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state at home, or private advice of some decisive measure or event abroad, I cannot avail myself of these advantages with justice, because they are excluded by the contract, which proceeded upon the supposition, that I had no such advantage.

In insurances, in which the underwriter computes his risk entirely from the account given by the person insured, it is absolutely necessary to the justice and validity of the contract, that this account be exact and complete.

CHAPTER IX.

CONTRACTS OF LENDING OF INCONSUMABLE PROPERTY.

WHEN the identical loan is to be returned, as a book, a horse, a harpsichord, it is called inconsumable, in opposition to corn, wine, money, and those things which perish, or are parted with in the use, and can therefore only be restored in kind.

The questions under this head are few and simple. The first is, if the thing lent be lost or damaged, who ought to bear the loss or damage? If it be damaged by the use, or by accident in the use, for which it was lent, the lender ought to bear it; as if I hire a job coach, the ware, tear, and soiling of the coach must belong to the lender; or a horse to go a particular journey, and in going the proposed journey, the horse die, or be lamed, the loss must be the lender's on the contrary, if the damage be occasioned by the fault of the borrower, or by accident in some use for which it was not lent, then the borrower must make it good; as if the coach be overturned or broken to pieces by the carelessness of your coachman: or the horse be hired to take a morning's ride upon, and you go a hunting

with him, or leap him over hedges, or put him into your cart or carriage, and he be strained, or staked, or galled, or accidentally hurt, or drop down dead, whilst you are thus using him; you must make satisfaction to the owner.

The two cases are distinguished by this circumstance, that in one case, the owner foresees the damage or risk, and therefore consents to undertake it; in the other case he does not.

owner.

It is possible that an estate or a house may, during the term of a lease, be so increased or diminished in its value, as to become worth much more, or much less, than the rent agreed to be paid for it. In some of which cases it may be doubted, to whom, of natural right, the advantage or disadvantage belongs. The rule of justice seems to be this: If the alteration might be expected by the parties, the hirer must take the consequence; if it could not, the An orchard, or a vineyard, or a mine, or a fishery, or a decoy, may this year yield nothing or next to nothing, yet the tenant shall pay his rent; and if they next year produce tenfold the usual profit, no more shall be demanded; because the produce is in its nature precarious, and this variation might be expected. If an estate in the fens of Lincolnshire, or the isle of Ely, be overflowed with water so as to be incapable of occupation, the tenant, notwithstanding, is bound by his lease; because he entered into it with a knowledge and foresight of the danger. On the other hand, if by the irruption of the sea into a country where it was never known to have come before, by the change of the course of a river, the fall of a rock, the breaking out of a volcano, the bursting of a moss, the incursions of an enemy, or by a mortal contagion amongst the cattle; if, by means like these, an estate change, or lose its value, the loss shall fall upon the owner; that is, the tenant shall either be discharged from his agreement,

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or be entitled to an abatement of rent. A house in London, by the building of a bridge, the opening of a new road or street, may become of ten times its former value; and, by contrary causes, may be as much reduced in value here also, as before, the owner, not the hirer, shall be affected by the alteration. The reason upon which our determination proceeds is this, that changes such as these, being neither foreseen, nor provided for, by the contracting parties, form no part or condition of the contract; and therefore ought to have the same effect as if no contract at all had been made, (for none was made with respect to them,) that is, ought to fall upon the owner.

CHAPTER X.

CONTRACTS CONCERNING THE LENDING OF MONEY.

THERE exists no reason in the law of nature, why a man should not be paid for the lending of his money, as well as of any other property into which the money might be converted.

The scruples that have been entertained upon this head, and upon the foundation of which, the receiving of interest or usury (for they formerly meant the same thing) was once prohibited in almost all Christian countries*, arose from a passage in the law of Moses, Deuteronomy, xxiii. 19, 20, “Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any

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By a statute of James the First, interest above eight pounds per cent. was prohibited (and consequently under that rate allowed) with this sage provision: That this statute shall not be construed or expounded to allow the practice of usury in point of religion or conscience.

thing that is lent upon usury; unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury."

This prohibition is now generally understood to have been intended for the Jews alone, as part of the civil or political law of that nation, and calculated to preserve amongst themselves that distribution of property, to which many of their institutions were subservient; as the marriage of an heiress within her own tribe; of a widow who was left childless, to her husband's brother; the year of jubilee, when alienated estates reverted to the family of the original proprietor; regulations, which were never thought to be binding upon any but the commonwealth of Israel. This interpretation is confirmed, I think, beyond all controversy, by the distinction made in the law, between a Jew and a foreigner: "unto a stranger thou mayest lend upon usury, but unto thy brother thou mayest not lend upon usury," a distinction which could hardly have been admitted into a law, which the divine Author intended to be of moral and of universal obligation.

The rate of interest has in most countries been regulated by law. The Roman law allowed of twelve pounds per cent. which Justinian reduced at one stroke to four pounds. A statute of the thirteenth year of Queen Elizabeth, which was the first that tolerated the receiving of interest in England at all, restrained it to ten pounds per cent.; a statute of James the First, to eight pounds; of Charles the Second, to six pounds; of Queen Anne, to five pounds, on pain of forfeiture of treble the value of the money lent: at which rate and penalty the matter now stands. The policy of these regulations is, to check the power of accumulating wealth without industry; to give encouragement to trade, by enabling adventurers in it to borrow money

at a moderate price; and of late years, to enable the state to borrow the subject's money itself.

Compound interest, though forbidden by the law of England, is agreeable enough to natural equity; for interest detained after it is due, becomes, to all intents and purposes, part of the sum lent.

It is a question which sometimes occurs, how money borrowed in one country ought to be paid in another, where the relative value of the precious metals is not the same. For example, suppose I borrow a hundred guineas in London, where each guinea is worth one and twenty shillings, and meet my creditor in the East Indies, where a guinea is worth no more perhaps than nineteen, is it a satisfaction of the debt to return a hundred guineas; or must I make up so many times one and twenty shillings: I should think the latter; for it must be presumed, that my creditor, had he not lent me his guineas, would have disposed of them in such a manner, as to have now had, in the place of them, so many one and twenty shillings; and the question supposes, that he neither intended, nor ought to be a sufferer, by parting with the possession of his money to me.

When the relative value of coin is altered by an act of the state, if the alteration would have extended to the identical pieces which were lent, it is enough to return an equal number of pieces of the same denomination, or their present value in any other. As if guineas were reduced by act of parliament to twenty shillings, so many twenty shillings, as I borrowed guineas, would be a just repayment. It would be otherwise, if the reduction was owing to a debasement of the coin; for then respect ought to be had to the comparative value of the old guinea and the

new.

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