8%

12% Forfeiture of three times the excess of interest

over 18%.

7% Forfeiture of all interest.

Forfeiture of excess of interest over 6%. 8% Forfeiture of all interest and costs.

Kansas

6%

6%

West Virginia

6%

Wisconsin

6 %

8% any %

7%

6% 6% Forfeiture of excess of interest over 8%.

6% Forfeiture of excess of interest.

12% Forfeiture of interest and costs.

*Allowed on railroad bonds only.

279. Not Usurious, etc.-It is not deemed usurious for the interest to be taken in advance, neither is it to purchase a third person's note

Forfeiture of excess of interest.

12% Forfeiture of double illegal interest.

10 % Forfeiture of all the interest.

at a great reduction from its face. This is deemed to be a chattel of uncertain value. The agreement to take unlawful interest must be absolute and unconditional. If the agreement is that in case the project for which the money is loaned shall fail, nothing is to be paid, but if the project is successful, a high rate is to be returned, such interest is not usurious. If the money is loaned at a risk, and the interest is to be paid out of the profits or not at all, it is not usury.

280. Expenses of Securing Loan.-When the borrower pays a broker a fee for finding him a lender, this fee does not make the contract usurious. But if the money really belongs to the broker, and it is not a charge for his time and expenses, he will be liable for usury.

281. Effect. Independent of any statutory provision, money paid voluntarily on a usurious contract cannot be recovered. But many States have provided differently.

PRACTICAL REVIEW.

I. On July A gave B his note at 60 days, for $100, but no mention is made of any interest. If the note is paid at maturity what amount can B demand?

II. In the above case, if the note is not paid until October 1 following, what amount can B claim in your State?

III. A being pressed for funds, borrowed $500 from B and agreed to pay him 2 per cent a month interest. If the note be for six months, how much can he collect in your State at maturity?

IV. A, of Denver, borrows of B, of Chicago, $1,000, on a note for ninety days, payable at the First National Bank of Chicago. The note bears interest at 12 per cent per annum. Is this usury, and if so, how much can be collected?

REVIEW QUESTIONS.

1. Define interest. 2. Define "legal rate." 3. What is meant by the "maximum rate?" 4. What law governs as to the rate? 5. On what is interest allowed by implication? 6. What is annual interest? 7. What is compound interest? 8. What is usury? 9. By what rule of interest are partial payments usually reckoned?

THE SALE OF PERSONAL PROPERTY.

CHAPTER XXVI.

282. Introduction.-A sale of personal property is of course a contract, and is subject to all the rules of law governing contracts. It must have the four essential elements of all contracts, besides which the Statute of Frauds provides that sales above a certain amount must be in writing. (Sec. 105.)

283. Definition. A sale of personal property is a present transfer by mutual agreement of the absolute or general title to certain per sonal property for a certain price. It transfers the absolute title a distinguished from that limited title given in case of loan or hire.

284. Parties. The parties to a sale are the seller and buyer, or as they are usually designated, vendor and vendee respectively. As a rule, those who are competent to contract generally are competent parties to a sale.

285. Assent to Contract and Price. The parties must agree not only the one to sell and the other to buy, but they must agree upon a price. The price must be fixed, or easily ascertainable by reference to the contract. If the contract does not furnish at least the true criterion of price, and something yet remains to be done between buyer and seller to ascertain it, there is no sale. This rule does not prevent the fixing of the price by implication. Where one goes into a store, points out an article and says he will take it, and possession is given immediately, it is a sale, for the law implies the buyer's promise to pay a reasonable price for it. The adequacy of the price is not necessary to the perfection of the sale, provided every part of the agreement is entered into in good faith, and there is an entire absence of fraud in the transaction. The law does not undertake to make contracts for parties, but leaves them to affix their own prices to goods sold. The price may be left to a third person, and in that

case it is sufficiently certain, for there remains no agreement to be made on the part of the parties.

286. Subject Matter. This is the property bought or sold. The property must have an actual existence, or at least be capable of existing. That which is not in existence when the title passes cannot be sold, though it has previously existed or may come into existence thereafter. A complete sale stops not short of full execution, of delivery and acceptance. The subject matter need not, however, actually be in the possession of the seller.

287. That Which Has Ceased to Exist.-If the thing existed at one time, but at the time of agreement it has ceased to exist, the sale is void, for there is nothing for the transfer of title to operate upon. This would be so with the sale of goods in a warehouse, which prove to have already been burnt up. Or an animal which, unknown to either party, was dead at the time of sale. When the thing is only partially destroyed, the better opinion seems to be that the buyer has an option whether he will take what remains, making due allowance for the part destroyed, or rescind the entire contract. The same rule holds true when there has been a failure of title as to part. If there be a failure of part, either through loss or defect of title, so that the remainder is unfit for the use intended, or that which remains was not within the inducement to the purchase, the buyer may rescind, and recover any money he may have paid.

288. Subject Matter Not Yet in Existence.-Formerly that which was not in existence at the time of transfer could not be subject matter of a valid sale. But the law has been gradually enlarging the scope of what may be legal subject matter of sale, and now a potential interest may be sold, but a mere possibility, coupled with no interest whatever, is not sufficient. Prospective interests, as profits of a voyage, future earnings on an existing contract, the year's clip of wool from a flock of sheep one now owns, are suitable subjects of sale. Thus the milk from a farmer's cows for a certain season, or next season's crop from his farm, or the future offspring of an animal now owned by the seller, are suitable subjects for sale. Each of these contemplates in effect the sale of the product of something which the seller already owns.

289. What Is Not Sufficient.-On the other hand the profits, income or increase of that which is not yet the seller's property, cannot be sold by him, even though he may contemplate purchasing it.

Of this nature are the crops of another's farm, the milk of his cows, or the wool of his sheep. It has been decided that there can be no sale of future wages outside of an actual control of service in force at the time of sale. Neither can there be a sale by a professional man of all prospective fees to be made by him during a certain future period. Here the expectation is not founded upon a right in actual existence.

290. Statute of Frauds. It will be recalled that one section of this famous statute, which we have already considered, has direct reference to the sale of personal property. The effect of it is to add a fifth requisite to those of an ordinary contract. A very few States1 have not re-enacted this section, and in them sales of personal property are unaffected. The statute requires the contract of sale of "goods, wares and merchandise" for the sum of fifty dollars or more to be in writing and signed by the party to be charged. The memorandum need not be formal, indeed the word memorandum would indicate as much. It may be a writing which consistently imports a sale contract. It may be expressed by letters, or an acknowledgment of invoice, or by a telegram. It is not even necessary that it pass between the parties, but it may be gathered from various sources from the writings of the defendant. It may consist of his written proposal, supplemented by parol proof of the plaintiff's acceptance. (Sec. 105.)

While most of the States have followed the English law, as to the amount of the sale, namely ten pounds (fifty dollars), yet a few have named a different amount above which every valid sale must be in writing.2

291. Who Must Sign. It will be observed that the statute requires the note or memorandum to be signed. It should be signed by both buyer and seller, if both are to be held, but if signed by but one only he can be held. A contract to be binding ought to be mutual in obligations, so that either might sue the other for noncompliance with its provisions, but this seems to be an exception to the general rule. If the memorandum is signed by but one of the parties, he can be held at the option of the other. In Michigan, however, it has been held that both must sign it or neither can be held.

1 Alabama, Arizona, Delaware, Illinois, Kansas, Ohio.

2 Maine, New Jersey, Missouri and Arkansas have fixed upon $30. Florida and Iowa require sales of any amount to be in writing. In New Hampshire it is $33, and in Vermont $40.