First National Bank of Rochester v. Harris.

The defendants alleged that Johnson & Company had obtained the check from them through fraud and without consideration; that it was overdue when indorsed to plaintiff and subject to the equities between the original parties; that it had not been duly presented for payment and that they had not had due notice of nonpayment.

At the trial in the Superior Court, before DEVENS, J., without a jury, it was agreed "that plaintiffs are a corporation duly organized under the laws of the United States; that on Thursday, November 10, 1870, the defendants signed the check, and sent it by mail to H. Johnson & Company in Rochester, New York; that H. Johnson & Company indorsed it and delivered it to the plaintiffs; that the plaintiffs received it on Monday, November 14, 1870, without actual or implied notice of any defect in the title of the indorsers to it, and at the same time paid the face of the check after deducting one-eighth of one per cent; that H. Johnson & Company never kept an account at, and never were depositors with, the plaintiffs' bank; that on November 16, 1870, the plaintiffs duly presented the check to the Second National Bank of Boston for payment, which was refused; that due notice of its non-payment was given to defendants; that the check has not since been paid; and that the defendants have a good and valid defense to any action on the check, brought against them by H. Johnson & Company." It was not agreed whether the plaintiffs bought the check from H. Johnson & Company on said November 14, or received it from them for collection only; but the judge found that they bought it.

It further appeared that on November 18, 1870, Henry S. Billings sued H. Johnson & Company in a trustee process in the Superior Court in this county, and summoned these defendants on that day as trustees therein; and that the suit is still pending.

By consent of the parties, the judge reported the case for the determination of this court on these facts.

W. P. Walley, for plaintiffs.

W. H. Twone, for defendant.

CHAPMAN, C. J. We cannot doubt that the plaintiffs had authority to buy checks. The power conferred on National Banks by the U. S. statutes of 1864, chapter 106, section 8, expressly confers it, in the clause which authorizes them to discount and negoti

Goldsbury v. Inhabitants of Warwick.

ate promissory notes, drafts, bills of exchange and other evidences of debt. Dealing in checks is also a part of the usual business of banking, and would be within the general powers of a bank, without special mention. Nor is there any difference, in this respect, between a check payable to bearer and one payable to order. Nor does section 10 of the General Statutes, chapter 53,* apply to checks, either by its terms, or by its object.

The plaintiffs appear to have bought the check in question in good faith, and presented it for payment in two days thereafter; and this does not appear to have been an unreasonable delay, considering the relative situation of the parties. Thus the case is governed by the case of Ames v. Meriam, 98 Mass. 294, and the plaintiffs are not subject to the defense set up.

The action of Billings against Johnson and these defendants as his trustees cannot affect these plaintiffs; for they were not parties to it, and their rights, as against the defendants, were fixed before the action was brought. Judgment for the plaintiffs.

GOLDSBURY V. INHABITANTS OF WARWICK.

(112 Massachusetts, 384.)

Taxation Construction of State statute-place of taxation.

A statute made it the duty of every shareholder in a National bank to give notice to the bank of his true residence each year, and, in case of neglect, made the shares taxable where the bank was located as well as where the shareholder resided. Held, that a shareholder was rightfully taxed upon his shares in the town where he resided although he had, through an honest mistake, notified the cashier that his residence was in another town.

A

CTION to recover back the amount of tax assessed on plaintiff for shares in a National bank owned by him. At the trial the plaintiff offered evidence tending to show that although for

*"In any action by an indorsee against the promisor, brought upon a promissory note made after the sixth day of May, eighteen hundred and thirty-uine, and payable on demand, any matter shall be deemed a legal defense which would be a defense to a suit thereupon if brought by the promisee; provided ' that no matter arising after notice of the indorsement or transfer of such note is given to the promisor shall constitute a defense.

Goldsbury v. Inhabitants of Warwick.

merly a resident of Warwick, she was a resident of Bernardston, and that she had so notified the bank. The defendants insisted that she was a resident of Warwick.

Upon notice to them, the defendants produced a printed document, sent to them by the tax commissioner, purporting to be a list of all the shareholders in the several National banks of this Commonwealth, with their residences, by which it appeared that the plaintiff was returned as the owner of these shares and as resident in Bernardston. This document was put in evidence against the objection of the defendants.

The presiding judge ruled, that under the Statute of 1872, chapter 321, in order to render the plaintiff liable to taxation for the bank shares aforesaid, in Warwick, the burden was on the defendants to show that the statement made to the cashiers by the plaintiff, as to her residence in the town of Bernardston, was intentionally false; and the jury having returned a verdict for the plaintiff, he reported his rulings to this court for determination.

D. Aiken, for defendants.

W. S. B. Hopkins, for plaintiff.

COLT, J. The Statute of 1872, chapter 321, providing for the collection of taxes upon bank shares, contains provisions for ascer taining and certifying to the assessors of the several cities and towns the true residence of every stockholder. To that end, it is made the duty of every shareholder to give notice to the bank of his true residence each year. If he refuses or neglects to do this, his shares. are made subject to taxation in the city or town where the bank is located as well as in the city or town where he resides.

The plaintiff gave notice to the banks in which she held shares that her residence was then in Bernardston, and would continue there until she should inform them to the contrary. She was taxed for these shares in Warwick, the place of her former residence, and seeks in this action to recover back the amount paid under protest.

It was ruled that under the statute, in order to render the plaintiff liable to taxation on these shares in Warwick, the burden was on the defendants to show that the statements made to the banks by the plaintiff as to her residence in Bernardston was intentionally false.

Goldsbury v. Inhabitants of Warwick.

The defendants' objection to this ruling is well taken. The actual residence of the shareholder fixes the place where he is liable to be taxed. It is easy and simple in most cases to determine as a matter of fact where that residence is. The actual facts are ordinarily so decisive that no declared intention will be permitted to control them. It is only where the facts are ambiguous and uncertain in the absence of any settled and permanent abode, that a party will be permitted to elect in which of one or more places of partial residence he will exercise his rights of citizenship and subject himself to taxation. To this extent weight is given to expressed intention without impairing the rule that in all cases, in order to establish a change of domicile, the actual fact of residence and the intention must concur. Hallett v. Bassett, 100 Mass. 167, 171.

The construction of the statute contended for sets up a new rule of evidence, changing the burden of proof, and applicable only to questions of residence as affecting liability to taxation for bank shares. It puts it in the power of the shareholder practically to fix his residence by a statement of his intention in that respect, unless it can be shown that the statement was intentionally false, and this without reference to the actual facts of his residence. It is enough if he is honestly mistaken in deciding a question which is sometimes difficult as to which there is much misapprehension. His decision must stand as conclusive unless impeached as intentionally false.

There is no difficulty in giving effect to all the provisions of the statute without adopting an interpretation which leads to such results. Its purpose is to provide for bringing to the knowledge of the assessors the actual ownership of property of this description. It secures this by requiring notice of residence to be given by the shareholder to the bank, to be transmitted by the bank to the assessors. It attempts to insure a compliance with its provisions by subjecting the shares to double taxation in case of a refusal or neglect on the part of the owner to make the required statements. But it expressly declares that they shall not be exempt from the payment of a tax legally assessed in the city or town where the owner resides. This leaves the question of residence to be settled by the usual rules, giving no more weight to the statements contained in the notice required by section 6 as evidence than would be given to it as an expression of intention by the rules

Central National Bank v. Pratt.

above stated. It is not necessary to inquire whether the double taxation of the statute can be enforced against one who has, without intention, incorrectly stated the place of his residence. It is enough that, between these parties, the rules of evidence are not affected. The question of the admissibility of the document produced by the defendants on notice, or of the validity of the plaintiff's notice to the banks, it is not necessary to consider.

New trial ordered.

CENTRAL NATIONAL BANK V. PRATT.

(115 Massachusetts, 539.)

National bank not governed by State Usury Laros.

It is within the constitutional power of Congress to fix the rate of interest which a National bank may take upon a loan of money and to determine the penalty to be imposed for taking a greater rate, and such power, when exercised by Congress, is exclusive of State legislation.

The provision of the National Banking Act, limiting the forfeiture for the making usurious charges by National banks to the interest, applies as well to banks established in States where a rate of interest is fixed by law, as to banks in States where no rate is fixed.

The laws of New York inposing penalties for taking usury do not apply to National banks established within the limits of that State.*

\ONTRACT by a National bank organized under the National Banking Acts of the United States, and having its place of business in the city of New York, against the indorser of a bill of exchange drawn by Joseph M. Strong of New York upon Matt Ellis of Boston, payable to the order of the defendant, and by him indorsed to the plaintiff, and accepted by Ellis. Trial in the Su

*In First National Bank of Whitehall v. Lamb, 50 N. Y. 95, decided by the Court of Appeals of New York, in 1872, it was held that National banks, located in the State of New York, were subject to the usury laws of the State; and this decision was followed in Farmers' Bank v. Hale, 59 N. Y. 53, but these decisions were subsequently overruled by the Supreme Court of the United States in Farmers and Mechanics' Bank v. Dearing, ante, p. 117, and by the Court of Appeals in Hintermister v. First National Bank, 64 N. Y. 212 (post). That National banks are not bound by the usury laws of a State was also held in First Nat. Bank v. Garlinghouse, 22 Ohio St. 492; S. C., 10 Am. Rep. 751.