The agreement of the 26th June, 1837, between Corning and Schroeppel, did not amount to a loan, but a contract for a loan. There must be a loan of money to constitute usury. There was, therefore, no loan until the 10th of July, 1837, when the money was advanced, and the land conveyed, and of course no usury, and no excess by way of premium for the use of money, over and above the legal rate of interest.
To call this transaction an executed contract, is merely to say that a loan, in pursuance of a previous agreement, is executed, in such a sense that the borrower cannot avoid the contract. This would be, in effect, to repeal the statute against usury.
Second, the action is barred by the statute of limitations.
The plaintiff contends that the contract consummated on the 10th of July, 1837, was entire; that the sale of the land, and the other provisions of the agreement, were but a cover to conceal a loan of money at a rate of interest prohibited by statute.
The excess, whether in money or in land, and securities considered as money, by the understanding of the parties, was, so far as it was derived from the bonds and mortgages assigned, received when the loan was made. They were received as cash, in payment for the real estate, which was also advanced as cash; and the excess of price over the cash value of the land, is the usury claimed in this action. *Page 109
The plaintiff is not at liberty to consider this as a money transaction throughout, in order to make out a usurious loan, and then to call the bonds and mortgages choses in action, with a view to avoid the statute of limitations, claiming that nothing was received, within the meaning of the statute, by the usurer, until the mortgagors paid money upon the securities.
Suppose A. should advance to B. a thousand dollars, at 7 per cent, and make it a condition of the loan that the latter should sell to the lender a bond and mortgage, well secured, at a discount of fifty per cent. The transaction would be usurious. The excess of interest would be equivalent to the discount stipulated, and it would be received when the mortgage was transferred by the borrower to the lender. The excess would then be paid. In this case, Corning charged, it is claimed, $7,500 more than the land was worth, which he imposed upon Schroeppel. The latter was to pay in bonds and mortgages, which were unquestionably good; and the effect of the arrangement was the same as if the excess in value of the land had been at the time deducted from the bonds and mortgages assigned.
As this was more than six years prior to the commencement of the suit, the statute of limitations is a perfect defense to the action.
RUGGLES, Ch. J., and McCOUN, JEWETT and GRAY, Js., concurred.