Butler citizen. [volume] (Butler, Pa.) 1877-1922, 1881-05-18
An Imp0yt1M Question Decid-
ed by Judge AcHes0G

Judge AcheSOn, SlttlDg III the y Cnileu
States Circuit Court yesterday, made
a dicision of considerable importance
to business men generally. The ques-
ton referred to the court was: Docs
the agreement by national bank to
receive greater rate of interest than
that allowed by the laws of the State
and the adding of the same into the
note, thereby increasing the principal,
destroy the interest bearing power o.
the note rom the time snGh Illegal con-
tract was executed? The parties were
the Farmers and Mechanics bank, of
Mercer, plaintiff, and Seth Hoagland,
defendant The facts of the case are as
follows: In 1876 the bank made loan
to the Mercer County Insurance Com
pany, Seth Hoagland being guarantor.
The interest paid for some time was 10
per cent Some months after the loan
was made the note was renewed and
interest agreed upon at the rate OF 10
per cent. per annum. and added to the
principal, but not paid. This note was
renewed from time TO time until the
case in suit was made The defendant
contended that the bank having viola
ted the law in agreeing to accept illegal
interest and adding the same to the
note destroyed the interest bearing
power of the note from the date the
illegal contract was agreed on.
Judge Acheson in his opinion stated
that it was clear that the charging OF
usurious interest worked forfeiture OF
the entire interest But the defendant
cannot aft.of against the plaintiffs
claim the usurious interest paid to the
bank; the only recourse being undep
the penal statute which provides for a
fine OF double the amount OF the
usurous interest taken. He also deci-
ded that the plaintiff could not recover
the interest charged at the earlier re-
newals, at rates in excess OF the legal
rate and included as part Of the princi-
pal 10 the notes in suit For the last
two years the bank had only charged
legal interest, per cent per annum,
and one Of the questions raised was !;
Can there ne any recovery for interest
from the dates at which tho bHnk re.
duced it's charge to legal ratey Judge
Acheson decides this in the negative.
The reduction of the interest to legal
rates did not purge the transaction OF
its usuriou qualities. and the illegallty
Of the original transaction carries its
effects throughout oil its changes,
Furthermore, upor every fresh renew
al interest was charged upon the
usurious interest which bpd entered into
the prior notes as principal. Tins the
rate was reduced but nominally to SIX
per centum, for with reference to the
amount legally due the rate was IN
thereof 1t appears, therefore, rom
the admissions upon this record. that
the bank from first TO last presiGted in
it's usurious charges Tie opinion con-
cludes: 1T is added. however that
one of the notes in suit includes an
item Of Indebtedness Of $l02, growing
out of an independent matter. Upon
the demurrer and under the stipulation
OF the parties let final judgment be en-
tered for the plaintiff, the judgment TO
include, first the face amount Of the
original notes to wit, $4,000. without
interest, and second, the sum OF $lO2,
with interest Of the latter sum to be
computed by the erk'-Patsbu' W
Commercial Gazette. Nay IL.
Remains OF Vim. Penn.
Among the Legislative proceedings
Of May 10th, 1881, we find the follow
ing:
"Mr. Everhart offered the following
concurrent resolution:
WHEREAS, Dellwyn Parrish, now Of
South Borough Lodge, Buckley Kent.
a native Of the city Of Philadelphia,
resident for some years past in Eng
land, member Of the Society Of
Friends, having n sincere regard for
his native city has expressed the pur-
pose To transfer at his own expense the
mortal remains of William Penn, origi-
nal proprietary Of the State Of Penn
sylvania and founder Of the city afore-
said. now inferred ia the graveyard Of