Court Opinion

ID: 3383994
Source: CourtListenerOpinion
Date Created: 2016-07-05 18:36:07.274844+00
Date Added: 2024-06-11T14:02:40.499620
License: Public Domain

The general corporation law of 1925, Chapter 10096, in its first section, now appearing as Section 6527, C. G. L., expressly provides that its provision shall apply to corporations incorporated or consolidated or reincorporated thereunder, and to "no other corporations." Section 60 of that Act, now Section 6586 C. G. L., provides that: "No corporation shall interpose the defense of usury in any action in any court in this State." This provision is limited by the first section of the Act, just above referred to, and hence does not apply to the appellant corporation, which was organized prior to the enactment of the Act of 1925.
Section 63 of the Act of 1925, being Section 6588, C. G. L., merely points out that the provisions of certain of the older statutes shall not apply to corporations incorporated under the 1925 Act, but shall remain in effect as to corporations formed before the 1925 Act became effective. It did not say that the older statute not thus pointed out should be repealed. This leaves Section 5970 in full force and effect as to corporations formed prior to the 1925 Act.
Section 5970 C. G. L., derived from Chapter 5219 of the Act of 1903, does not in my opinion give lenders the right *Page 84 
to violate the usury laws then in existence in making loans to corporations, nor does it take away the right of corporations to plead usury as a defense. It merely confers upon all corporations of this State the right "to borrow such sums of money at such rates of interest, and upon such terms as the company or its board of directors shall authorize or agree upon and may deem necessary or expedient, and to execute one or more deeds or mortgages or both as the occasion may require, of all their property," etc.
If it be said that this statute gave corporations the same power to borrow money which natural persons possess, surely it cannot be argued that natural persons did not have, under the statutes, the right to plead usury, either as a partial or complete defense, according to the circumstances. Indeed, corporations are regarded as persons within the meaning of many statutes, including usury statutes. See 14 C. J. 64-65, and cases cited. Note, too, the last paragraph in Thornton v. Bank of Washington, 3 Peters 36, 7 L.Ed., 594, 596.
Bona fide transferees of negotiable paper purchased before maturity, are protected by the usury statute, unless the usurious character of the paper should appear upon its face, or the transferee took with actual notice of the usury.
Our present usury statutes are mostly derived from Chapter 5690 of the laws of 1909, and being a later expression of legislative will than the Act of 1903 above referred to they would control; but I do not think there is any conflict between the power to borrow money and the regulations of such borrowing provided in our usury laws. This usury Act of 1909 appears in part as Section 6937 to 6945 C. G. L. As to those forms of usury which are prohibited and made penal, the prohibition against charging usury is levelled against "all persons, associations, firms or corporations," *Page 85 
their agents or representatives. If, as it clearly appears, it was the intention of the Legislature to prevent, by a most rigorous statute any corporation as well as person from charging usury, and to provide that when they charge more than a certain amount of usurious interest they can recover only the principal, and if they charge above a certain still higher rate, the lender shall forfeit the entire sum, both principal and interest and also be guilty of a misdemeanor, surely a borrower corporation which is the victim of usury will be protected, whereas here, the statute made no exceptions and these all embracing statutes, setting forth a general public policy, will not be deemed to be repealed as to corporations by a statute which merely gives corporations the right to borrow money on such terms as their governing boards may agree upon.
There is a clear field for the operation of both Section 5970 C. G. L. and our usury statutes, without any conflict. Nor can I see any indication from the language of Section 5970 C. G. L. that the Legislature intended to exclude corporations from the operation of our usury statutes.
See also Stack v. Detour Lumber  C. Co., 14 Ann. Cases, 112; Ringer v. Virginia Timber Co., 213 Fed. 1001.