Huggins v. Citizens National Bank of Kansas City ( 1894 )

This was a suit by a national bank upon a promissory note. The defense was twofold; first, that the note carried usury, and that the payments made upon it should be applied entirely to the principal; second, that having been applied to the payment of usurious interest, they should at least be allowed as an offset against the principal.

The court found that the note was tainted with usury, and that these payments had been applied to the usurious interest by the consent of the defendants, and gave judgment for the balance due of the principal. These, with the other conclusions of fact, we find to be sustained by the statement of facts.

As a conclusion of law, the court held that the payment of usurious interest to a national bank could not be pleaded as a setoff or counterclaim against the principal of the note sued upon. As this conclusion involves a Federal question, it must be sustained on the authority of the decisions of our Federal Supreme Court. Burnet v. Bank,98 U.S. 555; Bank v. Deering, 91 U.S. 29; Driesback v. Bank,104 U.S. 52; Stephens v. Monongahela, 111 U.S. 197; Bank v. Morgan,132 U.S. 141; Bank v. Childs, 132 Mass. 248 (and 43 Am. Reports, 509), and cases there reviewed. In the absence, however, of an authoritative decision of the question by the Supreme Court of the United States, we would be inclined to follow that line of decisions which had announced a different rule before the question came before that tribunal.

The conclusions of law and fact upon which the District Court entered judgment are hereby adopted, and the judgment affirmed.

Affirmed.