The Athens post. [volume] (Athens, Tenn.) 1848-1917, 1868-06-26

NhohOSiioi OuoShiCASAHs " 49, ~'"",A
Vile district, a few days since delivered
an important decision touching the rate
Of interest legally chargeabls by the
National Banks. The following is the
substance Of the opinion in the ease Of
MSlihe, executor, and the heirs and
tscdtors of Alexander Fall:
Under the general laws upon the SUBJ
ject Of usury in this State, the party
loanjng at q greater rate than six per
cent, where II is included in the note,
forfeits The excess over six per cent
Does the loan to Fall fall within the
general rule of law prohibiting usury,
or Is 1t construed and governed by, the
acts Of Congress creating the institu-
tion2 1t is corporate body and de-
rives its powers from the law that gave
it vitality, and 1t becomes necessary 70
examine the law creating the corporl-
ton. All acts within the scope of the
powers conferred are valid, and those
prohibited are void. BY the third sec
tion of the act of Congress, entitled
Gan act to provide a national currency,
secured by a pledge Of United States
bonds, and to provide for the circYlez
ton and redemption thereof approved
June 3, 1864, it is provided that every
association may take, receive, reserve
and charge ON any loan OF discount
made upon any note, bill of exchange,
or 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 where, by the laws
of any State, different rate is limited
for banks Of issue organized in any
such State under this act; and where
no rate is fixed by the laws of the State
or Territory, the banks may take, re-
serve or charge rate not exceeding1 q
per centum, and such interest may be
taken in advance, reckoning the days for
which the note, bill or evidence of debt
has to run; and the knowingly taking,
or receiving, reserving or charging a
rate of interest greater than aforesaid,
shall be held and adjudged forfeiture
of the entire interest which the notes,
bills or other evidences of debt carries
with it, or which has been agreed to be
paid thereon. 4i
BY the SD section of said act it is
provided that. "if the directors of any
asso ~iation shall knowingly violate or
knowingly permit any Of the officers,
agents or servants of the association to
violate any of the provisions of this act
all the rights, privileges and franchises
of the association derived from this act
shall be thereby forfeited" BY the pro-
visions of the 30th section of the act
the association is expressly prohibited
from taking or reserving greater rate
of interest than silk per cent, that be-
ing the rate of interest allowed by law
in this State. BY the 53d section, IT is
declared ,ferfciturc-of the rights and
of the association. The bank,
by their answer, admit that they re-
tanned, when the loan was made, inter-
est at the rate of nine per centum. Up
on a review of the authorities, / am
satisfied that the loan of money by the
National Bank was in direct violation
of the act creating the bank, and that
the contract is void, and that the bank
is not entitled to recover the principal
and legal interest. The object and pur-
poses of the law was to prevent the TAX
ing of usurious interest, and it is the
duty of the courts to enforce it. 1t is
demanded by every consideration of
public policy.