3 Biss. 82. Compare Flint v. Boston, 99 Mass, 141; First Nat. Bank v. Smith, 65 Ill. 44; Kyle v. Mayor etc. 75 No. Car. 445.

10 First Nat. Bank v. Douglas County, 3 Dill. 330.

11 First Nat. Bank v. Douglas County, 3 Dill. 330.

12 Nat. Bank r. Elmira, 53 N. Y. 49; Hershire v. First Nat. Bank, 35 Iowa, 272; First Nat. Bank v. Meredith, 44 Mo. 500.

13 Nat. State Bank v. Young, 25 Iowa, 311.

14 See Laws of N. Y. 1866, ch. 761; People v. Dolan, 36 N. Y. 59; People v. Comm'rs etc. 69 id. 91.

15 People v. Weaver, 100 U. S. 539; Browne's Nat. Bank Cas. 57; Nat. Ex. Bank v. Hills, 22 Alb. L. J. 451.

16 Nat. Ex. Bank v. Hills, 22 Alb. L. J. 451.

17_People r. Weaver, 100 U. S. 539; Browne's Nat. Bank Cas. 57; and see Frazer v. Sieberu, 16 Ohio St. 614.

18 Stetson v. Bangor, 56 Me. 274; and see Craft v. Tuttle, 27 Ind. 332; Nat. Bank v. Mayor etc. 8 Heisk. 814; Mayor etc. v. Macon Nat. Bank, 59 Ga. 648.

19 Horne v. Green, 52 Miss. 452. But compare Comm'rs v. Elston, 32 Ind. 27; Lily v. Comm'rs etc. 69 No. Car. 300.

20 Cummings v. Nat. Bank, 101 U. S. 153, 157.

21 Nat. Ex. Bank v. Hills, 22 Alb. L. J. 451; City Nat. Bank v. Pa ducah, Thomp. Nat. Bank Cas. 300; 5 Cent. L. J. 347. See First Nat. Bank v. Hershire, 31 Iowa, 18.

22 People v. Comm'rs etc. 94 U. S. 415; Hepburn v. School Directors, 23 Wall. 480; City of Richmond v. Scott, 48 Ind. 568.

§ 234. Citizenship.-A national bank is to be regarded as located in the place specified in its certificate of organization,1 and is a citizen of the state wherein it is located. It may, therefore, insist upon the removal of a suit on its behalf, from a state to a federal court.3 State courts have jurisdiction of suits brought by a national bank; 4 and it may be sued in the courts of the state in which it is located.5 And it has been held, that an action will lie against such bank only in the city or county in which the bank is located. Other decisions, however, hold that national banks doing business in one state may be sued in the courts of another state. A national bank was held to be a foreign corporation within a statute requiring corporations created by "the laws of any other state or country to give security for costs.8

1 Manuf. Nat. Bank v. Baack, 2 Abb. U. S. 222; 8 Blatchf. 137.

2 Davis v. Cook, 9 Nev. 134. Compare Main v. Second Nat. Bank, 6 Biss. 26; Nat. Park Bank v. Nichols, 4 id. 315.

3 Davis v. Cook, 9 Nev. 134; Chatham Bank v. Merch. Nat. Bank, 4 Thomp. & C. 196.

4 First Nat. Bank v. Hubbard, 49 Vt. 1.

5 Adams v. Daunis, 29 La. An. 315; and see Ordway v. Cent. Nat. Bank, Thomp. Nat. Bank Cas. 559; 47 Md. 217; 28 Am. R. 455.

6 Crocker v. Marine Nat. Bank, 101 Mass. 240; and see Cadle v. Tracy, 11 Blatchf. 101; Bank of Bethel v. Pahquoique Bank, 14 Wall. 383; Chesapeake Bank v. First Nat. Bank, 40 Md. 269.

7 Cooke v. State Nat. Bank, 52 N. Y. 96; 3 Abb. Pr. N. S. 339; Rob. Inson r. Nat. Bank etc. 81 N. Y. 385; and see Adams v. Daunis, 29 La. An. 315.

8 Nat. Park Bank v. Gunst, 1 Abb. N. C. 292.

§ 235. Interest on loans.-National banks may charge the rate of interest fixed by state laws for lenders generally, and may take a higher rate, if state banks of issue are permitted by the laws of the state to reserve more.2 If no rate of interest is defined by the laws of the state wherein the national bank is located, seven per cent is allowed to be charged. And this rule applies to loans made by national banks to corporations where the statute laws of the state expressly forbids a corporation to interpose the defense of usury. Where, by the statute law of a state, parties are allowed to contract for a usurious rate of interest, evidenced by a memorandum in writing, signed by the party to be charged, a national bank located in the state may discount notes, charging usurious interest in advance, without other memorandum than the notes.5 But a national bank is not justified in taking the rate of interest allowed by special statutes of a state, to a few banks of issue, where such rate is higher than that allowed to banks of issue generally. The only penalty incurred by national banks for taking excessive interest, is that imposed by the National Banking Act; 7 namely, the forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it. or which has been agreed to be paid thereon,8 and liability to action to recover back double the amount of interest paid. The penalty is not limited to cases where the note, etc., upon its face, carries interest with it; 10 but the moment usurious interest is "taken, received, or charged," the forfeiture is established." And any party to the transaction may avail himself of it, if payment is

9

sought to be enforced against him.12 And in an action by a national bank, on paper discounted by it, the defendant may set off the amount of usurious discounts on other transactions.18 In giving penalty of twice the amount of interest paid, the usurious interest only is doubled, and not the amount of the entire interest. 14 The action to recover the penalty must be commenced within two years from the time the usurious transaction occurred; 15 and where the two years have elapsed, the right to offset the usurious interest against any claim of the bank is also barred.16 But it has been held that the usuriousness of the transaction is not determined, and the two years do not begin to run, until the principal has been paid, or a judgment entered for the full amount thereof.17 A state court has jurisdiction of an action against a national bank to recover the penalty for exacting unlawful interest, 18 But the courts of one state have no jurisdiction of such an action against a national bank located in another state. 19 It has been held that the remedy by "forfeiture of the entire interest," for exacting unlawful interest, can only be had by way of defense to an action on the note, or to recover the loan, and no. action lies for it.20 But where illegal interest has been paid, it cannot be set up by way of counter-claim, or setoff, that the bank knowingly took a greater rate of interest than that allowed by law, and the proper remedy in such case is an action of debt to recover back twice the amount. 21

1 Tiffany v. Nat. Bank of Mo. 18 Wall. 409. Compare Shunk v. First Nat. Bank, 22 Ohio St. 508.

2 Tiffany v. Nat. Bank of Mo. 18 Wall. 409; and see Johnson v. Nat. Bank of Gloversville, 74 N. Y. 329.

3 U. S. Rev. Stat. § 5197.

4 In re Wild. 11 Blatchf. 243. Compare Rosa v. Butterfield, 33 N. Y. 665; First Nat. Bank v. Lamb, 50 id. 95.

5 Newell v. Nat. Bank of Somerset, 12 Bush, 57. Compare Wiley v. Starbuck, 44 Ind. 298.

6 Duncan v. First Nat. Bank, Thomp. Nat. Bank Cas. 360; 11 Bank. Mag. 787.

7 See U. S. Rev. Stat. § 5198; Farmers' etc. Nat. Bank v. Dearing, 91 U. S. 29; Wiley v. Starbuck, 44 Ind. 298.

8 U.S. Rev. Stat. § 5198. See Nat. Bank v. Lewis, 81 N. Y. 15.

9 U. S. Rev. Stat. § 5198; Nat. Ex. Bank v. Moore, 2 Bond, 170. No loss of the entire debt is incurred by the bank, as a penalty or other. wise, by reason of the provisions of the usury law of a state: Farm ers' etc. Nat. Bank v. Dearing, 91 U. S. 29; and see First Nat. Bank v. Garl'ughouse, 22 Ohio St. 432; Wiley v. Starbuck, 44 Ind. 298; Merchants etc. Nat. Bank e. Myers, 74 No. Car. 514; Cheek v. Merch. Nat. Bank, 10 Heisk. 618; Davis v. Randall, 115 Mass. 547; Hintermister v. First Nat. Bank. 64 N. Y. 212; overruling First Nat. Bank v. Lamb, 50 id. 95. And a bill in equity will not lie to recover usury from a na tional bank: Hambright v. Nat. Bank, 3 Lea, (Tenn.) 40; 31 Am. R. 629; Barnet v. Nat. Bank, 98 U. S. 555.

10 National Bank v. Lewis, 75 N. Y. 516.

11 National Bank v. Lewis, 75 N. Y. 516.

12 See Smith v. Exchange Bank of Pittsburg, 26 Ohio St. 141; Bank of Cadiz v. Slemmons, 34 id. 142; 32 Am. R. 354; Hintermister r. First Nat. Bank, 64 N. Y. 212; Nat. Bank v. Lewis, 75 id. 516.

13 Lucas v. Government Nat. Bank, 78 Pa. St. 228. Compare Overholt v. National Bank, 82 id. 490.

14 Hintermister v. First Nat. Bank, 64 N. Y. 212; Brown v. Second Nat. Bank, 72 Pa. St. 209. But see contra, Crocker v. First Nat. Bank, Thomp. Nat. Bank Cas. 317; National Bank v. Davis, id. 350; 6 Cent. L. J. 106. The taint of usury follows through a series of renewal notes, and the bank forfeits all the interest paid on the whole series: Cake v. Lebanon First Nat. Bank, 86 Pa. St. 303; and see Bank of Cadiz v. Slemmons, 34 Ohio St. 142; 32 Am. R. 364.

15 U. S. Rev. Stat. § 5198.

16 National State Bank v. Boylan, 2 Abb. N. C. 216; Shinkle v. First Nat. Bank, 22 Ohio St. 516; Higby v. First Nat. Bank, 26 id. 75; and see Overholt v. National Bank, 82 Pa. St. 209; Ordway v. Cent. Nat. Bank, Thomp. Nat. Bank Cas. 559; 47 Md. 217. But compare Pickett v. Merch. Nat. Bank, 32 Ark. 346.

17 Duncan v. First Nat. Bank, Thomp. Nat. Bank Cas. 360; 11 Bank. Mag. 787.

18 Bletz v. Columbia Nat. Bank, 87 Pa. St. 87; 30 Am. R. 343; Ord. way v. Cent. Nat. Bank, 47 Md. 217; 28 Am. R. 455; Thomp. Nat. Bank Cas. 559; Dow v. Ivasburgh Nat. Bank, 50 Vt. 112; 28 Am. R. 493. But see Newell v. Nat. Bank of Somerset, 12 Bush, 57; State v. Tuller, 34 Conn. 280.

19 Missouri Riv. Tel. Co. v. First Nat. Bank, 74 Ill. 217; and see $234, ante. But compare Cooke v. State Nat. Bank, 52 N. Y. 96.

20 Brown v. Second Nat. Bank, 72 Pa. St. 209.

21 Hintermister v. First Nat. Bank, 64 N. Y. 212; Nat. Bank v. Lewis, 81 id. 15; Barnet v. Nat. Bank, 98 U. S. 555. Compare Nat. Bank v. Lewis, 75 N. Y. 516.

§ 236. Acts ultra vires.-It is held to be ultra vires of a national bank to take special deposits to hold merely for the accommodation of the depositor; 1 or to buy promissory notes for speculation; 2 or to deal in stocks; & or sell bonds of railroad companies on commission; 4 or to take a mortgage upon real estate to secure future advances; 5 or, it seems, to loan its credit and become an accommoda

tion indorser of a promissory note.

But loans made by

a national bank to any person, in excess of one-tenth part

and in an action to

of its capital stock, are not void; recover such loans, the defendant cannot interpose the defense that they were in violation of the National Banking Act. So if a national bank enters into a contract which is ultra vires, it cannot afterward repudiate the contract and at the same time retain its fruits.9

1 Wiley v. First Nat. Bank, 47 Vt. 546; Thomp. Nat. Cas. 905. Compare § 231, ante.

2 First Nat. Bank v. Pierson, 16 Alb. L. J. 319; Thomp. Nat. Bank Cas. 637. But see Smith v. Exchange Bank of Pittsburg, 26 Ohio St. 141; Atlantic State Bank v. Savery, 18 Hun, 36; 22 Alb. L. J. 453; Nat. Pemberton Bank v. Porter, 125 Mass. 333; 28 Am. R. 235.

3 First Nat. Bank v. Nat. Ex. Bank, 92 U. S. 122.

4 Weckler v. First Nat. Bank, 42 Md. 581.

5 Woods v. People's Nat. Bank, 83 Pa. St. 57; Kansas Valley Nat. Bank v. Rowell, 2 Dill. 371.

6 National Bank v. Wells, 79 N. Y. 498.

7 Gold Min. Co. v. National Bank, 96 U. S. 640.

8 Gold Min. Co. v. National Bank, 96 U. S. 640; O'Hare v. Second Nat. Bank. 77 Pa. St. 96; Stewart v. Nat. Union Bank, 2 Abb. U. S. 424; Elder v. First Nat. Bank, 12 Kan. 238. Compare Allen v. First Nat. Bank, 23 Ohio St. 97.

9 Casey v. La Societé etc. 2 Woods, 77; Thomp. Nat. Bank Cas. 285; and see tit. ULTRA VIRES.

§ 237. Winding-up.-The dissolution or winding-up of national banks can be enforced only in the mode provided by the National Banking Act.1 But in cases not within the special provisions of that act, the bank may be proceeded against in the same manner as any other insolvent corporation.2 And the provisions of that act do not preclude the appointment of a receiver in a judgment creditor's suit. A receiver appointed by the comptroller of the currency is held to be an officer of the United States; but he does not represent the government in such a way that, by suing the receiver and comptroller, a judgment may be obtained against it.5 The receiver properly represents the bank, its stockholders, and its creditors.6 He holds the same title to the assets of the bank that the bank held. He may sue for debts