(1) The lender may require the borrower to purchase property of him at an excessive price as a condition of making a desired loan. The excess in the price of what is sold is in substance, additional compensation for lending the money, and will make the loan usurious although no more than legal interest is in terms exacted therefor.16
(2) If property is sold at much less than its true value and an option is given to the seller to repurchase it at a later day for a price not exceeding the value of the property, but greater than the original selling price by more than legal interest, the transaction is presumably a usurious mortgage, the apparent seller being in fact a borrower;17 and the same intention is evident if the agreement instead of attempting to secure usurious interest by means of a repurchase price, excessive as compared with the original selling price, does so by a provision that the seller shall hire the property prior to its repurchase at a rental greater than legal interest.
(3) Instead of making a loan in terms a seller may turn over to the buyer property, immediately and readily salable for cash, for which the buyer promises to pay in the future a sum amounting to the present cash value of the property plus an amount greater than legal interest. Such a transaction intended by the parties as a means of providing the buyer with money from the sale of the property will be regarded as usurious.18
(4) Though, as has been seen,19 it is generally held permissible to sell property for deferred payments bearing a higher rate of interest than is permissible on a loan of money, yet if such a transaction is merely a colorable device for making what is in substance a loan, it is usurious.20
(5) A sale with a lease back and an option to repurchase for the price paid is presumably usurious if the rent reserved is greater than legal interest.21
17 Sparks v. Robinson, 66 Ark. 460, 51 S. W. 460; Baggett v. Trulock, 77 Ga. 369/ 3 S. E. 162; Delano v. Rood, 6 111. 690; Patterson v. Bonner, 14 La. 214; Stockwell v. Richardson, 101 N. Y. 643 (memorandum; opinion of lower court reported in 5 N. £. 45).
18 Lowe v. Waller, 2 Doug. 736; Collier v. Barr, 64 Ala. 543; Quacken-bos v. Sayer, 62 N. Y. 344; Swanson v. White, 5 Humph. 373. Cf. Kelley v. Sprague, 13 N. Y. S. 64 (affd., without opinion, 128 N. Y. 582, 28 N. E. 250).
19 See supra, Sec. 1685.
20 Meyer v. Cook, 85 Ala. 417, 5
So. 147; Ford v. Hancock, 36 Ark. 248 Pope v. Marshall, 78 Ga. 635, 4 S. E 116; Ferguson v. Sutphen, 8 111. 547 Montague v. Sewell, 57 Md. 407 Earnest v. Hoskins, 100 Pa. St. 551 Hartranft v. Uhlinger, 115 Pa. St. 270, 8 Atl. 244.
21 Banks v. Walters, 95 Ark. 501, 130 S. W. 519; Scofield v. McNaught, 52 Ga. 69; Gaither v. Clarke, 67 Md. 18, 8 Atl. 740; Phelps v. Bellows' Estate, 53 Vt. 539. Compare the following cases where the lease was held to be a genuine transaction and not intended as a coyer for a usurious mortgage: Jackson v. Morris, 16 Ky. L.
Parties may call a transaction a -sale which they really intend as a usurious mortgage.22 And in all cases it is the sub-stance not the form of a transaction which is important.23