restriction of the 64th section of said act to discount negotiable notes, unless their negotiability be restricted by special indorsement.
    When a branch bank assumes to discount a promissory note made payable, by its terms, to such bank, or order, no action can be maintained on such discounted note, either by such branch bank, or, in case of its insolvency, by the State Bank of Ohio. •
    But where a loan of money is effected by the supposed discounting of such paper, an action may be maintained to recover the money so loaned. The-security, being in an unauthorized form, is simply void, and does not discharge the indebtedness arising from the loan which the bank had full power to make.
    In error to tbe district court of Ashland county.
    The original action, the judgment in which is now sought to be-reversed, was brought by the State Bank of Ohio, against Nelson Yanatta and Ealph Yanatta, survivors of Jesse S. Yanatta, upon an, obligation of the following tenor:
    “Newark, Ohio, 28th April, 1852. Sixty days after date, for value received, we, or either of us, promise to pay the Licking County Bank, or order, at its office in Newark, Ohio, thirteen hundred dollars; and we hereby authorize and empower any attorney of any court of record in the United States of America, at any time after the same become dues, to appear in any court within the said United States of America, for us and in our names, and confess judgment in favor of the legal holder hereof for the said amount, interest and costs, and to release all error and the right of appeal, and waive stay of execution on said judgment. Witness our hands and seals, this 28th day of April, a. d. 1852.
    “Jesse S. Yanatta, [Seal.'
    “Nelson Yanatta, 'Seal.'
    “Ealph Yanatta, ’Seal.’
    
      *The petition avers that the defendants executed to the payee said obligation, at its date, and that afterward, on the 2d of June, 1852, the said Licking County Bank committed an act of bankruptcy, within the meaning of the 24th section of the act entitled “ an act to incorporate the State Bank of Ohio, and other companies,” passed February 24, 1845, under which said Licking County Bank had been organized, and that said plaintiff had thereby become the legal holder of said obligation, and entitled to collect the amount thereof, and that said obligation remains due and wholly unpaid from' defendants to the plaintiff.
    The petition also states, as a second cause of action, that on or about the 21st day of July, 1851, the said Licking County Bank loaned to the said Nelson Yanatta, Ealph Yanatta, and Jesse S. Yanatta, thirteen hundred dollars, which they promised to pay to said bank in four months thereafter; that the said Licking County Bank, on the 2d day of June, 1852, committed an act of bankruptcy, whereby, in virtue of the provisions of the act aforesaid, the plaintiff became entitled to receive said money from the defendants as the survivors of said Jesse S. Yanatta, and that the whole amount of said $1,300, and interest thereon, remains due and unpaid from said defendants to the plaintiff.
    As a bar to the first of these causes of action, the defendants answer, that the Licking County Bank obtained the said obligation by discounting the same, and that at the time it was so discounted and accepted by the bank, it was not, by the terms thereof, payable solely to said bank, but was payable to said Licking County Bank, “ or order,” contrary to the provisions of the 64th section of said act incorporating the State Bank of Ohio, and other banking companies. '
    As a defense to the second cause of action, defendants answer that at the time of obtaining the said sum of thirteen hundred dollars, they, with the said Jesse S., executed *to the Licking County Bank their obligation of that date, in tenor and amount similar to the obligation set forth in the petition, and payable four months from that date, which the said Licking County Bank then and there discounted in the regular course of their business, and paid defendants the amount thereof, less the discount, which payment is the supposed loan of thirteen hundred dollars in the second cause of action mentioned; and that said bank received said obligation in full satisfaction and discharge of said sum of money so paid to defendants by said bank; and that said obligation was, at its maturity, and at sundry times thereafter, renewed ; the last renewal being the obligation set out in the plaintiff’s petition, and constituting the first cause of action therein stated.
    To this answer of the defendants, the plaintiff demurred, claiming that the facts which it sets up do not constitute a defense to either cause of action stated in the petition.
    The cause was taken, by appeal, into the district court, where the demurrer of the plaintiff was sustained, and judgment rendered against Nelson Yanatta, sole surviving defendant, which he now seeks to reverse, for alleged error of the district court in sustaining the plaintiff’s demurrer.
    
      L. Gase, for plaintiff in error, argued:
    1. The note in suit is in such form as to be negotiable to any person not having notice of the particular transaction out of which it sprung, and hence is in a form which violates the spirit and language of section 64 of the State Bank act, and therefore void, unless the section is directory. But said section is not directory. 12 Wheat. 81; Smith’s Com., secs. 676, 677, 680; 1 Curwen’s R. S., preface, 11, and cases there cited; 2 Cranch, 165, 168; Angell & Ames on Corp. 97, sec. 111; 13 Pet. 587; 4 Hill, 446-448; Bank of Chillicothe v. Swayne et al., 8 Ohio, 257, 289; 13 Ohio, 20.
    2. Under the state of the pleadings, the bank could *not properly recover on the second count for “ money lent.”
    The demurrer to the answer to that count admits that the money claimed as -having- been loaned was the proceeds of a sealed note, payable to the bank or order, and discounted by the bank; and that the note thus discounted was received in satisfaction and discharge of said money so paid; and that the note in suit is the last one, in the course of renewals of the note, so discounted. The case, then, presents the case, not of the loan of money, but of the purchase of a note. See 2 G-reenl. Ev., sec. 120; 18 Ohio, 1, 18, 19; 16 Ohio, 477.
    
      Buckingham, & White, for defendant in error, argued:
    1. We claim that the note is valid, because its form is in strict compliance with the provisions of the 64th section of the statute in question. It was made payable to the Licking County Bank or order. It was not payable to any other person. It was therefore •payable solely to the bank. The addition of the words “or order ” .did not make it any the less so. Those words only gave to the note such a capacity that the bank might afterward require it to •be made payable to some other person, and that was lawful. But, until the bank did require the note to be paid to some other person, it was strictly — to the letter and to the spirit — payable solely to the bank.
    But if the court should be of opinion that the statute intended -that the note should be without negotiable words, we still say that the non-conformity to the direction of the statute does not make the note void, because: 1. The enactment is merely directory, and a failure to comply does not make the note void. Bank of Kentucky v. Schuylkill Bank, 1 Pars. Eq. Cas. 231; Bank of U. S. v. Dandridge, 12 Wheat. 64, 86; Smith’s Com. on Stat. Constr. 782-796; Ang. & Ames on Corp., 4th ed., sec. 254. 2. This, and every statute, is to be construed so as to carry out and not prevent the main object aimed at (2 Bla. *Com. 321), which was to save the
    bank and its creditors its assets. But to hold the note void diminishes the assets, and thereby thwarts and prevents the very object intended. See Conant v. Seneca County Bank, 1 Ohio St. 298, 309; 12 How. 84, cited in State v. Ex’r of Buttles, 3 Ohio St. 321; U. S. Trust Co. v. Brady, 20 Barb. 120, 121.
    Again, where the contract is not in substance illegal, a person who has entered into the contract and received the consideration shall not be permitted to question the capacity of the corporation to make the contract. Circleville Bank v. Bennick, 15 Ohio, 337; Mott v. U. S. Trust Co., 19 Barb. 568; Steam Nav. Co. v. Weed, 17 Ib. 378; N. Y. Life Ins. & Trust Co. v. Staats, 21 Ib. 570; 10 Eng. L. & Eq. 275; Conant v. Seneca Co. Bank, 1 Ohio St. 298.
    2. If the note is void, then the bank can recover for the money loaned. Robinson v. Bland, 2 Burr. 1077. See also other cases cited in 2 Harrison’s Dig. 3144; 19 Eng. L. & Eq. 26; 21 Ib. 163; Philadelphia Loan Co. v. Towner, 13 Conn. 249; Ang. & Ames on Corp. 193 (ed. 2); Utica Ins. Co. v. Scott, 19 Johns. 1-7; Same Case v. Kip, 8 Cow. 20; Beach v. Fulton Bank, 3 Wend. 573-582; Life & Fire Ins. Co. v. M. F. Ins. Co., 7 Ib. 34; Leavitt v. Blatchford, 5 Barb. 29; Same Case on appeal, 3 Comst. 19, 34; Pelham v. Adams, 17 Barb. 384; Curtis v. Leavitt, Ib. 358, 362.
   Scott, J.

The judgment of the district court must be affirmed unless the facts stated in the answer of the defendants below, constitute a defense to both the causes of action set out in the petition..

It becomes necessary, therefore, to examine the validity of the defense set up in the answer, with reference to each of these causes of action.

And first, is the note described in the first cause of action stated in the petition void by reason of its form, in *being made payable to the Licking County Bank, or order.

The 64th section of the act, under which the Licking County Bank was organized, is as follows: “All notes, bills, and other evidences of debt, except bills of exchange, discounted by any banking company, shall be made by the terms thereof, or by special indorsement, payable solely to said company, and no such evidence of debt shall be assignable, except for collection, or for the following purposes: First. To pay and redeem the circulating notes of such company. Second. To pay other liabilities of said company; and, after such liabilities shall have been discharged, Third. To divide among the shareholders on their stock.” Swan’s Stat. 100. Is the note in question, by its terms, payable solely to the Licking County Bank, within the meaning of this section of the statute?

The legislative intention in this enactment is quite apparent. It was, doubtless, designed to prevent bank officers, in view of the bankruptcy of the corporation, from disposing of its assets in fraud of the rights of creditors and stockholders. To secure this end it requires that the notes and bills discounted by banks shall be nonnogotiable in form, or be made so by special indorsement.

They must be made “ payable solely to said company.” In construing this clause, we are not at liberty to strike out the word “solely” as unmeaning, nor to lose sight of its manifest restrictive import.

The whole effect of the insertion of the word “ solely ” or “ only ” in the indorsement of negotiable paper, is to restrain its further negotiation. Thus, it is said by Judge Story, in his Commentaries, on Promissory Notes, “ Where the indorsement is ‘ Pay to A B only,’ there the word ‘only’ makes it clearly restrictive, and does not authorize a payment or indorsement to any other party.” This, then, being the clear and sole effect of such a restrictive indorsement, must be presumed tc be the purpose intended by the legislature in requiring such special indorsement ^whenever “the terms of the note or bill would not, of themselves, restrict its negotiability. The latter part of the same section permits the-assignment • of discounted notes and bills, other than bills of exchange, only for the use of the banking company itself, in one of' four ways: Eor purposes of collection; for the redemption of its-circulation; for payment of its other liabilities; and for distribution among its stockholders. For each of these purposes such evidences of debt might readily bo assigned without being negotiable in form.

No other construction, than the one which we think the plain, meaning of the terms employed in the statute requires, would put. it out of the power of banking corporations to defeat the intention of the legislature, by making assignments of discounted paper, in fraud of billholders, creditors, and stockholders, and at the same-time secure bona fide purchasers of such paper, against fraud and imposition. The 51st section of the act gives to the banks a general power to buy and sell notes and bills ; the restriction of section 64 relates only to the form of bills and notes discounted, and does-not expressly declare them void, on account of the prohibited form. Whether a discounted negotiable note might not therefore be valid, in the hands of a bona fide purchaser, without notice of the manner-in which it had been acquired by the bank, is, to say the least, by no moans certain. The authorities would, perhaps, justify us in saying that it would be valid in the hands of such bona fide purchaser. Angel & Ames on Corp., sec. 268; 4 Hill, 445, 459; 11 Paige, 635. But were it otherwise, the non-negotiable form in which section 64 requires discounted paper to be clothed, would give full notice to-the purchaser, and thus secure him against imposition.

And, if our construction of the G4th section be correct, We think it apparent.that its language is mandatory, and not directory merely. The act authorizes banks to discount paper only in one mode, andr of course, they can have no power to discount otherwise. They are as effectually ^limited by the statute, in regard to the mode of exercising the power conferred, as they are in respect to-the power itself. Angel & Ames on Corp., sec. 111; 2 Cranch, 165; 13 Pet. 587. Besides, to construe this section as directory only, would render it powerless to prevent the mischief which it was intended to remedy.

Construing, then, the 51st section of the act, which gives to each banking company, to be organized under it, the power of discounting notes, “ except such as it shall be by this act prohibited from .... discounting,” in connection with the limitations of the fi4th section, a majority of the court are satisfied that the Licking -County Bank had no power, under its charter, to discount the note in question, because a negotiable form was given to it, in contravention 'as well of the spirit and policy, as of the terms of the statute. And if, for this reason, the note was void in the hands of the Licking County Bank, no action, could be maintained upon it by the State Bank of Ohio, which, upon' the commission of the act •of bankruptcy, succeeded, by operation of the statute, merely to the rights of the bankrupt corporation..

It remains to inquire whether the answer discloses a defense, •equally available, in regard to the second clause of action, in which the plaintiff socks to recover for money loaned. ' The 51st and Gist sections of' the act before referred to, give to the banks organized under it, power to loan money, and to take interest in advance on .any loan made, at the rate of six per cent, per annum. The answer does not deny that thirteen hundred dollars was in fact loaned to the defendants by the Licking County Bank, less the interest which the law allowed to bo taken in advance. The power of the bank to make such a contract of loan, without taking any written evidence ■of indebtedness was unquestionable. The answer shows the transaction to have been, not the discounting of a valid business note of •a third party, but in fact a loan of money, evidenced by a note drawn in a fohn which the law prohibited, *and wbiqh was void for want of power in the bank to receive it in that .form. The substantial contract of the parties was untainted with usury, or any other illegality; the sole vice was in the negotiable form of the note. As commercial paper, this note was utterly void; the bank could maintain no action upon it; and the statute prohibited its assignment, even if valid, except for the use of the bank. Now, can the defendant be permitted to claim that this void note, in respect to which they stand pari delicto with the bank, shall ■operate as a discharge and satisfaction of a bona fide indebtedness for money loaned ? The case of Miami Exporting Company v. Clark, 13 Ohio, 1, is relied on, as authority, in favor of such a claim. The ■court was not unanimious in the decision of that case ; but without imputiging its authority, we conceive it differed from the case now before us. The vice, in that case, was usury, which tainted not only the paper sued upon, but the contract of loan itself. Independent of the note, the contract was one which the Miami Exporting Company had no power to make. But here, as wo have said, every thing is-legal, except the form, of the paper. In that case, a recovery could not have been had if no note had been taken, but here it is clearly otherwise. Indeed, it is evident, that the court in that case would not have permitted void paper to extinguish or discharge a valid, debt; for they say: “As to the point, that if the original loan, was tainted with usury, the plaintiff might recover upon the common counts, although the subsequent paper was so tainted, we believe no difference of opinion exists."

We think the whole object of the requirement of the statute, as-to the form of discounted paper, is accomplished, and indeed can only be attained by holding that securities, taken in a prohibited form, are simply void, and do not affect the independent rights or-liabilities of the parties. The mischief intended to be remedied is thus guarded against, while the bona fide assets of the bank are preserved for the benefit of billholders *and creditors. A party should not be permitted to plead his own violation of the law as a discharge from legal obligation to pay an honest debt. The authorities are numerous, both in this country and in England, in support of the principle that money loaned on a written security which the statute makes void, may be recovered in an action on the-common counts. Indeed, I am aware of no authority to the contrary, where the vice of the paper is merely in its form.

The judgment of the district court is affirmed.

Swan, C. J., and Brinkerhoee and Peck, JJ., concurred.

Sutlife, J.

I concur with my brethren in the opinion expressed in this case, that the judgment below ought to be affirmed; but I. can not assent to the reasons expressed in that opinion for the affirmance. I will therefore briefly state my views of the case:

The defendants'below urged, as a defense to each cause of action set forth in the petion, the alleged fact that an obligation was taken for money loaned by the Licking County Bank, which, in form,, was in contravention of the statute law of the state, and that the note was taken by the bank in consideration of, and in satisfaction-for, the loan.

If the obligation was, in fact, accepted by the bank in contravention of the statute, so as to be thereby rendered void, obviously an action could not have been maintained thereon by the Licking, ■County Bank; nor would the State Bank, as the assignee of that 'bank, have any superior right of action upon the obligation. And if this objection can be sustained to the right of recovery upon the •first cause of action, so long as the doctrine held in the case of the Bank of Chillicothe v. Swayne et al., 8 Ohio, 257, and in the case of Miami Ex. Co. v. Clark, 13 Ohio, 1, shall continue to bo ad-hered to, the same facts would seem ^equally ajjplicable as a •defense to the second cause of action.

Let us then proceed to examine the question upon which the whole defense rests. Is the form of the obligation sued upon prohibited by sec. 64 of the act to incorporate the State Bank of Ohio, ■etc., referred to ?

The provisions of that section are as follows:

“All notes, bills, and other evidences of debt, except bills of exchange discounted by any banking company, shall be made, by the terms thereof, or by special indorsement, payable solely to said •company; and no such evidence of debt shall be assignable except for collection or the following purposes :

“ 1. To pay and redeem the circulating notes of such company.

“ 2. To pay other liabilities of the company; and after such liabilities shall have been discharged,

“3. To divide among the shareholders on their stock.”

Hoes the obligation set forth in the petition come within the provision of this statute ? It certainly is not included in the language ■of the statute. The Licking County Bank is the only payee expressed in the terms of the obligation. The obligation is therefore payable by the language therein expressed, “ by the terms thereof . . . . solely to said company.” Such was the terms of the obligation when received by the Licking County Bank, and such, .as appears by the pleadings, are still the terms thereof.

And the provisions of the statute in this case being urged as a penal statute in effect by the defendant, to work a forfeiture of the money lent, the plaintiff was entitled to the benefit of a strict construction of the statute. The defense which the defendants seek to .avail themselves of, being one only of strictissind juris on their part, and utterly wanting in equity, must be clearly shown, in order to entitle them to the benefit of such defense.

The statute has not, in its provisions, prescribed anjform *in whieh the notes or obligations to the banking companies should be •drawn ; and the banking companies are not by the provisions of this statute, as expressed, prohibited inserting in the notes or obligations, payable to themselves respectively, after the name of the j)ayee, the words, “ or order.” Without those words the obligation would be obviously, in this case, payable solely to the Licking County Bank. With those words, no one can say that the obligation has become payable, “by the terms thereof,” to the Licking County Bank jointly with any other payee; nor has the obligation, by the terms thereof, become payable to any oilier payee; but it still remains, by “the terms thereof,” payable solely to the Licking County Bank.

Again, the language of this section of the statute does not require absolutely that the obligation should be made payable solely to the bank by the terms thereof. The provision of the statute is in the alternative. The language is, “all notes, bills,” etc., “shall be made by the terms thereof, or by special indorsement, payable solely to such companj’’,” etc. Now, if this obligation had been made by the defendants payable to Jesse S. Yanatta, or order, and had been by him specially indorsed to the Licking County Bank, the paper would have been as strictly within the letter of the provision of the statute, as if the obligation had been made payable to the bank, and without the words “ or order.” It therefore appears from the language of section 64, not only that the words “ or order ” are not prohibited, but that they are clearly, by implication, permitted. Nor is the note or obligation assignable or negotiable by the banking company, by reason of the words “ or order,’’ except in the cases provided in the conclusion of that section.

The object of section 64 is shown by the next section, which provides that “all transfers of the notes, bonds, bills of exchange, and other evidences of debt, owing to any banking company,” , . . . “ made after the commission of an act of insolvency, or in contemplation thereof, *with a view to permit the application of its assets in the manner prescribed by this act, or with a view to .the preference of one creditor to another, except in the payment of its circulating notes, shall be held utterly null and void.” It thus appears evident that the object of section 64 was to have the notes and other evidences of indebtedness received by the banking companies, either upon the face of the instrument, or by the indorsement thereon show the proprietorship of the bank to the paper, at the time of the same being discounted by the bank. The same section prohibiting the bank from assigning the paper, except for the purposes named in said section, takes away the negotiable character of the paper, except for the particular purposes specified, and tends to prevent the transfer thereof in violation of the provisions of section 64, above mentioned.

The object of both sections is evidently to thereby both protect the billliolders and creditors of the bank, by more certainly securing-the assets of the bank and compelling their application to the honest and equal payment of its creditors in the manner proscribed by said act.

Having the object of section 64 thus plainly exj>ressed, oven if it. wore doubtful whether the bank had authority to receive and collect such an obligation as this, the rules of interpretation applicable, in such cases, to give effect to the entire act so far as practicable, “ut res magis valeat quam pereatfi would require us to hold the obligation valid. It should appear very clearly that the bank is, by the terms of the section referred to, prohibited taking an obligation, in such form, before we could be authorized to give such a construction to the law as to work a forfeiture of the money lent, and “preclude the plaintiffs from a recovery in this case; especially when such a construction would evidently militate against the-object of that section, by diminishing instead of protecting and-saving the assets of the banking company.

The main object of the provision being to prevent the note and like assets of the banking company being ^diverted from their-legitimate object, that of meeting the legal liabilities of the institution, the provision ought to bo construed so as to carry out its-object. And this section 64, having taken away the negotiability of all such notes payable to, or indorsed to the banking company,. except in the cases specified, in any other cases the notes would not be negotiable, even with the words “or order.” The oar-mark put upon all this kind of paper, is the name of the hank expressed as payee or indorsee thereof. When upon the face of the note or the indorsement it is Shown to belong to the bank, all persons are thereby notified that the same can only be assignable for collection,, to pay the indebtedness of the bank, or as a dividend to shareholders of the stock of the bank. And for those three purposes the-provisions of the act, as indicated by its language and object, intended that such notes should be assignable by the bank.

The act contemplates that, for the purposes of collection, a bill, or promissory note, payable in London or Paris, or at any other place, and necessarily to bo sent there for collection, may be assignable. If payable to the bank “ or order,” and assigned to the foreign agent of the bank, it might be by him very readily collected. But if the bill or note is to be destitute of words of negotiability, of what avail is an assignment? It must still be sued in the name of the bank. In like manner, section 64 provides that the note or bill so payable or indorsed to the bank, may be assignable to pay the liabilities of the bank. But if a merchant residing in London, wore willing to accept a bill or note for $10,000, payable in London, and which the bank could procure of a debtor, in payment of notes of the bank to that amount held by the merchant, he would doubtless require the indorsement of the bill to be made in the usual form. And the very fact that the negotiability of the bill was to be distinguished, in its terms or indorsement to the bank, by the suppression of the words “or order,” might utterly defeat the negotiation of the paper in the very cases ^contemplated by the statule as lawful and proper. And even if an assignment in such a case could be effected, the taking away the negotiability of the paper must necessarily depreciate its value, and the assets of the bank would be thereby so far forth impaired, instead of improved, by the operation of the statute. For, the possibility of the maker of the note or drawer of the bill, in such a case, setting up some defense against the paper, which he could not, if it were negotiable; and the consideration that the only legal right of action upon the-paper was to remain in the bank, and perhaps by a forfeiture of its franchise, or in some other-way to bo defeated, in consequence of the paper not being negotiable, are considerations which must necessarily reduce the valtie of such paper. And thus, while the express provision of the statute is, that the paper shall be assignable for the four purposes specified, this construction of the statute greatly embarassos, and tends to prevent such assignments for either of the purposes specified. Whether, therefore, we look only to the provisions of section 64, or whether we have respect to the reason and object of the enactment as shown by the context, as well as by that section, I find myself unable to concur in the opinion arrived at by the other members of the court, as to the validity of the note. On the contrary, I am of opinion that the note or obligation set. forth in the record, by a fair and reasonable construction of section 64, is not in contravention of its provisions.

Nor can I perceive how the present case is to be distinguished .■from that of the Miami Exporting Company against Clark, if that decision is to be still regarded as law, so as to authorize a recovery ■in this case upon the common counts, if the note were void. In "the case of the Miami Exporting Company v. Edmund Clark, 13 •Ohio, 1, the only defect in the bills of exchange received for the .money loaned by the bank, was want of power, on the part of the bank, to accept such bills. The bank was only ^empowered to take six per cent, interest upon its loans; the form of its notes being neither prescribed nor prohibited in any respect. But the court held in that case, that inasmuch as the bank had received a written memorandum of the agreement for the repayment of the loan, which was not in such terms as the bank was authorized to make, therefore the same was to be regarded as invalid; and further, that although the suit was against the man who had borrowed the money, the bank could not, in that case, recover back the money under the common counts.

In this case the majority of the court insist that the bank not only had no power to accept a note negotiable in form, such as here ■sued upon, but that the bank was actually prohibited taking such a note, and that the same is therefore invalid. In this state of the case, the bank does just what it did in the suit against Clark, when the note was declared invalid; it asks to recover, on the common counts, the money actually lent, and legal interest thereon; and the court in this case, without questioning the correctness of that, permit the plaintiff to recover independent of his note, which they ■declare invalid. I confess if I were to regard this note as one prohibited by statute, and invalid, I should be unable to reconcile the decision, that this plaintiff could then recover upon the second cause of action, under the rule laid down in that case against Clark.

For when it is well known that there were no usury laws in this .•state, but that the state was, under statute law, both paying and receiving a larger interest at the same time than the Miami Exporting Company was authorized to receive, or in fact contracted for, all that is said about the contract in that case being usurious, fainted with usury, etc., is simply gratuitous. All that could be (urged in that case as a legal objection to the plaintiff’s right to recover upon the common counts, I think would very clearly exist (against a right to recover in this case, if the note is to be considered ;as made in contravention of the statute.

*But I regard the note sued upon in this case, to be in conformity with the provisions of section 64, and valid. And I therefore concur in the opinion expressed, that the judgment of the district court should be affirmed.