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. S966. A loan of money is a contract by which one Loan of delivers a sum of money to another, and the latter agrees to return at a future to that which he borrowed. time a sum equivalent governed by the chapter on LOAN FOR USE. money. current money. S967. A borrower of money must pay the amount Loan to be 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. $968. A loan of money may be made with without reward, but is presumed to be made for reward. or 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. S 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 term 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. amount ex $974. When a greater rate of interest has been Recovery of paid than is allowed by this title, the person paying it may recover the excess from the person taking it. 1 R. S., 772. ceeding le gal interest. tion of ille renders con. tract void. S975. Every contract by which a lender of money Reservaintentionally takes or reserves to himself therefor gal interest any benefit or advantage whatever, in addition to the rate of interest allowed by this Title, is voidable by the party prejudiced thereby.3 1 Intention is an essential element of usury (Marvine v 3 2 Thomas v. Murray, 34 Barb., 157; Sweet v. Spence, 35 The statute (1 R. S., 772, § 5), declares such contracts S976. A borrower under a usurious contract is entitled to recover from the lender all that he gave to him under the same, without restoring or paying anything to the lender. 11 R. S., 772, 773. 2 Laws 1837, ch. 430. usury. S977. A usurious contract may be made valid by cure of an express remission of the usury by the creditor, in good faith, before the debt is due. This provision is new. usury. S978. A loan on lawful interest is not avoided by Subsequent a subsequent agreement to pay usury, but the latter agreement alone is void. Carson v. Ingalls, 33 Barb., 657; Jackson v. Packard, 6 TITLE V. HIRING. CHAPTER I. Hiring in general. Hiring, what. Products of thing. Quiet possession. Degree of care, &c., on CHAPTER I. HIRING IN GENERAL. SECTION 979. Hiring, what. 980. Products of thing. 981. Quiet possession. 982. Degree of care, &c., on part of hirer. 984. Thing let for a particular purpose. 985. When letter may terminate the hiring. 986. When hirer may terminate the hiring. 987. When hiring terminates. 988. When terminated by death, &c., of party. S979. Hiring is a contract by which one gives to another the temporary possession and use of property, other than money, for reward, and the latter agrees to return the same to the former at a future time. S980. The products of a thing hired, during the hiring, belong to the hirer. Putnam v. Wyley, 8 Johns., 435. S981. An agreement to let upon hire binds the letter to secure to the hirer the quiet possession of the thing hired during the term of the hiring, against all persons lawfully claiming the same. Vernam v. Smith, 15 N. Y., 327; Story Bailm., § 383. S982. The hirer of a thing must use ordinary part of hirer care for its preservation in safety and in good con dition. injuries, &c. S983. The hirer of a thing must repair all deterio- Must repair rations or injuries thereto occasioned by his ordinary negligence. $984. When a thing is let for a particular purpose, the hirer must not use it for any other purpose; and if he does, the letter may hold him responsible for its safety during such use, in all events, or may treat the contract as thereby rescinded. This is an established rule as to personal property (Fish S 985. The letter of a thing may terminate the hiring, and reclaim the thing, before the end of the term agreed upon : 1. When the hirer uses, or permits a use of the thing hired, in a manner contrary to the agreement of the parties; or, 2. When the hirer does not, within a reasonable time after request, make such repairs as he is bound to make. Thing let ular pur for a partic pose. When letter nate the may termihiring. S986. The hirer of a thing may terminate the When hirer hiring before the end of the term agreed upon : 1. When the letter does not, within a reasonable time after request, fulfill his obligations, if any, as to placing and securing the hirer in the quiet possession of the thing hired, or putting it into good condition, or repairing; or, 2. When the greater part of the thing hired, or that part which was, and which the letter had, at the time of the hiring, reason to believe was, the material inducement to the hirer to enter into the contract, perishes from any other cause than the ordinary negligence of the hirer. S987. The hiring of a thing terminates: 1. At the end of the term agreed upon; may terminate the hiring. When hiring termi nates. |