Discount

Interest reserved from the amount loaned at the time of making a loan. An allowance sometimes made for pi payment. As a verb, it is used to denote the act of giving money for a bill of exchange or promissory note, deducting the ini Dunkle v. Renick, 6 Ohio St 527; Niagara County Bank v. Baker, 15 Ohio St. 87; Philadelphia Loan <'<>. v. Towner, 13 Conn. 249; state v. Savings Institution, 48 Mo. L89; Fleckner v. Bank, 8 Wheat (1, S.) 338, 5 L. Ed. 633; Saltmarsh v. I 14 Ala. G77; Weckler v. Bank, 42 Md. 592, 20 Am. Rep. 95. Discounting means to take Interesl in advance; Mc Lean v. Bank,:; Mc Lean 597 Cas. No. 8,888. It is a mode of loaning money; New York Firemen ins.

Co. v. Ely, 2 Cow. (N. Y.) G78; Weckler v. Bank, 42 Md. 592, 20 Am. Rep. 95.

As to whether discounting includes buying and selling', the cases are not uniform. It is held to be another name for buying at a discount: Tracy v. Talmage, 18 Barb. (N. Y.) 456; Fleckner v. Bank, S Wheat. (U. S.) 338, 5 L. Ed. 63]: Pape v. Bank, 20 Kan. 4.r.0, 27 Am. Bep. 183; contra.

First Nat Bank of Rochester v. Pierson, 24 Minn. 141, 31 Am. Rep. 341; Niagara County Bank v. Baker, 15 Ohio St. 87. See 16 L. R. A. 223, note.

In an ordinary commercial document, discount means rebate of interest and not "true" or mathematical discount; [1896] 2 Ch. 320. A discount by a bank means ex ri termini a deduction or drawback made upon its advances or loans of money upon negotiable paper or other evidences of debt, payable at a future day, which are transferred to the bank. It is the difference between the price and the amount of the debt, the evidence of which is transferred; National Bank v. Johnson.

101 U. S. 276, 26 L. Ed. 742; Fleckner v. Bank, 8 Wheat. (U. S.) 338, 350. 5 L. Ed. 631.

The taking of legal Interest in advance is not usurious; but it is only allowed for the benefit of trade and where the bill or note discounted is meant for circulation and is for a short term; New York Firemen Ins. Co. v. Ely, 2 Cow. <NT.

Y.I 678; President, etc., of Bank of Utica v. Wager, 2 Cow. (N. Y.) 712: Bank of Utica v. Phillips, S Wend. (N. Y.) 408.

There is a difference between buying a bill and discounting it. The former word is used when the seller does not indorse the bill and is not accountable for Its payment: Mc Elwee v. Collins. 20 N. C. 350; but the discount of negotiable paper at more than a lawful rate of interest Includes purchase of such paper as well as loans: Danforth v. Bank. 4S Fed. 271, 1 C. C. A. 62, 17 L. R. The bona fide sale of a note, made in good faith for full value in it a, is valid and not usurious, but if in its origin H only a nominal negotiation, it by a subsequent Nich- I 7 Pet 0 623; Junction B. Co. v. Bank, 12 6, 20 L. Ed. 3 The discount of a note at more tl:' - who v,. maker nor pay.'... is iu. tul V. Willis. 20 Pa. 5 W V a device to cover usury and it may i: by the transferor; French v. Grindle. 163; l: I r v. 'rum 155; National Bank of Michigan v. Gn 140); but this rule only applies to business paper, since the accommodation paper at a discount of more than legal interest is usurious; Belden V. Laud.. 17 ' -111: in some cases II Is held that if the vendor indorses or guarantees or Ise bona bio for the payment of the bill or note, the transaction is usurious; Natl Bank v. Johnson, 104 U. S. 271, 26 L Ed. 742; Cov les v. Mc Vii kar,:; Wis. 725, however, it was also held that the lnd ment was valid i'le to the holder as against the maker though usurious as against the ' being valid in its Inception, was not vitiated by the subsequent transaction except Indorser. The last ruling, however, was said to be obiter dictum, but. the qu arising for adjudication, the view m proved and the subsequent ca Ided; Armstrong v. Gibson..".1 Wis. 61, li Rep. I The discounting of negotiable paper undi r the national bank act is synonymous with loans; National Bank v. Johnson. 104 U. S 271, 26 L. Ed. 742, citing Niagara Counts Bank v. Baker, 15 Ohio St 68, to the effect thai to discount paper Is "only a mode of loaning money with the riudit to take the Interesl allowed by law In advai Nation \i. Bad ca Where in an act of incorporation tl erdse Of banking powers was prohibited, it was held that fcherebj the discount!] ootes was forbidden; United German Bank v. Katz, 57 Md. 128, 139; Sewell, Banking. The true discount for a given sum. for a given time, is BUCh a sum as will in that time amount to the interest of the sum to be discounted.

Wharton.

In Practice. A set-off or defalcation in an action. Yiner, Abr. Discount.

Bu1 Trabue'a Ex*r v. Harris, l Mete t Ky.) 507.

In common-law actions there was a plea of discount but it is little used. In Delaware, where the common-law pleading Is Closely adhered to and Bhorl pleas are frenever any definite idea connected with the 1 plea of discount in the Delaware practice; that they could not "give it the force or meaning of a plea of set-off."

Glazier v. Mc Callister, 5 Harring. (Del.) 41.

Hence that plea is rather intended for use when matter which constitutes a deduction or defalcation of or from the plaintiff's claim is introduced to reduce it.