Plaintiffs brought an action to recover treble damages under the Usury Law of this state (Stats. 1919, p. lxxxiii; 2 Deering’s Gen. Laws, Act. 3757; Cal. Const., art. XX, § 22), alleging that within one year defendant had taken and received from them interest of $4,801.31 on a loan of $15,000. The trial court, hearing the case without a jury, found that the transaction was not usurious, and judgment was entered that plaintiffs take nothing. Plaintiffs appeal from the judgment and from an order denying their motion to vacate the judgment and enter another and different judgment.

Plaintiffs alleged that “On or about February 5, 1946, in the County of Los Angeles, plaintiffs were obligated by contract to pay $15,000.00 within three days to Douglas Aircraft Company, Inc. Being without liquid assets and having been deserted by certain expected backers, plaintiffs applied to defendant for a loan of $15,000. Defendant immediately made such loan, but in return therefor he exacted from plaintiffs their written agreement to pay him, within one year from February 5, 1946, $20,000.00 plus 5% interest on $15,000.00, and to furnish him the following security for his loan: (a) title to certain surplus war materials; and (b) the note of plaintiff J. Howard Batchelor and his wife, in the sum of $15,000.00 and bearing interest at the rate of 5% per annum, which note should be secured by a deed of trust on the home of plaintiff J. Howard Batchelor and his wife.”

The agreement entered into by the parties is as follows:

“The co-partners hereby acknowledge that they have received the materials purchased with the above moneys, and will hold the same for Arthur Mandigo, as follows:

The trial court found as follows:

It has long been established that the courts will pierce the veil of any transaction designed as a cloak to cover the exaction of usurious interest. The substance and not the form of the transaction is controlling,—the essence of the transaction rather than its trappings. (See authorities cited in Milana v. Credit Discount Co., supra, pp. 340, 341.) “No case is to be judged by what the parties appear to be or represent themselves to be doing, but by the transaction as disclosed by the whole evidence, and if from that it is in substance a receiving or contracting for the receiving of usurious interest for a loan or forbearance of money, the parties are subject to the statutory consequences, no matter what device they may have employed to conceal the true character of their dealings.” (27 R.C.L. 211.)

Appellants rely heavily upon the Milana case, supra. It is to be noted, however, that the court was there dealing with a judgment entered upon the granting of a nonsuit. The plaintiff, in order to keep her business operating, entered into an arrangement with a loan company which purported to be a sale of accounts receivable, which plaintiff guaranteed would be paid within 60 days. However, as stated in the decision, “In practice, accounts not paid within sixty days from assignment, although in some cases accounts were listed which were not yet due, were turned back to the plaintiff and were “repurchased’ by the defendants under the same agreement, and an additional discount was taken on the so-called repurchases.” The court held that the evidence would support a finding that the sale form was used merely as a cover for the real intent; that the trier of fact could reasonably conclude “that the essense of the agreements was the use by the plaintiff of the funds at prescribed rates of interest which were in excess of the constitutional rate.”

The situation with which we are here concerned, however, does not precisely parallel that presented in the many cases in which it has been held that the form of the transaction, or the label which the parties put on it, was but a subterfuge to conceal a usurious loan. The facts in the present cause are that plaintiffs had an opportunity to purchase surplus materials which they hoped to resell at a profit. They were not borrowing money in order to keep their business going, as was the situation in the Milana case, supra, nor did the transaction take the form of a purported sale of property owned by them with an agreement to repurchase, to cover what was in fact a pledge to secure a loan. The distinction between the situation presented by a purported sale to the creditor of property owned by the debtor and that of a “sale and resale between different persons” is illustrated'in the annotation in 154 American Law Reports, pages 1063, 1079, 1080, which quotes extensively from the ease of Stark v. Bauer Cooperage Co. (1925, C.C.A. 6th), 3 F.2d 214 (cert, den., 267 U.S. 604 [ 45 S.Ct. 464 , 69 L.Ed. 809 ]), which quotations we adopt as peculiarly appropriate to the ease before us, as follows:

(See, also, Austermuhl v. Wotton, 120 Wash. 376 [ 207 P. 662 ]; Eames v. Hardin, 111 Ill. 634 ; Powers v. Walrath, 235 Ill.App. 180 .)

Appellants place stress on the fact that respondent took no risk, but required ample security for the return of his investment and profit in the form of the personal obligations of the appellants and a deed of trust on the home of appellant Batchelor. While these facts are of importance, and perhaps determinative in many types of cases, they are not controlling here. (See authorities immediately above cited.) The language appearing in 154 American Law Reports, page 1081, in discussing the case of Stark v. Bauer Cooperage Co., supra, is here pertinent: “After pointing out that on both sides the parties were men of large affairs and highly competent to deal at arm’s length, and that ‘plainly he who would transform this contract into some different one, supposed to be hidden in all these plain terms, carries a heavy burden, ’ the court said that 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. Rejecting the apprehension of B’s counsel and of the court below that if the contract was allowed to stand as written, a highway would be pointed out to evade the beneficent purpose of the usury law, the court concluded: ‘When the capitalist and speculator have no existing relations and the speculator has no interest in a property for sale, the agreement that the capitalist 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. ’ ”

The learned trial judge, in denying a motion to enter another and different judgment, rendered a memorandum decision which in our view effectively disposes of the contention that the transaction was in its essence a loan, and from which we quote in part:

The judgment and order appealed from are, and each is, affirmed.

Doran, J., and Drapeau, J., concurred.

A petition for a rehearing was denied February 17, 1950, and appellants’ petition for a hearing by the Supreme Court was denied March 30, 1950. Carter, J., voted for a hearing.