discount

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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.

In a general sense, an allowance or deduction made from a gross sum on any account whatever.

In a more limited and technical sense, the taking of interest in advance. By the language of the commercial world and the settled practice of banks, a discount by a bank means a drawback or deduction 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. Fleckner v. Bank, 8 Wheat. 338, 5 L. Ed. 631; Bank v. Baker, 15 Ohio St 87. Although the discounting of notes or bills, in its most comprehensive sense, may mean lending money and taking notes in payment, yet, in its more ordinary sense, the discounting of notes or bills means advancing a consideration for a bill or note, deducting or discounting the interest which will accrue for the time the note has to run. Loan Co., v. Towner, 13 Conn. 249. Discounting by a bank means lending money upon a note, and deducting the interest or premium in advance. Bank v. Bruce, 17 N. Y. 507; State v. Sav. Inst., 48 Mo. 189. The ordinary meaning of the term "to discount" is to take interest in advance, and in banking is a mode of loaning money. It is the advance of money not due till some future period, less the interest which would be due thereon when payable. Weckler v. Bank, 42 Md. 592, 20 Am. Rep. 95. Discount, as we have seen, Is the difference between the price and the amount of the debt, the evidence of which is transferred. That difference represents interest charged, being at the same rate, according to which the price pnid, if invested until the maturity of the debt, will just produce its amount. Bank v. Johnson, 104 U. S. 276, 26 L. Ed. 742. . Discounting a note and buying it are not identical in meaning, the latter expression being used to denote the transaction when the seller does not indorse the note, and is not accountable for it. Bank . Baldwin, 23 Minn. 206, 23 Am. Rep. 683.

In practice. A set-off or defalcation in an action. Vin. Abr. "Discount." But see Trabue's Exit v. Harris, 1 Mete. (Ky.) 597.

— Discount broker. A bill broker; one who discounts bills of exchange and promissory notes, and advances money on securities.

A counting back, from or off; an allowance or deduction made from a gross sum, on any account; the taking of interest in advance, or an allowance paid on account of the immediate advance of a sum of money not to be repaid till some future time.

In a general sense. An allowance or deduction made from a gross sum on any account whatever.

In a more limited and technical sense. The taking of interest in advance. By the language of the commercial world and the settled practice of banks, a discount by a bank means a drawback or deduction 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. 8 Wheat. 338; 15 Ohio St. 87. Although the discounting of notes or bills, in its most comprehensive sense, may mean lending money and taking notes in payment, yet, in its more ordinary sense, the discounting of notes or bills means advancing a consideration for a bill or note, deducting or discounting the interest which will accrue for the time the note has to run. 13 Conn. 243. Discounting by a bank means lending money upon a note, and deducting the interest or premium in advance. 17 N. Y. 507, 515; 48 Mo. 189. The ordinary meaning of the term "to discount" is to take interest in advance, and in banking is a mode of loaning money. It is the advance of money not due till some future period, less the interest which would be due thereon when payable. 42 Md. 592. Discount, as we have seen, is the difference between the price and the amount of the debt, the evidence of which is transferred. That difference represents interest charged, being at the same rate, according to which the price paid, if invested until the maturity of the debt, will just produce its amount. 104 U. S. 278. Discounting a note and buying it are not identical in meaning, the latter expression being used to denote the transaction when the seller does not indorse the note, and is not accountable for it. 23 Minn. 206.

In practice. A set-off or defalcation in an action. Vin. Abr. "Discount." But see 1 Met. (Ky.) 597.

1. A counting ofE; an allowance or deduction from a gross sum on any account.^ A right -which a debtor has to an abatement of the demand against him in consequence of a partial failure of the consideration, or on account of some equity arising out of the transaction on which the demand is founded. 2 3. The difference between what is paid for a claim evidenced by negotiable paper and the face amount thereof. A bank of discount furnishes loans upon drafts, promissory notes, bonds, and other securities... " Discounting " and " buying " a note are not identical. The latter denotes the transaction "when the seller does not indorse the note and is not accountable for it."., Power to carry on the business of banking, by discounting evidences of debt, is merely an authority to lend money thereon, with the right to deduct the legal rate of interest in advance.' In Atlantic State Bank v. Savery, 88 N. T. 291, 302 (1880), it was decided that the purchase of a promissory note for a less sum than its face is a discoimt thereof within the meaning of the provision of the Banking Act of that State (Laws of 1836, o. 260, § 18), which authorizes associations organized imder it to discount bills and notes. And in support of that definition of the terms the court cites the authority of Mc Leod on Banking, p. 43, where the author says, " The difference between the price of the debt and the amount of the debt is called discount," and " to buy or purchase a debt is always in commerce termed to discount it." In Fledkner v, Banlc of United States, 8 ■Wheat. 850 (1823), Mr. Justice Story said, "Nothing can be clearer than that, by the language of the commercial world and the settled practice of banks, a discount by a bank means 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," and added that if the transaction could properly be called a sale " it is a purchase by way of discount." Discount, then, is the difference between the price and the amount of the debt, the evidence of which is transferred, and that difference represents interest charged, bemg at some rate, according to which the price paid, if invested untU the maturity of the debt, w Ul just produceits amount. And the advance, therefore, upon every note discounted, without reference to its character as busmess or accommodation paper, is properly denominated a " loan," for interest is predicable only of loans, being the price paid for the use of money. The specific power given to national banks (Rev. St. § 6136) is " to carry on the business of banking by discounting and negotiating promissory notes, drafts, 1 [Dunkle v. Eenick, 6 Ohio St. 53.5 (1856). = Trabue v. Harris, 1 Mete. 599 (Ky., 1838), Simpson, Chief Justice. bills of exchange, and other evidences of debt." So that the discount of negotiable paper is the form according to which they are authorized to make their loans, and the terms loans and discounts are synonymous. It was so held in Talmage v. Pell, 3 Sold. 328, 339 (1852); and in Niagara County Banlc v. Baker, 15 Ohio St. 68, 87 (1864), the point decided was that " to discount paper, as understood in the business of banking, is only a mode of lending money with the right to take the interest allowed by law in advance.".. A national bank is restricted to taking no more than seven per centum for the discount of negotiable paper when the person discounting is an indorser thereon, i See Usury.

practice, is set-off, or defalcation in an action. Vin. Ab. h. t. 7