Tiffany v. National Bank of Missouri
85 U.S. 409 (1873)

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U.S. Supreme Court

Tiffany v. National Bank of Missouri, 85 U.S. 18 Wall. 409 409 (1873)

Tiffany v. National Bank of Missouri

85 U.S. (18 Wall.) 409

Syllabus

Under the thirtieth section of the National Banking Act, which enacts that national banks

"may take, receive, reserve, and charge on any loan . . . interest at the rate allowed by the laws of the state or territory where the bank is located, and no more, except that where, by the laws of any state, a different rate is limited for banks of issue organized under state laws, the rate so limited shall be allowed for associations organized in any such state under the act."

National banks may take the rate of interest allowed by the state to natural persons generally, and a higher rate, if state banks of issue are authorized by the laws of the state to take it.

Tiffany, trustee of Darby, a bankrupt, brought an action of debt in the court below against the National Bank of Missouri, a corporation organized under the National Banking Act of June 3, 1864, to recover under the provisions of the thirtieth section of the act twice the amount of interest paid by the said Darby, on certain loans made by the bank to him before he was adjudged a bankrupt. The ground of the action was that the interest reserved and paid

Page 85 U. S. 410

was 9 percent; a rate averred to be greater than the amount allowed by law, to-wit, 8 percent

The provisions of the thirtieth section of the act, under which the suit was brought, are as follows:

"Every association organized under this act may take, receive, reserve, and charge on any loans . . . interest at the rate allowed by the laws of the state or territory where the bank is located and no more, except that where, by the laws of any state, a different rate is limited for banks of issue organized under state laws, the rate so limited shall be allowed every association organized in any such state under this act. And when no rate is fixed by the laws of the state or territory, the bank may take, receive, reserve or charge a rate not exceeding 7 percentum. . . ."

"And in case a greater rate of interest has been paid, the person or persons paying the same or their legal representatives may recover back, in any action of debt, twice the amount of interest thus paid from the association taking or receiving the same. . . ."

In Missouri, the banks of issue, organized under the state laws, are limited to 8 percent, but the rate of interest allowed by the laws of the state generally is 10 percent. As already signified, this bank had taken 9 percent.

On demurrer, the question was whether the national banks in Missouri were allowed to charge more than 8 percent. The court below adjudged that they were.

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