The obligation of a third person, as his bill or note, like any other property, may in good faith be sold by the owner for any price he can get.33 This principle is undisputed if the seller does not indorse or guarantee payment or if he gives merely an indorsement without recourse.34 If, however, he gives an in-dorsement or guaranty that the obligation will be paid, there is a conflict of authority. It is obvious that if the instrument were indorsed as collateral for a loan for which excessive interest was bargained the transaction would be usurious, but it should be noticed that it is not the indorsement but the contract to which the indorsed obligation is collateral that is objectionable, and it would be equally objectionable whatever the nature of the collateral. Perhaps because of the possibility that the appearance of a sale may easily be given to what is in fact a loan with collateral, some courts hold that as the indorsing seller is bound for the amount of the obligation, the transaction is in substance a loan to him, and if the rate of discount is excessive, a usurious loan. If it be granted that the transaction is in effect a loan, the consequences of its being usurious will depend upon the statute locally in force. Under the early-English statute the indorsement was held void so that not only no recovery against the indorser could be had, but none against the maker.35 But in most jurisdictions of the United States, even though the accuracy of the reasoning be conceded, the penalty for usury is not such as totally to invalidate the indorsement, and the indorsee may recover from the maker.36 According to another view the transaction is not usurious, but the indorsee can recover from the indorser only the amount paid, with legal interest, though he can recover against prior parties on the obligation its full face value.37 The bargain, however, is in terms not a loan but a sale, and though accompanied with a guaranty of the value of the article sold, it should not be regarded as within the purview of statutes against usury, unless the parties are in fact intending a loan rather than a sale; and this is the more general rule.38

29 E. g. because under the local statute it was void even in the hands of an innocent holder, Cuthbert v. Haley, 8 T. R. 390; Perdue v. Brooks, 85 Ala. 450, 5 So. 126; Houghton v. Payne, 26 Conn. 396; Dix v. Van Wyck, 2 Hill, 522; or because purchase of a note representing the claim was after maturity and the assignee therefore was subject to personal defences. Mo-Farland v. State Bank, 7 Kans. App. 722, 52 Pac. 110. See also Call v. Palmer, 116 U. 8. 98, 29 L. Ed. 559, 6 S. Ct. 301; Taylor v. Morris, 22 N. J. Eq. 606; Armstrong v. Middaugh, 74 N. Y. Misc. 45, 133 N. Y. S. 647.

30See supra, Sec.399.

31 Barnes v. Hedley, 2 Taunt. 184; Wright v. Wheeler, 1 Camp. 165, n. Masterson v. Grubbs, 70 Ala. 406; Kilbourn v. Bradley, 3 Day (Conn.), 356, 3 Am. Dec. 273; Yermeule v. Vermeule, 95 Me. 138, 49 Atl. 608; dark v. Phelps, 6 Mete. (Mass.) 296; Coleman v. Cole, 96 Mo. App. 22, 69

S. W. 692; Miller v. Hull, 4 Denio, 104; Person v. Mattson, 33 N. Dak. 49, 156 N. W. 780, Ann. Cas. 1918 A. 747; Guinn v. Security State Bank (Okl.), 176 Pac. 898; Bomar v. Smith (Tex.), 195 S. W. 964; Maretin v. Hall, 9 Gratt. 8; Gerlaugh v. Bassett, 20 Wis. 671. Cf. Habach v. Johnson, 132 Ark. 374, 201 S. W. 286; Dean v. Maxfield (Tex. Civ. App.), 209 S. W. 466.

32 See supra, Sec. 147.

33 Junction R. Co. v. Bank of Ashland, 12 Wall. 226, 20 L. Ed. 385; Orr v. Sparkman, 120 Ala. 9, 23 So. 829; Loan, etc., Co. v. Shaffer, 44 Dist. Col. App. 366; Campbell v. Morgan, 111 Ga. 200, 36 S. E. 621; Colehour v. State Sav. Inst., 90 111. 152; Met-calf v. Pilcher, 6 B. Mon. 529; Mutual Nat. Bank v. Regan, 40 La. Ann. 17, 3 So. 407; Priest v. Garnett (Mo.), 191 S. W. 1048; Steen v. Stretch, 50 Neb. 572, 70 N. W. 48; Munn v. Commission Co., 15 Johns. 44, 8 Am, Deo.

219; Weaver Hardware Co. v. Solo-movitz, 98 N. Y. Misc. 413, 103 N. Y. S. 121; Atlantic State Bank v. Savery, 82 N. Y. 291; Maas v. Chatfield, 90 N. Y. 303; Baily v. Smith, 14 Ohio St. 396, 84 Am. Dec. 385; Cook v. Forker, 193 Pa. St. 461, 44 Atl. 560, 74 Am. St. Rep. 699; Connor v. Don-nell, 55 Tex. 167. It may be sold to the maker at a large discount unless the transaction is intended as a cover for usury. Kentucky Coal Min. Co. v. Mattingly, 133 Ky. 526, 118 S. W. 350.

34 Durant v. Banta, 3 Dutch. 624, 630.

35 Lowes v. Maszaredo, 1 Stark. 385; Chapman v. Black, 2 B. & Aid. 588; Nichols v. Fearson, 7 Pet. 103, 8 L. Ed. 410. See also Lloyd v. Keach, 2 Conn. 175, 7 Am. Dec. 256; Whit-worth v. Adams, 5 Rand. 333, 419.

36 Knights v. Putnam, 3 Pick. 184; Importers, etc., Bank v. Iittell, 47 N. J. L. 233; Collier v. Nevill, 3 Dev. 30; Connor v. Donnell, 55 Tex. 167; Bank of Radford v. Kirby, 100 Va. 498, 42 S. E. 303; Armstrong v. Gibson, 31 Wis. 61,11 Am. Rep. 599.