Gunn v. Head

• Decision Date: 31 July 1855
• Parties: GUNN, Plaintiff in Error, v. HEAD, Defendant in Error.
• Court: Missouri Supreme Court

21 Mo. 432

GUNN, Plaintiff in Error,

v.HEAD, Defendant in Error.

Supreme Court of Missouri.

July Term, 1855.

1. Usury upon a contract in another state must be specially pleaded. The act of 1847, allowing the defence of usury under the general issue, even if not repealed by the practice act of 1849, is only applicable to contracts made in this state.

2. Although parties cannot prospectively agree that interest may bear interest, yet, after interest has accrued, it may be agreed that it shall bear interest.

Error to Benton Circuit Court.

There is a sufficient statement in the opinion of the court to show the point upon which the case was reversed.

F. P. Wright, for plaintiff in error.

Gardenhire, for defendant in error.

SCOTT, Judge, delivered the opinion of the court.

This was an action on an account stated in California, for money due on contracts between the parties, entered into in that state.

The answer, in effect, was, that there was no legal accounting between the parties, and that the plaintiff had been overpaid. There was a judgment for the defendant, Head, the court finding that the transaction was vitiated with usury, and that the sum claimed was usurious interest.

We do not see how the finding of the court can be sustained. It far transcended the matters in issue. When the account stated was proved as alleged in the plaintiff's petition, we find no authority in the pleadings for inquiring into the matter of usury; for we presume that the mere denial that there was any legal accounting between the parties, will not be insisted as sufficient to raise any such issue. The practice act of 1849 requires that all defences shall be specially pleaded. It is not necessary to inquire whether the provision in the act of 1847, respecting the defence of usury, which allows such defence to be made under the general issue, or under the plea of non est factum, when the suit is on a specialty, was repealed by the practice act of 1849, as the provision in the act of 1847 is only applicable to contracts made in this state. The contract or contracts out of which this controversy arose, were all made in California, and the law of that state respecting interest is preserved in the record.

The court was evidently mistaken in the notion that interest cannot bear interest. Parties cannot prospectively agree that interest may bear interest; but after interest has accrued and is due, it may be agreed that such interest may bear interest. ( Van Banchotten v. Lawson, 6 J....