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U.S. Supreme Court

National Bank v. Johnson, 104 U.S. 271 (1881)

National Bank v. Johnson

104 U.S. 271

ERROR TO THE SUPREME COURT

OF THE STATE OF NEW YORK

Syllabus

1. The sole particular, so far as loans and discounts are concerned, in which sec. 5197 of the Revised Statutes places a national bank upon an equality with natural persons is in permitting it to charge a rate of interest allowed to them which is prescribed and limited by the laws of the state, territory, or district where the bank is located.

2. Although under those laws a contract between natural persons to reserve and pay upon the discount of business paper any stipulated rate of interest may be valid, such a contract, if a national bank be a party thereto, and the paper he in pursuance thereof transferred to it, is in violation of that section when such rate is in excess of seven percent per annum.