Title to property lent. Care re quired of borrower. Id. Degree of skill. Borrowed, when to the same thing to him at a future time, without reward for its use. $949. A loan for use does not transfer the title to the thing; and all its increase during the period of the loan belongs to the lender. $950. A borrower for use must use great care for the preservation in safety and in good condition of the thing lent. Scranton v. Baxter, 4 Sandf., 5; Phillips v. Condon, 14 Ill., 84; see Howard v. Babcock, 21 id., 259. S951. One who borrows a living animal for use, must treat it with great kindness, and provide everything necessary and suitable for it. S952. A borrower for use is bound to have and to exercise such skill in the care of the thing lent, as he causes the lender to believe him to possess. Story on Bailm., § 237. S 953. A borrower for use must repair all deteriorarepair inju- tions or injuries to the thing lent, which are occasioned by his negligence, however slight. ries. Use of thing lent. Relending forbidden. Borrower, when to Bes. S954. The borrower of a thing for use may use it for such purposes only as the lender might reasonably anticipate at the time of lending. Story on Bailm., § 232. S955. The borrower of a thing for use must not part with it to a third person, without the consent of the lender. Story on Bailm., § 234; Esmay v. Fanning, 9 Barb., 176; 5 How. Pr., 228; see Bringloe v. Morrice, 1 Mod., .210. S956. The borrower of a thing for use must bear bear expen- all its expenses during the loan, except such as are necessarily incurred by him to preserve it from unex pected 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. See Story on Bailm., § 273. $957. The lender of a thing for use must indemnify the borrower for damage caused by defects or vices in it, which he knew at the time of lending, and concealed from the borrower. Story on Bailm., § 275; approved, Blakemore v. Bristol 1 $958. The lender of a thing for use may at any 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.2 'Edw. on Bailm., 143. 2 Story on Bailm., § 258. S 959. 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. Gilbert v. Manchester Iron Mfg. Co., 11 Wend., 625. turn. $ 960. The borrower of a thing for use must return Place of re 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. Loan for exchange, what. Id. Title to property lent. Contract cannot be lender. S961. A loan for exchange is a contract by which one delivers personal property to another, and the latter agrees to return to the lender a similar thing at a future time, without reward for its use. S962. A loan, which the borrower is allowed by the lender to treat as a loan for use, or for exchange, at his option, is subject to all the provisions of this chapter. This provision is necessary to prevent frauds upon third persons. S 963. By a loan for exchange the title to the thing lent is transferred to the borrower, and he must bear all its expenses, and is entitled to all its increase. See Norton v. Woodruff, 2 N. Y., 153; Foster v. Pettibone, id., 433; Mallory v. Willis, 4 id., 76; Hurd v. West, 7 Cow., 752; Carpenter v. Griffin, 9 Paige, 310. S964. A lender for exchange cannot require the modified by borrower to fulfill his obligations at a time, or in a manner, different from that which was originally agreed upon. Certain sec tions appli cable. This follows from the nature of the contract. It is, in fact, simply an executory exchange. $965. Sections 957, 959, and 960, apply to a loan for exchange. CHAPTER III. LOAN OF MONEY. Originally, no interest was allowed upon a loan of SECTION 966. Loan of money. 967. Loan to be repaid in current money. 968. Loan may be for reward. 969. Interest, what. 970. Annual rate. 971, 972. Legal interest. 973. Deduction of amount of interest in advance. 974. Recovery of amount exceeding legal interest. 975. Reservation of illegal interest renders contract void. 976. Rights of borrower under contract reserving illegal interest. 977. Cure of usury. 978. Subsequent usury. $ 966. A loan of money is a contract by which one Loan of delivers a sum of money to another, and the latter money. 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. Loan to be current money. $967. A borrower of money must pay the amount due in such money as is current at the time when the repaid in loan becomes due, whether such money is worth more or less than the actual money lent. Code La., 2884. or S968. A loan of money may be made with without reward, but is presumed to be made for reward. Gillet v. Van Rensselaer, 15 N. Y., 397. what. $969. Reward for the loan, forbearance, or use of Interest, money, or its equivalent, is called interest. Annual rate, Legal inte rest. Id. Deduction of amount of interest in advance. S970. When a rate of interest is prescribed by a law or contract, without specifying the period of time by which such rate is to be calculated, it is to be deemed an annual rate. 1 R. S., 773. S971. Under an obligation to pay interest, no rate being specified, interest is payable at the rate of seven one-hundredths of the principal for one year, and in the like proportion for a longer or shorter time; but in the computation of interest for less than a year, three hundred and sixty days are deemed to constitute a year.2 1 1 R. S., 771. 21 R. S., 773. $972. No greater interest than is allowed by the last section may be taken,' except from a state or corporation.2 11 R. S., 772. 2 By Laws 1850, 344, ch. 172, corporations are forbidden to interpose the defense of usury. This has been construed as not merely prohibiting them from setting up usury as a defense, but also as prohibiting them from maintaining an action to recover back the usury (Butterworth v. O'Brien, 23 N. Y., 275; 28 Barb., 187); and, in short, as a repeal of the usury laws so far as they operated in favor of corporations (Curtis v. Leavitt, 15 N. Y., 9; Belmont Bank v. Hoge, 7 Bosw., 543). It has, however, been held that their sureties can defend on this ground (Hungerford's Bank v. Dodge, 30 Barb., 626; 10 Abb. Pr., 24). The provision here introduced would prevent this from being done. S973. The interest which would become due at the end of the term for which a loan is made, not exceeding one year's interest in all, may be deducted from the loan in advance, if the parties thus agree. Marvine v. Hymers, 12 N. Y., 227. Perhaps the termi should be less than a year under this decision. The longest term for which there is express authority, is six months, but the decisions have not laid down any precise rule as to time. |