169 A. 917 | Conn. | 1934
The substituted complaint alleges that the defendant Palatnick borrowed $940 from the plaintiff and signed a note, payable to it or order, for $1000, payable $20 weekly commencing one week after date, and providing that upon default in any payment for one week after due the whole amount shall become due. The defendants Tonken and Goodman indorsed the note before delivery. It is further alleged, in paragraph six, that "Said sum was loaned to the defendant J. Palatnick with no intent other than to receive the amount actually loaned plus interest at the rate of six per cent. per annum, and therefore, suit is brought for only the amount actually loaned with accrued interest at said rate;" that Palatnick has paid $180 and that there remains unpaid $760 on the principal and interest to date. The note by its terms calls for payments the aggregate amount of which would exceed the loan by a sum greater than interest at the rate permitted by §§ 4732 and 4733 of the General Statutes, which are *3
quoted in a footnote.* Columbus Industrial Bank v.Rosenblatt,
From their argument in this court it appears that the defendants construe the complaint as alleging a parol agreement, collateral to the note, and to which they, as indorsers, were not parties, which agreement was to the effect that, notwithstanding the provisions of the note itself, interest exceeding six per cent per annum on the amount actually loaned was not to be charged. The point of their grounds of demurrer is that, at least as against them, such allegations will not avail to permit the terms of the note to be altered through proof of a parol agreement between the marker and the payee limiting the interest to be paid and received to a less, and legal, rate and amount than the note expressly provides for. The short and adequate answer to this contention is that the complaint does not admit of the construction so ascribed to it. The plain purport of its allegations is that the plaintiff took the note with no intent to collect more than the sum loaned with lawful interest and now, in effect, concedes that the excess of the face of the note above that amount is not recoverable, on account of lack of consideration *4 (1 Daniel, Negotiable Instruments [7th Ed.] § 230) and makes no claim to that excess.
The plaintiff-appellant contends that the fact that the amount of the note exceeds the sum actually loaned by an amount greater than the interest charge sanctioned by § 4732 of the General Statutes, does not conclusively establish the intent to transgress that statute which is contemplated by § 4733, and under § 4736 of the General Statutes, precludes any action to recover on the loan, but that allegations of absence of intent to evade the provisions of these statutes are admissible and material in this action and, for the purposes of the demurrer by which they are to be regarded as admitted, sufficient to remove the stigma of usury attaching to the note if alone considered.
Not only the acceptance of a note which on its face appears to be usurious, but also an intent thereby to evade the provisions of § 4732 and obtain interest or its equivalent in excess of the statutory limit, is required in order to bring the action under the ban of § 4736. Therefore the question of fact as to the existence of such intent is an essential element for consideration in determining whether or not the action is maintainable. "No device can be invented, and no disguise can be put on, which will make a contract valid, if behind or underneath [it] an intent to evade the statute is found." Douglass v. Boulevard Co.,
The demurrer must be tested by the legal sufficiency of the allegations of the substituted complaint and the facts provable thereunder. Bassett v. Foster,
There is error, the judgment is set aside and the cause remanded to be proceeded with according to law.
In this opinion the other judges concurred.
