The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918. Page: 44
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250 FEDERAL REPORTER
lerest is contracted for or received, directly or indirectly, greater than twenty
per cent, per annum, the principal and all interest shall be forfeited, and any
amount paid on such contract may be recovered by suit." Acts of Mississippi
1912, p. 801.
The forfeiture provisions of this statute are penal in their nature.
The penal laws of Mississippi are not effective on transactions hap-
pening beyond the borders of the state. The statute does not purport
to operate extraterritorially or to make a usurious contract entered
into in another state subject to the penalties it denounces. A forbid-
den transaction occurring in Pennsylvania and having penal conse-
quences there does not subject a party to it to a penalty denounced by a
Mississippi statute which does not purport to have such an effect. The
transaction in question was such as to subject the lender to a penalty
imposed by the law of Pennsylvania, the state in which the lending
took place. It is that penalty which the lender incurred. If more than
20 per centum per annum interest had been reserved, and payments
on the contract had been made to the lender in Pennsylvania, it hardly
would be contended that the making of such payments gave rise to
the right of action in the borrower'which the Mississippi statute would
have made a consequence of the transaction if it had happened in the
latter statg. We are not of opinion that the Mississippi statute oper-
ated extraterritorially in the one way more than the other. It happens
in the instant case that the deed of trust in question is enforceable for
the principal of the debt secured whether it is the Pennsylvania law or
the Mississippi law that governs in determining the consequences of
[3, 4] Another suggestion is that the deed of trust is unenforceable
by the nonresident corporation to which it was made because of that
corporation's failure to comply with the requirements of the Mississippi
statute prescribing the conditions on which such a corporation may
do business in that state. Though that corporation, prior to the exe-
cution of the deed of trust in question, did or transacted business in
Mississippi in violation of the law of that state, that law does not
purport to give to that conduct the effect of invalidating a contract
subsequently made by the corporation in another state. The making
of the contract in Pennsylvania did not constitute the doing of business
in Mississippi. In this connection, the decision in the case of Chatta-
nooga Building, etc., Association v. Denson, 189 U. S. 408, 23 Sup.
Ct. 630, 47 L. Ed. 870, is called to our attention. In that case it was
held that a delivery in Alabama to a Tennessee corporation's agent
there of a note and mortgage to the corporation, which were payable in
Tennessee, constituted the doing of business by the corporation in
Alabama. That decision by no means supports the contention that the
making of the contract here in question by the delivery in Pennsyl-
vania of the deed of trust and the notes it secured constituted a doing
of business in Mississippi.
The conclusion is that the decree under review was not erroneous
in denying an injunction restraining the foreclosure of the deed of trust
The decree is affirmed.
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The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918., legislative document, 1918; Saint Paul, Minnesota. (digital.library.unt.edu/ark:/67531/metadc38821/m1/59/: accessed April 26, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.