279 Mo. 672 | Mo. | 1919
This cause was heard in the Springfield Court of Appeals (185 S. W.-241), and was certified here because one of the judges deemed the opinion to be in conflict with decisions of this court.
On March 14, 1910, appellants executed a note for $8650, payable April 1, 1913, to L. N. Manley, with interest “from date at the rate of eight per cent per annum payable semi-annually according to the tenor and effect of the interest coupons hereto attached and bearing even date herewith.” Six coupons notes were executed. The first was for $378.76 and represented the interest on the principal note from March 14, 1910, to October 1, 1910. Each of the five remaining coupons was for $346, six months’ interest on the principal note. The five fell due, respectively, on April 1, 1911, October 1, 1911, April 1, 1912, October*!, 1912, and April 1,1913. Each coupon note was expressed to bear interest at eight per cent from maturity. April 11, 1911, new notes were given to cover the interest to April 1, 1911. Each of' these drew interest at eight per
The petition alleges that the “bond or obligation and coupons . . . was and is usurious and unenforceable on its face in requiring the plaintiffs to pay more than eight per cent per annum, payable semiannually for the money loaned to them; and in compounding interest oftener than once a year,” and that by reason thereof respondent was entitled to no more than his principal and six per cent simple interest, whereas he demanded and was paid the sum of $718.91 in excess of that amount. Judgment for that amount and for costs, expenses and a reasonable attorney’s fee is prayed. The trial court gave judgment for defendant.
I. We agree with the 'Court of Appeals (185 S. W. 1. c. 247) that the sums paid the trustee for eommissi°ns and expense of publication of notice cannot be charged against respondent.
II. The petition alleges and appellants’ evidence shows that the overpayment, which they contend resulted from a usurious exaction, was made to cover semiannual interest upon interest. As pointed out by the Court of Appeals, this is an action under Section 7282, Revised Statutes 1909. This section provides for the recovery by the payor of any sum paid in • excess of the rates prescribed by the “three' preceding sections” These sections provide that (1) in the
In 1845 (R. S. 1845, secs. 6 and 7, p. 615) provisions permitting the compounding of interest once a year were enacted. Section 7185, Revised Statutes 1909, reads as follows:
“Parties may contract, in writing, for the payment of interest upon interest; but the interest shall not be compounded oftener than once a year. Where a different rate is not expressed, interest upon interest shall be at the same rate as interest on the principal debt. ’ ’
Under these sections it is lawful for parties to contract in writing for interest at the rate of eight per cent per annum, compounded annually. In this day and age, in the absence of a law limiting the rate of interest, there can be no usury. [Newton v. Wilson, 31, Ark. 484.] Further, unless the rate of interest exceeds the applicable statutory maximum, there is no usury in a particular case. [Black’s Law Dictionary; Webster’s International Dictionary; Parkham v. Pulliam, 45 Tenn. 497; Rosenstein v. Fox, 150 N. Y. 354; Kreibohm v. Yancey, 154 Mo. 67.] The interest contract in this case is in writing and it fixed an eight per cent rate, to be compounded semi-annually. The provision for compounding oftener than once a year was void. [Western Storage Co. v. Glasner, 169 Mo. l. c. 46, 47.] Section 7182, Revised Statutes 1909, under which this action is brought, gives a right of action, by specific reference, solely for violation of Sections 7179, 7180 and 7181. It does not purport to give a cause of action
III. With most of the opinion of the Court.of Appeals we agree. In our opinion, it fell into error, when it held, as we understand its holding, that a payment of compound interest constitutes usury in every case in which it exceeds the written contract, although the total amount paid does not exceed the amount which could lawfully be exacted and paid on a written obligation. Other than the semiannual compounding feature of the contract, there is no suggestion that there was any trick, fraud or intent to cover up or secure usurious interest. This disposes of the only question raised by appellants.
The judgment is affirmed. All concur.