Statement of the Case.

certain bonds of that date made and executed and delivered by plaintiff to the Union Loan and Trust Company of Sioux City, Iowa, as trustee for defendant, which said bonds were in the sum of $1000 each, in all one hundred bonds, into which at that time and subsequently all of said indebtedness, except that represented by said note for $3040.38, executed and delivered to the defendant on the 17th day of June, 1890, was merged. That said bonds were secured by mortgage on certain lands situated in the counties of Woodbury and Plymouth, in the State of Iowa. On or about the 3d day of March, 1892, a suit in equity was commenced in the District Court of Woodbury County, Iowa, and a judgment and decree was entered against plaintiff on or about the 23d day of December, 1893, for the sum of $94,578.90, being the entire indebtedness due from plaintiff to defendant as entered by said court upon the said bonds and said note for $3040.38. And on the 19th day of March, 1894, upon the execution sale of the premises mortgaged to secure said indebtedness, the defendant knowingly took and received the entire sum of said judgment, including all the usurious interest before that time, knowingly charged in the said account for overdrafts upon all of the said notes and bonds, in all the sum of $47,020.37. That the items of interest upon the overdrafts aforesaid, charged upon account against plaintiff, were so charged without any contract therefor, at the time of such charging were each and all at a higher rate of interest than that allowed by law of Iowa, corrupt and usurious, and in violation of sections 5197 and 5198 of the Revised Statutes of the United States. The items of interest upon overdrafts aforesaid, charged by defendant and carried into the notes aforesaid, were knowingly charged, contracted for by their incorporation in said notes, reserved, taken and received by the defendant as a part of the entire amount of interest paid by the plaintiff and knowingly received by defendant, in the total amount of money collected upon said judgment and decree, and knowingly charging, contracting, reserving, taking and receiving of which was a corrupt and usurious transaction, in violation of sections 5197 and 5198 of the Revised Statutes of the United States, and occurred within two years prior to the commencement of this ac

Statement of the Case.

tion. That the entire amount of interest as aforesaid, knowingly charged, contracted for, taken and received was in amount the sum of $47,020.37, whereby defendant became indebted to plaintiff in the sum of $94,040.74, no part of which has been paid."

The answer of the defendant admitted substantially the allegations of the petition detailing the transactions between it and the plaintiff, but alleged that it charged plaintiff only the interest permitted by the laws of Iowa, "and that if at times, through the inadvertence or mistake of the clerks and accountants of the bank, the bank charged more than such proper rate, at other times, through similar inadvertence and mistake, a less amount was charged, so that during the course of its business with the plaintiff, the total amount charged to him as interest upon overdrafts was two thousand seventyeight dollars and eighty cents ($2078.80), while at the legal rate under the laws of Iowa, and according to the custom of bankers, there was due from the plaintiff to the defendant the sum of two thousand ninety-six dollars and sixty cents ($2096.60), and there was no intention to charge usurious interest at any time."

The answer also admitted that all the unpaid indebtedness of plaintiff remaining was included in the bonds of plaintiff, which was secured by a mortgage upon his real estate as alleged, and that the mortgage was foreclosed and the property sold, but denied that any interest upon the overdrafts was paid by the sale, but averred "that before the rendition of the judgment and decree in the said foreclosure proceedings, the court ordered deducted from the amount found due all sums charged as interest upon overdrafts, which was in fact deducted, and such sums were not included in the judgment and decree, and the defendant denies that on the sale of the property of the plaintiff on the said judgment foreclosure, any of the sums of interest upon overdrafts were thereby paid, but on the contrary alleges that there is still a large deficit on the said judgment, amounting to about the sum of ten thousand dollars ($10,000), which was not paid by the sale of the said property, and has not since been paid."

Statement of the Case.

The answer also alleged that if usurious interest was paid by the plaintiff "it was so paid more than two years prior to the time of the commencement of this suit, and therefore said suit is barred by lapse of time."

The answer also alleged a settlement between defendant and the plaintiff on the 17th of June, 1890, in pursuance of which the plaintiff delivered to the defendant $61,000 in the bonds already mentioned, and his promissory note for $3048.38, and "that the said bonds and note were received by the defendant in full payment and settlement of all existing liability and indebtedness on the part of the plaintiff to the defendant, and thereby the plaintiff paid to this defendant all sums charged for interest or otherwise, and that the said settlement took place more than two years prior to the bringing of this suit, and this suit is therefore barred by limitation."

The answer also pleaded the foreclosure suit in bar.

The plaintiff filed a reply traversing the allegations of the

answer.

The case was referred to a referee to report the facts. It is not necessary to give the report of the referee in full. He found that defendant had charged interest on plaintiff's overdrafts to the amount of $2064, and that the average rate of interest charged was 10.22 per cent, and the total amount of interest charged in excess of 10 per cent was $72. That the interest on the overdrafts was included in the various notes given by the plaintiff prior to March 15, 1890; "and all of the indebtedness of plaintiff to defendant, arising or growing out of said bank account from January 1, 1886, to March 15, 1890, was evidenced by said notes, but said notes were not given in payment of said indebtedness."

The referee also found the execution of the negotiable bonds by plaintiff, and the mortgage to secure the same as alleged in the proceedings, the foreclosure of the mortgage, and that plaintiff, "in his answer and amendments in said case set up that excessive interest had been charged on overdrafts by the First National Bank, and said interest had been included in the notes afterwards given, and said notes were merged in the bonds in suit, and asked that an accounting be had of the amount of ex

Statement of the Case.

cessive interest charged on said overdrafts, and that the amount so found be deducted from the amount due on the bonds; and said D. H. Talbot, in support of his allegation, introduced evidence showing the amount of interest charged on said overdrafts; and in the determination of the case the court found that excessive interest on overdrafts to the amount of two thousand and sixty-four dollars ($2064.00) had been charged the plaintiff, and ordered that said two thousand and sixty-four dollars ($2064.00), with interest at the rate named in the bonds, amounting to five hundred ninety-five dollars and forty-six cents ($595.46), making a total of two thousand six hundred nine dollars and forty-six cents ($2609.46), be deducted from the amount due on the bonds, and a decree was entered in said case for the amount due on said bonds, less said sum of two thousand six hundred nine dollars and forty-six cents ($2609.46).

"Ninth. That in said cause a decree for ninety-four thousand five hundred seventy-eight dollars and ninety cents ($94,578.90) was rendered, of which forty-nine thousand seventy dollars and forty-seven cents ($49,070.47) was principal, thirty thousand nine hundred eighty-eight dollars and fifty-two cents ($30,988.52) was interest and fourteen thousand five hundred nineteen dollars and ninety-one cents ($14,519.91) was the amount paid on prior liens, taxes and interest on same by plaintiff in that action.

"Tenth. That the sheriff, under an execution issued on said decree, sold March 19, 1894, plaintiff's property, amounting to thirty-six thousand four hundred thirty-nine dollars and fifteen cents, ($36,439.15); and on May 19, 1894, under said execution sold property amounting to fifty thousand and sixty dollars ($50,060), and on July 2, 1894, sold under said execution property amounting to twelve hundred dollars ($1200.00), making a total of eighty-seven thousand six hundred ninety-nine dollars and fifteen cents ($87,699.15) realized from sheriff's sale of said land under said decree, and leaving a balance, including the interest to date of sale, of eleven thousand one hundred fortyone dollars and five cents ($11,141.05) unpaid on said judgment and decree, which balance, with interest, has not been paid.

"Eleventh. That the interest on overdrafts, not having been

Statement of the Osse.

included in said decree, was not paid by the sale of plaintiff's land under said execution.

"Twelfth. That plaintiff's overdrafts, including interest thereon, was paid June 17, 1890, more than four (4) years before the commencement of this action."

As conclusions of law the referee found as follows:

"First. That interest on overdraft was excessive, but not illegal, or usurious, and did not taint the subsequent debt, notes and bonds, of which it formed a part of the consideration.

"Second. That the custom of bankers to compute interest on a commercial basis of thirty days to the month, making three hundred and sixty days to the year, under the tables, is legal.

"Third. That plaintiff's cause of action occurred June 17th, and this suit is barred under section 5198 of the Revised Statates of the United States, on which this action is based.

"Fourth. That the matter in this suit was adjudicated between the same parties in the case of the Union Loan & Trust Company v. D. H. Talbot, and that relief could have been granted, and plaintiff is now estopped from maintaining this suit.

"Fifth. That interest charged plaintiff on overdraft was not included in and did not form a part of the decree in the case of the Union Loan & Trust Company v. D. H. Talbot, and was not paid by said sheriff's sale of plaintiff's property under execution issued on that decree."

He recommended that judgment be entered dismissing plaintiff's petition, and that defendant have judgment for costs.

That plaintiff filed exceptions to the report, and the matter came on to be heard March 19, 1896, and the court adjudged that the conclusions of the referee were correct; that the matters in the suit had been adjudicated in the former action; that plaintiff's cause of action had accrued June 17, 1890, and that his suit was barred by the statute of the United States upon which the action was based, and plaintiff's petition was dismissed.

The Supreme Court of the State, in passing on the case, affirmed the findings of fact of the referee, but said "that it was VOL. CLXXXV-12