Court Opinion

ID: 6599120
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:06:09.533151+00
Date Added: 2024-06-11T15:57:57.323518
License: Public Domain

By the Court,
Paine, J.
That the $1,500 loan was made by the bank, the evidence leaves no room for doubt. It also clearly appears that the papers were executed to Lander as a mere cover for the violation of the law in the rate of interest. The note was therefore void for usury, if the usury law was applicable to determine the effect of a contract made by a bank in violation of the banking law. In the case of Rock River Bank v. Sherwood, 10 Wis., 230, the question was considered, and we there held that the usury law then in force was so applicable. The respondent’s counsel now contends that the question was not involved in that case. But whether it was so or not, it was supposed to be, and was fully considered. . And as it is in this case, we deem it necessary only to say that we are satisfied of the correctness of the conclusion there arrived at upon this point. That conclusion is said to be irreconcilable with our decision in Reedsburg Bank v. Hastings, 12 Wis., 47. But we are unable to see any conflict.
In that case it was held that the provision of the constitution concerning the rule of taxation was designed as a limitation on the legislative power established by the constitution, and not on the power of the people acting in their primary sovereign capacity; and that it could not be applied to invalidate the *106provisions of tbe banking law, wbicb bad been enacted by tbe people in tbeir sovereign capacity in tbe same manner in wbicb they bad enacted tbe constitution itself. But bere there is no question about invalidating or affecting any provision of tbe banking law, either by applying to it any clause of tbe constitution or any subsequent statute. Tbe respondent’s counsel is undoubtedly right in assuming it as a necessary consequence of tbe decision in tbe Beedsburg Bank case, that a mere act of tbe legislature is not capable of changing or amending tbe banking law; and we have so decided in Van Steenwyck v. Sackett, 17 Wis., 645. But there is no such question presented bere, and it by no means follows that because that law cannot be amended by tbe legislature, the banks existing under it cannot be affected by or subjected to any other law. On tbe contrary it is very obvious that they may be and are. Thus tbe mode and measure of redress for most wrongs that may be committed by banks in common with other persons, are not provided for in tbe banking law, but are to be looked for in tbe general legislation concerning remedies. And they are changed, as against banks, whenever that general legislation is changed. Thus, if a bank leases premises, and refuses to deliver possession on tbe expiration of tbe lease, it is not in tbe banking law that tbe remedy is to be found, but in tbe statute concerning unlawful detainer. And if that statute should be changed and rendered more stringent, imposing new penalties on tbe lessee for tbe wrong, banks would be subjected to tbe new statute, like all other persons. And it would not do for them to say that no such liabilities were imposed by tbe banking law, and tbe legislature could not amend that law, and therefore they were not subject to the new statute. Tbe obvious answer would be that such a statute was no attempt to amend tbe banking law; no attempt to change or impair any of its provisions or interfere with any rights conferred by it; no attempt to legislate upon a matter wbicb that law bad undertaken to regulate. That law provided the terms and *107conditions on wbicb tbe business of banking might be carried on. It did not attempt — and it would have been exceedingly unreasonable for it to bave done so — to provide a special separate system of remedies against banks for wrongs wbicb they might commit against others. It designed to leave them subject, like all other persons, to tbe general laws upon those questions.
Other instances might be referred to illustrating the correctness of this position. Thus, if a bank should refuse to discharge a mortgage which had been paid, it would be liable to the penalty given by the law upon that subject. And that law might be changed and it would be still liable. If it should maintain a nuisance on its premises, or create one on the premises of another, it would be subject to the appropriate remedies.
The question involved here falls strictly within this distinction. In applying the usury law to a contract made by a bank in violation of its charter, there is no attempt to amend or interfere in any way with the banking law. It is only allowing the legislature to say what shall be the effect if the bank violates that law and the general law of the state, and that in respect to a matter where the banking law itself made no attempt to regulate it. That this is fully within the province of the legislature there can be no room for doubt.
But the respondent’s counsel further contends that even though it was correctly decided that the usury law of 1856 was applicable to the usurious contract of a bank, yet the same cannot be held of chapter 160, Laws of 1859, which was in force when this contract was made. This is claimed in consequence of section 9 of that chapter, which says: “ This act shall not in any manner affect the operation of an act to authorize the business of banking, approved April 19, 1852.” It is argued that this is equivalent to a provision excepting banks from the operation of the act. But the language will not bear that interpretation. It is only a disclaimer by the legislature *108of any intention to interfere with the banking law, and could only have been inserted to prevent any claim that the act might otherwise have the effect of allowing banks, like other persons, to contract for twelve per cent, instead of ten, to which rate they were limited by the banking law. The section was unnecessary, as the act could not affect the operation of the banking law. But although, from excess of caution, the legislature unnecessarily provided that their act should not have that effect, that was by no means equivalent to saying that if banks should violate its provisions, and the banking law, they should not be subjected to its operation.
But it seems to be immaterial, so far as the right to maintain the action on this note is concerned, whether the usury law of 1859 or the banking law is held applicable. In the case of the Rock River Bank v. Sherwood the counsel contended for the application of the usury law of 1856, under which a usurious contract was good for the principal, so as to avoid the effect of a class of decisions which hold that where a corporation makes a contract in violation of its charter, it is totally void for mere want of power to make it, independent of the question of usury. These cases are referred to in the opinion of Justice Cole, 10 Wis., 237, and their applicability was only denied by holding, as we then did and now do, that the effect of such contracts made by a corporation was to be determined by the general law as to the effect of all usurious contracts. But in this case it seems immaterial, as the law of 1859 made the contract void, the same conclusion which must have been arrived at if that law was held inapplicable, and the question determined by the charter.
The right of the sheriff to sue on the account was disposed of by the decision of this court in Brower v. Smith et al, 17 Wis., 410. He could not sustain the action.
The judgment is reversed, with costs, and the cause remanded with directions to enter judgment for the defendant.