
    Pasquale Caponigri, Appellant, v. Pasquale Altieri and Pietro Altieri, Respondents.
    (Supreme Court, Appellate Term,
    December, 1897.)
    Negotiable instruments—Usurious discount by private banks—Counterclaim by parties accommodated, for illegal interest paid.
    Where an action is brought by a private’ and individual banker upon a note which he has discounted for the defendants, its maker and indorser, they may successfully interpose a counterclaim based upon allegations and proof that the note was given in part renewal of one for a larger sum which, with its earlier renewals, were discounted by the plaintiff for the defendants’ accommodation at usurious rates, as the plaintiff thereby became liable to them, under the banking laws of the state (Laws, of 1882, chap. 409, §§ 68, 69, re-enacted in 1892 by chap. 689, § 55) for the repayment of twice the amount of the interest paid, with an accompanying penalty of the loss of all interest; nor is this construction affected by the statement, contained in the statutes of 1882 and 1892, that it is intended to place private and individual bankers on an equality “ in the particulars,” referred to in the section, with national banks, as this phrase only means that there shall be a uniform penalty for usury in the' case of state and national banks and of private and individual bankers.
    Oaponigri v. Altieri, 21 Mise..Rep. 510, affirmed.
    Appeal from a judgment of the General Term of the City Court of Rew York, which affirmed a judgment for the defendants rendered upon a verdict in their favor.
    Action upon a promissory note by the indorsee against the maker and indorser, the defendants’ contention being that the note was given in part renewal of one for a larger amount, which, with earlier renewals thereof, the plaintiff, ■ a private and individual banker, had discounted for their accommodation at usurious rates; and that because of such usury the plaintiff had incurred a loss of all interest and a forfeiture of double t-he sum paid for the forbearance of the loan. The amount of such forfeiture was counterclaimed by the defendants.
    Frederic J. Swift, for appellant.
    Geo. C. De Lacy, for respondents.
   Bischoff, J.

The conclusiveness of the judgment of affirinanóe in the court below, as to the facts in evidence (Meyers v. Cohn, 4 Misc. Rep. 185), and the state of the record, restrict our authority upon this appeal to a review of the question whether, or not, the forfeiture or penalty urged by the defendants was available to them'. by way of counterclaim. The trial court ruled that it was, and the jury, consistently with such ruling, found for the defendants in $1,000, such being the amount in difference between the defendants’ claim, at double the amount of the usurious interest paid by them, and that of the plaintiff, the principal of the note in suit.

The State Banking Law (Laws 1882, chap. 409, §§ 68, 69) • provided as follows:

§ 68. Every banking association organized and doing business under and by virtue of the laws of this state, and every private and individual banker or bankers doing business in this state, are hereby authorized to take, receive,' reserve and charge on every loan or discount made, or upon any note, bill of exchange or other evidence of debt, interest at the rate of six per centum per annum; and such interest may be taken in advance, reckoning the day for which the note, bill or other evidence- of debt has to run. The knowingly taking, receiving, reserving or charging a rate of interest greater than aforesaid shall be held and adjudged a'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; and in case a greater rate of interest has been, paid the person or persons paying the same or their legal representatives may recover back twice the amount of the. interest thus paid, from the association, or private or individual banker, taking or receiving the same; provided, that such action is commenced within two years, from the time the said excess, of interest, is taken.- But. the purchase, discount or sale of a bona fide bill of exchange, note or other evidence of debt, payable at another place than the place of such purchase, discount or sale, at not more than the current rate of exchange for sight drafts, or a reasonable charge for collecting the same, in addition to the interest,'shall not be considered as taking or receiving a greater rate of interest than six per centum per annum.”

“ § 69. It is hereby declared that the true intent and meaning of the last preceding section is to place and continue the private and individual bankers and banking associations organized and doing business as aforesaid on an equality, in the particular in said section referred to, with national banks organized under the act of congress, entitled ‘An act to provide a national currency, secured by pledge of United States bonds, and to provide for the circulation and redemption thereof/ approved June third, eighteen hundred and sixty-four.” These provisions were retained in the revision of 1892 (Laws 1892, chap. 689, §. 55), identically as quoted. •

Under an act of Congress according a right of action, against national banks, to a party paying interest upon a usurious loan, in phraseology substantially the same as that employed in this statute of our state, the Court of Appeals held that the borrower’s demand for the penalty was properly the subject of a counterclaim to- the bank’s action to recover the money loaned. National Bank v. Lewis, 75 N. Y. 516.

In that case the defendant’s right of demand arose solely from the act of Congress, and that act was1 construed by the Supreme Court of the United States, subsequently to the Court of Appeals decision, as giving no right of an enforcement of the demand by way of .counterclaim (Barnet v. Bank, 98 U. S. 555), which construction of. the federal statute was conclusive upon the state courts (Hintermister v. First Nat. Bank, 64 N. Y. 212, 214), and was, therefore, adopted by the Court .of Appeals upon a reargument of the Lewis case, 81 N. Y. 15.

. In the case at bar the defendants’ rights as against the plaintiff, a private banker, exist by virtue of a state statute which, unless some contrary legislative intent appears, must be construed in accordance with the views expressed by the Court of Appeals when considering an act similarly framed, their decision being, so far, unrestricted by any more conclusive judicial authority.

As an independent question, the matter is to be determined in favor of the maintenance of the counterclaim, since the Court of Appeals as an independent tribunal has so decided (National Bank v. Lewis, 75 N. Y. 516), but it is- claimed by the appellant that the legislature intended so to regulate the rights and liabilities of private bankers and state banks as to place them, in all particulars, upon an exact equality with- national banks, and had to this extent adopted the provisions of the federal law governing national banks, as construed by the Supreme Court of the United 'States.

The contention proceeds Upon the following provision of the State Banking Law, as above quoted: “ It is hereby declared that the true intent and meaning of the last preceding section is to- place and continue the private and individual bankers * * * on an equality, in the particulars in 'said section referred to, with national banks. * * *”

The “ particulars in said section referred to ” have to do with the penalty for the taking of usurious interest, and the “ equality ” sought to be accomplished is obviously a uniformity of the penalty in the case of all banks, national and state, and individual bankers, the inequality being found in the situation whereby, but for this enactment, the national banks, dealing usuriously, forfeited twice the amount of interest received, and the state banks, or individual bankers, in no' greater fault, forfeited the entire subject of the loan.

By the law of this state, counterclaims are favored as tending to avoid a multiplicity of actions (Glen, etc., Mfg. Co. v. Hall, 61 N. Y. 226, 237; Carpenter v. Manhattan Ins. Co., 22 Hun, 49), and we are to presume that the legislature had knowledge of this.aspect of the matter when-omitting any specific restriction-against this method of procedure from the act in question.

Failing any provision which should place this statute without the scope of the statute regulating counterclaims (Code Civ. Pro., § 501), as liberally construed, we think that the legislative intent was to equalize the rights of the national and state, banks and individual bankers, while not in any way altering the rules of procedure as existing in this state, and, as so existing, the defendants were entitled to maintain their counterclaim in accordance with the decision of the Court of Appeals in Bank v. Lewis.

As stated, this question of the legal enforcibility of the counterclaim is the only one involved by the exceptions upon which reliance is placed by the appellant, and the judgment, accordingly, must be affirmed, with costs.

Daly, P.. J., and McAdam, J., concur.

Judgment, affirmed, with costs. :  