I dissent. The defendant is a stock corporation and as such has the power “ to borrow money and contract debts, when necessary for the transaction of its business, or for the exercise of its corporate rights, privileges or franchises, or for any other lawful purpose of its incorporation; and it may issue and dispose of its obligations for any amount so borrowed.” Stock Corp. Law, § 6; Laws of 1909, chap. 61. The company is.incorporated for the purpose of buying and selling and dealing in real estate. To obtain money with which to carry on its business, it has induced various persons, including this plaintiff, to enter into an agreement whereby they pledge themselves for a definite period to advance money in small installments, payable monthly or annually, in consideration of which the company issues a certificate wherein it promises to pay to the holder at the expiration of the stated period $1,000 (or some other sum according to the size of the installment), ‘1 which sum includes interest on said payments at the rate of 6$ per annum.” There are annexed to the agreement certain added stipulations, most of which are for the benefit of the holder of the certificate. For example, the holder may surrender it at any time to be applied toward the purchase-price of real estate sold by the company. He may transfer it to any other *656person by endorsement and record upon the company’s books. After two years he may surrender it for a new paid-up certificate or for cash, upon sixty days ’ notice to the company..
In my opinion, there is nothing in the transaction to distinguish it from the ordinary case of a loan secured by a debenture. The money is loaned to the company by the holder of the certificate in small instalments for use in its legitimate real estate business, and at the termination of the agreement the sum total of all the instalments loaned is repaid with interest. Unless it be said, therefore, that every corporation .not incorporated under the banking laws that borrows money and issues an obligation for its repayment is guilty of an ultra vires act, some fact must appear to remove this case from the accepted rule.
The result reached by Mr. Justice Gerard seems to be predicated upon a conclusion that the payment of this money to the company by the plaintiff and receipt by him of the certificates was equivalent to a receiving of ‘ ‘ deposits ’ ’ within the meaning of section 22 of the General Corporation Law, which provides that “No corporation domestic or foreign, other than a corporation formed under or subject to the banking laws of this state- * * * shall by any implication or construction be deemed to possess the power *' * * of receiving deposits.” It is stated in the certificate issued by the defendant: “ The payments on within certificate being accepted by the company for investment in business, not for deposit, the owner has the following privileges * * While I agree that this statement in itself would have no effect did it appear clearly that the contract between the parties and their relations with each other showed a mere deposit, I am of the opinion that there is nothing in the-contract or the known relations of these parties which, in the face *657of an express declaration to the contrary, can convert the transaction from an ordinary loan for the purpose of investing in defendant’s business to a bank deposit and make it an ultra vires act.
The distinction between a loan and a deposit of money to be used by the depositary is not a broad one, but is sufficiently so that the law recognizes certain rules as applicable to each. By a loan of money is meant the delivery by one party to, and the receipt by the other party of, a given sum of money, upon an agreement, express or implied, to return the sum loaned, with or without interest. A loan is usually made at the request and for the benefit of the borrower, and is to be paid on the due date without demand. Where no time of payment is fixed by the contract of loan, the debt is instantly due and an action may be brought without demand, the bringing of the action being a sufficient demand to entitle the lender to recover. Even if the loan is, by the terms of the agreement, to be paid on demand, yet no special demand is necessary, the money being due without it. As the term-is now used, a deposit of money is the delivery of a sum of money by one party to another for safekeeping, and payable not in the money specifically deposited but in an equal amount, with or without interest, upon the demand or order of the depositor. Payne v. Gardiner, 29 N. Y. 146, 167, 168. The distinctions between the two, therefore, are: First. That the loan is for the benefit of the person who receives the money while the deposit is for the benefit of thé person who delivers the money. Second. The loan is payable without demand, the deposit only on demand. Third. As to the loan, the Statute of Limitations begins to run from the due date, and, if there is ho due date expressed, then immediately, while on a deposit *658the Statute of Limitations does not begin to run until there has been a demand.
Therefore when we consider a transaction wherein money is delivered to a corporation, to determine whether the money was a loan, and hence within its general corporate powers, or a deposit and without its corporate powers unless it is a banking corporation, we must consider the purpose of the delivery and the primary object of the corporation in receiving it.
If we find that, in a given case, the use to which the money is devoted is merely incidental, and that the primary object of the corporation is receiving, collecting and dealing in money, it may safely be said that a banking business within the definition of the Banking Law is-being transacted and the act of .the corporation is ultra vires unless it has a banking charter. If, on the other hand, it appears that the corporation is regularly engaged in some business or trade and is. obtaining loans of money as a means of conducting its business and merely incidental thereto, the transaction is authorized by section 6 of the Stock Corporation Law quoted above and must be held to be a valid one.
Upon the facts of the case at bar as disclosed by the record, I am unable to say as a matter of law that the defendant is engaged in receiving deposits in violation of the statute and am of the opinion that upon this demurrer it must be regarded as a legitimate real estate company borrowing money for the purposes of its business.
It has been said that the defendant company comes within the definition of a mortgage loan or investment corporation contained in section 2 of the Banking Law, as follows: “Any corporation other than an insurance corporation formed * * * for the purpose of selling, offering for sale, or negotiating bonds or notes *659secured by a deed of trust or mortgages on real property or dioses in action, owned, negotiated or guaranteed by it, or for the purpose of receiving any money or property either from its own members or from other persons, and entering into any contract, engagement or undertaking with them for the withdrawal of such money or property at any time with any increase thereof, or for the payment to them or to any person of any sum of money at any time, either fixed or uncertain * * It would be absurd to suggest, however, that any corporation incidentally ‘1 entering into any contract * * * for the payment to any person of any sum of money at any time either fixed or uncertain ’ ’ is engaging in the banking business, for such an interpretation would nullify section 6 of the Stock Corporation Law and would disrupt half of the business of this city and state. The distinction must here be drawn again between a corporation incidentally engaging in such transactions in order to raise money for their own use and those ‘ ‘ formed for the purpose ” of doing so and dealing in such transactions as their principal business.
The cases of Chapman v. Lynch, 156 N. Y. 531, and Chapman v. Comstock, 134 id. 509, relied upon by the respondent merely held that where a person deposited a sum of money with a business corporation, not as a loan but for safe keeping and for the convenience of the depositor, subject to withdrawal upon demand, and for which he received a regular pass-book, like those issued by a bank in which interest was credited at regular intervals, the transaction was a ‘ ‘ deposit ’ ’ and was ultra vires. The cases contain no discussion of the distinguishing elements of loans and deposits, but tested by the rules above discussed the transaction was clearly a deposit. They are of no value in determining this case.
*660I am of the opinion that the complaint fails to state a cause of action against the defendant, as no facts are alleged therein which, without further allegations as to the nature of the defendant’s business; are sufficient to show that the transactions set forth are ultra vires.
The judgment and order should be reversed and the demurrer sustained.
Judgment and order affirmed, with ten dollars costs and disbursements.