Associated Credit Co. v. Nogic, CV

• Decision Date: 16 May 1974
• Docket Number: No. CV,CV
• Court: Connecticut Circuit Court
• Parties: ASSOCIATED CREDIT COMPANY v. Lawrence NOGIC et al. 6-702-45346.

Page 740

327 A.2d 740

6 Conn.Cir.Ct. 745

ASSOCIATED CREDIT COMPANY v. Lawrence NOGIC et al.

No. CV 6-702-45346.

Circuit Court of Connecticut, Sixth Circuit.

May 16, 1974.

Alvin M. Murray, New Haven, for plaintiff.

Francis X. Dineen, New Haven, for defendants.

BURNS, Judge.

This is an action in which the plaintiff, as assignee, seeks judgment against the defendants, as makers, on a note, alleging that the note was given to the plaintiff's assignor pursuant to a home solicitation sale and remains fully unpaid. The defendants in answer denied several of the allegations of the plaintiff's bill of particulars, offered nine special defenses, and interposed a counterclaim for a penalty under the federal Consumer Credit Protection Act (15 U.S.C. § 1640 (1970)) and Federal Reserve Board 'Regulation Z' promulgated thereunder. See 12 C.F.R., pt. 226.

The court, having heard the parties on the issues, finds the following: On October 28, 1969, the defendants, as buyers, and Holiday Food Company, Inc., hereinafter called Holiday, as seller, entered into an agreement for the sale of an upright freezer and a 'Jumbo Pack' food program. This agreement was based on a home solicitation sale, as that term was defined and regulated by the Home Solicitation Sales Act, chapter 740 of the General Statutes, as amended by Public Acts 1969, No. 178.

The agreement stated separately the price and method of payment for the freezer and the price and method of payment for the food program, and the parties executed one note, on paper of the Tradesmen's National Bank, providing for payment of the freezer, and another note providing for payment, at the office of the plaintiff, for the food program. Each note bore the notation, 'This instrument is based upon a home solicitation sale, which sale is subject to the provisions of the Home Solicitation Sales Act. This instrument is not negotiable.' Both the freezer and the food were received by the defendants, who retained the former and consumed the latter. The note executed in payment for the food program was assigned by Holiday to the plaintiff and is the subject of this litigation.

Of the nine special defenses by the defendants, only the first need be considered, since it is dispositive of the plaintiff's claim, i.e., that the note is subject to all claims and defenses which the defendants might have against Holiday, that the note was based on a home solicitation sale, and that the agreement on which the sale was based was void and of no effect because it failed to contain the wording required by § 42-135 of the General Statutes.

On October 1, 1969, No. 178 of the 1969 Public Acts took effect, § 1 of which amended § 42-135 of the General Statutes and was applicable to the agreement entered into by the defendants. Section 1 provided that no agreement of the buyer in a home solicitation sale shall be effective unless it is signed and dated by the buyer and unless it contains a conspicuous notice in ten-point bold-face type or larger directly above the space reserved in the agreement for the signature of the buyer, which notice was set forth in the statute.

The agreement signed by Holiday and the defendants contained, directly above the signatures of the buyers, a notice which differed in three respects from the notice provided for in the statute. First, the notice was not in bold-face type, although certain other provisions of the agreement were in this distinctive type face. Second, subdivision (5) of the notice as set forth in the statute stated that the buyer could cancel the agreement by notice by certified mail posted not later than midnight of the third calendar day after the day on which the buyer signed the agreement except that, if the signing was on Friday, Saturday, or Sunday, the concelation was to be posted not later than midnight of the Wednesday immediately following; the notice in the agreement, however, stated that cancelation could be effected by notice posted not later than midnight of the calendar day on which the buyer signed the agreement, except that, if the signing was on Friday, Saturday, or Sunday, the cancelation was to be posted no later than midnight of the Monday immediately following. Third, the notice set forth in the agreement then added, 'such action will result in a service charge'-language which was not included in the statutory notice and apparently was a veiled reference to the modest cancelation fee authorized by § 42-138 of the General Statutes.

'( I)t has become increasingly clear that the policy of our state is to protect purchasers of consumer goods from the impositions of overreaching sellers.' Fairfield Credit Corporation v. Donnelly, 158 Conn. 543, 550, 264 A.2d 547, 550. The enactment of the Home Solicitation Sales Act in 1967 and of the liberalizing amendment of 1969 was evidence of legislative concern for the protection of consumers from high-pressure sales tactics, and the thrust of §§ 42-135 and 42-137 of the act was to provide a 'cooling-off period'-originally twenty-four hours and, after October 1, 1969, seventy-two hours-within which the buyer could cancel an agreement which, on reflection, he might find inadvisable for him; further, the buyer was to be clearly put on notice of this right so that he could take advantage of it. To reinforce this protection, the legislature provided in § 42-135 that '...