Cromb v. Olson

There is no dispute over the facts in this case. June 1, 1891, defendants applied to the cashier of the “Bank of Fosston,” a firm doing a private banking business, for a loan of $50. The cashier drew a note payable to the order of the bank October 1, for the sum of $54, with interest at 10 per cent., which was signed by defendants, returned to the cashier, and on which they received $50 and no more. This action was brought to recover a balance claimed to be due the bank on this $54 note, and the defense of usury was interposed. It was shown upon the trial that one of the members of the banking firm had instructed the cashier not to demand or exact more than 10 per cent, per annum as interest on money loaned by him, and it was also shown, without -objection, that on several occasions, aside from that now in question, the cashier had exacted and received as interest upon loans of money sums in excess of the lawful rate of interest, and it stood admitted that the cashier had the general management of all of the loans made by the bank as well as its collections. That the cashier required of defendants an unlawful and prohibited rate of interest is undisputed, and, on the facts as they appear, we are clearly of the opinion that the bank must be held responsible for his act, and, as to it, the note must be held usurious.

Judgment affirmed.