John Hancock Mutual Life Insurance v. Nichols

Gilbert, J. I think the plaintiff is not bound by the conversation between Gale and Hichols and Whitlock. Hor can I give full credence to the version of that conversation, [405] which was given by the latter. Assuming, however, that the evidence is sufficient to warrant the inference that the plaintiff refused to make the loan unless the defendant effected the insurance put in evidence by him, I think the transaction was not usurious for two reasons. (1.) The plaintiff gave quid pro quo for the premiums received. (2.) Whether the insurances would enable it to acquire the legal interest on the sum loaned, depended upon the contingency of the assured living for a period long enough to produce that result. It is not unlawful for a lender to refuse to lend to persons who are not his customers. The business of the plaintiff is to make insurances upon lives. It must invest its surplus funds. To confine its loans to its own patrons, is no more than the insisting upon fair reciprocity. There may be cases where the issuing of policies of life insurance is resorted to as a mere shift or device to cover up the real transaction which is an usurious one; but that is not the case here. I think, therefore, that, upon principle as well as upon authority, the plaintiff is entitled to the usual judgment with costs ( Washington Company agt. Paterson Company, 10 E. C. Green, 160; Down agt. Greene, 12 M. & W., 481; Manly agt. Hawkins, 1 D. & Walsh, 363.)