21 A.2d 652 | Conn. | 1941
The plaintiff is a corporation organized under the laws of New York and licensed to lend money under the provisions of 340 ff of the banking law of the state. 4 McKinney's Consolidated Laws of New York 580. In the complaint it is alleged that the defendants, by their promissory note, jointly and severally promised to pay to it the sum of $250 in partial payments with interest; that the note contained a provision that if default should be made in the payment of any instalment of principal or interest it should immediately thereafter become due and payable without further notice; and that such a default had occurred. A second count was added based upon a claim that the loan had been secured by fraudulent representations, but it is not necessary to consider any issues arising under that count. The defendants pleaded specially in their answer that the plaintiff failed to comply with the provisions of the statutes of New York concerning loans. Section 352 of the banking law states various restrictions as to loans of $300 or less. Section 353 requires that the licensee shall deliver to "the borrower" at the time any loan is made a statement upon which there shall be a printed copy of 352 in the English language, showing in clear and distinct terms the amount and date of the loan and its maturity, the nature of the security, if any, for the loan, the name and address of the borrower and the licensee, and the agreed rate of charge; and it also provides that no licensee shall "take any confession of judgment or any power of attorney." Section 358 provides that any person violating any of the provisions of certain sections of the statute, including 353, shall be guilty of a misdemeanor, and that any contract of loan not invalid for any other reason, in the making or collection *256 of which any act shall have been done which constitutes a misdemeanor under the section, shall be void and the lender shall have no right to collect or receive any principal, interest or charges whatsoever.
The trial court found that the defendants had borrowed $250 from the plaintiff as evidenced by their note; that there had been a default in making the payments required; that a certain amount was due on it at the time of trial; that at the time the loan was made the defendants executed and delivered to the plaintiff as security a chattel mortgage and wage assignment; that at that time the plaintiff gave to the defendant Donald J. Lyons a copy of the note and of the mortgage and a passbook in which to record monthly payments; that the defendant Mary E. Lyons received no papers at all at the time the loan was made; that the plaintiff introduced no evidence to show that either of the defendants received, at the time of the loan, such a statement as that required by 353 of the statute; and that in fact the plaintiff did not deliver to either of them such a statement. The chattel mortgage which the court found was delivered when the loan was made provided that if default should be made in payment of the debt or interest charges according to the term of the note secured, or if certain other contingencies occurred, the entire amount, at the option of the mortgagee, should become due and payable at once, "and the Mortgagee, its agents, successors and assigns, are hereby authorized in such event to sell all or any part of such personal property with or without notice for cash at private sale or public auction for the best price it can reasonably obtain"; also that the mortgagee might buy at such sale; and that the property might be sold in bulk or in parcels or so much thereof as might satisfy the debt, interest charges and lawful expenses of sale, with a *257 right in the mortgagee, its successors and assigns, to retain such amounts out of the proceeds, the surplus to be returned to the mortgagors; and the mortgagee, its agents, successors and assigns, were authorized to enter upon the premises of the mortgagors or any place where the personal property or any part of it might be found and take possession of and dispose of it as provided in the instrument. The trial court concluded that the provisions of the mortgage amounted to a power of attorney, and that the taking of this power of attorney, as well as failure to give each of the defendants a statement in accordance with 353 of the statute, made the note void. From a judgment for the defendants the plaintiff has appealed.
The trial court decided the case upon the basis that the right of the plaintiff to recover must be determined under the laws of New York. In that state a mortgagee of personal property, after default made by the mortgagor, becomes the absolute owner of the property, subject, however, to a right of redemption remaining in the mortgagor; this right is an equity, to be enforced only in an equitable action; and it may be terminated either by a valid sale of property under the provisions of the mortgage or by foreclosure. Harrison v. Hall,
The defendants are husband and wife. The exhibits attached to the finding show that both signed the application for the loan, the note, which was a joint and *259
several obligation, and a chattel mortgage given as security for it. The trial court has found that both borrowed the sum represented by the note. The plaintiff attacks this finding on the ground that the husband was the actual borrower and the wife merely an accommodation party, its claim being that the requirement that a statement be given "the borrower" does not require that it be given to an accommodation party. Upon the record before us we cannot hold, as matter of law, that the wife was merely an accommodation party. The plaintiff's claim, however, involves a broader proposition which would be presented should the trial court find that both were actual borrowers. That question is whether, under such circumstances, the statement required by the statute must be given to both. This is not a situation where rights may be directly affected by the giving or failing to give the required statement to the "borrower." In Atta v. Bergin,
The only evidence as to the husband is that he was given a copy of the note and one of the mortgage and a passbook in which to record payments; the passbook was not put in evidence, and consequently it is left entirely uncertain whether there was printed in it such a statement as the statute requires. The finding of the trial court that no such statement was given to him is without support in evidence. The illegality of a recovery by the plaintiff did not appear on the face of the complaint, and any facts claimed to establish it were required to be affirmatively pleaded in the answer; Practice Book, 104; Wiggin v. Federal Stock Grain Co.,
There is error, the judgment is set aside and a new trial ordered.
In this opinion the other judges concurred.