Manchester Realty Co. v. Kanehl , 130 Conn. 552 ( 1944 )

The trial court has held this note not usurious as a matter of fact. The majority opinion finds it usurious as a matter of law. The latter conclusion is based on the proposition established by the second Atlas case that the intent which is necessary to constitute usury is not the specific intent to violate the statute, but the intent to exact payments which exceed the amount of interest allowed by the statute. To prove that the latter intent was entertained, it is assumed that the plaintiff was going to require that the $800 actually loaned be repaid in ten semiannual instalments. I have no quarrel with the figures but the assumption as to the method of repayment seems to me unwarranted under the facts of this case. If the note is not usurious under any reasonable method of computing the interest, it should not, in my opinion, be held usurious as a matter of law, but the decision should be left to the trial court as a matter of fact. For example, if the bonus payments were spread over the entire period under the rule in the Council case and the semiannual payments were $12 on the bonus and $48 interest, the principal being payable at the end of the five years, the return to the payee would be greater than the return under the terms of the note.

It is a fair inference from the finding that the mortgage was bona fide when given. It follows that it was legal even if the interest reserved exceeded the amount allowed by statute. Bridgeport Mortgage Realty Corporation v. Whitlock, 128 Conn. 57, 61,20 A.2d 414; Cohen v. Mansi, 113 Conn. 91, 93,154 A. 160. The majority opinion lists numerous cases in which explanations of the demand for excessive interest have been accepted. In addition to the fact that the loan was secured by a mortgage of real estate exceeding $500 (General Statutes, 4737) it appears that, in giving credit for the partial payment, the plaintiff figured the interest on $800 rather than on $920, and that the amount due under the terms of the note, including the bonus, at both the date of the complaint and the date of the judgment was far less than the amount figured at 12 per cent per annum on the $800 actually advanced.