Esmay vs. Fanning, 9 Barb., p. 176; How. Pr., p. when to bear expenses. 1892. The borrower of a thing for use must bear Borrower, all its expenses during the loan, except such as are necessarily incurred by him to preserve it from unexpected and unusual injury. For such expenses he is entitled to compensation from the lender, who may, however, exonerate himself by surrendering the thing to the borrower. NOTE.-Story Bailm., Sec. 273, Chap. 4, p. 276 see, also, note to Secs. 1887-1889, ante. liable for 1893. The lender of a thing for use must indem- Lender nify the borrower for damage caused by defects or defects. vices in it, which he knew at the time of lending, and concealed from the borrower. NOTE.-Story on Bailm., Sec. 275; approved, Blakemore vs. Bristol and Exeter Railway Co., 8 El. & Bl., pp. 1035, 1051. And the rule limited to defects thus known and concealed.-M'Carthy vs. Young, 6 H. & N., p. 329. may require thing lent. return of 1894. The lender of a thing for use may at any Lender time require its return, even though he lent it for a specified time or purpose. But if, on the faith of such an agreement, the borrower has made such arrangements that a return of the thing before the period agreed upon would cause him loss, exceeding the benefit derived by him from the loan, the lender must indemnify him for such loss, if he compels such return, the borrower not having in any manner violated his duty. NOTE.-Edw. on Bailm., pp. 143, 177; McAlister vs. Reab, 4 Wend., p. 483; Orser vs. Storms, 9 Cowen R., p. 687; Smith vs. Miles, 1 T. R., p. 480. Lender has a strict right, at all times, to revoke a loan for an indefinite time.-5 Bac. Ab., Tresp. (C), pl. 9, 16, 17; Putnam vs. Wyley, 8 John. R., p. 433; 2 Camp. R., p. 464. Rests on the good faith and good pleasure of the When returnable without demand. Place of return. lender (Story Bailm., 258), but in certain cases borrower has action for damages; still all such loans are at common law deemed precarious and at the mere will of the lender.—Id., p. 277,288. Again: if revoked unreasonably, or after partly accomplished, suit for damages lies, or at least a recoupment may be had. 1895. If a thing is lent for use for a specified time or purpose, it must be returned to the lender without demand, as soon as the time has expired, or the purpose has been accomplished. In other cases it need not be returned until demanded. 1896. NOTE.-Story Bailm., 257: thing must be returned at time and place and in the manner contemplated by the contract. Courts endeavor to give effect to intention of the parties on this point.-Edw. Bailm., p. 183; Orser vs. Storms, 9 Cowen R., p. 687; 8 Johns. R., p. 432. Case directly in point, see Gilbert vs. Manchester Iron Manf'g Co., 11 Wend., p. 625. The borrower of a thing for use must return it to the lender, at the place contemplated by the parties at the time of lending; or if no particular place was so contemplated by them, then at the place where it was at that time. NOTE. The place where they are to be restored, in the absence of express agreement, depends on circumstances, says Edwards Bailm., p. 180. They must be returned ordinarily at the place where they were received.-Id. See on this point Co. Litt., p. 2106; Aldrich vs. Albee, 1 Greenleaf R., p. 120; here it is said bailor may name the place. In Bixby vs. Whitney, 5 Greenleaf R., p. 192, it is said the bailee must seek the lender and learn in what place he will receive it. The text, however, fixes the place in the absence of a place fixed by agreement. CHAPTER II. LOAN FOR EXCHANGE. SECTION 1902. Loan for exchange, what. 1903. Same. SECTION 1904. Title to property lent. 1905. Contract cannot be modified by lender. 1906. Certain sections applicable. exchange, 1902. A loan for exchange is a contract by which Loan for one delivers personal property to another, and the lat- what. ter agrees to return to the lender a similar thing at a future time, without reward for its use. 1903. NOTE. A LOAN FOR EXCHANGE is that contract which in the civil law is designated as a "MUTUM," in which the identical thing lent is not to be returned, but another thing of the same kind, quality, nature, or value.-Story on Bailm., Sec. 47, and N. 3; Just. Inst., Lib. 3, Tit. 15; Dig., Lib. 44, Tit. 9, 1. 1, Sec. 2; and other references there (Sec. 47, Story on Bail) made to Pothier, Pand.; Ayliffe, Pand.; Bell Comm.; Stair. Just., and Ersk. Inst. Thus, for example, when the loan is money, wine, or other things that may be valued by number, weight, or measure, and are to be restored only in equal value or quantity. Jones on Bailm., p. 64; Story id., as above. THE PROPERTY IN THE THING LOANED passes immediately from the lender to the borrower, and the identical thing lent cannot be recovered or redemanded. The borrower bears the loss of destruction (Edw. Bailm., p. 137), and is at common law a SALE.-Id., p. 186. On an ordinary loan of a certain number of shares of stock, one share being just as good as another, it would only be necessary to return the same amount of stock in kind.-3 Ersk. Inst., Tit. 1, Sec. 18; see Edw. Bailment, Tit. "Pledges or Pawns," p. 204; consult Brewster vs. Hartly, 37 Cal., p. 15; though not directly in point, this question is to a certain extent ably argued, and each of the Justices rendered a separate opinion. A loan, which the borrower is allowed by Same. the lender to treat as a loan for use, or for exchange, at his option, is subject to all the provisions of this Chapter. 1904. NOTE. This is interposed as a provision necessary to prevent frauds on third persons. By a loan for exchange the title to the Title to property lent. Contract cannot be modified by lender. Certain sections thing lent is transferred to the borrower, and he must bear all its expenses, and is entitled to all its increase. NOTE.-Norton vs. Woodruff, 2 N. Y., p. 153; Foster vs. Pettibone, 7 id., p. 433; Mallory vs. Willis, 4 id., p. 76; Hurd vs. West, 7 Cow., p. 752; Carpenter vs. Griffin, 9 Paige, p. 310; see, also, Sec. 1902, ante, and note. 1905. A lender for exchange cannot require the borrower to fulfill his obligations at a time, or in a manner, different from that which was originally agreed upon. NOTE. This follows from the nature of the contract. It is, in fact, simply an executory exchange and manifestly just to require parties to be controlled and governed by their agreement made at the time possession of the loan changes. 1906. Sections 1893, 1895, and 1896, apply to a applicable. loan for exchange. NOTE. See the sections referred to, ante, and notes. Loan of money. CHAPTER III. LOAN OF MONEY. NOTE.-Originally no interest was allowed upon a loan of money; but with the progress of business it became necessary, and the transaction thus entered into, although in strictness a hiring, is universally known as a loan. This use of the word having obtained so long, it would be idle to attempt to change it. SECTION 1912. Loan of money. 1913. Loan to be repaid in current money. 1914. Loan may be for reward. 1915. Interest, what. 1916. Annual rate. 1917. Legal interest. 1918. Same. 1919. Interest becomes part of principal, when. 1920. Interest on judgment. 1912. A loan of money is a contract by which one delivers a sum of money to another, and the latter. agrees to return at a future time a sum equivalent to that which he borrowed. A loan for mere use is governed by the Chapter on Loan for Use. NOTE.-A loan of money is in-tanced by Story and Edwards in their definitions of a "mutum," or loan for exchange.-See Sec. 1902, ante, and note. The time of the return, like that of a loan for use, is to follow the agreement of the parties.-See Secs. 1893-6, ante, and notes. A loan of money is the "mutum" of the civil law, and is so treated in Title XII, Chapter II, "Loan for Consumption," Book III, La. Code. 1913. A borrower of money, unless there is an express contract to the contrary, must pay the amount due in such money as is current at the time when the loan becomes due, whether such money is worth more or less than the actual money lent. аш NOTE. See Code La., Art. 2884. The loan of money differs from another ordinary "mutum" in this: the identical money is not consumed, but it passes beyond the control of the borrower, and is as incapable of being collected and returned almost as if it were actually consumed. This section recognizes the existence of the Act to us known as the Specific Contract Act, provided for in the Co. Civ. Pro. Cal., Sec. 667 (¿ 200); see, also, Sec. 3367, post, and note. 1914. A loan of money may be made with or without reward, but is presumed to be made reward. for NOTE.-Gillet vs. Van Rensselaer, 15 N. Y., p. 397. It has been frequently asserted, says Edw. on Bailm., p. 262, that under the ancient common law, to take interest was illegal and criminal (Hume's History, 33 Chap.; 5 Cow. R., p. 608); but from the fact that the first statutes on the subject are all negative in terms, as if to prohibit a previously permitted practice, this assertion does not seem to be well sustained by facts. The first Act (37 Henry VIII, Chap. 9) provided that "none shall take for the loan of any money or commodity above the rate of ten pounds for one hundred pounds for one whole year." All subsequent Acts, even to the present day, are prohibitory in their character, which certainly recognizes the natural right to demand a compensation for the use of money. In California Loan to be current repaid in money. Loan may reward. be for |