Zazzaro v. Colonial Acceptance Corp.

Decision Date18 July 1933
Citation167 A. 734,117 Conn. 251
CourtConnecticut Supreme Court
PartiesZAZZARO v. COLONIAL ACCEPTANCE CORPORATION et al.

Appeal from City Court of Hartford; Herbert A. Ross, Judge.

Action by Michael Zazzaro against the Colonial Acceptance Corporation and others for the conversion of an automobile in which defendants filed counterclaim. Judgment for defendants, and plaintiff appeals.

Error in part, and cause remanded, with directions.

Jacob Schwolsky, of Hartford, for appellant.

Frederick J. Corbett and David Haymond, both of Hartford, for appellees.

Argued before MALTBIE, C.J., and HAINES, HINMAN, BANKS, and AVERY JJ.

BANKS Judge.

Plaintiff purchased a used automobile from Harry A. King Motor Company under a conditional sales contract dated August 31, 1931. The " list price" of the car was $1,050, plus a so-called " finance charge" of $106, making the " total price delivered" $1,156. Plaintiff paid $200 down, received an allowance of $250 on an old car, and gave a note for $706 for the balance of the purchase price, payable in monthly installments of $59 each. The sales contract provided that, if any installment of the note was not paid when due, the entire purchase price should become immediately due and payable, and in that event the seller or its assigns might take possession of the car and sell it at public or private sale, crediting the proceeds of the sale less expense upon the purchase price, the purchaser to remain liable for the balance of the purchase price. As a part of the same document, the King Motor Company assigned all its rights under the sales contract to the named defendant and indorsed the plaintiff's note to it without recourse. The plaintiff made no payments on the note, and the Acceptance Corporation took the car into its possession on October 17, 1931. The plaintiff contended that the finance charge of $106 was usurious, rendering the note uncollectible under our usury laws, Gen. Stats. ch. 241, that he was not therefore in default, and that the defendant unlawfully took the car from his possession. The court held that the finance charge was an enhancement of price on account of an installment sale, and that the transaction was not a loan, and not usurious.

The court found that the plaintiff was told that $1,050 was the cash price of the car, and that, if it was purchased on time there would be finance charges, and the price would be larger. It also found that the charge was made in anticipation of certain services, disbursements, and risks attendant upon a conditional sale with installment payments, and was in addition to the cash price of the car. These findings are attacked on the ground that the other facts found, and the excerpt from the evidence certified show, that this was a finance charge and not an addition to the cash price because of a sale on time. The charge is referred to in the evidence and throughout the record as a " finance charge." That does not determine its character as either an enhancement of price on account of an installment sale or an interest charge upon a loan. The court concluded that it was the former, and the subordinate facts support that conclusion. The cash price of the car was $1,050, and in the conditional sales contract the item of $106 is added to make up the " total price delivered" of $1,156, which was quite obviously the price of the car when bought on the partial payment plan. The transaction was the very common one in which a credit corporation " finances" the purchase of an automobile by advancing a part of the purchase price to the dealer, taking an assignment of the conditional sales contract executed by the conditional vendee. The credit company assumes the risk of the collection of the installment payments, and its so-called " finance charge" is generally held to represent the increased charge made to the conditional vendee because the sale is of that character. See cases in annotations in 48 A.L.R. 1442, and 57 A.L.R. 880. When property is sold on credit at an advance over the cash price, in good faith, and with no intention to defeat the usury laws, the transaction will not be held usurious though the difference between the cash price and the credit price, if considered as interest, would amount to more than the legal rate. Bridgeport L. A. W. Corp. v. Levy, 110 Conn. 255, 259, 147 A. 841; 27 R.C.L. 214; 39 Cyl. 927; A.L.R. annotations, supra. Our statutes provide that no one shall " directly or indirectly loan money to any person" at more than the lawful rate of interest, and that no one with intent to...

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  • Johnson v. Sears Roebuck & Co.
    • United States
    • United States Appellate Court of Illinois
    • September 28, 1973
    ...Florida v. Joiner, 280 Ala. 605, 196 So.2d 720; Howell v. Mid-State Homes, Inc., 13 Ariz.App. 371, 476 P.2d 892; Zazzaro v. Colonial Acceptance Corp., 117 Conn. 251, 167 A. 734; Kass v. Garfinckel, Brooks Bros., Miller & R., Inc., (D.C.App.) 299 A.2d 542; Petersen v. Philco Finance Corp., 9......
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    ... ... Worsham, 102 Ga. 825, 30 S.E. 541 (1898); Milo Theater Corp. v. National Theater Supply, 71 Idaho 435, 233 P.2d 425 (1951); Borel v ... Daniels, Inc. v. Fenton, 97 Colo. 409, 50 P.2d 62 (1935); Zazzaro v. Colonial Acceptance Corp., 117 Conn. 251, 167 A. 734 ... (1933); ... ...
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    ...not involve a loan of money or a forbearance of a debt within the meaning and application of the usury laws. Zazzaro v. Colonial Acceptance Corp., 117 Conn. 251, 167 A. 734 (1933). (5) A finance company is not precluded from enforcing a credit sale contract according to its terms, if valid ......
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