HERNDON, J. This appeal is taken by plaintiffs from a judgment entered in favor of defendants after a nonjury trial wherein plaintiffs sought to recover treble damages for alleged usurious interest charges. As their grounds for urging a reversal, appellants argue that the evidence is insufficient to support the trial court’s findings: (1) that the money advanced by respondents was their contribution to a joint venture involving the purchase of real estate, and not a loan; [145](2) that respondents held an option to purchase the real estate involved; and (3) that “there was an accord and satisfaction by and between the plaintiffs and the defendants on or about December 9, 1958.”
As recently stated in Gruner v. Barber, 207 Cal. App.2d 54, at page 57 [24 Cal.Rptr. 292] : “We find ourselves immediately presented with the oft-repeated and time-honored rule that when a finding of fact is attacked on the ground that there is not any substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether there is any substantial evidence, contradicted or uncontradicted, that will support the finding, and when two or more inferences can reasonably be deduced from the facts, a reviewing court is without power to substitute its deductions for those of the trial court. (Brewer v. Simpson, 53 Cal.2d 567 [2 Cal.Rptr. 609, 349 P.2d 289].)”
In Giorgi v. Conradi, 199 Cal.App.2d 82 [18 Cal. Rptr. 588], the last quoted rule was restated and its application in a case involving an allegedly usurious transaction was stated as follows at page 85: “Whether a business transaction is usurious depends on its own facts. The presumptions are that such transactions have been fair, regular and legal (Code Civ. Proc., § 1963, subds. 19 and 33 ; Hersum v. Latham, 120 Cal.App.2d 325, 328 [260 P.2d 988] ; Stafford-Lewis v. Wain, supra, [128 Cal.App.2d 614 (276 P.2d 157)], at pp. 620 and 621). It is a question of fact as to whether a particular transaction is or is not usurious (Wheeler v. Superior Mortgage Co., 196 Cal.App.2d 822, 829 [17 Cal.Rptr. 291]). Where, as here, the form of the transaction makes it appear that to be nonusurious, it is for the trier of fact to determine whether the intent of the parties was that disclosed by the form adopted, or whether such form was a mere sham and subterfuge to cover up a usurious transaction (Janisse v. Winston Investment Co., 154 Cal.App. 2d 580, 582 [317 P.2d 48, 67 A.L.R.2d 225]). The burden is upon the one who charges the extraction of usurious interest to prove his charges by a preponderance of the evidence (Advance Industrial Finance Co. v. Western Equities, Inc., 173 Cal.App.2d 420, 428 [343 P.2d 408] ; Sharp v. Mortgage Securities Corp., 215 Cal. 287 [9 P.2d 819]).”
In the instant case, the facts relating to the transactions between the parties were essentially uncontradicted, so that the problem of the trial judge was to decide what were the [146]more reasonable inferences to be drawn from those facts. Prior to October 17, 1957, appellants had entered into a transaction wherein they had undertaken to purchase certain property for approximately $53,000. It is not clear from the record whether they were to pay $15,000 or $16,000 down; but, in either event, after the down payment was placed in escrow, they were to assume an existing encumbrance of over $37,000. They were convinced that if they could acquire title they would be able to make a very substantial profit by a quick resale. However, they found themselves unable to put more than $500 into the escrow. They were faced with the necessity of finding someone to advance the remainder of the required down payment or they would suffer a complete forfeiture of their rights.
Through the agency of a so-called “finder,” respondents, who are husband and wife, were contacted by appellants and some preliminary negotiations were had concerning their putting up the required capital and coming into the transaction as full partners or as coequal joint venturers on a percentage basis. No actual percentages were ever agreed upon because respondents, apparently for tax reasons, felt that they could not await the full consummation of a resale, which would doubtless entail the taking of second trust deeds, before they realized a return of their investment.
On October 17,1957, by adapting and modifying a standard form of “Sale Escrow Instructions” to the point where it was rendered practically unintelligible, the parties arrived at a highly ambiguous agreement. It was provided therein that respondents, who were sometimes referred to as “lenders,” were to pay $15,500 into an escrow created for the purpose of effectuating this transaction. The escrow agent was authorized immediately to transfer this money into the escrow previously set up to handle appellants’ purchase of the real property involved.
Appellants, on their part, were to pay to respondents via this new escrow the $15,500 invested by the latter, plus $1,550 cash and an assignment of a $2,500 third-party note secured by a second trust deed on other property. Further, appellants were to give respondents their own note for the $17,050 payment provided for, said note being made payable on or before January 2, 1958, and secured by a second trust deed covering the property being purchased.
Finally, there was to be deposited in this escrow a grant deed vesting in respondents the title to the real property [147]which was being purchased. The escrow company was authorized to record this deed on January 3, 1958, if the $17,050 payment to respondents had not been made in full. It appears to have been understood by all concerned that appellants hoped for a quick resale of the property wherein the down payment would produce sufficient cash to enable them to make the repayment required by respondents’ investment on or before the specified date.
Appellants argue that the terms of the hopelessly ambiguous “Sale Escrow Instructions,” and certain testimony of the parties to the effect that respondents did not wish to go into the deal as full partners, or as coequal joint venturers, lead inescapably to the conclusion that respondents loaned appellants $15,500 for a period of less than ninety days with “interest” in the amount of $1,550 cash and a third-party note in the face amount of $2,500.
Respondents contend, on the contrary, that it is clear from the evidence that the parties intended to combine in a joint venture involving the purchase and sale of real estate and that respondents, who were advancing practically all the capital, had chosen to take their profit in a fixed amount from the anticipated down payment immediately upon a resale rather than from the much larger profit which might be realized upon final completion of the expected resale.
Actually, there is nothing entirely “clear” as to the intentions of the parties with reference to the precise legal nature of their relationship, but the trial court chose to accept the interpretation urged by respondents. Certainly we cannot say that the trial court’s interpretation and the inferences which it drew from the evidence were not the more reasonable. Appellants presently assert that their liability under the note and trust deed was absolute and that the placing in escrow of the deed conveying the property to respondents amounted to an invalid restraint upon their redemption rights in violation of section 2889 of the Civil Code.* Respondents contend, however, that not only did they put up all the capital, but that they took all the risks, for if the speculative resale had failed to materialize, appellants would have been under no obligation to repay them anything and they would have been left holding an unmarketable tract of [148]desert land bound by the obligation to make the payments on the existing $37,000 encumbrance. A cynical reader of the record might suspect that if the resale actually had failed of materialization instead of having beeen consummated at a price of $97,876, the contentions of the parties might now be reversed.
In any event, as we have shown, the trial court's finding that the instant transaction “was a venture in real estate and not a loan” is amply supported by the evidence. As stated in 49 Cal.Jur.2d, Usury, section 63, page 735: “The advancing of money as a hazardous investment in an enterprise must be distinguished from the advancing of money as a loan, and the former is outside the purview of the usury law.” Reference is made to the following additional authorities which contain discussion showing the sufficiency of the admitted facts of the instant case to support the trial court’s finding that the transaction here involved was not a loan: Brown v. Lamb, 83 Cal.App. 187 [256 P. 825] ; Lamb v. Herndon, 97 Cal.App. 193 [275 P. 503] ; Jameson v. Warren, 91 Cal.App. 590 [267 P. 372] ; Witkin’s Summary of California Law (7th ed.) volume 1, page 184-185; 55 Am. Jur., Usury, section 32, page 347; 91 C.J.S., Usury, section 25, page 599; 6 Williston on Contracts (rev. ed.) section 1692, page 4786; Restatement of the Law on Contracts, section 527, page 1024, and comment (a) thereon.
It appears to us that the most reasonable inference from the evidence is that which was drawn by the trial court, namely, that the basic understanding of the parties was that respondents were to have a limited share of the profits if an immediate resale were consummated, but would acquire complete ownership of the property if it failed.
It is probable, too, that the trial court in its deliberations was impressed with the fact that society’s usury laws were designed primarily to protect the indigent, who are helpless to protect themselves in a practical sense, and were not intended to regulate the inter se free bargaining between speculators. "Such laws are intended as a bulwark to protect the needy from the greed of the rapacious. It is the theory of such enactments that those in distress might be plunged into deeper distress if the law did not come to their relief and protect them from the money lender, who would prey upon misfortune and wring from the needy borrower, in his endeavor to tide over present difficulty, the utmost farthing as compensation for what is often an evanescent benefit—mere[149]ly the putting off of an evil day.” (In re Washer, 78 Cal. App. 759, 771-772 [248 P. 1068].)
In the instant case, appellants, who concede that they are speculators in real estate and that the property here involved was one such speculation, were neither needy nor in distress —excepting, of course, such distress as may have been caused by the thought of losing a “quick” profit. If they were unable to find someone with the capital to risk in their venture, they stood to lose nothing they presently owned but would merely be unable to exercise the potentially lucrative option they had obtained. When respondents declined to join in a full joint venture, the parties struck a bargain which, in practical effect, called for respondents to purchase the land from the third party owner subject to the right of appellants to repurchase it within a certain period.
The language adopted by the court in Batchelor v. Mandigo, 95 Cal.App.2d 816, 821 [213 P.2d 762], is equally apt here: “ ‘An impecunious but optimistic speculator, who finds a property for sale at such a bargain price that he sees a profit of 200 per cent if he could buy it and hold it awhile, hurries to a moneyed friend, explains the situation, and says, “If you will buy this from the present owner, and then sell it to me on five years’ credit, I will buy it of you at an advance of one third over what you pay, and make my interest-bearing purchase contract and notes for that total sum.” The friend agrees, and it is done. Later the buyer concludes that the transaction was a usurious loan to him.’ ” This type of transaction was then distinguished from the situation where the hard-pressed owner of property or a business goes through the form of a sale thereof with option to repurchase at an increased price that would result in a violation of the usury law if the transaction was merely a disguised loan. The rule that would be applicable in this situation would not apply “. . . when at the beginning of negotiations, the final contract vendee does not own the property, but covets it, and is not hard pressed but avaricious.”
The court in Batchelor v. Mandigo, supra, at page 822, also found the following language pertinent: “ ‘. . . the transaction, “in a fair sense, though not in the most common one,” was a joint adventure, B. to furnish the present opportunity and future management for making a large profit, M. to furnish the capital. . . . “When the capitalist and speculator have no existing relations and the speculator has no interest in a property for sale, the agreement that the capital[150]ist will buy the property and carry it for the other and that the speculator will buy it from him at a fixed price is not, ipso facto, a loan.” ’ ”
Although in the instant case respondents never acquired title to the purchased property in their- own name, it was a fair inference from the evidence that the parties intended to create this situation, particularly when appellants found they were unable to meet the agreed payment on respondents’ investment by January 2, 1958, whereupon the grant deed transferring title to respondents was to be recorded. To permit appellants to avoid the consequences of the bargain (which their own testimony indicates they believed had been made) would not be in accord with the beneficent intendment of the usury laws.
“ The usury law is to be used as a shield and not as a sword.” (Haines v. Commercial Mortgage Co., 200 Cal. 609, 621 [254 P. 956, 255 P. 805, 53 A.L.R. 725].) “The Usury Act is intended to prevent the charge of an excessive rate of interest, and may not be used as an engine to perpetrate an injustice.” (Van Noy v. Goldberg, 98 Cal.App. 604, 609 [277 P. 538].)
The language of the court in the case of Ambrose v. Alioto, 65 Cal.App.2d 362, 367 [150 P.2d 502], is also appropriate here: “In a very real sense Ambrose was hazarding his investment on the success of the enterprise and was to receive a share in the earnings of the boat, and finally and possibly in the boat itself, rather than any interest on his investment or any flat obligation to repay the same. . . . ‘When the whole sum advanced is put in hazard—as where one advances money under a contract that may be satisfied by delivery of property of uncertain or speculative value or the payment of an increased amount by a specified date—the amount to be repaid may be considered a price set for the surrender of an investment, rather than a usurious loan. ’ ” (See also Lindsey v. Campbell, 132 Cal.App.2d 746, 751 [282 P.2d 948].)
The criteria for determining whether a transaction is a loan or a joint investment as set forth in the Batchelor v. Mandigo case, supra, were recently reaffirmed in Giorgi v. Conradi, supra, 199 Cal.App.2d 82, 86: “ ‘ “The rule set forth in 55 Am.Jur. 342 does indicate to the court a reasonable line of demarcation between a legitimate business venture with the parties unequal in the extent of their risk but equally eager in their anticipation of profit, and a situation [151]in which a necessitous borrower is victimized by a designing usurious lender. It is there suggested that a transaction is likely to be a loan where the recipient of the money parts with title to property of his own as security. On the other hand, the transaction is more likely to be a business venture where the money is used entirely for the purchase of property not theretofore owned by either of the persons.” ’ The uncontroverted evidence established that the plaintiffs did not become the owners of the property until after the consummation of the transaction, and that Giorgi exercised his option by the payment of $1,000. Giorgi testified that he was interested only in acquiring the land, not in merely borrowing money. ...”
The trial court appears to have been amply justified in finding that the same basic type of transaction was involved in the instant ease. Thus, Mr. Rough, an attorney who acted as the “finder” and appears to have casually advised both parties throughout this transaction, testified: “. . . I asked [appellant Wooton], inasmuch as I was going to put this up to some friends or clients, that I said, ‘What will happen if you don’t resell this property? Have you fellows got the money to pay this back in this short time? $15,000 means quite a bit of money’—at that time, in ’57, when money was rather tight. And [he] said, ‘Well, no, I don’t think we have the cash to pay it back, but we will put up a deed in escrow to whoever loans the money, and if we don’t make a resale of this property between now and January 1st, 1958, the escrow will be instructed to record that deed, and whoever puts up the money will get this property at what we are paying for it, $115 an acre, which he is a cinch to make—resell it at a handsome profit.’ ”
Appellant Wooton himself testified: “Q. Then instead of [Mr. Coerber] sharing without limitation in profits, you eventually decided to limit it to just a portion of the down payment which might be received ? The Witness: That is a difficult question to answer whether yes or no, because obviously whatever moneys he got was out of the—out of the profits, one way or the other, or down payment, but there was a limitation on it, that is true. Mr. High: Q. Outside of this exception that you have noted, then, was Mr. Rough’s testimony substantially correct? A. I will say yes.”
Appellant Sparks testified that the testimony of Mr. Rough and appellant Wooton was correct, but pointed out that the [152]money advanced by Coerber could have been repaid from any source and was not restricted to funds received from the resale. However, he stated: “Q. It is a fact that if the money was not paid out of the sale of the property, [respondent Coerber] was to have the property, and the deed was given pursuant to that? A. This is correct.” He later indicated that he did not mean to restrict the source of the payment to the resale, but never denied that in the event of default respondents were to become the owners of the property.
However, as the determinative date of January 2, 1958, drew closer, it became clear to appellants that they would be unable to make their required payment by that date. Negotiations were then had concerning an extension of time. As a result thereof, an amendment dated December 16, 1957, was placed in the escrow extending the time limit thereof to March 2, 1958. It was further provided in this amendment that the assignment of the third-party note for $2,500 would be delivered to respondents on January 2, 1958, and that the escrow company would pay to respondents 2 per cent of the gross sales price of the property involved.
In this connection Mr. Rough (whose testimony appellants agreed to be correct) stated in regard to this transaction: “. . . Ellis Wooton called me and said that, ‘We are having some trouble and we are just faced with another delay, and we got to ask Coerber for an extension, and have you got any—what do you think? Have you got any suggestions how we can handle it?’ And, as I recall, my response was that, ‘Well, I think, Ellis, that if you have got to keep extending this deal, and in view of the fact that Coerber can take this land at any time away from you, in which you have got obviously good prospects for a nice profit, I think that you should sweeten Coerber up with some additional share of the profits or a consideration for this extension.’ I never worked out the details. Wooton and Coerber worked that out between themselves.” (Italics added.)
Appellants urge that since the ultimate resale price of the property was $97,876, this provision for an additional payment to respondents in the amount of $1,957.52 was usurious in and of itself. In other words, appellants argue that since an agreement to forbear enforcement of a note in consideration for a usurious payment is usury regardless of the original validity of the note (Aitken v. Southwest Finance Corp., 131 Cal.App. 95, 104 [20 P.2d 1000]), the requirement that they [153]pay $1,957.52 for a 60-day extension of a $17,050 note was usurious.
On the other hand, respondents contend that although appellants could have paid them off from any source prior to January 2, 1958, it was clearly intended that if appellants failed to make the required payment, respondents would become the owners of the property. Therefore, the promised 2 per cent of some unknown and speculative future profit was really no consideration at all, for if appellants failed to perform by January 2, 1958, respondents, as owners, were entitled to 100 per cent of any potential future profits. Further, appellants were under no obligation to pay even this uncertain sum, but could still walk away from the deal leaving respondents holding the land if it proved to be unmarketable at a profit.
In either event, as the new date of March 2, 1958, approached and the resale had not been completed, appellants desired still another extension. Therefore, on February 28, 1958, a further amendment was placed into the escrow extending the time limit to April 2, 1958, provided appellants paid in $5,000 by March 4, 1958. This sum was to be turned over to respondents and applied on the $17,050 note. This was done and a balance of $12,050 remained due and payable on April 2, 1958.
As heretofore indicated, the parties’ written agreement was so ambiguous that either side might with some logic have selected and argued for alternative and opposing interpretations dependent upon the outcome of the anticipated efforts to effect a resale of the property. Originally, appellants seem to have enjoyed the more favored position, for they stood to make a remarkably substantial profit upon an actual cash outlay of only $250 each. However, in order to gain their first extension of time, they were required to part with a note in the face amount of $2,500. To gain their second extension of time, a payment of $5,000 was required. By April 2, 1958, the resale apparently was practically assured and respondents evidently decided to assert their rights.
On April 2, 1958, appellants had deposited only $10,000 into the escrow, but respondents were promised that the full balance would be on deposit by 10 a.m. the following day. However, when respondent Coerber arrived that afternoon, it had not been deposited. Although he was advised later that afternoon that it was then available, he declined to proceed with the transaction, Whether respondents had the [154]legal and equitable right to take title to the property and completely cut off appellants’ rights because of the latter’s default of April 2, 1958, may be debatable, but it cannot be doubted that both the parties and Mr. Rough believed that respondents possessed at least a justiciable basis for their asserted position.
It was in the light of these circumstances that the parties agreed that respondents were to receive certain notes and trust deeds of the face value of $3,775. Subsequently, the parties made various further amendments to their agreement which finally culminated on December 11, 1958, in respondents receiving the agreed amount of cash and six notes in the face amount of $925 each in lieu of the two earlier notes totalling $3,775 and in payment of the 2 per cent share of the gross sales price. Appellants asserted no claim of usury prior to the closing date. Clearly this settlement was a valid accord and satisfaction of the disputed and conflicting claims of the parties. (Civ. Code, §§ 1521, 1523.)
The judgment is affirmed.
Pox, P. J., concurred.
Civil Code, section 2889, provides: 'All contracts for the forfeiture of property subject to a lien in satisfaction of the obligation secured thereby, and all contracts in restraint of the right of redemption from a lien, are void.”