DocketNumber: No. CV01-0073765S
Citation Numbers: 2003 Conn. Super. Ct. 1926
Judges: RIPLEY, JUDGE TRIAL REFEREE.
Filed Date: 2/6/2003
Status: Non-Precedential
Modified Date: 4/18/2021
It appears from a stipulation of facts filed by the parties on November 18, 2002 (entry no. 123) that the defendants executed a promissory note as part of a real estate transaction in the amount of $26,000 with interest which note provided for installment payments. No payments of any amount had been paid and the amount now due according to the parties is $27,484.71 as of the date of the stipulation. To this claim the defendant Servulo Gonsalves has filed a special defense that the note which he signed contained an interest rate in the event of a default of eighteen (18) percent which rate of interest is usurious on its face and contrary to Section
The promissory note in question bears an interest rate of 18 percent in event of default but also provided for repayment of the face value of the note, $26,000, with interest at the rate of 9 1/2 percent with successive monthly payments. The transaction which gave rise to the note was an agreement between the plaintiff and the defendants regarding the defendants' purchase of a residence owned by the plaintiff. That agreement provided, inter alia, that if the defendants sold the property the plaintiff would be entitled to 25 percent of the appreciated value. This transaction was akin to a purchase money mortgage as the court understands the nature of the transaction. Thereafter, the property was sold and the proceeds were insufficient to satisfy the "purchase money CT Page 1927 mortgage." The note in question was then executed in exchange for furnishing a release of mortgage so as to allow the sale by the defendants to a third party to proceed.
It is the defendants' claim that Section
No person and no firm or corporation or agent thereof, other than a pawnbroker as provided in section
21-44 , shall, as guarantor or otherwise, directly or indirectly, loan money to any person and, directly or indirectly, charge, demand, accept or make any agreement to receive therefor interest at a rate greater than twelve per cent per annum.
invalidates the note in question and that Sec.
It has been suggested that "late charges or charges for default have generally been seen as compensation to a lender for his extra trouble and expenses rather than a charge for the use of money." See Usury and ItsProgeny: A Survey of Interest Rate Regulation In Connecticut, William O. Kafes, 43 Conn. B.J. 220, 258, quoting from Mortgage Loans and UsuryLaws, Prather, W.C. 16 Bus. Law 181, 182.
It is the conclusion of this court that this transaction falls fairly within the provisions of Sec.
The court concludes that the plaintiff is entitled to judgment in the amount agreed to, $27,484.71, plus costs and interest to date. Additionally, in the event of any action being required to enforce collection, the note provided for reimbursement of counsel fees as claimed in the complaint. An affidavit on file (entry no. 24) indicates that such fees total $7,021.75, and such amount is approved.
Judgment may enter against the defendant Servulo Gonsalves in the amount of $34,506.46 plus interest and costs. CT Page 1928
George W. Ripley
Judge Trial Referee CT Page 1929