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Flushing National Bank v. Pinetop Bldg. Corp.

Appellate Division of the Supreme Court of New York, Second Department
Sep 20, 1976
54 A.D.2d 555 (N.Y. App. Div. 1976)

Summary

In Flushing National Bank v. Pinetop Building Corp., 54 A.D.2d 555 (2d Dep't 1976), the Second Department said, "Section 190.40 of the Penal Law was not intended to cover loans by banks."

Summary of this case from Discover Bank v. Brown

Opinion

September 20, 1976


In an action inter alia upon a promissory note, defendants appeal from a judgment of the Supreme Court, Queens County, entered April 27, 1976, which is in favor of plaintiff. Judgment affirmed, with costs. The plaintiff is a national bank which loaned money to defendant Pinetop Building Corp., the maker of a promissory note. The individual defendants are guarantors of that note. At the trial, it was adduced that the loan was at an interest rate of 27.5% per year. Defendants contend that under section 190.40 Penal of the Penal Law, which makes loans at an interest rate in excess of 25% per annum criminally usurious, the entire loan, principal and interest, is illegal and void, and hence unenforceable. Under subdivision 6 of section 108 and section 235-b Banking of the Banking Law, the sole penalty for any usurious loan by a banking institution is the forfeiture of interest. Section 190.40 Penal of the Penal Law was not intended to cover loans by banks (see Franklin Nat. Bank of L.I. v De Giacomo, 20 A.D.2d 797; Reisman v Hartmann Son, 51 Misc.2d 393). Martuscello, Acting P.J., Latham, Margett, Rabin and Hawkins, JJ., concur.


Summaries of

Flushing National Bank v. Pinetop Bldg. Corp.

Appellate Division of the Supreme Court of New York, Second Department
Sep 20, 1976
54 A.D.2d 555 (N.Y. App. Div. 1976)

In Flushing National Bank v. Pinetop Building Corp., 54 A.D.2d 555 (2d Dep't 1976), the Second Department said, "Section 190.40 of the Penal Law was not intended to cover loans by banks."

Summary of this case from Discover Bank v. Brown

In Flushing National Bank v. Pinetop Building Corp., 54 A.D.2d 555 (2d Dep't 1976), the Second Department said, "Section 190.40 of the Penal Law was not intended to cover loans by banks."

Summary of this case from Bank of Am. v. David

In Flushing National Bank, the Second Department held that "[u]nder sections 108 (subd. 6) and 235-b of the Banking Law, the sole penalty for any usurious loan by a banking institution is the forfeiture of interest."

Summary of this case from Discover Bank v. Brown

In Flushing National Bank, the Second Department held that "[u]nder sections 108 (subd. 6) and 235-b of the Banking Law, the sole penalty for any usurious loan by a banking institution is the forfeiture of interest."

Summary of this case from Bank of Am. v. David
Case details for

Flushing National Bank v. Pinetop Bldg. Corp.

Case Details

Full title:FLUSHING NATIONAL BANK, Respondent, v. PINETOP BUILDING CORP. et al.…

Court:Appellate Division of the Supreme Court of New York, Second Department

Date published: Sep 20, 1976

Citations

54 A.D.2d 555 (N.Y. App. Div. 1976)

Citing Cases

Discover Bank v. Brown

In Flushing National Bank v. Pinetop Building Corp., 54 A.D.2d 555 (2d Dep't 1976), the Second Department…

Bank of Am. v. David

In Flushing National Bank v. Pinetop Building Corp., 54 A.D.2d 555 (2d Dep't 1976), the Second Department…