Plaintiff recovered a' judgment for $9,033.32 against defendants Samuel C. Hawthorne, R. R. Langley and John Wall on a negotiable promissory note made by them and payable to plaintiff’s order. The note was dated October 1, 1908, and became due in one year. It drew 10 per cent, interest from maturity until paid, the first year’s interest having been deducted when the loan was made. Aside from this no interest has ever been paid. The defense was usury. Defendants appealed.
Following are the principal facts: Upon the application of Hawthorne and Langley, plaintiff agreed to loan them $5,000 on substantially these conditions: First, that they would get John. Wall to sign the note with them; second, that they would pay the interest at 10 per cent, for one year in advance; and, third, that defendants would take as a part of the loan an assignment of a judgment owned by plaintiff against a man named James Craig, Sr., for $125.65 that was obtained on October 4, 1898, in a justice of the peace court in Wahoo, Saunders county, and drawing 10 per cent, interest from date of its recovery. The judgment was assigned at a valuation of $200 as' a part of the loan. The testimony is not clear as to whether the $5,000 note was signed on October 1, 1908, the day of its date, or on October 14, 1908, the day when the transaction was closed. In view of the record we do not think this point is material. On October 14,1908, plaintiff gave defendants $4,300 in cash' and a credit of $500 on the note for one year’s interest in advance and an assignment of the Craig judgment, all as consideration for the note in question.
We think the court erred in giving instruction numbered 4 and in refusing to give defendant’s requested instruction numbered 2. From plaintiff’s testimony alone it is incredible that the Craig judgment was of any value. It was obtained ten years before the loan was made, and five years from its date an execution was returned “no property found,” It does not appear that, aside from the issuance of an execution, plaintiff ever tried to collect the judgment. Nor does it appear that he counted it of sufficient value, nor Craig’s financial prospects of sufficient promise, to file a transcript in the office of the clerk of the district court at Wahoo. It sufficiently appears that defendants did not make an application to plaintiff to buy a judgment, but to obtain a loan. The transaction appears to us to be a device by the parties to evade the usury law. Rev. St. 1913, sec. 3350. The sale of property of any kind at a price beyond its value as a part of a loan as a pretext for obtaining more than the lawful rate of interest taints the transaction with usury, and in an action to
The evidence does not support the judgment. It appears from plaintiff’s evidence that he could not lawfully recover more than $4,300 if the case were to he tried again. The judgment is therefore reversed and the cause remanded, with directions that judgment he rendered in favor of plaintiff for $4,300, and that defendants recover their costs in the district court and in this court.
Reversed.