25 N.J. Eq. 160 | New York Court of Chancery | 1874
This suit is brought for the foreclosure and sale of certain mortgaged premises, in Paterson, now owned by the Paterson Silk Manufacturing Company. The complainants’ mortgage, which is dated February 2d, 1871, was given to them by John Byard, while he was the owner of the property, to secure the payment of $18,000, with interest. He subsequently sold and conveyed the premises to the Paterson Silk Manufacturing Company, a corporation created by special act of the legislature of this state, subject to the encumbrance of the complainants? mortgage, which, by the deed, the grantees therein assumed to pay, the amount of it being computed and allowed to them as part of the purchase money. On or about the 1st of March.,, 1873, the silk com-
On the argument, it was insisted by the defendants’ counsel, that the bill must be dismissed, because the complainants, who are a corporation under the laws of the state of New York, and are there located, offered no evidence of their existence. But, although the complainants sue as a foreign corporation, styling themselves in the bill the Washington Life Insurance Company, of the city of New York, neither of the answers raises any question as to their existence or right to sue, but both of them set up a defence on the merits alone. Under these answers I do not think it was incumbent on the complainants to prove their corporate existence.
The answers allege that Byard, being in straitened circumstances, applied to the complainants’ agent, Samuel S. Wood, Jr., in the city of New York, for a loan of $25,000 upon the mortgaged premises, and that it was agreed upon between them that the complainants should lend Byard $18,000, for which, with interest at seven per cent, per annum, he was to give them his mortgage on the mortgaged premises, and to give them a bonus or premium of $2000, and take a policy on his life for $10,000, to be issued by them. They allege that on those terms only was he able to get the money. The .answers state that this agreement was executed, and that Byard, accordingly, paid to the complainants the $2000 premium, and took out the life policy, paying to them as the premium therefor, $1049.20, besides a policy fee of $1.
The transaction seems to have been this : Byard being in need of money, and being the owner of a very valuable
The defendants’ counsel, on the hearing, insisted that the complainants imposed, on Byard, as terms on which alone the loan would be made, the talcing out of a life policy, and that that was intended as a mere cover for usury. It does not appear, however, that the taking out of the policy was a condition. It is probable that it was proposed by Byard himself, as an inducement, and so became part and parcel of the agreement. But if it be admitted that it was a condition of the loan, itis not evidence of a usurious agreement. The policy was taken out at the usual rate, and there is no evidence whatever, that it was designed as a cover for unlawful interest. Grosvenor v. Flax Co., 1 Green’s Ch. 543; Griffin v. N. J. Oil Co., 3 Stockt. 50; Utica Insumnce Co. v. Caldwell, 3 Wend. 295; New York Fire Ins. Co. v. Donaldson, 3 Edw. 199.
The defendants are not entitled to the deduction claimed, or any part of it. There will be a decree for the complainants, in accordance with these view's, for the amount of principal and interest due on their mortgage; according to its terms.