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sonal to the debtor. But the debtor's sureties, heirs, devisees, executors and administrators are also entitled to make the same defense to the contract which he might have made whenever the usurious contract affects their rights and interests.

19. May the borrower be estopped from setting up usury?

If he induces an innocent party to purchase the instrument infected with usury, by representations that it is valid and collectible, he is estopped from urging usury as a defense.

20. Is it usurious for one to charge a sum exceeding legal interest for the use of his financial credit, as maker, acceptor, indorser or surety of commercial paper?

It is not, if done in good faith without usurious design.

21. Are national banks subjected to the provisions of the statutes of states upon the subject of usury?

They are not. Their liabilities are measured by the National Bank Act of Congress which only subjects them, as a penalty for taking usurious interest, to the forfeiture of all interest stipulated for, and where the interest has been paid, the recovery by the borrower of twice the amount of such interest.

1

Interest Law of New York State.

22. What is the legal rate of interest in this state?

The legal rate is six per cent and no person or corporation shall take more than that.

23. What is the penalty for charging usury?

If an action be brought within one year after the taking of illegal interest, the excess of interest above the legal rate may be recovered.

24. If the borrower should bring no action, what other party may recover the excess of interest?

At any time within three years after the one year has expired, an overseer of the poor of the town where such payment was made, or any county superintendent of the poor in the county where the payment was made, may sue and recover the excess of interest with costs.

25. What is the effect of the lender refunding the excess of interest prior to the bringing of an action?

It frees him from any further forfeiture, penalty or punishment which he may have incurred by taking more than the legal rate.

26. What is done with a bill or note that is proven to be usurious in its inception?

The same is declared void and must be surrendered and cancelled.

27. On what kind of loan may more than 6% be taken and yet not render the contract usurious ?

On demand loans of $5,000 or more, based on warehouse receipts, bills of lading, certificates of stock, certificates of deposit, bills of exchange, bonds, etc., held as security for the repayment of the loan, any rate agreed to in writing shall be law ful.

28. What is allowed to a bank or banker in making loans?

That the interest may be taken in advance at the legal rate, the time to be computed by exact days to the date of maturity of the note or bill on which the loan is granted.

29. What penalty is inflicted on the bank or banker for attempting to take more than the legal rate of interest?

The bank or banker forfeits the entire interest as penalty.

30. How much may be recovered of the bank or banker if the illegal interest has been paid?

If the borrower brings an action within two years from the time the illegal interest was paid, he may recover twice the amount of the interest thus paid.

31. What other charge, in addition to the interest, is allowed to the bank or banker in discounting paper ?

If the note or draft be payable at some other place than where discounted, a reasonable charge may be made in addition to the discount for the collection of the note or draft and yet such charge not be considered usury.

32. What rate of interest are savings banks permitted to

pay?

Such institutions are not permitted to pay more than 5% per annum on deposits.

33. What is one of the chief purposes of the foregoing laws in New York State?

To put state and private banking institutions on the same basis as national banks located within the state.

34. Can a corporation in New York be permitted to plead usury?

It cannot.

35. Is a person who has received usurious interest liable criminally?

In New York he is guilty of a misdemeanor.

S A LES

"Let the buyer beware." 1. What is a sale?

A sale is a transfer of title in property for a price, either paid or to be paid, in money.

2. What are the essential elements of a sale?

It is necessary that there be parties, price, subject-matter and mutual assent.

3. What are the parties called?
Vendor and vendee.
4. Who may make sales?

Any competent party who is the lawful owner of the goods to be sold.

5. Can one sell goods that ere found or stolen?

Goods that have been found or stolen cannot be sold so as to give to the buyer any better title than the seller has, except in the case of negotiable instruments payable to bearer.

6. Can one who has obtained goods fraudulently sell and give good title?

If the buyer be innocent of the fraud and give present value for the goods he can hold them.

7. Is a person a bona fide purchaser for value within this rule which protects his title as against the defrauded owner, where the consideration for the purchase is antecedent or past due indebtedness?

He is not. In order to secure protection as a bona fide purchaser he must advance or pay some new or fresh consideration without notice of the fraud.

8. How must the price be? It must be definite, and if not stated there must be in the terms of the contract something from which it can be ascertained.

9. What is the rule as to adequacy of price?

In the absence of fraud the amount of the price agreed upon is not material. A person may buy or sell an article for a price greatly disproportionate to its real value, and if done of his own free will he cannot afterward rescind the contract on the ground of the inadequacy of the price.

10. What attribute must the subject matter of a sale have?

The subject matter of a sale must have either an actual or a potential existence. Potential existence is the power to exist, as the apples to grow in an orchard or the wool to grow on the back of sheep and these may be the subjectmatter of a sale.

II. Must the goods be in possession of the seller at the time of the sale?

Actual possession is not necessary. A bill of lading in the possession of the seller is sufficient evidence of ownership.

12. What is a sale of goods not yet owned by the seller?

Such a sale is simply an executory contract. But if the seller fails to perform his contract, he is liable to the buyer in damages for the breach thereof.

13. Of what does assent consist?

Proposition on the one hand and acceptance on the other are the essentials of assent. The acceptance must be as broad as the proposition, and any condition coupled with an acceptance usually converts it into a new proposition.

14. What is the application of the statute of frauds to the sale of chattels?

That no contract for the sale of chattels of $50 or upwards shall be binding unless the whole or part of the price be paid when the contract is made, or the whole or part of the goods shall be actually accepted and received by the buyer, or some note or memorandum of the sale be made and signed by the party to be charged thereon.

15. Is a contract by which it is agreed that the vendor will manufacture and deliver to the vendee at a subsequent date

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