
    John G. Shinkle and Wife v. The First National Bank of Ripley.
    1. Under the code of civil procedure, it is competent for the defendant in error to file a cross-petition, asking the reversal of the judgment for errors prejudicial to him, and not assigned in the plaintiffs petition; and it is not error in the court to hear the case upon both petitions at the same time, and to reverse the judgment for such errors.
    2. Where judgment is rendered upon a special finding of the facts, and a motion for a new trial, predicated on the ground that the finding is contrary to the law and the evidence, is made and overruled, but no bill of exceptions setting forth the evidence is taken, and the judgment is subsequently reversed on error, the finding of the court, although it sets forth in detail all the facts proven upon the trial, can not be regarded as such bill of exceptions in the case; and it is therefore not error in the revising court to render final judgment upon the findij g, instead of remanding the cause for retrial.
    '3. The words “by discounting and negotiating promissory notes, drafts, bills of exchange,” etc., contained in the eighth section of the national currency act of lt!64, are not to be read as limiting the mode of exercising the “incidental powers” necessary to carrying on the business of banking, but as descriptive of the kind of “banking” which is authorized ; and the true reading of the provision is, that the company may carry on banking “by discounting and negotiating promissory notes, drafts, bills of exchange,” etc., and may exercise “all such incidental powers as shall be necessary” for that purpose.
    4. Four persons being jointly indebted to one bank in two several sums, and to another bank in one sum, by mutual agreement between all parties, the notes which the banks respectively held for the debts were given up, and the debtors each executed his individual note and mortgage for such part of the aggregate sum as it was agreed among the debtors he should secure and pay; and in pursuance of said agreement ■the new notes and mortgages were drawn and made payable to a third person, and by him indorsed to one of the two banks. In an action against one of the debtors, upon his note and mortgage, by the bank to which it had been so assigned : Reid, that the transaction.was a payment, and not a mere renewal of the old notes ; that there was a sufficient consideration to support the new notes and mortgages; and that the bank had authority, by the provision of the national currency act, to make the arrangement, and take the new notes and mortgages in that form and manner.
    5. In such action interest is recoverable upon the new note, although the old notes bore usurious interest, which was thus paid in full; and no offset or deduction can be allowed to the defendant on account of such usurious interest, in an action brought against him after the expiration of two years from the date of such payment, the period limited by the national currency act for recovering back double the amount of usurious interest paid.
    Motion for leave to file a petition in error to the District ■Court of Brown county.
    The original case was an action by the bank, against .Shinkle and wife, to recover the amount of Shinkle’s promissory note for $1,400, and to foreclose a mortgage executed by him and his wife to secure its payment. The note and mortgage were dated August 24, 1867, and were both executed aud delivered to one A. J. Stivers, and by him ■assigned and transferred to the bank.
    
      The defenses set up were, that the note was made without consideration; that the bank was not the owner of the-note; and that it included, or was given in part for, usurious interest. Issues were taken on these several matters of defense, and on the trial the court, to which the cause was submitted without the intervention of a jury, made a special-finding of the facts. These facts are substantially as fol lows ;
    The plaintiff in error, John G. Shinkle, with Walter L. Shinkle and Barton B. Shinkle, were partners, under the-name of J. G. Shinkle & Co. Prior to the date of the note- and mortgage in suit, the firm had made two several loans of money from the defendant in error — one for $5,000, dated July 25, 1864, and the other for $6,768, dated December 80, 1865. They had also made a loan of $1,600 from the Farmers’ National Bank of Ripley, Ohio, dated March 26, 1867. On each of these loans Michael Shinkle was surety,, and on each interest was charged and reserved at the rate of ten per cent. These loans were continued, by renewing the notes given for them from time to time, at the same rate of iuterest, down to the time of executing the note and mortgage in suit. The Shinkles then being unable to pay their debts, and having lately, at the request of these two-banks, made an assignment of their property for the benefit of creditors, by agreement of all the parties to these loans, an arrangement was entered into, as follows: The-aggregate amount due on the three loans, including the illegal interest, was divided into four several sums, in proportions agreed upon and arranged between the Shinkles themselves, of which portions each was to assume and pay one, in five annual installments, at six percent, interest, and to secure the same by mortgage on his individual property,, with a proviso that if the interest should not, be paid at the end of each year the principal sum should become due in. two years and six months. The portion thus assumed and agreed to be secured and paid by said John G. Shinkle was-$1,400, and it was for the security and payment of that sum, and in fulfillment of said agreement on his part,' that the note and mortgage in suit were executed. The portion-so assumed and secured by Walter L. Shinkle was $4,400; that assumed and secured by Barton B. Shinkle, $4,000; and that assumed by Michael Shinkle, $4,765. The notes and mortgages were all executed and delivered according to this agreement, and by the consent of the two banks, and for their use and benefit, were executed and delivered to Slivers, withontany consideration moving from Stivers, and were transferred by him to the defendant in error without any new consideration, and by consent of all parties ; and by like consent the old notes were cauceled and given up.
    On this finding of facts, the court rendered a judgment in favor of the defendant in error, for the amount of the note in suit, without interest, but including the usurious-interest so incorporated in the note.
    To reverse this judgment, Shinkle and wife filed their petition iu error in the District Court, alleging, among other grounds of error, that the judgment upon the facts found should have been rendered iu their favor, or if not, that the court at least erred in including in the judgment the usurious interest incorporated in the note. The defendant in error thereupon filed its cross-petition in error, praying to have the same judgment reversed, on the ground that the court erred in excluding the interest upon the note in suit. The petition and cross-petition were both heard and decided at the same time, and without objection by either party; and upon their hearing the District Court reversed the judgment of the Common Pleas, and gave the bank a judgment'and order of sale for the full amount of the note in suit, with interest from its date, holding that the Common Pleas erred in disallowing the interest accruing upon the note, and did not err in allowing the usurious interest included in the body of the note. This judgment of the District Court Shinkle and wife now seek to reverse.
    The assignments of error relied upon are sufficiently set forth in the opinion of the court.
    
      
      White $ Waters, for the motion :
    1. A cross-petition in error is not authorized by statute, and there is no precedent for it. S. & C. 1101, sees. 515, 517; Ex parte Collier, 6 Ohio St. 55.
    2. The District Court, after reversing the Common Pleas, should have remanded the cause for a new trial. S. & C. 1020, 1026, secs. 263, 279; Stivers v. Borden, 20 Ohio St. 232; Slocum v. Swan, 4 Ohio St. 161; Franklin Bank v. Buckingham, 12 Ohio, 482; Bissell v. Cochran, 15 Ohio, 58; Kepner's Adm’r v. Sniveley’s Adm’r, 19 Ohio, 296-299.
    3. The bank could only take a mortgage to itself, and to secure a debt previously contracted; it could loan upon personal security only. See sec. 8 Banking Law; Hunter v. Field. 20 Ohio, 340; Commissioners of Canal Fund v. Perry, 5 Ohio, 56; Niagara Co. Bank v. Barker et al., 15 Ohio St. 68.
    4. No interest should have been allowed upon the note. Morse on Banks and Banking, 506, sec. 30.
    5. The doctrine of novation and extinguishment of the original debt does not apply to this case. 1 Parsons’ Cont. 217.
    6. The original contract being usurious, any subsequent contract to carry it into effect is also usurious. That there .are different parties to the new contract makes no difference, so long as there remain the same usurer and the same usury. Bridge v. Hubbard et al., 15 Mass. 92; Warren v. Crabtree, 1 Maine, 167; Baggs v. Louderback, 12 Ohio, 53, 57; Walker v. Bank of Washington, 3 How. 62; Moncure v. De Witt, 13 Peters, 345; Botsford v. Sanford, 2 Conn. 276, 279, 284-286; Wales v. Webb, 5 Conn. 154; Townsend v. Bush, 1 Conn. 259; Powell v. Waters, 8 Cowen, 685; Reed v. Smith, 9 Cowen, 647; Tuthill v. Davis, 20 Johns. 285; Jackson v. Percard, 6 Wend. 415.
    7. By reasou of the usury, the first and all subsequent notes are wholly void. Bank of Chillicothe v. Swayne, 8 Ohio, 257; State v. Granville Society, 11 Ohio, 1-12; Trustees of Springfield Tp. v. Dermott, 13 Ohio, 104; Barthool
      
      mew v. Bentley, 1 Ohio St. 37, 41; Debolt v. Ohio Life Ins. and Trust Co., 1 Ohio St. 56-3, 575; Straus v. Eagle Ins. Co., 5 Ohio St. 59, 61; Creed v. Commercial Bank, 11 Ohio, 487, 492; Miami Exporting Co. v. Clark, 13 Ohio, 1, 17; Morris v. Way, 16 Ohio, 469, 477; Bank of Wooster v. Stevens, 1 Ohio St. 233, 235; Preble Co. Bank v. Russell, 1 Ohio St. 313, 320; Russell v. Taylor, 1 Ohio St. 327, 329; Vannata v. State Bank, 9 Ohio St. 27, 36; Union Bank v. Bell, 14 Ohio St. 230, 209; Niagara Co. Bank v. Barker et al., 16 Ohio St. 68; Bank of United States v. Owens, 2 Peters, 527.
    8. Under section 30 of the banking law, Morse on Banking, 506, a national bank in Ohio can make no legal contract reserving interest at a greater rate than six per •cent.; hence the contract itself is void.
    The statutory provision forfeiting the interest only, is not superfluous and nugatory. Under it the borrower has the option to plead forfeiture of interest only, or to claim that "the contract itself is void. Sedgwick on Stat. and Const. Law, 87.
    
      Baird Young, contra:
    1. A cross-petition in error is allowable; moreover, the -plaintiff in error did not move to strike it out, but submitted the case to the District Court upon the petition and cross-petition, and thereby gave jurisdiction.
    2. The District Court had power, after reversing the 'Common Pleas, to reader judgment as it did. S & C. 1106, sec. 526; 67 Ohio Laws, 115; 5 Ohio St. 251, 253.
    3. The settlement of August 24,1867, was a payment of the old debts. Busby v. Finn, 1 Ohio St. 409, 420; 3 Parsons on Contracts, 121, note i; Ib. 122, 123; 12 Ohio, 157; 2 Greenl. Ev. 425, secs. 519-521; Story on Bills, sec. 441; Pothier on Obligations (by Evans), N, 546-564; 4 Pick. 444; 2 Met. 157, 162.
    4. More than two years having elapsed between that settlement and the beginning of these suits, the Sbiuklcs can not recover, by way of counter-claim or set-off, auy usuri<ous interest so paid, or auy penalty therefor.
    
      5. The usurious interest was paid, if at all, by “J. G-. Shinkle & Co.,” and could only be sued for in their names..
    6. Usury does not avoid the contract itself. Fleckner v. U. S. Bunk, 8 Wheat. 338; U. S. Bank v. Wagner, 9 Peters, 399; Baudle v. Isaac, 13 Md. 202; Farmers’ Bank v. Burchard, 33 Vt. 346; Rock River Bank v. Sherwood, 10 Wis. 230; Bank of Middlebury v. Bingham, 33 Vt. 621; Planters’ Bank v. Sharp, 4 Smedes & M. 75.
   Welch, J.

It is claimed, in the first place, that the District Court erred in entertaining and acting upon the cross-petition in error. The court, it is said, should have heard and decided the case upon the principal petition alone, and should either have reversed the judgment for errors assigned in the principal petition, or else have affirmed the judgment.

It is perhaps a sufficient answer to this objection to say that it comes too late. By the record it appears that the cause was heard upon the cross-petition, as well as the principal petition, without objection. No motion was made to strike the cross-petition from the files, and the cause was, in effect, submitted to the court upon both petitions. Had such a motion, however, been made, we think the court would not have erred in overruling it. There is no good reason why cross-petitions in error should not be allowed equally as in original actions. They were allowed at common law, and there is nothing in the code which forbids their use. On the contrary, they are calculated to subservea leading object of the code,-namely, to avoid multiplicity of suits, and to render litigation simple, cheap, and speedy. In order to reverse a judgment, the plaintiff in error must show, not only that the judgment is erroneous, but also that the error works a prejudice to him. If it appears in the record that there is error, not to his prejudice, but to the prejudice of the defendant in error, there is no good reason why the latter should not be allowed at once, the-record and the parties all being before the court, to ask and obtain the reversal or modification of the judgment: for Ills benefit. To summon the opposite party, who is already in court, and to bring in a copy of the record, a copy of which is already in court, would be a useless labor, and involve an unnecessary expense and delay; and to bring in and file with the petition in error the papers in the original case, as the present law requires, would seem to be impracticable, they already being in court. We think the court did not err in entertaiuing the cross-petition, and hearing and deciding the case upon it as well as upon the original petition in error.

It is claimed, also, that the court erred in rendering a final judgment in the case, instead of remanding it to the Common Pleas for retrial and further proceedings.

We fail to see on what ground this objection can be maintained. There was a special finding of the facts by the court, and the oidy question that remained was as to the judgment warranted b3r these facts. There was no motion for a now trial, and no bill of exceptions setting forth the evidence. Counsel seem to base their argument upon the idea that the evidence is set forth in the special finding of the court, and that that finding takes the place-of a bill of exceptions, and is to be regarded as such. This arises írom a failure to distinguish between the fads and the evidence. We have before us, in the finding of the-court, all the/«cis of the case; but we know nothing of the evidence upon which those facts were found. It matters not that the finding is in the language of the witnesses; it is nevertheless a finding of facts, and not merely the testimony in the case.

Butthe plaintiffs in error insist, that upon the facts found, the bank ivas entitled to no judgment; (1) because the original notes for which, in part, the noie in suit was given, were void for usury ; (2) because the bank was not authorized by its charter to take a note and mortgage executed to a third person; and (8) because no consideration was paid by Stivers for the note and mortgage, nor was any paid by the bank to him. They also insist, that if the bank was entitled to any judgment, no interest should have been allowed or recovered upon the note in suit, and that the usurious interest reserved upon the old notes, and iri■corporated into the note in suit, should have been excluded.

We have already held, in the case of the First National Bank of Columbus v. Garlinghouse, decided at the present term, that the reservation of illegal interest by a national bank, organized or acting under the act of 1864, does not render the note or bill discounted void in loto. These old notes were, therefore, at the time of the making and execution of the note and mortgage in suit, valid and subsisting securities, and their surrender was a sufficient consideration to support the note and mortgage in suit. And there is clearly nothing in the objection that the note and mortgage were made to Stivers, and without consideration moving from him, and transferred by him to the bank without any consideration from the bank to him. This was a mere form of executing the new notes and mortgages to the bank. Stivers took them, of course, as mere agent or trustee for the bank. The whole thing was done by the mutual agreement of all parties, and that agreement and its execution on the part of the bank, and by Stivers, was the real •consideration for the notes and mortgage executed by the Shinkles.

We are equally clear in the opinion that the bank had power, by its charter, to take notes and mortgages in this way and form, for the purpose of securing its claims. The power to adopt reasonable and necessary measures for the collection and security of debts is necessarily incident to the power of banking. As we construe section 8 of the act of Congress of 1864, it expressly gives all such necessary incidental powers, without limitation as to the particular modes in which they are to be exercised. The words, “ by discounting promissory notes, dralts, bills of exchange,” etc., contained in that section, are not to be read as limiting the modes of exercising the incidental powers granted, but as limiting and defining the kind of banking which is authorized by the act. In other words, the association is authorized by section 8, to carry on “ banking by discounting and negotiating promissory notes, drafts, bills of exchange,” etc., and to exercise “ all such incidental powers as shall be necessary” for that purpose.

But did the court err in allowing the bank to recover interest upon the new note, and to recover the illegal interest reserved upon the old notes, or rather, the pro rata part of such illegal interest incorporated in the new notes? We think not. We regard the transaction of settlement between these parties as an absolute payment of the old notes, and in no sense a renewal or continuance of the indebtedness which they were given to secure. In legal effect the transaction was equivalent to an actual payment of the old' debts in money, and tho borrowing anew, by each party, of the amount for which he so executed his new note and mortgage. Viewed in this light, it is undeniable that the-now note in suit, not being in itself usurious, would bear interest. It would follow, also, that the Shinkles, under the* provision of section 30 of said act, would have the right toreeover back from the bank double the amount of the usurious interest so paid. But this right to recover double the-* amount of interest is limited by the act to two years from the time the interest was paid, and unless it is exercised within that period, it is gone. In the present case, the period of two years had elapsed long before the commencement of the action. The right to recover the interest being barred, the right to offset the amount against any claim of the bank is also barred. It is unnecessary, therefore, to inquire whether a pro rata, or any other part of the usurious interest so paid upon the old debts, could, in case-the right of recovery had not been so barred, be offset against the claim of the bank in the present case. It is enough to say, if the right ever existed, it has been extinguished by lapse of time.

Motion overruled.  