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4. Where a factor undertakes for a commission, to sell merchandise and guarantee the sale.

5. Where the holder of an instrument for the payment of money, upon which a third person is or may become liable to him, transfers it in payment of a precedent debt of his own, or for a new consideration, and in connection with such transfer enters into a promise respecting such instrument. A guarantor is exonerated, except so far as he

may

be indemnified by the principal, if by any act of the creditor without the consent of the guarantor the original obligation of the principal is altered in any respect, or the remedies or rights of the creditor against the principal in respect thereto are in any way impaired or suspended.

A surety is one who, at the request of another, and for the purpose of securing to him a benefit, becomes responsible for the performance, by the latter, of some act in favor of a third person, or hypothecates property as security therefor.

A surety is exonerated :
1. In like manner with a guarantor.

2. To the extent to which he is prejudiced by any act of the creditor which would naturally prove injurious to the remedies of the surety, or inconsistent with his rights, or which lessens his security; or,

3. To the extent to which he is prejudiced by an omission of the creditor to do anything, when required by the surety, which it is his duty to do.

A surety has all the rights of a guarantor.

A surety may require his creditor to proceed against the principal, or to pursue any other remedy in his power, which the surety cannot, himself, pursue, and which would lighten his burden; and if in such case the creditor neglects to do so, the surety is exonerated to the extent to which he is thereby prejudiced.

A surety may compel his principal to perform the obligation when due.

A surety, upon satisfying the obligation of the principal, is entitled to enforce every remedy which the creditor then has against the principal, to the extent of reimbursing what he has expended, and also to require all his co-sureties to contribute thereto, without regard to the order of time in which they became such.

Whenever property of a surety is hypothecated with property of the principal, the surety is entitled to have the property of the principal first applied to the discharge of the obligation.

LETTER OF CREDIT. A letter of credit is a written instrument, addressed by one person to another, requesting the latter to give credit to the person in whose favor it is drawn.

The writer of a letter of credit is, upon the default of the debtor, liable to those who gave credit in compliance with its terms.

CHAPTER XXXVII.

SALE.

No sale of personal property, or agreement to buy or sell it, for a price of two hundred dollars or more, is valid, unless :

1. The agreement, or some note or memorandum thereof, be in writing, and subscribed by the party to be charged, or by his agent; or,

2. The buyer accepts and receives part of the thing sold, or when it consists of a thing in action, part of the evidences thereof, or some of them ; or,

3. The buyer, at the time of the sale, pays a part of the price.

The foregoing provisions do not affect an agreement to manufacture a thing from materials furnished by the manufacturer or by

another person.

No agreement for the sale of real property, or of an interest therein, is valid, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party to be charged, or his agent thereunto authorized in writing.

If a buyer of personal property does not pay for it according to contract, and it remains in the possession of the seller after payment is due, the seller may rescind the sale, or enforce his lien for the price.

In order to make a sale of personal property effectual as against creditors, there must be an immediate, actual, and continued change of possession.

CHAPTER XXXVIII.

CONTRACTS.

A contract is an agreement to do or not to do a certain thing. It is essential to the existence of a contract that there should be :

1. Parties capable of contracting. 2. Their consent. 3. A lawful object. 4. A sufficient cause of consideration. A written instrument is presumptive evidence of consideration. Contracts are either expressed or implied.

An express contract is one, the terms of which are stated in words.

An implied contract is one, the existence and terms of which are manifested by conduct.

The following contracts are invalid, unless the same, or some note or memorandum thereof, be in writing, and subscribed by the party to be charged, or by his agent:

1. An agreement that by its terms is not to be performed within a year from the making thereof.

2. A special promise to answer for the debts, default or miscarriage of another, except in the case mentioned in Chapter XXXVI.

3. An agreement made upon consideration of marriage, other than a mutual promise to marry.

4. An agreement for the sale of goods, chattels, or things in action, at a price not less than two hundred dollars, unless the buyer accept or receive part of such goods and chattels, or the evidences, or some of them, of such things in action, or pay at the time some part of the purchase money; but when a sale is made by auction, an entry by the auctioneer in his sale book, at the time of the sale, of the kind of property sold, the terms of sale, the price, and the names of the purchaser and person on whose account the sale is made, is a sufficient memorandum.

5. An agreement for the leasing for a longer period than one year, or for the sale of real property, or of an interest therein; and such agreement, if made by an agent of the party sought to be charged, is invalid, unless the authority of the agent be in writing, subscribed by the party sought to be charged.

6. An agreement authorizing or employing an agent or broker to purchase or sell real estate for compensation or a commission.

All contracts may be oral, except such as are specially required by statute to be in writing.

CHAPTER XXXIX.

NEGOTIABLE INSTRUMENTS.

A bill of exchange is an instrument negotiable in form, by which one, who is called the drawer, requests another, called the drawee, to pay a specified sum of money.

A bill of exchange is payable :
1. At the place where, by its terms, it is made payable; or,

2. If it specify no place of payment, then at the place to which it is addressed ; or,

3. If it is not addressed to any place, then at the place of residence or business of the drawee, or wherever he may be found. If the drawee has no place of business, or if his place of business or residence cannot, with reasonable diligence, be ascertained, presentment for payment is excused, and the bill may be protested for nonpayment.

Presentment of a bill of exchange for acceptance must be made in the following manner, as nearly as by reasonable diligence it is practicable :

1. The bill must be presented by the holder or his agent.

2. It must be presented on a business day, and within reasonable hours.

3. It must be presented to the drawee, or if he be absent from his place of residence or business, to some person having charge thereof, or employed therein ; and,

4. The drawee, on such presentment, may postpone his acceptance or refusal until the next day. If the drawee have no place of business, or if his place of business or residence cannot, with reasonable diligence, be ascertained, presentment for acceptance is excused, and the bill may be protested for non-acceptance.

When a bill of exchange is payable at a specified time after sight, the drawer and indorsers are exonorated if it is not presented for

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