Court Opinion

ID: 5556718
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:42:31.382687+00
Date Added: 2024-06-11T08:35:21.189621
License: Public Domain

McCay, Judge,
concurring.
I concur in the judgment in this case, with some hesitation. The general rule, as it seems to me, as established by the decided current of the authorities is, that the maker of a note cannot, if the note was valid when given, object to the plaintiff’s title to it, on the ground that he acquii’ed it in an illegal transaction, and especially is this true if the illegality alleged, *75be usury, since it is not the province of the .maker to protect the payee or indorser against the oppression of the holder. But as this case presents itself, the maker has a good defense to the note. He has fully paid it to the payee. He has discharged the contract between himself and the party to Avhom the note was made. The present holder has a right to make him pay it again, alone on the principle that he is an in-innocent holder, that he has in good faith been misled, to his injury, by the face of the note. Can one place himself in this favored position by an act, which the law, for purposes of public policy, declares absolutely void ? Our Legislature, in its wisdom, has declared that no bank shall, directly or indirectly, loan money at more than seven per cent, or discount or purchase paper or debts at a greater discount than said rate: Irwin’s Code, section 1480. And that every contract, note, bill, draft or paper, made in violation of this provision, shall be null and void. Evidently this provision has more in it than the ordinary law, as to usury by individuals, which merely makes illegal interest not recoverable. The intent is to prevent banks, having special privileges granted by charter, having franchises bestowed by the State, for the public good,abusing their franchises to the public injury. The act of taking usury, by a bank, is an illegality, and any contract in violation of this is declared null and void. As I have said, it is assuming a great deal to ask that one shall be entitled to place himself in the position of a bona fide holder — -an innocent purchaser — by an illegal and void act; an act directly in the teeth of the statute which was intended to prevent banks from misusing their franchises.
It is asked that the defendant shall pay a sum of money he does-not justly owe, because he has negligently permitted this bank to become the innocent holder of his note, when the fact is, that, in becoming such holder, the bank violated the law. The defendant must pay again, because the bank has innocently made a contract which the law declares null and void. This view of the matter strikes my mind with much force, and upon it I concur.