Columbus Industrial Bank v. Miller
| Decision Date | 05 April 1939 |
| Citation | 6 A.2d 42,125 Conn. 313 |
| Court | Connecticut Supreme Court |
| Parties | COLUMBUS INDUSTRIAL BANK v. MILLER et al. |
Rehearing Denied May 16, 1939.
Appeal from Superior Court, Fairfield County; Carl Foster, Judge.
Action on a promissory note by the Columbus Industrial Bank against Charles G. Miller and others. The case was tried to the court. Judgment for defendants, and plaintiff appeals.
Error and judgment directed.
The function of court is to determine not whether statute is wise legislation but whether it is within scope of legislative power.
Irving Elson and Daniel E. Brennan, Jr., both of Bridgeport, for appellant.
Raphael Korff and Milton H. Hausman, both of Bridgeport, for appellees.
Roger W. Davis and Douglas B. Wright, both of Hartford, amici curiae.
Argued Before MALTBIE, C.J., and HINMAN, AVERY, BROWN, and JENNINGS JJ.
The plaintiff, an industrial bank organized and doing business under the provisions of General Statutes, Chapter 211, §§ 4031-4041, as amended, brought an action upon a promissory note against five makers. Two of the defendants filed an answer alleging that the plaintiff charged interest at the rate of more than 12 per cent. on the money loaned, and that the note was unenforceable because of usury. The case was tried to the court and judgment rendered in favor of these defendants, from which the plaintiff has appealed. In its assignments of error, the plaintiff claims certain corrections of and additions to the finding, and that, as corrected, the facts show the transaction was authorized by law and did not offend against the usury statutes. The case was argued at the January term of this court. As far as appeared from the record, in the trial court both parties proceeded upon the theory that the plaintiff was subject to the statutes against usury, General Statutes, Chapter 241, §§ 4729-4737. The brief filed upon behalf of the plaintiff suggested a claim to the contrary but the matter was not pressed in argument. While it is true that this court is not bound to consider any errors on an appeal unless they are specifically assigned and unless it appears on the record that the question was distinctly raised at the trial and was ruled upon and decided by the court adversely to the appellant's claims, or that it arose subsequent to the trial, Practice Book, 1934, p. 108, § 363, the court may nevertheless of its own motion consider an error apparent on the record when the public character of the case and its importance not only to the parties but to the public are deemed sufficient to warrant such a course; State v. Gannon, 75 Conn. 206, 218, 52 A. 727; Cole v. Jerman, 77 Conn. 374, 382, 59 A. 425; Donovan v. Davis, 85 Conn. 394, 399, 72 A. 1025; Underwood Typewriter Co. v. Hartford, 99 Conn. 329, 341, 122 A. 91; and in order to prevent manifest injustice, as where it appears that both counsel and the court below overlooked an applicable statute. Cunningham v. Cunningham, 72 Conn. 157, 160, 44 A. 41; Schmidt v. Manchester, 92 Conn. 551, 555, 103 A. 654; Stevens v. Neligon, 116 Conn. 307, 311, 164 A. 661. This court ordered a reargument upon the question whether, since the revision of the General Statutes in 1930, loans made by industrial banks have been subject to the provisions of the usury laws. The case was reargued upon that point at the March term of this court; and as the decision upon this question is decisive of the appeal it is unnecessary to consider the other questions raised by the plaintiff.
Among the operative facts appearing in the finding are these: On November 21, 1931, the defendant Charles G. Miller and four others executed and delivered to the plaintiff their joint and several promissory note in the amount of $1,000 payable to the plaintiff or order fifty weeks from its date. The note recited the deposit by the makers, as collateral security, of Installment Certificate of Indebtedness for Investment, of the bank number 10074. The certificate executed by the bank and by the defendant Charles G. Miller on the same day. It was for $1,000 and by its terms the registered owner agreed to pay $1 a week for fifty consecutive weeks for every $50 of the certificate or multiple thereof until the entire sum had been paid. Both the note and certificate contained similar default clauses providing that the entire sum of the note should become due upon failure to pay any installment upon the certificate.
On execution and delivery of the note and the certificate of indebtedness for investment duly signed by both parties, the plaintiff deducted $60 as interest in advance and 2 per cent. as a service charge and gave the defendant Miller is check for $920. The note and certificate of indebtedness were delivered to the plaintiff simultaneously and bore the same number. It would serve no useful purpose to state the facts in detail. It is sufficient to say, that from all the facts and circumstances the trial court reached the conclusion that the making of the note and the certificate of indebtedness constituted one transaction entered into by the plaintiff with the intent of charging and receiving interest at a greater rate than 12 per cent. per annum and as such was in violation of General Statutes, § 4732. It is obvious that if the note is considered separately from the certificate of indebtedness the $80 deducted as interest in advance for fifty weeks and service charge would not render the note usurious. If, however, the payments upon the certificate were treated as payments upon the note, thereby the amount of the indebtedness would be periodically reduced until the last payment when the indebtedness would be only $20. Computed in this manner, the agreement called for the payment of interest at the rate of more than 12 per cent. per annum upon the amount actually loaned.
The creation of industrial banks was provided for in the Public Acts of 1919, Chapter 196, which contained this provision The sections referred to were in the Revision of 1918. By an act approved May 23, 1927 [20 Special Laws, p. 460], authority was given to the Governor to appoint a commission to revise the General Statutes and the commission was directed to make a separate list of such statutes as it should consider obsolete and should be repealed and include such list in its report to the General Assembly of 1929. The commission compiled and reported to the session of 1929 a list of the obsolete laws determined upon by them. The General Assembly [Public Acts, 1929, Chapter 258] adopted the revision prepared by the commission and directed the commission ‘ to correct, revise, arrange and include in said revision [therein] the public acts enacted at this [the 1929]...
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