Knoch and Castle, Senior Circuit Judges and Kiley, Circuit Judge. Kiley, Circuit Judge (concurring).
KNOCH, Senior Circuit Judge.
Plaintiffs-appellants, Herman Ross and Hubert Garner, brought their action in the United States District Court against Lake City Equity Finance Corporation, defendant-appellee, to recover double damages under the Illinois usury statute, Ill.Rev.Stat. Ch. 74, §§ 4-6. Jurisdiction was based on diversity of citizenship. Plaintiffs are residents of Michigan. Defendant is an Illinois corporation.
Plaintiffs-appellants have appealed from grant of motion for summary judgment in favor of defendant.
The facts are briefly as follows. In May, 1967, defendant agreed to lend plaintiff Hubert Garner and one Irving Stollman $190,000 to be repaid in one year with interest at 1 1/2% per month plus a "service fee" of $20,000.
Plaintiffs' complaint below incorporated a copy of the application for this loan. The application states that the purpose of the loan is "to purchase land for Peru Mall Shopping Center." Plaintiffs explain that this meant acquisition of about thirty acres of vacant land as no shopping center yet existed.
In the course of negotiating the loan, Messrs. Garner and Stollman stated that the proceeds would be used solely to buy the tract of land in Peru, Illinois, on which the shopping center was to be built. In an affidavit executed by them, they said they were engaged in the business of construction and of buying and selling real estate, in connection with which it was necessary from time to time for them to borrow funds and that they currently needed $190,000 which they sought to borrow from defendant, with the understanding that this would be a business loan within the meaning of the statutes of Illinois respecting interest.
Defendant advanced some $75,500 to buy the land, which defendant's nominee used to acquire title to the vacant land. Defendant held the deed conveying title as security for repayment.
In November 1967, Mr. Stollman conveyed his interest in the realty to plaintiff Hubert Garner and assigned to both plaintiffs all his right, title and interest in the loan, including any refund which might become due from defendant.
The following month plaintiffs allege they paid defendant $97,290.03, which included interest arrearages, $1000 attorneys' fees, and the $20,000 service fee. Plaintiffs contend that $32,087.56 of this sum was a usurious charge for which they claim double damages.
The motion for summary judgment was supported by an affidavit of defendant's president Joseph R. Miller, to the effect that this was a business loan as indicated by the application and affidavit described above, and was thus specifically exempted under the Illinois usury law.
Plaintiffs argue that defendant did not meet the burden of showing (1) the absence of any genuine issue of material fact, and (2) that it is entitled under applicable substantive law to a judgment as a matter of law.
Plaintiffs argue that the loan in question was clearly for a speculative venture and did not fall within the business loan exemption:
"any business loan to * * * a person owning and operating a business as sole proprietor or to any persons owning and operating a business as joint venturers * * * transacted solely for the purpose of carrying on or acquiring the business of such * * ...