The Opinion of the Court was delivered by
Shields, J.
This is an action of covenant, commended in the Circuit Court of La Salle county, at the November term thereof, 1839, by Levi H. Rood against Loring Delano apd Charles Hayward. The declaration contains two counts. The first count declares that the said Delano and Hayward, on the 11th day of May, 1837, at Ottawa, in the county of La Salle, executed and delivered a bond of th'at d'ate to the said Rood, whereby it was agreed between them as follows, to wit: “The said Levi H. Rood being seized in fee of the following town lot, in Ottawa Centre, viz: lot No. one (1), in block No. nineteen (19); If the said Rood shall, on the 11th day of May, in the year of our Lord 1839, tender to the said Delano and Hayward, or, in cáse of their absence, deposit with the clerk of the Circuit Court of LaSalle county, a good and sufficient deed of the aforesaid mentioned lot, the said Delano and Hayward shall pay to the said Rood, his heirs, executors, or administrators, the sum of $1000. It is agreed'that if the deed aforesaid is not tendered as aforesaid, or deposited as above mentioned, this agreement to be void.” The second count is substantially the same as the first, and both aver a tender of the deed', and a failure to pay the sum of one thousand dollars. There are several pleas, but the fifth, sixth and seventh need only be noticed. They set up the defence, that the bond in suit was executed for an usurious consideration.
The cause was tried at the November term 1841, and a verdict found for the plaintiff for $1149. The defendants moved the Court for a new trial, which was overruled, and judgment rendered upon the verdict.
The bill of exceptions sets forth, that on the trial of the cause, after the plaintiff had given the bond in evidence, and proved the tender of the deed according to its provisions, the defendants proved that some time before the execution of the bond, Hayward had a conversation with Rood, in which he, Hayward, proposed to sell to Rood, real estate in Ottawa' Centre; that Rood declined purchasing, but stated to Hayward that he would like to purchase on the same terms that he had heard that one Sebo had purchased from Hayward and Delano, viz., upon receiving a guaranty that the property shall rise in value at the rate of fifty per cent, per annum; that Hayward subsequently communicated the substance of this conversation to the defendant, Delano, who was at the time embarrassed and pressed for money; that the defendant, Delano, shortly after applied to Rood to purchase from him Delano’s real estate in Ottawa Centre; that Rood refused to buy, alleging as a reason, that he had no confidence in town property; that Delano stated that he wanted to raise five hundred dollars, and would sell to Rood property to that amount, and guaranty a rise of fifty per cent, a year for two years; that Rood replied, that if Delano would give him a guaranty of that nature, and procure the defendant, Hayward, to go in with him, so as to make him, Rood, secure, (as he was acquainted with Hayward, and had confidence in his word,) he would purchase, and advance the five hundred dollars, and that Delano might select the lots to put in the deed; that, in pursuance of the agreement, the lot mentioned in the deed was designated and selected by Delano, and approved by Rood, and a Warranty deed of the same executed by Delano and wife to Rood, and the bond, hereinbefore set forth, executed by Delano and Hayward to Rood, and the said sum of five hundred dollars paid by Rood to Delano. The deed and bond were delivered, and the money paid at the same time. There was no other consideration for the bond. The cash value of the lot, at the date of the execution of the bond, was from two hundred and fifty to three hundred dollars, and that Hayward, at the time, represented to Rood that it was worth ¿500; that Rood, in making the purchase, relied upon the guaranty of the bond. The foregoing was all the evidence given in the case.
Exceptions were also taken to the ruling of the. Court in giving and refusing instructions; but, as the reversal of the judgment is based on the ground that the verdict was manifestly contrary to evidence, it is unnecessary to notice the instructions.
The whole transaction, including the making of the bond, deed, &c., is to be taken together, and construed as cne contract, Bailey v. Cromwell, 3 Scam. 72; Duncan v. Charles, 4 do. 566; and this Court is called upon to determine from the facts and circumstances of the case, as given in evidence, whether this contract is usurious. Any contract or assurance for the loan or forbearance of money, or any other thing, upon which a greater rate of interest has been directly or indirectly reserved, discounted or taken, than twelve per cent, per annum, is usurious. Gale’s Stat. 343; R. L. 349. This embraces every imaginable case, every device by which an usurious loan is attempted to be disguised. If one man is bound by contract to pay another more than twelve per cent, per annum for a loan of money, such contract is directly within the statute of usury. If the transaction is attempted to be^ covered up by a pretended sale, then it is indirectly within the statute. How is it with the present case? Rood first refused to purchase any real estate. He next consented to purchase, upon receiving a guaranty that it would rise in value for two years, at the rate of fifty per cent, per annum, and that Delano would then take the same back, and repay Rood the consideration with interest at the rate of fifty per cent, per annum. This is no sale. It wants one of the principal constituents of a sale: it is not binding upon Rood. He takes a conveyance of the lot, it is true; but takes a bond at the same time, that, upon a reconveyance of that same lot, he shall be repaid the sum advanced with usurious interest. The deed and bond, construed together, are merely a mortgage to secure to himself the money advanced, with exorbitant interest. Glover v. Payn, 19 Wend. 518. It comes almost literally within the definition of usury already given. The deed and the bond are the assurance which Rood takes for the advance or loan of 500, by which he reserves to himself interest at the rate of fifty per cent, per annum, and no contingency could happen which would enable Delano to compel Rood to retain the property. There is no contingency in the case but his own simple election. In Hytle v. Legan, 1 Marshall, 529, the Court says, “that if, upon an application to borrow money, a contract for purchasing property at a low price is made, with the privilege of re-purchasing it at a price enhanced beyond the statute of usury, (the first purchaser running no real hazard,) it will be considered a device to evade the statute of usury.” This applies exactly to the present case. In Butt v. Bondurant, 7 Monroe, 323, the Court says, “if such a contract were permitted to stand, the statute against usury would be a dead letter. It would only be necessary to follow the loan with a conditional sale of property at half price; and, whether the borrower restored the money, or paid for it in the estate bought, he would still have to pay usury, and endure oppression, which is the very evil the law intended to avoid.” This is the language used by the Court in relation to a conditional sale to secure the repayment of money. In the case under consideration, there was in reality no sale, because Rood retained in himself the power to return the lot, without any condition or contingency except his own mere pleasure.
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The Opinion of the Court was delivered by
Shields, J.
This is an action of covenant, commended in the Circuit Court of La Salle county, at the November term thereof, 1839, by Levi H. Rood against Loring Delano apd Charles Hayward. The declaration contains two counts. The first count declares that the said Delano and Hayward, on the 11th day of May, 1837, at Ottawa, in the county of La Salle, executed and delivered a bond of th'at d'ate to the said Rood, whereby it was agreed between them as follows, to wit: “The said Levi H. Rood being seized in fee of the following town lot, in Ottawa Centre, viz: lot No. one (1), in block No. nineteen (19); If the said Rood shall, on the 11th day of May, in the year of our Lord 1839, tender to the said Delano and Hayward, or, in cáse of their absence, deposit with the clerk of the Circuit Court of LaSalle county, a good and sufficient deed of the aforesaid mentioned lot, the said Delano and Hayward shall pay to the said Rood, his heirs, executors, or administrators, the sum of $1000. It is agreed'that if the deed aforesaid is not tendered as aforesaid, or deposited as above mentioned, this agreement to be void.” The second count is substantially the same as the first, and both aver a tender of the deed', and a failure to pay the sum of one thousand dollars. There are several pleas, but the fifth, sixth and seventh need only be noticed. They set up the defence, that the bond in suit was executed for an usurious consideration.
The cause was tried at the November term 1841, and a verdict found for the plaintiff for $1149. The defendants moved the Court for a new trial, which was overruled, and judgment rendered upon the verdict.
The bill of exceptions sets forth, that on the trial of the cause, after the plaintiff had given the bond in evidence, and proved the tender of the deed according to its provisions, the defendants proved that some time before the execution of the bond, Hayward had a conversation with Rood, in which he, Hayward, proposed to sell to Rood, real estate in Ottawa' Centre; that Rood declined purchasing, but stated to Hayward that he would like to purchase on the same terms that he had heard that one Sebo had purchased from Hayward and Delano, viz., upon receiving a guaranty that the property shall rise in value at the rate of fifty per cent, per annum; that Hayward subsequently communicated the substance of this conversation to the defendant, Delano, who was at the time embarrassed and pressed for money; that the defendant, Delano, shortly after applied to Rood to purchase from him Delano’s real estate in Ottawa Centre; that Rood refused to buy, alleging as a reason, that he had no confidence in town property; that Delano stated that he wanted to raise five hundred dollars, and would sell to Rood property to that amount, and guaranty a rise of fifty per cent, a year for two years; that Rood replied, that if Delano would give him a guaranty of that nature, and procure the defendant, Hayward, to go in with him, so as to make him, Rood, secure, (as he was acquainted with Hayward, and had confidence in his word,) he would purchase, and advance the five hundred dollars, and that Delano might select the lots to put in the deed; that, in pursuance of the agreement, the lot mentioned in the deed was designated and selected by Delano, and approved by Rood, and a Warranty deed of the same executed by Delano and wife to Rood, and the bond, hereinbefore set forth, executed by Delano and Hayward to Rood, and the said sum of five hundred dollars paid by Rood to Delano. The deed and bond were delivered, and the money paid at the same time. There was no other consideration for the bond. The cash value of the lot, at the date of the execution of the bond, was from two hundred and fifty to three hundred dollars, and that Hayward, at the time, represented to Rood that it was worth ¿500; that Rood, in making the purchase, relied upon the guaranty of the bond. The foregoing was all the evidence given in the case.
Exceptions were also taken to the ruling of the. Court in giving and refusing instructions; but, as the reversal of the judgment is based on the ground that the verdict was manifestly contrary to evidence, it is unnecessary to notice the instructions.
The whole transaction, including the making of the bond, deed, &c., is to be taken together, and construed as cne contract, Bailey v. Cromwell, 3 Scam. 72; Duncan v. Charles, 4 do. 566; and this Court is called upon to determine from the facts and circumstances of the case, as given in evidence, whether this contract is usurious. Any contract or assurance for the loan or forbearance of money, or any other thing, upon which a greater rate of interest has been directly or indirectly reserved, discounted or taken, than twelve per cent, per annum, is usurious. Gale’s Stat. 343; R. L. 349. This embraces every imaginable case, every device by which an usurious loan is attempted to be disguised. If one man is bound by contract to pay another more than twelve per cent, per annum for a loan of money, such contract is directly within the statute of usury. If the transaction is attempted to be^ covered up by a pretended sale, then it is indirectly within the statute. How is it with the present case? Rood first refused to purchase any real estate. He next consented to purchase, upon receiving a guaranty that it would rise in value for two years, at the rate of fifty per cent, per annum, and that Delano would then take the same back, and repay Rood the consideration with interest at the rate of fifty per cent, per annum. This is no sale. It wants one of the principal constituents of a sale: it is not binding upon Rood. He takes a conveyance of the lot, it is true; but takes a bond at the same time, that, upon a reconveyance of that same lot, he shall be repaid the sum advanced with usurious interest. The deed and bond, construed together, are merely a mortgage to secure to himself the money advanced, with exorbitant interest. Glover v. Payn, 19 Wend. 518. It comes almost literally within the definition of usury already given. The deed and the bond are the assurance which Rood takes for the advance or loan of 500, by which he reserves to himself interest at the rate of fifty per cent, per annum, and no contingency could happen which would enable Delano to compel Rood to retain the property. There is no contingency in the case but his own simple election. In Hytle v. Legan, 1 Marshall, 529, the Court says, “that if, upon an application to borrow money, a contract for purchasing property at a low price is made, with the privilege of re-purchasing it at a price enhanced beyond the statute of usury, (the first purchaser running no real hazard,) it will be considered a device to evade the statute of usury.” This applies exactly to the present case. In Butt v. Bondurant, 7 Monroe, 323, the Court says, “if such a contract were permitted to stand, the statute against usury would be a dead letter. It would only be necessary to follow the loan with a conditional sale of property at half price; and, whether the borrower restored the money, or paid for it in the estate bought, he would still have to pay usury, and endure oppression, which is the very evil the law intended to avoid.” This is the language used by the Court in relation to a conditional sale to secure the repayment of money. In the case under consideration, there was in reality no sale, because Rood retained in himself the power to return the lot, without any condition or contingency except his own mere pleasure. It matters not what name may have been given to the transaction, or how it may appear mystified by the intricacy of the mode in which the parties managed to involve it; yet, when analyzed with slight attention, it will require very little acuteness to discover that it was simply a loan of $500, the lender taking, at the same time of making the loan, both a lot of land and a bond, as security for the repayment of the same with usurious interest.
In many of the cases cited in the argument, the question, as to when a sale, whether absolute or conditional, constituted a cover for the usurious transaction, has been discussed, and the Courts, in such a case, have always left it to the jury to determine whether the transaction was a sale or a loan; or, in other words, when the facts proved showed a sale, the Court would, nevertheless, leave it to the jury to scrutinize the intent, and determine whether it might not be a loan; but when, as in this case, the evidence made out a case of loan, however denominated, or however attempted to be disguised, Courts have uniformly declared such cases usurious. Such is the conclusion from the authorities. Hall v. Haggart, 17 Wend. 280; Colton v. Dunham, 2 Paige, 272. These cases sustain the principle, that when a purchaser, at the time of sale, reserves to himself the right of returning the specific thing purchased, and then of compelling the seller to repay the consideration with more than lawful interest, the transaction is usurious.
With the policy of usury laws we have nothing to do. They may be of very doubtful utility. Legislation should be slow to interfere with the right of private contract. In cases of fraud and oppression, Courts of Equity could always afford ample relief: but, while such laws are in existence, it is the duty of Courts to enforce them, and discountenance every attempt to evade them. The evidence in the present case makes out a clear case of usury. The new trial should, therefore, have been granted.
The judgment of the Court"below is reversed with costs; and the case remanded.
Caton, J. did not hear the argument, and gave no opimo»,.haying; been of counsel in the Court below.