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who undertook the risk of its safe custody. For instance, if, after the purchase, the seller offers to deliver it, and the safe delivery forms a part of his responsibility; on its failure, payment may be resisted or reclaimed. But if the buyer requests the seller to keep charge of the article, he takes the responsibility on his own shoulders, and cannot resist or reclaim payment, except for injury done wilfully.

But in this, as in other cases, custom determines, if not more correctly, at least more effectually, than casuists can. Not that custom of itself possesses any authority to decide between right and wrong; but only that the contracting parties are presumed to have in view all the tacit conditions of similar contracts. Hence, frequently, by custom alone can it be decided, at what moment the risk of the buyer ends, and that of the seller commences.

CHAP. VIII.-CONTRACTS OF HAZARD.

By contracts of hazards are meant Gaming and Insu

rances.

Some say that one side in this kind of contracts ought not to have any advantage over the other; but this is scarcely possible. For that perfect equality of skill and judgment, which this rule requires, is seldom, if ever, to be met with. Nor is it requisite, if practicable. For one party may, it ne pleases, give the whole stake, and of course a part of it; or, in other words, he may assent to the natural inequality of the parties, and allow to his opponent an advantage in the chance of winning the whole.

The proper restriction is, that neither side have an advantage unknown to the other. For though the event be still uncertain, such advantage has its value; and so much of the stake as that value amounts to, is taken from the other party without his knowledge or consent. If, for instance, in a game of whist, one party has greater skill; the other knows that such a superiority is possible, and takes his measures

105 Give an example for each side?

106 How are such cases generally determined? Why? 107 What are contracts of hazard?

108 What has been thought of this kind of contracts? 109 Can that well happen? Why?

110 Is it actually necessary, if it could happen? Why? 111 What is a proper restriction? Why?

accordingly. But if the superiority be not in skill, but in acts unknown to, and not even suspected by, the other, such as looking into his opponent's hand, or making concerted signals with his partner, the advantage is an act of dishonesty, and the contract to pay the loss is void. And so in other cases where chance enters, all advantage obtained, except from sources which one party previous to the contract knew or suspected that the other might possess, vitiates the contract. Hence, in the case of insurances, where the underwriter enters on the risk, dependent solely on the representations of the insured, if such representations be designedly incorrect, the policy becomes void; because the insured has not, in fact, completed his part of the contract, which is to tell the whole truth.

CHAP. IX.-CONTRACTS OF LOANS OF PROPERTY INCONSUMABLE.

When the article lent is to be itself restored, as a book or horse, the loan is of property inconsumable; in contradistinction to consumable property, when not the thing itself, but its value is to be returned, as money, or articles in their nature perishable.

If the article which is lent be damaged, the loss of the damage will fall on the lender, provided such damage occur by using the article in the proper manner, for such purposes as the article was lent for; because the lender contemplated the possibility of such damage previous to lending. But if the damage accrue by the negligence of the borrower in the use of the article lent, or in its misapplication to other and new purposes, the borrower must sustain the loss; for here the lender neither knew nor suspected such misapplication of the loan.

In the case of an estate or house lent on lease for a term of years, the increase or diminution of its value may be such as to make the rent a positive gain or loss either to the land

112 Give an example of honest and dishonest advantage. 113 Does this principle hold in all contracts of hazard?

114 How will it apply to insurances?

115 What is inconsumable property?

116 On whom must the damage of such property fall?

117 In what cases will the borrower be accountable for it?

118 What case may be stated, in which the value may be eventually increased or diminished?

H

lord or to the tenant. To ascertain to whom the advantage or disadvantage belongs, we must inquire if the alteration was expected by the parties. For if so, the hirer must take the consequences of benefit or loss; if not, the owner. For instance, as the uncertainty of produce in successive seasons is expected by both parties, the hirer both receives the benefit of a good, and suffers the loss of a bad season. But if the loss be occasioned by an event, which the parties could neither foresee nor avert, as any convulsion of nature, or the irruption of an enemy, the loss shall fall on the owner; who, in like manner, is to receive the benefit that might arise from similar unexpected changes. This determination rests on the reason that events foreseen form a part of the contract; but that with respect to events not foreseen, the contract is as if none had been made.

CHAP. X.-CONTRACTS OF MONEY-LENDING.

The loan of money, like that of other property convertible into money, may be paid for.

The objection to usury or interest, (for they formerly meant the same,) once prohibited by law in Christendom, arose from the Mosaic enactment; "Thou shalt not lend on usury to thy brother. To a stranger thou mayest lend." Deut. xxiii. 19, 20. But this prohibition is now supposed to be a part of the polity intended peculiarly for that nation, which was calculated to preserve in the same family its share of the property originally distributed to each tribe; and it is therefore ranked in the same class with the law which required a man to marry his brother's widow if left childless, and with another law which enacted that in the year of jubilee, alienated estates should revert to the original proprietor.

This interpretation is confirmed by the distinction made between the brother and a stranger; a distinction which God would hardly have made, had he intended the law to be of universal application.

The Roman law once allowed twelve per cent. as the rate of interest, but Justinian afterwards reduced it to four.

119 What is the rule of justice in such cases? Give an example. 120 Why do we arrive at this determination?

121 What is thought of the law of Moses that prohibits interest? 122 How is this interpretation confirmed?

123 What have been the rates per cent.?

In

the reign of Elizabeth, the first act which tolerated usury restrained the rate to ten per cent., which, in the time of James I., was reduced to eight; then, by Charles II. to six, and by Anne to five, on pain of forfeiture of treble the amount. [In the United States the rate is generally six per cent., though in some states it is seven.]

The policy of these regulations is to give the borrowers the power to obtain aid at a moderate rate, and to guard them against the extortions of avaricious money-lenders.

Compound interest, though sometimes forbidden by law, is not contrary to natural equity; for if interest has been any time due, it is actually a sum lent.

Whoever borrows money is bound to repay it; and in order to effect such repayment, he is also bound to make every sacrifice of a pecuniary kind, by turning into money all available assets, lessening his family expenses, and employing all the lawful means he can devise, the moment he perceives no reasonable prospect of satisfying his creditor without such sacrifice. Nor has the debtor the right to delay the repayment; for by such delay the creditor depends on the uncertain contingency of the debtor's life; a condition which neither party anticipated originally in the contract for the loan.

The law which authorizes the imprisonment of an insolvent debtor has been represented as a gratuitous cruelty, which benefits neither the creditor nor community. If the incarceration of the debtor were merely to satisfy the creditor's feelings of revenge, the motive and the act would be equally unjustifiable. But if it be viewed as a public punishment, its justice will be apparent. The frauds relating to insolvency are as necessary to be punished as frauds of other kinds. Nor is the obstinacy of debtors who will not pay their debts when they can, less deserving of punishment. The only question is, whether the power of imprisonment should rest with the exasperated creditor. Now the

124 What is the intention in making these rules?

125 Is compound interest lawful?

126 To what management is a borrower bound?

127 Has he the right of procrastination in payment? Why?

128 What has been thought of imprisoning debtors?

129 When is it wrong? When is it just? Why?

130 Why should the power of punishment be in the hands of the creditor?

frauds are so various and versatile, that discretionary power alone can reach them; nor will such power be effectually exercised, unless intrusted to the creditor alone.

But as imprisonment is a punishment, and as punishment presupposes crime, the imprisonment for insolvency, when such insolvency is the result of acts over which the debtor had not any or only a small control, is a manifest wrong; and for a creditor, provoked by such loss, to relieve his own pain by inflicting a greater on the creditor, is inhuman.

Any alteration of the law, which should distinguish between fraudulent or non-fraudulent acts of insolvency, would be an improvement; but a total repeal of the law would be a greater hardship to the needy than even its present rigor. For as the power to coerce is a kind of security to the creditor, the loss of that, as in the case of a repeal, must be supplied by some other security, which the needy, though honest, would be unable to give, and therefore would be deprived of the aid of the loan. Now as persons without capital must buy on credit before they can sell; in the absence of loans, both he who has and he who wants the funds for trading would be unemployed. Hence, a greater evil would accrue from the sufferings of the niney-nine wanting a loan, than from those of the remaining hundredth, who, after having obtained a loan, becomes insolvent, and is then left to the vengeance of an exasperated creditor.

CHAP. XI.-CONTRACTS OF LABOR-SERVICE.

In this country, service of citizens is voluntary and by contract. But as the contract involves many particulars as to work, food, treatment, and indulgences, as well as pecuniary recompense; only a few leading points are noticed in the contract, and the rest are left to the known custom in such cases.

A servant is not bound to obey the unlawful commands of

131 When should this act of punishment be resorted to ?

132 What may be said of the law on this subject?

133 What would be the effect of repealing the law, and why?

134 What would be the general effect?

135 Does the contract for services embrace all the particulars of the bargain? Why?

136 How are the omitted points determined?

137 What is a servant not bound to obey?

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