Opinion
April 6, 1923.
David Haar of counsel [ Catharine C. Fries with him on the brief], for the appellants.
Morse S. Hirsch, for the respondents.
This action was brought to declare usurious and void a loan made by defendants to plaintiffs, and to cancel a deed and bill of sale which the plaintiffs caused to be delivered to the defendants as security therefor. The complaint also prays that a temporary injunction issue against enforcing the loan until the final determination of the action.
It appears from the pleadings that a petition in bankruptcy was filed against the plaintiffs, and a settlement negotiated. In order to effectuate this settlement, plaintiffs had to raise some cash. To this end the parties entered into an agreement in writing, whereby, in consideration of mutual promises and other consideration, the defendants were to pay the plaintiffs $6,000; the plaintiffs were to cause a third party to execute instruments transferring certain property to the defendants; the defendants were to organize a corporation with themselves as principal stockholders, to conduct the business formerly conducted by the plaintiffs, employing the plaintiffs for that purpose; the plaintiffs to purchase the property transferred to defendants, at the end of a year, for $8,550; in the meantime the corporation to lease from the defendants the said property transferred; upon the fulfillment of these agreements, the defendants were to transfer to the plaintiffs the shares of stock of the corporation held by them.
Since it appears that the plaintiffs are not parties to the conveyances in question, they cannot maintain a suit in equity for its return. This right lies in one Charles Oppenheim, who conveyed the property. ( Joannes Brothers Co. v. Lamborn, 199 App. Div. 588; Insurance Co. of Pennsylvania v. Park Pollard Co., 190 id. 388; affd., 229 N.Y. 631.)
Moreover, the contract, which the plaintiff alleges to be usurious, appears on its face to be a legitimate business transaction and not a simple loan of money. The pleader does not allege that there was an agreement to use this contract as a cloak for the usurious loan; and for failure to allege the facts constituting such agreement the pleading is defective. ( Von Haus v. Soule, 146 App. Div. 731; Myers v. Wheeler, 24 id. 327; affd., 161 N.Y. 637.) In addition the plaintiff does not allege facts showing that his remedy at law is inadequate which is necessary in the case at bar in order that his right in equity may arise.
It follows that the order appealed from should be reversed, with ten dollars costs and disbursements, and the motion granted, with ten dollars costs.
DOWLING, SMITH, PAGE and McAVOY, JJ., concur.
Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.