Johns v. Jaeb

GUITTARD, Justice.

In this suit to recover usury penalties, the principal question is whether defendant advanced funds to plaintiff as a loan or as a contribution to a limited partnership of which plaintiff was the general partner. The transaction was in the form of a limited partnership and an agreement of plaintiff to purchase defendant’s interest in the supposed limited partnership. Since plaintiff was unconditionally obligated to repay in monthly installments the entire amount advanced plus a fixed sum, we hold that the transaction was in substance a loan. Accordingly, we reverse the…