The defendant indorser's reasons of appeal support his claims that the note in suit was usurious, because: (1) the plaintiff payee had accepted the note for $6,000, being a larger amount than was loaned thereon, $4,950, and with intent to violate the provisions of General Statutes, § 4798* and § 47998224 (2) the plaintiff demanded payment of the face of the note instead of the amount actually loaned, and with *Page 558 intent to violate General Statutes, § 4798. Further reasons of appeal are: (3) that plaintiff cannot maintain this action because in violation of and prohibited by § 4798 and § 4799, and in addition because the plaintiff cannot make his unlawful acceptance of this note the basis of a recovery at common law; (4) that the recovery against defendant indorser could not exceed the amount actually loaned; and (5) that interest on the note should be computed from the maturity of the note instead of from its date.
These summarize the chief points of the appeal, aside from the correction of the finding, and their disposition will determine the appeal. Correction of the finding by striking out paragraphs nine and ten, which recite that the payee accepted the note intending to receive at its maturity only the amount loaned, and without intention to exact any usurious payment from the makers nor to evade the statute concerning usury, and inserting in place that the payee accepted the note in violation of General Statutes, § 4798 and § 4799, was denied.
The two elements required to constitute an acceptance of a note in violation of these statutes are its acceptance contrary to the terms of these statutes, and with the specific, unlawful intent to violate the statutes. The fact that the note exceeds the amount loaned is evidential of this intent, but not conclusive, since it may be open to explanation satisfying the trier that its acceptance was not with the unlawful intent, which is an essential element to bring it within the prohibition of these statutes. DeVito v. Freberg, 94 Conn. 145,148, 108 A. 547. The instances where such an explanation will be accepted by a trial court when the face of the note exceeds the amount loaned, will be rare, and the liability of its manufacture, in order to avoid a liability upon the note, will always be very carefully *Page 559 weighed by the trier before accepting the explanation. The plaintiff payee offered evidence tending to show that he did not intend by accepting this note to violate these provisions of the statute, and we cannot hold, as matter of law, that the court found the facts in explanation and recited in paragraphs nine and ten, contrary to or without evidence. The conclusion of the trial court, that the note was usurious as between the makers and the payee, if it refers to the time of the acceptance of the note, is plainly unsupported by the finding. These paragraphs of the finding make such a conclusion as applied to the acceptance of the note wholly inadmissible. Paragraph ten of the finding is confined to the time of the acceptance of the note by the payee when delivered to him by the makers. It cannot be interpreted to include the time when the payee made demand upon the defendant indorser for payment of the face value of the note. Neither can the conclusion be so interpreted, since by its terms it limits the usuriousness of the note to the transaction "between the makers and the payee." The reasons of appeal based upon usury between makers and payee must, upon the facts found, fail.
The motion to correct asked to have added to the finding: "The plaintiff presented the note for payment in the full amount of $6,000, and demanded payment in the full amount thereof"; and "The plaintiff sued for, and upon the trial demanded payment of, the note in the full amount of $6,000." There is no controverted issue as to these facts and they sufficiently appear in the record before us, although it would have been better had the finding been made more specific upon these facts by complying substantially with these requests. No correction of the finding was asked by adding that the payee at the time of his demand of payment intended to violate the provisions of § 4798 *Page 560 and § 4799. No fact is found which directly or indirectly explains the fact of the making of the demand, nor is a conclusion possible from the facts found that the payee did not at the time of his demand intend to claim the face of this note. His demand was for the face of the note, $6,000, when he knew that only $4,950 was due, since this was the amount he had loaned. In the absence of any facts from which a reasonable inference could be drawn that this demand for the face of this loan was not intended to violate § 4798, by demanding interest at a rate greater than twelve per centum per annum, the only legal conclusion which could be drawn was that the demand was made with this illegal intention. The correction that "said note did not purport to drawn interest," should have been granted, and we add this to the finding. While the trial court has found that defendant Turello's indorsement was not for the accommodation of the plaintiff payee, it has not found that Turello was not an accommodation indorser. The parties assume, and the record makes it clear, that as between the makers and the indorser Turello, he was an accommodation indorser, and we purpose disposing of this case as though this fact, which the parties accept as one of the facts in the case, had been a part of the finding.
We have, then, the case of a payee who loans a less sum of money on a note than its face, but not intending to demand payment on the note of more than the amount loaned, but subsequently demands of an accommodation indorser on the note payment of the face of the note; and the question is whether the payee can maintain an action against the indorser for the face of this note when the statute, § 4802,** prohibits an action *Page 561 upon any cause arising from the negotiation of a loan and the demand for interest thereon at a rate greater than twelve per centum per annum. Assuming that there was no usury in the payee's acceptance of the note by reason of his repudiation of the excess of the note over the amount loaned, the demand upon the indorser for usurious interest within § 4798 was an action which arose out of the negotiation of a loan prohibited by § 4798, and hence was an action prohibited by § 4802. The statute, § 4798, when first enacted, radically changed our law against usury. Its terms are broad; it would be difficult to conceive of a more inclusive statute. No person, with certain named exceptions, shall, as guarantor or otherwise, and hence as indorser, directly or indirectly, charge, demand, accept or make any agreement to receive, for a loan, interest at a rate greater than twelve per centum per annum. When the plaintiff payee made demand of this indorser for the face of this note, he was demanding the usurious interest which is prohibited by these statutes, and he cannot maintain an action upon such demand. As a general rule, the accommodation indorser has the same right to contest a usurious note as the maker. Note, 22 Amer. Rep. 292.
Had the action been brought to recover the amount actually loaned, recovery might have been had.
The plaintiff relies upon the recent case of Baggish v. Offengand, 97 Conn. 312, 320, 116 A. 614, in which it is said: "Behind that defense an indorser could not find protection, because he was not a party to the alleged usurious agreement and could not be injured thereby." This statement is made upon the facts before the court in that action, which showed that the usurious agreement was between the maker and payee, to which the indorser was not a party, and as a result of which no facts appeared which showed that the *Page 562 indorser could have been injured by the usurious agreement, since he indorsed the note without knowledge of its usurious character. The principle there announced had reference to an indorser who is not an accommodation indorser and indorses without knowledge of the usury. A reference to the facts in this record and particularly to the record upon the second appeal, reported in99 Conn. 683, 686, 122 A. 790, will disclose this to have been the situation. The issue in the instant case, concerning an accommodation indorser, makes it unnecessary for us to review, as the defendant insists that we shall, the principle quoted and applied to an indorser upon consideration.
There is error, the judgment is set aside and the Superior Court directed to render judgment for defendant.
In this opinion the other judges concurred.