Missouri Val. Life Ins. Co. v. Kittle
| Decision Date | 01 May 1880 |
| Citation | 2 F. 113 |
| Court | U.S. District Court — District of Nebraska |
| Parties | THE MISSOURI VALLEY LIFE INSURANCE COMPANY v. KITTLE and others. |
J. M Woolworth, for plaintiff.
E Wakely, for defendant.
Bill in equity brought to foreclose a mortgage upon certain real estate in Nebraska, executed by Robert Kittle and wife to the plaintiff, to secure the payment of a certain promissory note for $2,500.
The defence is that the note sued on is usurious. The legal rate of interest under the law of Nebraska is 12 per cent. per annum, and this rate is contracted for by the terms of the note. It is claimed by the defendants that, in addition to the lawful interest thus provided for, a further consideration for the loan was exacted by the plaintiff under the cover of a transaction of insurance entered into between the plaintiff and defendant Robert Kittle. The plaintiff is a corporation organized under the laws of Kansas, and its purposes are declared by article 4 of its charter, among other things, to be 'to make insurance upon the lives of individuals, * * * and to make such legal investments of all moneys received as premiums for policies issued and from other sources as will best promote the interests of all concerned; and, carrying out the objects of said corporation may loan the money of the corporation at a percentage not exceeding 20 per cent. per annum. ' It is clear that the company was organized for the purpose of engaging in the business of insuring the lives of individuals and of loaning money, and it does not appear, either from the charter or the evidence, that the loaning of money was merely incidental to the business of insurance. It is pretty evident, I think, that the company looked to the income to be derived from investments and loans as the chief source of its profits; but, however this may be, it is safe to assume that loaning money was one of the primary objects for which the company was created.
The defendant Robert Kittle applied to the plaintiff for a loan of money. He did not desire, and did not apply for, a policy of insurance upon his life. He was informed in substance that the company was loaning money, and would loan him $2,500 upon satisfactory security, provided he would take from plaintiff a policy of insurance upon his own life or that of some other person for $5,000, and pay the premiums, amounting to about $300 per annum. Whether more than the legal rate of interest has been contracted for is a question of fact to be collected from the whole of the transaction as it passed between the parties. We are to inquire whether there was an agreement device or shift to reserve or take more than the law permits. It is not usual to express an usurious contract upon the face of a written agreement. 'The charge of usury,' says Mr. Tyler, 'in most instances attaches to pretended cases of exchange...
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