neglect imputable to the borrower, the loss falls on the owner. In this way the Romans lent not only movable things, but also immovables, such as a house to dwell in.1 of borrower. He who borrows a thing, gratuitously, for his own use, is Obligations obliged to take care of it, not only as he takes care of what is his own, but with all the exactness that is usually observed by a careful and diligent person. "In rebus commodatis talis diligentia præstanda est, qualem quisque diligentissimus pater familias suis rebus adhibet."2 The borrower can only use the thing for the purpose for which it was lent; he cannot allow another person to use it, nor keep it beyond the time agreed on, nor detain it as a setoff against any debt due to him by the lender. The loan may be either for a limited time or for a special occasion. When a thing is lent during pleasure, the loan is called Precarium. The borrower must restore the article in the same good plight in which he received it, subject only to such deterioration as may arise from reasonable use. He is bound to make good all injury which befalls the thing while it is in his possession, if the injury was caused by his fault, or was of such a nature that a careful person might have prevented it. Thus, if a man borrow a horse, and so maltreat the animal by over-riding it, or otherwise, as to cause its death or render it useless, he will be liable for its value to the owner. In some instances the borrower is held responsible for loss by inevitable accident, as when he has improperly detained the article borrowed beyond the time when he ought to have returned it; for the loss is then presumed to have arisen from his breach of duty. By the French law this is carried so far, that if the thing lent perish by an accident which the borrower could have guarded against by employing a similar thing belonging to himself; or if, not being able to save but one of the two things, as in a case of accidental fire, he has preferred his own, he is held responsible for the loss of the other to the lender. 3 Mutuum is a gratuitous loan of things intended for con- Mutuum. 3 Code Civil, art. 1882. 1 I. 3. 15. 2. 2 D. 13. 6. 1. pr. I. 3. 15. 2. Obligation to pay interest at Rome. sumption, which are usually estimated by number, weight, or measure, such as money, corn, wine and the like, on condition that the borrower shall restore, not the same identical things, but as much of the same kind and quality.1 From the nature of this contract, the property of the thing lent passes to the borrower, and if it perish from any cause, the loss falls on him. The lender becomes a mere creditor for the value; and this distinction is important in bankruptcy. In the loan of corn, wine, and other articles of the like nature, the borrower must restore as much of the same kind and quality as he received, whether the price of the commodity has risen or fallen in the market. Should he fail to satisfy his obligation, he will be responsible to the lender for the value of the article, having regard to the time and place when it should have been delivered. The action under which the lender established his claim against the borrower was called condictio certi. By the Macedonian senatus-consultum, it was ordained, that any one who should lend money to a son under the power of his father, without the father's consent, should have no action for its recovery. In a loan of money under mutuum, the borrower was not obliged to pay interest on the sum received. If it was intended that interest should be paid, a special engagement to that effect by the debtor was indispensable; and then interest became exigible, not under mutuum, but in virtue of express contract, by stipulation or otherwise. By the Roman law interest was due ex lege, or by agreement. In contracts bonæ fidei interest was also due ex mora, where there was undue delay in paying the capital. For, according to Ulpian, he pays less who pays late—minus solvit qui tardius solvit.3 The capital sum was called sors or caput, and the interest fanus or usuræ. Among the Romans the legal rate of interest varied very much at different times. The Twelve Tables prohibited any 1 I. 3. 15. pr. 2 "In bonæ fidei contractibus ex mora usuræ debentur."-Marcianus, D. 22. 1. 32. 2. 3 D. 50. 17. 12. 1. one from exacting more than the unciarum fœnus.1 This It was unlawful to charge interest upon interest, which was called anatocismus.5 Finally, if the interest was allowed to accumulate on a debt till it exceeded the capital, the surplus was not allowed to be charged. in this In this country the rate of interest has been usually regu- Interest lated by law, and has varied at different times. A statute country. of the thirteenth year of Queen Elizabeth limited the rate of interest to 10 per cent per annum; a statute of James I. to 8 per cent per annum; a statute of Charles II., in 1660, to 6 per cent; and a statute of Queen Anne, in 1713, to 5 per cent. Mr Bentham pointed out the impolicy of these restrictions on the trade in money in his Defence of Usury,' published in the year 1787; but so deep-rooted was the prejudice against the rapacity of money-lenders, that more than 1 Tac. Ann. vi. 16. 2 Niebuhr, Röm. Geschichte, vol. ii. p. 431-439. 3 Maynz, § 266. 4 C. 4. 32. 26. § 1. 5 C. 4. 32. 28. • C. 4. 32. 27. § 1. Marezoll, § 121. half a century elapsed before the system of restriction was abandoned. At length, after some experimental relaxation in the case of bills of exchange, the usury laws were finally repealed by the Statute 17 & 18 Vict. c. 90, passed in 1854. Where interest is payable upon any debt or sum of money by any rule of law, or upon any contract, express or implied, it is declared that the same rate of interest shall be recoverable as if the Act had not been passed.1 By the law of England, "interest is and always was payable where there has been a contract to that effect express or to be implied from circumstances, the usage of trade, or the mode of dealing between the parties, and also upon a bond, bill, or promissory note. In most other cases there was a considerable dispute upon the question of interest, and the leaning of the courts seemed, on the whole, against allowing it. However, by Statute 3 & 4 Will. IV. cap. 42, it is enacted, that upon all debts, or sums certain payable at a certain time or otherwise, the jury, on the trial of any issue or inquisition of damages, may, if they think fit, allow interest for the creditor at a rate not exceeding the current rate of interest from the time when such debts or sums certain were payable, if such debts or sums be payable by virtue of some written instrument at a certain time; or, if payable otherwise, then from the time when the demand of payment shall have been made in writing, so as such demand shall give notice to the debtor that interest will be claimed from the date of such demand until the time of payment; provided that interest shall be payable in all cases in which it is now payable by law."2 In Scotland, interest is due ex mora as well as ex pacto. So, in many cases, an implied agreement to pay interest is held to arise from any undue delay in paying the principal sum; but in regard to all claims or accounts upon which interest is not due, either by law or agreement, it has been said, no demand for interest can be made, till after they have been duly rendered and payment has been required.3 1 Stat. s. 3. 2 Smith's Mer. Law, 6th edition, pp. 545, 546. 3 More's Stair, vol. i. p. 78, notes. Sect. 2.-Deposit. effects of Deposit is a contract by which the owner places a thing Nature and in charge of another to keep it gratuitously and restore it on deposit. demand. The property and the risk remain with the depositor, so that if the subject perish accidentally the loss falls on him. The depositary is bound to preserve the subject with reasonable care, and to exercise the same vigilance as he does in his own affairs. He is not entitled to make any use of the deposit, unless expressly or tacitly authorised to do so. As a general rule, he is liable only for gross neglect, because he derives no benefit from the transaction.1 But he will be held responsible for ordinary neglect, if he come under a special undertaking for safe custody, or officiously propose to keep the subject without being asked to do so, or if he receive compensation for the deposit. In this last case the contract ceases to be a gratuitous deposit, and resolves into locatio operarum. The depositary is bound to restore the subject, with all its fruits and accessories. On the other hand, he is entitled to be reimbursed of all necessary charges. From the exuberant trust implied in deposit, the subject deposited cannot be retained as a set-off for any separate debt or claim due to the depositary by the owner. Sufferers from fire, shipwreck, or other calamity, might be Necessary compelled by circumstances to leave their goods in the hands deposit. of persons wholly unknown to them, and this was called by the Romans depositum miserabile. In that class of cases the depositary who proved unfaithful to his trust was liable to be sued under a prætorian action for double the value of the articles embezzled.2 tion. When a subject was placed in neutral custody to abide the Sequestraissue of a lawsuit or reference for determining the right, this kind of deposit was called by the Romans sequestration. It might be either voluntary or judicial, and the condition of every such deposit was, that the subject should be delivered 1 D. 13. 6. 5. 2. Ulpian. 2 D. 4. 9. 1. § 1 and 3. |