Brockway v. Haller

57 Iowa 368 | Iowa | 1881

Adams, Ch. J.

i. istekest : pleading. Interest in this State is limited to six per cent per annum. To this rule there is one exception. Parties may agree in writing for the payment of interest not exceeding ten per cent per annum. Code, section 2077. The agreement in this case to pay ten per cent interest on the delinquent interest not being in writing, such interest cannot of course be recovered. The plaintiff therefore only seeks to recover six per cent. The defendant contends that he cannot recover even that. His theory is that a contract to pay ten per cent is not a contract to pay six per cent, and as no other than the ten per cent contract is relied upon the plaintiff must fail.

But ten per cent includes six per cent. If the plaintiff had brought an action to recover six per cent on a written contract to pay ten per cent, his recovery could not be denied. The written ten per cent contract would have been good enough evidence of the defendant’s liability to pay six per cent. For the same reason a parol contract to pay ten per cent shows a liability to pay six per cent. If a parol contract to pay ten per cent were illegal the case would be different. But it is simply insufficient to enable the claimant to enforce a ten percent liability.

The defendant contends that we cannot regard the ten per cent contract as including a contract to pay six per cent, because the law implies a contract to pay six per cent from the agreement to pay the interest annually. But parties may cover by express contract what the law would otherwise imply, and in such case it is proper to declare upon the express contract. We see no objection to the plaintiffs declaring on the express contract to pay ten per cent, as including a contract to pay six per cent and as creating a liability for that amount. Any other view would be extremely technical, and operate to defeat substantial justice. We think that the demurrer was improperly sustained.

Reversed.