Keyes v. Brown

• Decision Date: 26 July 1967
• Citation: 232 A.2d 486,155 Conn. 469
• Court: Connecticut Supreme Court
• Parties: Allan D. KEYES et al. v. Douglas W. BROWN et al.

Page 486

232 A.2d 486

155 Conn. 469

Allan D. KEYES et al. v. Douglas W. BROWN et al.

Supreme Court of Connecticut.

July 26, 1967.

Stephen P. Sachner, Danbury, with whom, on the brief, was L. Stewart Bohan, Meriden, for appellants (defendants).

Joseph Neiman, Hartford, for appellees (plaintiffs).

Before KING, C.J., and ALCORN, HOUSE, THIM and RYAN, JJ.

THIM, Associate Justice.

The plaintiffs instituted this action in the Circuit Court, seeking damages for alleged fraudulent representations relied on by them in entering into a retail instalment contract, and the rescission of the contract on the alleged ground that the contract violated § 42-84 of chapter 733 of the General Statutes, the pertinent provisions of which appear in the footnote. ¹ The defendants in their answer deny the allegations of fraud and noncompliance with the statute. In addition, the defendant Thurston Foods, Inc., hereinafter referred to as Thurston, counterclaimed to recover the balance due under the contract. The trial court found the issues for the defendants on the complaint and for Thurston on the counterclaim. The plaintiffs appealed. The Appellate Division reversed the trial court, holding that the plaintiffs were entitled to rescind the contract. The case was remanded with direction to render judgment for the plaintiffs on the issue of rescission and on the counterclaim. The defendants petitioned for certification, which we granted.

The finding of the trial court as corrected by the Appellate Division reveals these facts: On March 11, 1963, the defendant Douglas W. Brown, a salesman for Thurston, negotiated the sale of a freezer and a frozen food plan with the plaintiffs at their home in Enfield. The plaintiffs signed a retail instalment contract. The contract was not dated. It did not contain the model and the serial number of the freezer, and the dates when payments were to be made were not set forth in the contract. In addition, Brown failed to give a copy of the contract to the plaintiffs. On March 25, 1963, after the First New Haven National Bank had approved the plaintiffs' credit standing, Thurston completed the contract. The model and the serial number of the freezer were entered, and the schedule of the payments, which the plaintiffs were to make, was inserted. The contract was dated March 25, 1963. The plaintiffs were not present when the contract was completed. The contract was then assigned to the First New Haven National Bank, and a copy of the contract was mailed to the plaintiffs.

After making three payments pursuant to the contract, the plaintiffs refused to make further payment on the grounds that the frozen food plan was not as represented, that the freezer was defective, that certain services were not furnished, that certain charges in the contract were never agreed to, and that § 42-84 of the General Statutes had not been complied with. The bank reassigned the contract to Thurston and has no further interest in this litigation.

From these facts, the trial court concluded that the plaintiffs were not induced to purchase the freezer by any fraudulent representations made by the defendants; that the contract came into existence on March 25, 1963; that, although the original papers signed on March 11, 1963, may have had statutory deficiencies, the acceptance by the plaintiffs of a copy of a properly executed contract on March 25 and the making of the three subsequent payments constituted a waiver of the deficiencies.

In reversing the trial court, the Appellate Division concluded that the insertion of the date in the contract different from the date on which the plaintiffs signed the contract, along with the failure to state the dates when payments were to be made, and the failure of the defendants to deliver an executed copy of the contract at the time the plaintiffs signed it constituted violations of § 42-84. The Appellate Division further concluded that these violations were not waived and that, under the statute, the plaintiffs were entitled to rescind the contract.

On oral argument before this court, the parties conceded that fraud was no longer an issue in this appeal.

The defendants assert error by the Appellate Division in the alternative. First, they claim that, regardless of any failure on their part to comply with the provisions of § 42-84, the Appellate Division erred in concluding that the provisions of that statute entitled the plaintiffs to rescind the contract; second, that, even if it is assumed that the statute allows retail buyers to rescind such contracts, the Appellate Division erred in concluding that the plaintiffs did not waive any rights they had because of the defendants' noncompliance with the statute. For reasons hereinafter stated, the only issue we resolve is whether the Appellate Division erred in concluding that the buyer under a retail instalment contract may rescind the contract when the seller fails to comply with the requirements of § 42-84. Since this statute does not expressly confer a right of rescission, it is necessary to ascertain whether such a right was intended by the legislature by virtue of the language it used in the statute.

Obviously, the purpose of the contract requirement provisions set forth in § 42-84 is to protect retail buyers of goods from unknowingly assuming excessive charges by requiring that all charges and terms be fully set forth by the retail seller before the contract is signed by the buyer, and by requiring that the buyer be immediately given a copy of the complete, executed contract. The statute states that the written contract 'shall be completed as to all essential provisions prior to the signing of the contract by the retail buyer. * * * The retail instalment contract shall recite * * * the number of instalment payments required and the amount and date of each payment * * *.' (Italics added for emphasis.) The statute also provides that the buyer 'shall' be given 'a true and complete executed copy of the retail instalment contract at the time the retail buyer signs such contract.' On the basis of the plain purpose of the statute and the language used therein, we construe the contract requirement provisions of this statute to be mandatory. See State ex rel. Eastern Color Printing Co. v. Jenks, 150 Conn. 444, 450, 190 A.2d 591; Blake v. Meyer, 145 Conn. 612, 616, 145 A.2d 584; see also Carter v. Seaboard Finance Co., 33 Cal.2d 564, 573, 203 P.2d 758. For the protection of the retail buyer, the retail seller must comply strictly with the provisions of this statute. Stasher v. Harger-Haldeman, 58 Cal.2d 23, 29, 22 Cal.Rptr. 657, 372 P.2d 649.

Since § 42-84 does not declare whether a retail instalment contract which is not completed in the manner which the statute directs is void, voidable, illegal or valid, we must ascertain the statutory effect intended on such a contract. It is clear that the provisions of the statute are leveled against the retail seller. Because the retail buyer is a member of the class for whose protection the statute was enacted, he is not to be regarded in pari delicto if the retail seller fails to comply with the mandatory provisions of the statute. Bratta v. Caruso Car Co., 166 Cal.App.2d 661, 664, 333 P.2d 807. In the light of the purpose of the statute and the language used therein, we conclude that a retail instalment contract which is not completed in conformity with the provisions of § 42-84...