Thornton v. Bank of Washington - 28 U.S. 36 (1830)
U.S. Supreme Court
Thornton v. Bank of Washington, 28 U.S. 3 Pet. 36 36 (1830)
Thornton v. Bank of Washington
28 U.S. (3 Pet.) 36
The party who demurs to evidence seeks thereby to withdraw the consideration of the facts from the jury, and is therefore bound to admit not only the truth of the evidence, but every fact which that evidence may legally conduce to prove in favor of the other party. And if upon any view of the facts, the jury might have given a verdict against the party demurring, the court is also at liberty to give judgment against him.
The taking of interest in advance upon the discount of a note in the usual course of business by a banker is not usury. This has been long settled, and is not now open for controversy.
The taking of interest for sixty-four days on a note is not usury if the note given for sixty days, according to the custom and usage in the banks at Washington, was not due and payable until the sixty-fourth day. In the case of Renner v. Bank of Columbia, 9 Wheat. 581, it was expressly held that under that custom the note was not due and payable before the sixty-fourth day, for until that time the maker could not be in default.
Where it was the practice of the party who had a sixty day note discounted at the Bank of Washington, to renew the note by the discount of another note on the sixty-third day, the maker not being in fact bound to pay the note according to the custom prevailing in the District of Columbia; such a transaction on the part of the banker is not usurious, although on each note the discount for sixty-four days was deducted. Each note is considered as a distinct and substantive transaction. If no more than legal interest is taken upon the time the new note has to run, the actual application of the proceeds of the new note to the payment of the former note before it comes due, does not of itself make the transaction usurious. Something more must occur. There must be a contract between the bank and the party at the time of such discount, that the party shall not have the use and benefit of the proceeds until the former note becomes due, or that the bank shall have the use and benefit of them in the meantime.
This case was brought before the court to reverse the judgment of the circuit court on a demurrer to the evidence offered by the defendants in error, the plaintiffs below, to sustain a claim on Mr. Thornton as endorser on a promissory note discounted at the bank of Washington for the benefit of one Bailey, the maker of the note.
The facts of the case are stated in the opinion of the Court, delivered by MR. JUSTICE STORY.