The following dissenting opinion was delivered by
Scates, J.I cannot agree to the precedent that will be set by the decision of the Court in this case, holding that a contract of sale and re-sale of land upon a guaranty of an advance of the property at the rate of fifty per cent, per annum, or a re-purchase at an advance of one hundred per cent, in two years, is usurious.
To apply the principles of law applicable to cases of usury, 1 will first repeat the definition laid down in the Opinion of the Court. Any contract for the loan or forbearance of any money, goods, or things in action, whereby any person shall reserve, discount, or take, directly or indirectly, in money, goods, or things in action, more than twelve per cent, per annum, upon one hundred dollars for one year, or at that rate for a greater or less sum, or for a longer or shorter period, is deemed to he usurious. 1 Vesey, Jr. 531.
I would first lay it down as a settled rule in these cases, that the- question, whether the contract is one for a loan or forbearance, or a bona fide sale, is a question of fact for the determination of a jury; whether it be a merely colorable sale, to cover a real loan or forbearance, is a question of fact for a jury. The finding of the jury, unless manifestly against the weight of evidence, is conclusive of the fact, as in other cases. Hall v. Haggart, 17 Wend. 284; N. Y. Fire Ins. Co. v. Ely, 2 Cowen, 706; Doe, &c. v. Gooch, 5 Eng. Com. Law R. 418; Doe, &c. v. Brown, 3 do. 110. These authorities will suffice to show that it is a question of fact for the jury, whether the transaction was a loan, in fact, or colorably, or a sale. If it were a sale, no inadequacy of price will make it usurious; nor would exorbitancy of price. If this transaction was a sale, it is good; if a loan, it is usurious. Doe, &c. v. Brown, 3 Eng. Com. Law R. 110; Doe, &c. v. Gooch, 5 do, 418; Beete v. Bidgood, 14 do. 82. The intention of the parties, therefore, became very essential; for it mustbe governed by the intention of the parties, whether they intended a sale or a loan. Doe, &c. v. Brown, 3 Eng. Com. Law R. 110; Lloyd v. Scott, 4 Peters, 220; N. Y. Fire Ins. Co. v. Ely, 2 Cowen, 706. These transactions, when once shown to be loans, cannot be sustained, however diversified and ingenious the devices may be to evade the statute. For instances of many shifts to evade the law, see 7 Bac. Abr. title Usury, (C), 190 to 198; 4 Peters, 220; 1 Vesey, 528.
There are several cases so much in point, that 1 advert to them more at length. In Beete v. Bidgood, 14 Eng. Com. Law R. 80, (S. C. 7 Barn. & Cres. 453,) the transaction was for the purchase of land, and the Court concluded that it was a sale upon an agreement founded upon what was considered partly as the present price of the estate, and partly upon what was considered its price, if paid for at a future day. It was not, therefore, usurious; for the Court would look, not at the form and words, but to the substance of the transaction.
Doe, &c. v. Gooch was the case of the assignment of a building lease for ninety nine years, at a rent of one hundred and eight pounds, for the sum of two thousand, three hundred pounds, and at the same time an agreement to re-take the premises at a rent of three hundred and ninety five pounds, with liberty to re-purchase the lease upon re-payment of two thousand, three hundred pounds. It was left to the jury to say whether it was a purchase or a loan; the jury found it to be a purchase. The King’s Bench affirmed the judgment; for, although it appeared that the leased premises were not worth more than one thousand pounds, and a rent had been been reserved of three hundred and ninety five pounds, yet the jury had found it to be a sale. 3 Barn. & Ald. 664; 5 Eng. Com. Law R. 418.
Doe, &c. v. Brown, was this: Wilson applied to and obtained a loan of eight hundred pounds of Bromley, and was to pay him eighty pounds for the same for six months; and if not paid, Bromley might sell the premises which were conveyed to him by Wilson, by an absolute deed. Wilson, wanting more money, applied to Metcalf, and stated to him this transaction. Metcalf agreed to give him' twelve hundred pounds, paying out of it to Bromley his money, and take an assignment of the premises from Bromley. He did so, and took an assignment, paying Wilson the balance of the twelve hundred pounds. At the same time Wilson agreed to re-purchase of Metcalf, and he, to sell the premises to Wilson, at fourteen hundred pounds, provided the purchase was made within fourteen months. The jury found this transaction to he a sale and not a loan; and the Court sustained the verdict. It was contended, as in this case, that this was mere machinery for the advance of money, although it has the form and complexion of a sale. The Court say: “ With respect to the objection to the contract between Wilson and Metcalf, that the former should re-purchase, and the latter re-convey by a given day, I am of opinion that it is not usury." Wilson sells for twelve hundred pounds, and is to re-purchase at a large advance: this is a circumstance to raise a suspicion, whether the whole transaction is not colorable; but it is not an usurious contract on that account merely. If a sale were intended, it is a valid contract; if nothing were meant but a loan of money, it is void. The question is, whether it be a loan or a sale of the premises. The agreement by Wilson to re-purchase, at all events, looks like a loan. But it is a question for the jury as to the real intention of the parties.” 1 Holt, 295; S. C. 3 Eng. Com. Law R. 110.
The position, for which I contend, does not in the least conflict with the law, as laid down in the other authorities cited on the argument. In some of those cases, the question was •»R*M»originaIly presented in a Court of Chancery, where the Court passed upon, and found the facts of the case — in others, juries returned a special verdict. But in no case similar to this, have the Court disturbed the verdict of the jury. Much less should they do so in this case; for when, by our statute, usury is put in issue by the pleadings, the defendants are made competent witnesses. They were accordingly sworn and testified; and no one would suppose them inclined to suppress any important fact. Yet they have not said one word about there being an application for a loan by defendant, or of a loan being made. Surely, if such had been the intention of the parties, the witnesses would have mentioned it. The Court should be the less inclined to declare this an usurious contract, simply from its nature and character, because the defendant here is liable to, and must forfeit three times the amount of usurious interest, one third of which goes to the plaintiffs. He will lose his whole principal, and double as much more; and the plaintiffs will make a thousand dollars out of property worth, as stated by the witnesses, two hundred and fifty, or three hundred dollars. With this opportunity to plaintiffs to disclose the whole transaction, and the sum of five hundred dollars as a reward of making it usurious, no one can believe they would not have spoken of a loan in their testimony, if one had been made. But they simply give the naked transaction, during all the negotiation about which, the parties never speak of a loan, but only of a sale and re-sale at an advance.
It seems to me, from the view taken of it by the Court, that they decide in substance, that such a contract or purchase and re-sale at an advance, is to be taken as conclusive evidence of an usurious loan, notwithstanding a jury have found that it was a contract of sale. In the cases I have referred to, the Court of King’s Bench held differently.
I am of opinion that the judgment ought to be affirmed.
Thomas, J. concurred in the dissenting opinion.
Judgment reversed.