The Digest or Pandects : Book 20 ( Scott )

THE ENACTMENTS OF JUSTINIAN.

THE DIGEST OR PANDECTS.

~ Book XX ~

( S. P. Scott, The Civil Law, V, Cincinnati, 1932 ).

1. Concerning pledges and hypothecations and the manner in which they are contracted (..)
2. In what cases a pledge of an hypothecation is tacitly contracted.
3. What property cannot legally be pledged or hypothecated.
4. Which creditors are preferred in cases of pledge or hypothecation (..)
5. Concerning the sale of property pledged and hypothecated.
6. In what ways the lien on property pledged or hypothecated is released.

Tit. 1. Concerning pledges and hypothecations and the manner in which they are contracted, and the agreements by which they are made.

1. Papinianus, Opinions, Book XI.

A general agreement in pledging property, even such as is afterwards obtained, is valid. In a case, however, where an agreement has been made with reference to property belonging to another which was not due to him who pledged it, but the ownership of it is afterwards acquired by the debtor, the creditor will hardly be entitled to an equitable action, if he was not ignorant that the property belonged to someone else, but the retention of the property in his possession will be the better mode of procedure.

(1) Where a slave is given by way of pledge, the creditor cannot sell his peculium, unless an agreement has been expressly entered into on this point. It makes no difference when the slave or his master acquired the peculium.

(2) Where a tract of land is given in pledge, and it is expressly agreed that the crops thereof shall also be pledged and a bona fide purchaser has consumed said crops, he cannot be compelled to restore them by an equitable action under the Lex Servia; for it is held that the lien of the pledge is not removed by usucaption, as the question of the pledge is distinct from the intention of the owner. The case is unlike the one involving the crops, since they never belonged to the debtor.

(3) It was agreed in a contract that, if interest on a debt was not paid when due, the crops of the property hypothecated should be set off against the interest, to the limit of that which was lawful. Although matters of less importance were included in the stipulation when it was made, it is held that the agreement is not void; since, if the lower rate of interest should not be paid at the appointed time, the parties could properly agree to pay more than the legal rate of interest.

(4) Where a woman had given a tract of land to her husband and he had pledged it, and after a divorce, the woman recovered possession of her land, and gave it in pledge to the creditor on account of the debt, in this instance the pledge seems to have been only properly made with reference to the money for which she was indebted to her husband for having improved the land; that is to say where he had incurred greater expense than the value of the crops which he had taken from it; for the woman is held only to have transacted her own business to that amount, and not to have undertaken to transact that of another.

2. The Same, Opinions, Book III.

Where a surety who has had pledges or mortgages assigned to him after he has paid a debt for money loaned, proceeds against the debtor by way of mandate, or brings suit against him on the ground of being his creditor; if he has been guilty of negligence with reference to the pledges, this must be taken into consideration. He cannot, however, sue him by means of the direct action on pledge.

3. The Same, Questions, Book XX.

Where a debtor who brought suit for his property lost his case because he did not prove that the property belonged to him; the Servian Action will also be granted to the creditor where he proves that the This applied to all loans of personal property where the return was made in specie, otherwise it was a sale. Property was in the hands of the debtor at the time that the contract for the pledge was made. Where, however, the debtor who claimed an estate is defeated, the judge who presides in the Servian Action without paying attention to the decision rendered with reference to the estate, must examine the grounds on which the property was pledged. It is held to be different in cases which have reference to legacies and freedmen, where a decision is rendered in favor of him who claimed a lawful inheritance. Still, a creditor cannot properly be compared in every respect with a legatee, since legacies, in fact, are not valid unless the will is also decided to be so; for it may happen that a pledge may be properly taken, and the suit with reference to the same be improperly brought.

(1) A man who brought suit for the recovery of his property was defeated by an unjust decision, and afterwards pledged the property. The creditor cannot have any more right in this property than the party who gave it in pledge; therefore he will be barred by an exception on the ground that the case has already been disposed of, although the party who gained the case can by no means institute proceedings to recover what is not his own, for in this instance it must be taken into consideration not what he did not have, but what right the debtor would have in the property pledged.

4. Gaius, On the Hypothecary Formula.

Hypothecation is contracted by means of an informal agreement, where a party consents that his property shall be encumbered under a mortgage on account of some obligation. It does not matter in what terms the agreement is stated, as is the case in obligations contracted by the consent of the parties; and hence, if it is agreed without an instrument in writing that property shall be hypothecated, and this can be proved, the property will be bound to the extent of the agreement. Documents are drawn up with reference to these matters to enable the intention of the parties to be the more easily established, and what was agreed to is valid without them if it can be proved, just as a marriage is valid although there may be no written evidence of the same.

5. Marcianus, On the Hypothecary Formula.

It must be remembered that property can be hypothecated for any kind of an obligation whatsoever where money is lent, a dowry bestowed, a purchase or sale made, a leasing and hiring concluded, or a mandate given; also where the obligation is absolute, or where it is for a certain time, or under some condition, or where it is assumed in pursuance of an agreement, or to secure a present indebtedness, or one previously contracted. Property can also be hypothecated on account of an obligation to be contracted hereafter, it can be done not only to secure the payment of an entire sum of money but also only a portion of the same, and it is also available in civil or praetorian obligations, as well as in those which are merely natural. Hypothecation in a conditional obligation is not binding, however, unless the condition is complied with.

(1) The difference between a pledge and an hypothecation is only one of words.

(2) A party can hypothecate property not only for an obligation of his own, but also for that of another.

6. Ulpianus, On the Edict, Book LXXIII.

By a general obligation, affecting all property which the party now has or may have hereafter, those things are not included which it is probable that one would not have been likely to especially encumber, as for instance, household goods. Clothing must also be left with the debtor, and among the slaves those which he uses so much that it is certain that he would not have given them in pledge, because their services are very necessary to him, or he values them on account of the affection which he entertains toward them.

7. Paulus, On the Edict, Book LXVIII.

The Servian Action is not available with reference to articles which are in daily use.

8. Ulpianus, On the Edict, Book LXXV.

Finally, it is settled that a concubine, natural children, and apprentices, or any other attendants of this kind, are not included in a general obligation.

9. Gaius, On the Provincial Edict, Book IX.

This rule also should be observed with reference to property belonging to the debtor at the time when the agreement was made. Whatever is capable of purchase and sale can also be made the object of a pledge.

10. Ulpianus, On the Edict, Book LXXV.

Where a debtor pledges his property to two persons at the same time, so that it is entirely bound to each of them, both can avail themselves of the Servian Action for the entire amount against other persons. When a dispute arises between them, the condition of the possessor is the better one, and he will be entitled to the exception, "You could have the property, if it had not been agreed that it should also be pledged to me." If, however, it was the intention of the parties that the property should be encumbered to each one equally, an equitable action will lie as between themselves and against third parties, by means of which they each may obtain possession of half the property.

11. Marcianus, On the Hypothecary Formula.

Where he who has charge of property belonging to the government borrows money for it, he can encumber the property.

(1) Where an agreement is entered into that the use of whatever is pledged can be made by the creditor, and some one is placed in charge of the land or of the house, he can retain possession of the same instead of the pledge, until the money is paid to him; since he can take the profits instead of interest, either by leasing them, or by himself collecting them, or by occupying the premises. Hence, if he should lose possession of the property, it is customary to make use of an action in factum.

(2) The question arose whether an usufruct can be given by way of pledge or mortgage, if the owner of the property agrees to this, or only he who is entitled to the usufruct gives his consent? Papinianus, in the Eleventh Book of Opinions, says "that the creditor must be protected, and if the proprietor desires to institute proceedings against him to prevent his using the right of usufruct against his consent, the Praetor will protect him by an exception, if it had not been agreed between the creditor and the party to whom the usufruct belonged, that the usufruct should be pledged; for as the Praetor protects the purchaser of the usufruct, why should he not also protect the creditor?" On the same principle, an exception can be filed against the debtor.

(3) The servitudes of urban estates cannot be given in pledge, and therefore an agreement cannot be made for their hypothecation.

12. Paulus, On the Edict, Book LXVIII.

Pomponius says that it should be held that an agreement can be made to pledge a right of a pathway, and the right to drive cattle, or to conduct water in such terms that, if the money is not paid the creditor can make use of such servitudes, provided he has adjoining land; and if the money should not be paid within a certain time, he can sell said servitudes. This opinion should be adopted on account of its benefit to the contracting parties.

13. Marcianus, On the Hypothecary Formula.

Where a flock is liable by way of pledge, any future increase of the same will also be liable. If, however, the entire flock should be renewed through the death of those previously pledged, it will still be liable as pledged.

(1) A slave who is to be free conditionally can be pledged, although the right to the pledge, as security, will be extinguished as soon as the condition is fulfilled.

(2) As it is held that property in pledge can also be encumbered by the creditor, so long as both debts are due the pledge will be bound to the second creditor, and an exception as well as an equitable action should be granted him. If, however, the owner should pay the debt, the pledge will also be released. It may be doubted, however, whether or not an equitable action should be granted to the creditor on the ground that money has been paid. For what if the obligation has been discharged? What Pomponius wrote in the Seventh Book of the Edict is correct, namely, that if he who gave the property in pledge owes money, after it has been collected he should pay his own creditor with it. If, however, he owed some article, and delivered it, it should remain with the second creditor by way of pledge.

(3) A creditor can lawfully claim whatever stands upon the surface of the land, against any possessor whomsoever; whether a mere informal agreement with reference to its encumbrance was entered into, or whether possession of it was delivered which was subsequently lost.

(4) Even if the creditor obtains a judgment against his debtor, the mortgage still continues to exist, because an hypothecary action has its own condition; that is to say, it remains effective where the money is not paid or security given. If I institute proceedings personally against the defender of an action, even though he may have given me security and lost his case, the hypothecation still remains in force. With much more reason, therefore, where proceedings are instituted personally either against the principal debtor, or against the surety, or against both together, even though judgment has been rendered against them, the hypothecary obligation still continues operative. By this it appears that the creditor has not been satisfied, because he has obtained a right of action on the judgment.

(5) Where property is conditionally encumbered on account of a debt, it must be held that proceedings cannot properly be brought before the condition has been fulfilled; since nothing is owing in the meantime. But where the condition upon which the debt is dependent arrives, if it had been contracted under a condition, the party can then bring suit. If, however, the debt is due immediately, and the hypothecation was made under a condition, and the creditor has brought the hypothecary action before the condition was fulfilled, it is, indeed, true that the money has not been paid, but it would be unjust for the lien to be released. Therefore, a bond should be executed by order of the court, providing that if the condition is fulfilled and the money is not paid, the property hypothecated should be given up, if it is in existence.

(6) If the hypothecation was made to secure the interest also, the interest should be paid. We say that the same rule applies with reference to a penalty.

14. Ulpianus, On the Edict, Book LXXIII.

The question arose whether it would be permitted, if the day of payment had not yet arrived, to take action with reference to the pledges? I think that permission to do this should be granted, because the party has an interest in doing so. Celsus also gives the same opinion.

(1) In those instances where a natural obligation exists, it is settled that the pledge remains encumbered.

15. Gaius, On the Hypothecary Formula.

Property which is not yet in existence but which will come into existence hereafter, can be hypothecated, as for instance, fruits on the trees, the offspring of a female slave, the increase of flocks, and other things which may be produced, are subject to hypothecation. The same rule should be observed whether the owner of land makes an agreement either with reference to the usufruct of the same, or concerning anything which may come into existence thereon, or whether he who has the usufruct does so; as Julianus stated.

(1) When it is stated that the creditor must prove that the article in question was included in the effects of the debtor when the contract was made, this refers to an agreement expressly entered into, and not to the one which it is usual to insert into undertakings every day; namely, that where certain property has been specifically hypothecated, whatever else now remains in possession of the debtor, or whatever he may hereafter acquire, shall be liable; just as if the said property had been explicitly encumbered.

(2) Where parties who have already encumbered their property also bind themselves to a second creditor, in order that the risk may be avoided which those are accustomed to run who hypothecate the same thing several times, it is usual for them to provide that the property is hypothecated to no one else except Lucius Titius, for instance; and that it is liable to such an extent that the encumbrance will exceed the prior obligation, so that it will be pledged to the amount of the excess, or for the entire amount, when the property is released from the lien for the first debt. In this instance, it should be considered whether the property is thus encumbered if such an agreement has been made, or whether it has been simply agreed that only the surplus shall be subject to hypothecation. It is presumed that the entire property is included in the agreement after it has been released by the first creditor. Is there not still a portion of the same encumbered? The opinion which we have first stated is the better one.

16. Marcianus, On the Hypothecary Formula.

Where land which has been hypothecated is afterwards increased by an alluvial deposit, it is all liable.

(1) If property is hypothecated without the knowledge of the owner, and the latter afterwards ratifies the transaction, it must be held that what he ratified he intended to have a retroactive effect to the time of the agreement; but the wishes of those only will be observed who have a right to pledge the property.

(2) Where property is hypothecated, and its form is afterwards changed, an hypothecary action will still lie; just as where a house is hypothecated, and its site afterwards becomes a garden. The same rule applies where the agreement was made with reference to a vacant lot, and a house is subsequently built upon it; or where vines have been planted upon ground which was without them when it was hypothecated.

(3) The question is asked, where an action is brought for the recovery of a pledge, whether he who is sued is in possession of the property which is the subject of the action. For, if he is not in possession of it, and has not committed fraud to avoid being in possession, he should be discharged. If, however, he should be in possession, and either pays the debt, or surrenders the property, he should also be discharged, but if he does neither of these things, judgment should be rendered against him. Where he is willing to give it up, but cannot do so because it is not at hand, or is at a distance, or in a province, it is customary for security to be furnished, since, if the party should give security to deliver it, he will be discharged. But if he has ceased to hold possession through fraud, and though, having made every exertion, he is unable to deliver the property, judgment shall be rendered against him for the amount to which the plaintiff will swear in court, as in other real actions; for if judgment should be rendered against him for the amount that is due, of what advantage would a real action be, as he could recover the same amount by bringing a personal one?

(4) The judge should sometimes decide with reference to the profits obtained by the person from the property which is the subject of the action, and render judgment against him for the profits from the time that issue was joined. But what if the land should be of less value than the debt? For he could not decide anything with reference to the profits previously obtained, unless they were still in existence, and the property was not sufficient to satisfy the claim.

(5) The question is asked, "How can a creditor obtain for himself the property hypothecated which has been adjudged to him by a decree of court?" He cannot bring an action to recover its ownership, but he can bring an hypothecary action; and if he is met by the possessor with an exception on the ground that the case has already been decided, he can reply that "that decision is favorable to me."

(6) Where a debtor has had judgment rendered against him for a larger sum than the principal and interest together, because he refused to surrender the pledge; and if he only pays the amount of the debt, will the hypothecation be released? I do not approve of this, so far as it relates to the subtlety of the law and the authority of the opinion; for the entire obligation seems to be transferred to the decision, and hence the money is due; but I think it is more equitable for the hypothecation to be released, if the party only pays the amount which he actually owes.

(7) The property of another can be legally hypothecated under the condition that it will become the property of the debtor.

(8) Where two creditors enter into an agreement with reference to hypothecated property, the question arises to what extent has each one a lien on the same; whether for the entire amount of the debt, or for an equal portion with the other? It is the better opinion that each one has a lien on the pledge for the amount of the debt. But how would it be if both of them should institute proceedings against the possessor; will the property be encumbered for the amount due to each one, or for the entire amount, as if it was bound for the whole to each of them? It must be held that they can only bring an action for a portion, if the property was pledged separately to both of them on the same day. If, however, the understanding was that it should be encumbered to both of them at the same time, each of them can legally proceed with reference to the entire property; otherwise each one can only bring suit with reference to a share of it.

(9) A pledge or an hypothecation can be made as follows, "If the debt is not paid within a certain time, the creditor may hold possession of the property by the right of a purchaser, and an estimate of the value of the same must then be made at a just price." In this instance the transaction is held to be a species of conditional sale. The Divine Severus and Antoninus stated this in a Rescript.

17. Ulpianus, On the Edict, Book XV.

The right to avail himself of his pledge gives the creditor an action in rem.

18. Paulus, On the Edict, Book XIX.

If I receive property in pledge from anyone who can make use of the Publician Action, because he has not the ownership of the same, the Praetor will protect me by the Servian Action to the same extent as he will the debtor by the Publician.

19. Ulpianus, On the Edict, Book XXI.

Where a party receives several articles in pledge, he is not compelled to release one of them, unless he receives the entire amount that is due to him.

20. The Same, On the Edict, Book LXIII.

When it is agreed that a party who has lent money for the repair of a house shall receive from the rents, by way of pledge, the money which was loaned, he also is entitled to an equitable action against the tenants; just as in the case of security which the debtor has given to the creditor by way of pledge.

21. The Same, On the Edict, Book LXXIII.

If an agreement is made between a tenant and my agent with reference to a pledge, and I ratify the agreement, or direct it to be made; it is held that it is entered into between the tenant and myself.

(1) Where a debtor purchases in good faith a slave from some one who is not his master, and pledges him, and retains possession of him, there is ground for the Servian Action; and if the creditor proceeds against him, he can meet the exception by a reply on the ground of fraud. This was the opinion of Julianus, and it is reasonable.

(2) Any other advantage or disadvantage accidentally arising with reference to the pledge must be enjoyed, or sustained by the debtor.

(3) If the property pledged is not returned, damages must be assessed in court against the possessor; but it is evident that the amount will not be the same where the proceeding is instituted against the debtor, as where this is done against any other possessor; for, so far as the debtor is concerned, a creditor cannot collect more than the former owes, because he has no greater interest, but from other possessors he can recover the value of the pledge over and above the amount of the debt, and he must return the same to the debtor, if an action on pledge is brought against him.

22. Modestinus, Differences, Book VII.

Where anyone, without my knowledge, pledges my property to Titius, his creditor, and I become the heir of Titius, the pledge, which indeed was not valid at first, does not immediately become so, but an equitable action on pledge will be granted to the creditor.

23. The Same, Rules, Book III.

A creditor can legally lease lands hypothecated to him by way of pledge.

(1) The obligation of pledge can also legally be contracted between parties who are absent.

24. The Same, Rules, Book V.

Where anyone is forbidden to purchase property within certain limits, he is not prohibited from receiving such property in pledge.

25. The Same, Opinions, Book VIII.

Where the contract for a pledge is void or worthless, there is no ground for the retention of the pledge by the creditor, not even if the property of the latter belongs to the Treasury.

26. The Same, Opinions, Book IV.

A surety obtained permission from the court that, before he paid the debt, he could obtain possession of the pledges, provided he satisfied the creditors. He did not satisfy them, and then the heir of the debtor offered to pay the creditors. I ask whether the surety can be compelled to return the pledges; and Modestinus answered that he can be compelled to do so.

(1) A father easily persuaded his emancipated son, Seius, who has borrowed a sum of money from Septicius, to write an acknowledgment of indebtedness with his own hand, because he himself was unable to do so at the time, for the purpose of giving a house belonging to his said son by way of pledge to his creditor. The question arose whether Seius could legally retain possession of this house with his other property, since he had renounced the estate of his father, and could be interfered with for the sole reason that he had written the said document with his own hand, by the direction of his father, as he did not give his consent to his father either under his own seal or by any other statement in writing. Modestinus answered that when Seius wrote with his own hand that his house would be hypothecated, it was evident that he gave his consent to the obligation.

(2) Lucius Titius hypothecated certain lands and the slaves that were attached to them. His heirs having divided the lands between them, substituted other slaves for those who died. The creditor afterwards sold the land together with the slaves; and the question arose whether the purchaser could properly bring an action to recover the slaves which had recently been placed upon the land. Modestinus answered that if the slaves were not themselves pledged, and were not the offspring of female slaves who had been encumbered, they were, by no means, bound to the creditor.

27. Marcellus, Digest, Book V.

A certain man gave a slave in pledge, and then placed him in chains for some trifling offence, and afterwards released him; and, because the debtor did not pay the debt, the creditor sold the slave for a lower price than he was worth when pledged. Can an action be brought by the creditor against the debtor because the suit on the loan was not sufficient to enable him to recover the deficiency? What if the debtor should have killed or blinded the slave? If he had killed him, he would be bound to produce him in court, but if he had blinded him, we should grant an action for malicious injury to the amount of the interest of the creditor; because by disabling or confining the slave the debtor had diminished the value of the pledge. Let us suppose that no action will lie on the ground of a loan, for the reason that the case has been lost. I do not think that the matter is unworthy of the attention and assistance of the Praetor. Ulpianus says, in a note, that if the debtor put the slave in chains in order to injure the creditor, he will be liable; but if he did so because he deserved punishment, he will not be.

28. Paulus, Questions, Book III.

Where a legacy was left to a son under paternal control on a certain condition, his father received his own property from the heir by way of pledge. The father being dead, or the son emancipated, and the condition upon which the legacy was based having been fulfilled, the legacy becomes due to the son. The father could not legally bring an action to recover the pledge, nor could the son, who had now begun proceedings for that purpose, do so; nor could he have any right to the pledge which was acquired during the preceding time; just as has been stated in the case of a surety.

29. The Same, Opinions, Book V.

Paulus was of the opinion that a general agreement covering all the property of the debtor was sufficient to establish the obligation of pledge; but that such property as was not included in that of the deceased, but was afterwards acquired by the heir in some other manner, could not be recovered in an action by a creditor of the testator.

(1) Where female slaves are pledged, the children born of them are also considered to be encumbered. Still, what we have stated with reference to their children being liable, whether an express agreement was made with reference to them or not, only applies where their ownership is acquired by the person who encumbered them, or to his heir. If, however, the children were born while the female slaves were in the possession of another master, no liability will attach to them under the pledge.

(2) A house which was given in pledge was burned; Lucius Titius purchased the ground on which it had stood, and erected a building thereon. The question arose as to what became of the pledge? Paulus answered that the right to the pledge still remained, and therefore the right of the soil was held to follow the usufruct; that is to say, so far as the right of pledge was concerned; but the bona fide possessors will not be compelled to surrender the house, unless the builder should receive the expenses incurred in its construction, to the extent that the property was rendered more valuable.

(3) Where a slave, with the knowledge and consent of his master, enters into an agreement that all the property of the latter shall be hypothecated, the slave himself, who made the contract, will form part of the property pledged.

30. The Same, Opinions, Book VI.

The risk of a claim secured by pledge which is sold by the creditor, must be assumed by the purchaser, if the former proves that the property was actually encumbered.

31. Scaevola, Opinions, Book I.

The condition under which certain land subject to the payment of rent to the State was, that if, after a certain time, the rent should not be paid, the land would revert to the owner. It was afterwards given in pledge by the possessor, and the question arose whether this could legally be done? The answer was that the pledge was good where the payment of money was involved. It was also asked where the debtor, as well as the creditor, were in default for the payment of the rent, and for this reason a judicial decree had been rendered that the land belonged to the owner in compliance with the terms of the contract, whose position was preferable? The answer was that, according to the facts stated, as the rent had been paid, the owner might avail himself of his privilege, and the right to the pledge was extinguished.

32. The Same, Opinions, Book V.

A debtor agreed that everything belonging to his land and everything added to it, placed upon it, brought to it, born upon it, or derived from it, should be encumbered. A portion of the said land was without tenants, and the debtor, for this reason, gave it to his steward to be cultivated, and furnished him at the same time with the slaves necessary for that purpose. The question arises, whether the slave, Stichus, who was the steward, and the other slaves designated for the cultivation of the land, as well as the underslaves of Stichus, were encumbered. The answer was that only those who were brought there with the intention of the master that they should remain permanently, and not such as were employed temporarily, were subject to the pledge.

33. Tryphoninus, Disputations, Book VIII.

Where anyone promises to pay either you or Titius, he cannot recover what he has paid to Titius; but if he has given him a pledge, and the latter received it before payment, he can recover it.

34. Scaevola, Digest, Book XXVII.

Where a debtor gave a shop in pledge to his creditor, the question arose whether the transaction was void, or whether it should be held that under the designation of "shop" all of the property contained therein was pledged. And if the party should sell the said merchandise, from time to time, and purchase other goods and place them in said shop, and then should die, could the creditor recover by an hypothecary action everything found there, as the merchandise had been changed, and other articles substituted? The answer was that whatever was found in the shop at the time of the death of the debtor was held to have been pledged.

(1) It was also asked, where a letter, such as the following, was sent, namely: "When I borrowed five hundred denarii of you, I requested you not to take a surety but to accept a pledge from me, for you know absolutely and with certainty that my shop and my slaves are not encumbered to anyone else but yourself, and that you have confidence in me as an honest man." Is the obligation of a pledge incurred? Or is this letter of no force, because it has no date, and no reference to the consul? The answer was that, as an agreement with reference to pledges seems to have been made, the obligation derived from a pledge is not void, merely for the reason that the date and the name of the consul do not appear, and no seals are attached to the document.

(2) A creditor accepted from a debtor, by way of pledge, all the property which he had or might have subsequently. The question arose whether the money which the said debtor had borrowed from the other party, as it was included in his property, would be bound to the creditor by way of pledge? The answer was that it would.

35. Labeo, Probabilities of the Epitomes, by Paulus, Book I.

If a house which you have a right to sell under the terms of a contract of pledge is consumed by fire, and is afterwards rebuilt by your debtor, you will have the right with reference to the new building.

Tit. 2. In what cases a pledge of an hypothecation is tacitly contracted.

1. Papinianus, Opinions, Book X.

By a decree of the Senate enacted under the Emperor Marcus, the pledge of a house given to a creditor who had lent the money to repair the building, will also extend to him who furnished the money, at the direction of the owner, to the workman who made the repairs.

2. Marcianus, On the Hypothecary Formula.

Pomponius, in the Fortieth Book of Various Extracts, said that, "Everything brought into a house by a lessee was pledged, not only for the rent but also for any deterioration of the property caused by neglect of the tenant, on account of which the owner would be entitled to an action on lease against him."

3. Ulpianus, On the Edict, Book LXXIII.

Neratius thinks that where a warehouse is leased, whether the agreement refers to other things or only to the space occupied, a tacit agreement exists with reference to whatever is placed therein, and that the rule also applies in this instance; which is correct.

4. Neratius, Parchments, Book I.

It is our practice that whatever is placed on urban estates is considered to be pledged, as it were, by tacit agreement; in rustic estates, however, the contrary rule is observed.

(1) Can it be doubted whether stables which are not joined to other buildings should be considered as being included in these estates? And, indeed, there is no question with respect to urban estates, since they are separated from other buildings. However, with reference to a tacit pledge of this kind, they do not differ greatly from urban estates.

5. Marcianus, On the Hypothecary Formula.

Pomponius states, in the Thirteenth Book of Various Extracts, that if a lessee gives me a gratuitous lodging in a house which he has rented, any personal property brought there by me will not be considered to be tacitly pledged to the other of the house.

(1) He also says that it should be considered that a pledge can be brought in by the consent of the owner in such a way that it may be liable for a portion of the indebtedness.

(2) Where anyone becomes a surety, and his property has been given in pledge by the debtor for whom he became responsible, it is certainly understood by this act of giving security that he has, so to speak, directed his property to be liable for the debt. If, however, his property is hypothecated subsequently to his becoming surety, it will not be legally encumbered.

6. Ulpianus, On the Edict, Book LXXIII.

Although, in the case of urban estates, it is customary to understand that a tacit agreement was entered into to the effect that the property which is brought or placed in the house is liable, just as if an express contract had been made with reference thereto; it is certain that a pledge of this kind does not affect the freedom of a slave. This opinion Pomponius approves, for he says that it does not, in any way, hinder manumission, where the pledge is liable for the rent.

7. Pomponius, Various Extracts, Book XIII.

The crops produced upon rustic estates are understood to be tacitly pledged to the owner of the land which is leased, even if there is no express agreement to that effect.

(1) Let us consider whether everything that has been brought or placed in a house is pledged, or only such property as has been brought to be kept there. The latter is the better opinion.

8. Paulus, Sentences, Book II.

If a debtor uses money lent to him without interest, the creditor can retain for himself the profits of the encumbered property to the amount of the legal rate of interest.

9. The Same, On the Duties of the Prefect of the Night Watch.

A difference exists between property tacitly liable for rent and such as is encumbered by agreement on account of a manifest pledge; for we cannot manumit slaves which have been pledged, but we can manumit those residing in a house who are tacitly liable for the rent; provided we do this before they are seized on account of nonpayment of rent, for then we cannot liberate slaves which have been detained by way of pledge. Nerva, the jurist, deserves to be ridiculed for stating that slaves who have been detained as security for rent can be liberated by merely showing them at a window.

10. Scaevola, Digest, Book VI.

The heir of a guardian entered into an agreement with the heir of the ward, and when he had paid the greater amount of the debt, he gave a pledge for the remainder. The question arose whether the property was legally encumbered under the original contract. The answer was that, in accordance with the facts stated, it was encumbered.

Tit. 3. What property cannot legally be pledged or hypothecated.

1. Marcianus, On the Hypothecary Formula.

A ward cannot hypothecate property without the authority of his guardian.

(1) Where a son under paternal control, or a slave, encumbers property belonging to his peculium for another person, it must be said that the property is not liable even though he may have the free management of his peculium, just as such persons are not allowed to give away their peculium; for neither of them has unrestricted management of his property. This, however, involves a question of fact, as to how far each of them seems to have been permitted to manage his peculium.

(2) The Divine Pius stated in a Rescript addressed to Claudius Saturninus, that any property which a party cannot purchase because it is not an object of commerce, cannot be taken in pledge. But what if any one should receive by way of pledge land, the title to which is in litigation, would he be barred by an exception? Octavenus was of the opinion that an exception would be available even in a case of pledge. Scaevola says, in the Third Book of Various Questions, that this is the method of procedure, as an exception is available wherever the property, the title to which is in dispute, is movable.

2. Gaius, On the Hypothecary Formula.

If anyone hypothecates property in behalf of a woman who has become surety for another, or in behalf of a son subject to paternal control to whom money has been lent in violation of the Decree of the Senate, the question arises, is he entitled to relief? In the case where he encumbered his own property for the woman, it can readily be said that he is entitled to relief, just as an exception is granted to the surety of such a woman. Where, however, the party hypothecated his property in behalf of a son under paternal control, the same rules must be laid down which apply to the surety of a son under such circumstances.

3. Paulus, Questions, Book III.

Aristo wrote to Neratius Priscus that even where a contract was made with a party to whom money was loaned to be paid to another on behalf of the creditor, he would not succeed to the right of pledge, unless he expressly agreed that the same property should be encumbered to him; for the second creditor should not succeed to the rights of the first, who himself made no agreement with reference to a pledge; and, in this instance, the position of the purchaser becomes preferable. Finally, if the first creditor contracted with the debtor with reference to the sale of the pledge, and the second one neglected to secure the same privilege of sale, not through forgetfulness, but because it was understood that the pledge could not be sold; let us see if the right of the first creditor will pass to the second so as to permit him to sell the pledge. I think that this should be admitted, for it often happens that a person can claim by means of a third party something to which he is not personally entitled.

4. The Same, Opinions, Book V.

Titius, when he was about to borrow money from Maevius, executed an undertaking and indicated certain property to be given by way of pledge, and then, after he had sold some of the said property, he received the money. The question arose whether the property sold was liable to the creditor? The answer was that, since it was in the power of the debtor, after security had been given, not to receive the money, the obligation appeared to have been contracted with reference to the pledge at the time when the money was paid; and therefore the property which the debtor had in his possession when the money was paid should be taken into account.

5. The Same, Sentences, Book V.

A creditor who knowingly accepts a son under parental control as a pledge from his father shall be sentenced to relegation.

Tit. 4. Which creditors are preferred in cases of pledge or hypothecation, and concerning those who are subrogated to prior creditors.

1. Papinianus, Questions, Book VIII.

A certain man who promised a dowry for a woman accepted a pledge or an hypothecation to secure the restitution of the dowry to himself. Having paid a portion of it, the husband afterwards gave the same property in pledge to another party, and afterwards the remainder of the dowry was paid. A question arose with reference to the pledge. Since the party who promised the dowry is required to pay the entire amount on account of his promise, the times of payment should not be taken into account, but the date when the obligation was contracted. It cannot properly be said that it is in the power of the party not to pay the remainder of the money, because, under these circumstances, the woman would not seem to be endowed.

(1) The case of him who receives a pledge is different, when this is done to secure the payment of a debt within a certain time; where, for instance, the property was pledged to another before the money was paid.

2. The Same, Opinions, Book III.

He who, in general terms, has received the property of a debtor by way of pledge, is in a better position than he to whom a tract of land forming part of the property of the debtor is subsequently hypothecated. If, however, the agreement was made with the first creditor that other property shall only be liable by way of pledge where his right to that which he has accepted under a general hypothecation is not sufficient to secure the debt, and the second agreement fails, the second creditor will be found to be the sole, rather than the preferred one, so far as the pledge subsequently given is concerned.

3. The Same, Opinions, Book XI.

Where a creditor received pledges which had also been received by a second creditor in accordance with the terms of another agreement, and a renewal having afterwards been made, he added other pledges to the former ones, it was held that the advantage of priority remained with the first creditor, as he had practically been subrogated to himself.

(1) Where a tract of land was due to Titius on account of a mandate, and he for whom the business had been transacted pledged it before possession of the same had been delivered to him, and after it had been delivered, he pledged the same land again to another party, the position of the first creditor appears to be preferable, if the second creditor did not pay the price of the land to the party who transacted the business, and it would be held that his position would be preferable, dependent upon the amount that he paid and the interest on the same, unless the first creditor offered to return him the money. If, however, the debtor should pay money derived from some other source, the first creditor should be preferred.

(2) After a division of a tract of land by certain boundaries had been made, it was agreed between two brothers that, if one of them should not release his undivided share of the land, which had been given to a creditor by way of pledge, the other brother could sell half of the share of his brother obtained by the division. I thought that a contract of pledge should be understood to have been concluded, but that the first creditor ought not to be preferred to the second, since the second pledge seemed to apply to that portion which the brother could not encumber beyond his own share, without the consent of his joint-owner.

4. Pomponius, On Sabinus, Book XXXV.

If a debtor, before redeeming his pledge from his first creditor, should pledge the same property to another for money lent, and, before he pays what is due to either creditor, sells other property to the first creditor for the purpose of setting off the debt against the price of the property sold; it must be held that this has the same effect as if the money had been paid to the first creditor, for it makes no difference whether he discharged the debt by payment, or by set-off, and therefore the position of the second creditor is preferable.

5. Ulpianus, Disputations, Book III.

Sometimes the position of the second creditor is preferable to that of the first; for example, where the money which the second creditor borrowed has been spent for the preservation of the property itself; as for instance where a ship was pledged, and I lent money for the purpose of equipping or repairing it.

6. The Same, On the Edict, Book LXXIII.

Hence, the money of the second creditor insures the safety of the entire pledge. This is also the case where money is lent for the support of the sailors, without which the ship could not safely arrive at its destination.

(1) Moreover, where anyone has lent money on merchandise pledged to himself either for its preservation or to defray the expenses of transportation, he will be preferred, even though he may be a second creditor; for the expenses of transportation are a prior lien.

(2) The same rule applies where the rent of a warehouse, or of land, or of transportation of merchandise by beasts of burden is due; for, under such circumstances, this creditor will be preferred.

7. The Same, Disputations, Book III.

The same rule applies to property purchased with the money of a ward. Wherefore, if the property was purchased with the money of two wards, each of them will have a right in the pledge in proportion to the sums expended for the purchase. If, however, the property was not entirely bought with the money of one creditor, each creditor will be entitled to participate, that is, the first creditor and the one with whose money the property was purchased.

(1) If I should encumber to you any property which I may hereafter obtain, and expressly hypothecate to Titius a certain tract of land, provided I should, in time, acquire its ownership, and I subsequently do acquire it; Marcellus holds that both creditors have a right to the pledge. For it is not of much importance whether or not the debtor paid for the land out of his own funds, since, as it was bought with money obtained on pledge, the property is not to be considered pledged merely because the money was obtained from such a source.

8. The Same, Disputations, Book VII.

Where the government expressly takes property by way of pledge, it must be said that it will be preferred to the Treasury, if the debtor afterwards becomes bound to the Treasury; because private individuals would, in an instance of this kind, be preferred.

9. Africanus, Questions, Book VIII.

A certain man rented a bath from the next Kalends, and it was agreed that the slave Eros should be held by the lessor in pledge until the rent was paid. The lessee gave the same Eros in pledge to another person for money loaned before the Kalends of July. Advice having been taken as to whether, when this creditor brought suit for the recovery of Eros, the Praetor should protect the lessor, the opinion was that he should; for although the slave was given by way of pledge at a time when no rent was due, because at that time Eros had begun to be in such a position that the right of pledge attaching to him could not be released without the consent of the lessor, his position should be considered preferable.

(1) The authority goes still farther and holds that, where money is lent under a condition, a creditor should be protected against a subsequent creditor, provided the condition is not one which cannot be complied with without the consent of the debtor.

(2) If, however, an heir should make an agreement pledging his property on account of legacies bequeathed under a condition, and he afterwards pledges the same property already encumbered on account of money borrowed, and the condition upon which the legacies are dependent is subsequently fulfilled; it is held that, in this instance, he to whom the pledge was first given must be protected.

(3) Titia gave a tract of land which was not hers in pledge to Titius, and subsequently pledged it to Maevius, and then, having become the owner of the property, she bestowed it upon her husband as a dowry, after its value had been appraised. It was decided that if the money was paid to Titius, Maevius would have no better claim to the pledge for that reason; for where the right of the first creditor was released, that of the second was confirmed, since the property was found to belong to the debtor. In the case proposed, however, the husband occupies the position of a purchaser, and therefore, since neither when the property was encumbered to Maevius, nor when payment was made to Titius, it was owned by the woman, at no time could the pledge to Maevius be valid. This, however, is only true where the husband accepted the land as dowry after it had been appraised, and did so in good faith; that is to say, if he was not aware that it was hypothecated to Maevius.

10. Ulpianus, Opinions, Book I.

If, after sentence has been pronounced, a pledge should be taken in a case by the authority of someone who can order this to be done, the heir of the party to whom the pledge was given will be preferred through the privilege of priority of time.

11. Gaius, On the Hypothecary Formula.

In the case of a pledge, the creditor who first lent the money and accepted the hypothecation, is to be preferred; even though the debtor had previously agreed with another that if he borrowed money from him the same property should be bound, even if he subsequently did receive the money from him; for notwithstanding he had previously agreed to do so, he was not obliged to take the money.

(1) Let us see whether the same principle applies where a stipulation is made under a condition, and a mortgage executed; and, while the transaction was pending, another creditor made a loan absolutely, and received the same hypothecated property as security; and then, if the condition of the first stipulation should be fulfilled, will the creditor who afterwards lent money be entitled to the preference? I fear, however, that another view must be taken in this instance; for, when the condition has once been complied with, the result will be that it will have the same effect as if no condition was prescribed at the time the stipulation was entered into. This is the better opinion.

(2) Where a tenant agrees that everything brought upon the land or originating therein shall be pledged, and, before bringing anything there, he hypothecates his property to another, and then brings it upon the land, that creditor will be preferred who absolutely and expressly received the pledge; for the reason that the property is not liable under the first agreement, but under that where it is brought upon the land, which was done in the later transaction.

(3) When a contract is made with reference to the hypothecation of property to come into existence hereafter, as, for instance, with reference to the offspring of a female slave; the question arises whether the slave was included in the property of the debtor at the time of the execution of the contract; and with reference to crops, where it is agreed that they shall be subject to pledge, it also should be ascertained whether the land or the right of usufruct belonged to the debtor when the agreement was entered into.

(4) Where the second creditor is ready to pay the first one what is owing to him, let us see whether he will be entitled to the Hypothecary Action, if the first creditor refuses to accept the money. We hold that the action cannot be brought by the first creditor, since he was responsible for the money not having been paid.

12. Marcianus, On the Hypothecary Formula.

Where a first creditor has received property in pledge, or is in possession of the same, and another sues to receive it by means of the Hypothecary Action; the first creditor can lawfully avail himself of the exception: "If the property had not previously been encumbered to me by pledge or hypothecation. Or, where the other party is in possession, the first creditor can bring suit to recover the property by means of the Hypothecary Action, and if he is opposed by the exception," "If the agreement had not been made that the property should be encumbered to him," he can reply in the manner above mentioned. Where, however, the second creditor proceeds against another party in possession, he can do so legally, and the property hypothecated can be adjudged to him, but in such a way that the first creditor can deprive him of it by an action.

(1) Where a possessor has had judgment rendered against him in the manner previously stated, because he did not return the property pledged, and also has been ordered to pay the damages assessed; the question arises whether he will still be liable to the second creditor, even if the money has been paid to the first? I think that this opinion should be adopted.

(2) Where the first creditor lent money without security, and the second one did the same thing, but took security, and then the first one received the same property in hypothecation for his debt; there is no doubt that the second creditor is entitled to the preference. Wherefore, if a contract was made with reference to the hypothecation of property to the first creditor within a certain time, his claim will undoubtedly be preferred; even though, before the time elapsed, the debtor entered into an absolute agreement hypothecating the same property to the other creditor.

(3) Where the same creditor lends two sums of money at different times, that is to say, before and after the second creditor, he will be preferred to the second creditor, and in the other instance he will be the third.

(4) If a debtor hypothecates property to you and then encumbers the same property to another with your consent, the second creditor will be preferred. The question very properly arises, where the money is paid to the second creditor, is the property still encumbered to you? A question of fact which depends upon the intention of the parties is here involved; for, when the first creditor permitted the property to be encumbered to another, the point is whether it was entirely released from the lien, or whether the usual order should be observed, and the first creditor should take the place of the second.

(5) Papinianus states in the Eleventh Book that if the first creditor, after a renewal of the obligation, takes the same pledges together with others, he is then subrogated to himself; but if the second creditor does not tender him the money, he can sell the pledge in such a way as only to obtain the first money expended, and not what he subsequently lent; and any excess above the first loan which he receives he must pay to the second creditor.

(6) It must be borne in mind that, even if the debtor is unwilling, the property will be liable to the second creditor, not only for his own debt, but also for that of the first creditor, as well as for the interest, and what he has paid to the first creditor; but where the second creditor paid the interest due to the first, he does not recover his own interest, for he was not transacting the business of another, but really his own. Papinianus also states this in the Third Book of Opinions, and it is correct.

(7) Where a simple hypothecation has been agreed upon by the second creditor, he can recover the hypothecated property from any other possessor except the first creditor and anyone who purchases it from him.

(8) A man having borrowed money from Titius, made an agreement with him that his land should be either pledged or hypothecated to him. He afterwards borrowed money from Maevius, and agreed with him that, if the said land should cease to be encumbered to Titius, it should be encumbered to him. Then a third party lends the debtor money on condition that he shall pay Titius, and enters into an agreement with him that the same land shall be either pledged or hypothecated to him, and that he shall be subrogated to Titius. The question arises whether the second creditor is to be preferred to the third, who agreed that, the money having been paid to Titius, the condition should be carried out, and the third creditor should only blame himself for his own negligence. In this instance, the third creditor should be preferred to the second.

(9) Where a third creditor permits property pledged to him to be sold, in order that the proceeds may be paid to the first creditor, and that he may be subrogated to the first with reference to other pledges; Papinianus says, in the Eleventh Book of Opinions, that he will be subrogated to him, and in fact the second creditor has no other right, except to pay the claim of the first, and succeed to his place.

(10) Where property is hypothecated to the first creditor, but nothing has been agreed upon with reference to its sale, and an agreement has been made with a subsequent creditor for the sale of the same; it is the better opinion that the claim of the first creditor should be preferred. For it is settled with reference to a pledge, that where an agreement is made with the first creditor, even though the property should be delivered to the second, the former is entitled to priority.

13. Paulus, On Plautius, Book V.

I sold you a house, with the understanding that the rent of the first year should belong to me, and that of the ensuing years should belong to you, and that the right of each of us should be dependent upon the pledges given by the tenant. Nerva and Proculus hold that unless the pledges are sufficient to secure the rent due to both vendor and purchaser, the right to all the pledges first belongs to me, because nothing has been clearly stated as to whether or not the sums shall be divided pro rata with reference to all the pledges, and if there is any surplus remaining after the first year it will belong to you. Paulus says this is a question of fact, but it is probable that the intention of the parties was that the right in the pledges should follow the first rent that is due.

14. The Same, On Plautius, Book XIV.

If anyone, who is not the owner, should pledge the same property to two persons at different times, the first one is entitled to the preference; although where we receive a pledge from different parties who are not the owners, the position of the possessor of said property is the better one.

15. The Same, On the Edict, Book LXVIII.

A building erected upon the ground of another can be given in pledge, in such a way, however, that the claim of the owner of the ground shall be preferred, if the title to the same has not been transferred by him.

16. Paulus, Questions, Book III.

Claudius Felix hypothecated the same tract of land to three different persons, first to Eutychiana, then to Turbo, and finally to a third creditor. Eutychiana having been sued by the third creditor, contended for her rights in court, and having been defeated did not appeal, while Turbo, who also lost his case before another judge, appealed. The question arose whether the third creditor, who had obtained a judgment against the first, should also defeat Turbo, or if she were removed from the case, whether Turbo ought to take preference over the third creditor. It is clear that when the third creditor pays the first one out of his own money, he will be subrogated to him to the amount which he paid. There were some authorities who held that, in this instance also, the third creditor should be entitled to the preference, but this does not seem to me to be at all just. For, suppose that the first creditor had brought an action against the third, and had been defeated by means of an exception, or in some other way, could the third creditor who had defeated the first avail himself of an exception on the ground of a judgment rendered against Turbo, who had lent the money in the second place? Or, on the other hand, if, after the first decision by which the first creditor had been defeated by the third, the second creditor should obtain a judgment in his favor against the third, could he avail himself of an exception, on the ground of a decision rendered, against the first creditor? By no means, in my opinion; and therefore the third creditor is not subrogated to the first whom he defeated, for where a matter has been decided between two parties, it can neither benefit nor injure a third, but his entire right remains unimpaired to the second creditor, without any prejudice resulting to the first decree.

17. The Same, Opinions, Book VI.

Where anyone purchases land which has been encumbered by the debtor to another, he should be protected only to the extent to which the proceeds of the sale have come into the hands of the first creditor.

18. Scaevola, Opinions, Book I.

Lucius Titius lent money at interest and received pledges, and Maevius lent money to the same debtor on the same pledges. I ask whether Titius should not be preferred, not only so far as the principal and the interest which accrued before Maevius made his loan are concerned, but also with respect to that which subsequently accrued. The answer was that Lucius Titius was entitled to the preference with reference to all that was due to him.

19. The Same, Opinions, Book V.

A woman gave a tract of land, which had been pledged as dowry to her husband, and by her will she appointed, as heirs, her husband and her children by him and by a former husband. The creditor, although he could have brought suit against the heirs, who were solvent, had recourse to the land. I ask whether, if a lawful possessor should tender him the amount of the debt, he would be compelled to transfer to him his rights of action. The answer is that what was asked does not seem to be unjust.

20. Tryphoninus, Disputations, Book VIII.

The question arose if, after you had made a contract with a party and before you lent him any more money, Seius should lend the same debtor fifty aurei, and the debtor should encumber to him the property to an amount exceeding the value of what had been pledged to you, and then you should lend to the same creditor, for instance, forty aurei, which was the excess of the value of the property which you lent in the first place; would the surplus of the pledge be liable to him for the fifty aurei, or to you for the forty which you lent? Suppose that Seius was ready to tender you the amount loaned in the first place. I held that the result would be that Seius would be preferred with reference to the surplus value of the pledge, and if the sum lent in the first place, together with the interest, was tendered by him, he would be preferred to the first creditor, so far as the amount which he had subsequently lent to the same debtor is concerned.

21. Scaevola, Digest, Book XXVII.

Titius hypothecated to Seia all the property which he possessed or might subsequently acquire, on account of a judgment that had been rendered against him for a sum of money which he owed because of his guardianship. Afterwards, having borrowed money from the Treasury, he encumbered all his property to it, and paid Seia a portion of what was due to her, and promised to pay her the remainder after having renewed the obligation; and as before, an agreement was made concerning pledges. The question arose whether Seia should be preferred to the Treasury both with reference to the property which Titius had at the time of the first obligation, as well as to that which he had acquired after said obligation was contracted, until his entire indebtedness was discharged. The answer was that there was nothing in what was stated to prevent her from being preferred.

(1) A creditor made a loan to a dealer in marble on a pledge of tombstones, the price of which had been paid to the vendors out of the money furnished by the creditors. The debtor was the lessee of certain warehouses belonging to the Emperor, and, as the rent for the same had not been paid for some years, the officer charged with its collection proceeded to sell the tombstones. The question arose whether the creditor had a right to retain them on account of the pledge. The answer was that, in accordance with the facts stated, he had that right.

Tit. 5. Concerning the sale of property pledged and hypothecated.

1. Papinianus, Questions, Book XXVI.

A creditor received certain lands by way of pledge, and afterwards another creditor lent the same debtor money, and entered into an agreement by which the entire property of the debtor was pledged; then the first one made the latter execute a similar obligation with reference to all his property to secure either another, or the same contract. Before the second creditor was paid, the first one sold the other property on the ground of its having been pledged, without having any right to do so; and on this account a personal action would not lie against the debtor in favor of the creditor, nor could an equitable action be granted him to recover his pledges. Nor could he properly be sued in an action of theft, with reference to the personal effects, because the creditor, in instituting proceedings, acted in his own behalf, being mistaken with respect to the order which should be observed in the sale of the article; especially as the other creditor did not lose, by theft, the possession of property which was never in his hands. The second creditor cannot institute proceedings for production, because the first is not in possession, and did not act fraudulently in order to avoid being in possession. It follows, then, that the second creditor must sue those in possession of the property.

2. The Same, Opinions, Book II.

Where a surety was sued, he obtained an order of court to hold the land hypothecated to the creditor, by the right of purchase. A second creditor who had subsequently made a contract with reference to the same pledge, will, nevertheless, have the privilege of tendering the money which the surety had paid, together with the interest which, in the meantime, had accrued; for a sale of this kind, which is concluded for the purpose of transferring the possession of property pledged, is usually made on account of the requirements of the law.

3. The Same, Opinions, Book III.

Where the first creditor sells the pledge in compliance with the terms of the agreement, it is settled that the second creditor has no right to tender the money.

(1) Where, however, the debtor sells a pledge without consulting his creditors, and pays the price of the same to the first creditor, the second creditor can offer to the purchaser the amount paid to the first, together with the interest which has accrued in the meantime; for it makes no difference whether the debtor sells the property pledged, or pledges it a second time.

4. The Same, Opinions, Book XI.

Where the time for the payment of the money is prolonged by consent, it is held to have been agreed that the power to sell the pledge shall not be exercised before the time has elapsed.

5. Marcianus, On the Hypothecary Formula.

Where a second creditor, having paid the claim of the first, is subrogated to him, he can lawfully sell the pledge on account of the money which he has paid and lent.

(1) Where a second creditor, or a surety, having paid the debt, receives the pledges given for the same, the debtor can properly tender him the amount paid, even though the pledges are held under the title of purchase.

6. Modestinus, Rules, Book VIII.

Where a second creditor purchases a pledge from the first, he is understood not to have paid him the money for the purpose of acquiring the ownership of the same, but to hold the property in pledge for his own benefit; and therefore the money can be tendered to him by the debtor.

7. Marcianus, On the Hypothecary Formula.

Where a creditor sells a pledge, or land which has been hypothecated, under the condition that he shall have a right to refund the money and recover the pledge; can he do this if the debtor is ready to pay the money? Julianus states in the Eleventh Book of the Digest that the pledge, indeed, seems to have been regularly sold, but that the debtor can bring suit against the creditor to compel him to assign to him any rights of action which he may have. What Julianus says with reference to a pledge also applies to hypothecation.

(1) It must be considered whether, where property hypothecated is sold, the debtor should be permitted to recover it by paying the money to the purchaser. If, in fact, it was sold under the condition that the purchase should be rescinded, if the money is refunded by the debtor within a certain time, and it is paid within that time, he can recover the hypothecated property. But if the time has elapsed, and this matter has not been arranged by agreement, the sale cannot be rescinded, unless the debtor is under twenty-five years of age, or is a ward, or is absent on public business, or some other cause exists on account of which relief is granted by the Edict.

(2) The question is asked, where an agreement has been exacted by the creditor that the debtor shall not be permitted to sell property which has been hypothecated or pledged, what the law is, and whether an agreement of this kind is void having been made contrary to law, and therefore the property can be sold. It is certain that the parties must abide by such an agreement, and that a sale made in violation of it will be void.

8. Modestinus, Rules, Book IV.

The creditor has a right to sell any of the pledges on which he has a claim that he pleases, in order to obtain what is due to him.

9. Paulus, Questions, Book III.

The question arose whether the debtor would be released where the creditor could not obtain the price of the pledge from the purchaser. I think that if the creditor was in no way to blame, the debtor would still remain liable; because a sale does not necessarily release the debtor, unless the purchase-money was received.

(1) Moreover, Pomponius says in the Second Book of Extracts that, where pledges are given it is customary to add, namely, that when a pledge is sold and the price does not satisfy the claim, the debtor must make up the deficiency, is superfluous; because this takes effect by operation of law, and therefore should not be added.

10. The Same, Opinions, Book VI.

Although a person who purchases property subject to the condition of the pledge cannot have recourse to the vendor in case he is deprived of it by a better title; still, the creditor who sold the land should not be heard, if he attempts to institute proceedings on some other ground with reference to the same property.

11. Scaevola, Opinions, Book I.

An arbitrator appointed for the partition of an estate, in the division of the property belonging to the same assigned certain claims, as a whole, which were due separately by debtors to the estate. The question arose, whether, if the debtors did not pay, each of the heirs could sell the property pledged in order to obtain the entire price. I answered that he could.

12. Tryphoninus, Disputations, Book VIII.

It was stated in a Rescript by the Emperor, in reply to an application made by Papinianus, that a creditor could purchase a pledge from his debtor, because it still belongs to the debtor.

(1) Where property belonging to another has been pledged, and the creditor sells it, let us see whether the price received by the creditor will release the debtor from liability to a personal action on the ground of money loaned. And, indeed, it might be answered that is true if the sale was made on condition that no obligation would be incurred in case of eviction, because the price paid under such circumstances would certainly rather benefit the debtor, and also be a source of profit to the creditor, where this arises out of any contract made, or obligation assumed by the debtor; the debtor will, however, be released only so far as the creditor is concerned, but he will still be liable to the owner of the property where the pledge has not yet been lost through eviction, or he will be liable to the purchaser, after eviction, in an equitable action to prevent his profiting by the loss of another. If, for instance, a creditor, while proceeding against a possessor of the property pledged, deprives him of a greater amount of the crops than he is entitled to, he should receive them by way of satisfaction of what is owing to him. And where, on account of an unjust judicial decision, a creditor has deprived the owner of property which did not belong to the debtor, under the pretense that it was encumbered to him; and the question was asked whether; if the claim was paid it should be restored to the debtor, our Scaevola held that it should be restored. If, however, the creditor who sold the property did not do so in a way that he would be absolutely sure of keeping the price, but would be compelled to return it under certain circumstances, I think that, in the meantime, nothing can be recovered from his debtor, but that his release would remain in abeyance. But if the creditor is sued in an action on sale and must indemnify the purchaser, he can recover the amount of the debt from the debtor, because it is evident that he was not released.

13. Paulus, Decrees, Book I.

A creditor who, availing himself of his privilege, sells a pledge, is obliged to assign his rights; and if he is in possession of a pledge he must certainly transfer it.

14. Scaevola, Digest, Book VI.

Arbitrators appointed for the partition of an estate among heirs, having divided the property of the same, assigned certain claims in bulk to the heirs individually, which were due to several heirs to the estate. The question arose; where the share of a debtor which had been assigned to an heir was not paid, whether the said heir could sell the pledge given by the debtor, in order that the price might be credited on the total amount of the claim. I answered that he could do so.

Tit. 6. In what ways the lien on property pledged or hypothecated is released.

1. Papinianus, Opinions, Book XI.

The friend of an absent debtor took charge of his business, and, with his own money, released the pledges without their having been offered for sale. It is held that the owner was restored to his former condition, and therefore the party who transacted his business cannot justly ask that he shall be granted a praetorian action under the Lex Servia. If, however, he is in possession of the property which was pledged, he can protect himself by an exception on the ground of bad faith.

(1) Where a vendor sold a tract of land, and received it by way of pledge as security for a portion of the purchase-money, and afterwards presented the remainder of the price to the purchaser by a letter sent to him, the vendor having died, it was decided that a donation made in this way was void. The Treasury, which succeeded to the vendor, appeared as claimant, but was not permitted to bring suit for the land on the ground that it had been pledged, because it was held that the lien on it had been released by the will of the party who made the donation, as the law makes the donation of money void where there is no ground for the release of a pledge.

(2) A party who appeared in defence of another who was absent, gave an undertaking that he would execute the judgment. The conduct of the case having been afterwards transferred to the principal party himself, the sureties given by him who appeared for the defence to insure the execution of the judgment, will not be liable, nor will the pledges which they gave be liable either.

2. Gaius, On the Provincial Edict, Book IX.

If a creditor should bring suit to recover a pledge from the possessor under the Servian Action, and the possessor should obtain an appraisement of the property in court, and the debtor brings an action against him for the recovery of the property; he will not be permitted to do this, unless he first pays what is owing to the creditor.

3. Ulpianus, Disputations, Book VIII.

Where property has been sold under the condition that, unless a better offer is made for it, the sale shall stand, and the property is delivered, and the purchaser, before the time for the offer of a better price has passed, pledges the said property, Marcellus says in the Fifth Book of the Digest that the right to the pledge is extinguished, if better terms should be offered; although where the property is sold on condition that it will please the purchaser, he does not think that the right to the pledge is extinguished.

4. The Same, On the Edict, Book LXXIII.

Where a debtor, all of whose property was pledged, restores as unsound a slave that he had purchased; does the Servian Action cease to be available? The better opinion is that it does not, unless this has been done with the consent of the creditor.

(1) Where a creditor consents to the sale of a pledge, or that the debtor may exchange the property, donate it, or give it by way of dowry, it must be said that the pledge is released, unless he consented to the sale, or to other things, with the exception of the property pledged; for many creditors are accustomed to give their consent with this reservation. Where, however, the creditor himself sells the property, with the understanding that he will not release the pledge unless he is satisfied; it must be held that an exception will not prejudice him. But if he does not consent that the pledge shall be sold, but ratifies the sale after it has been made, the same opinion should be adopted.

(2) A nice question arises in the case of a sale of property especially encumbered: whether it is valid, or whether the transaction should prejudice the creditor, because he gave his consent; for instance, where some principle of law prevents the sale. It must be held that the sale will be valid.

5. Marcianus, On the Hypothecary Formula.

Property subject to hypothecation is released where the creditor either renounces his right, or agrees that he will not claim the money; unless it is alleged that an agreement has been made that the debt shall not be collected personally from the debtor. But what course should be pursued if another person happens to be in possession of the property hypothecated? Where, however, an agreement gives rise to a perpetual exception, it can also be said in this case that the party has renounced his right to the property hypothecated.

(1) If the creditor should consent not to demand the money within a year, it is understood that the agreement also applies to the property hypothecated.

(2) Where it is agreed between the parties that a surety shall be furnished instead of an hypothecation, and this is done, it will be held that satisfaction is given to the creditor, and that the lien on the property hypothecated is released. The case is different where the creditor sells his right to the claim and receives the money; for, in this instance, all the obligations remain unimpaired, because the money is received as the price of the claim, and not by way of payment.

(3) It is understood that the creditor has been satisfied if an oath has been tendered, and the party swears that the property was not hypothecated.

6. Ulpianus, On the Edict, Book LXXIII.

A pledge is also released where the debt is either paid, or the creditor is satisfied with reference to it. Moreover, we must say that the same rule applies where the pledge is released by lapse of time, or the obligation is extinguished in any manner whatever.

(1) Where the party is ready to pay, there is good reason to assume that the pledge has been released; but the case is different where he is not prepared to pay, but is willing to satisfy his creditors in some other way. It is, therefore, advantageous to the debtor to have satisfied his creditor, because the latter must blame himself if he accepts satisfaction in lieu of payment. He, however, is not to be blamed who declines to accept any other satisfaction, but demands payment.

(2) With reference to security, we do not adopt the opinion of Atilicinus, who held that if a debtor gave anyone security for money loaned, the latter should be considered to have released his pledges.

7. Gaius, On the Hypothecary Formula.

Where a creditor consents to the sale of the property hypothecated, the lien on the latter is released. In such instances, however, the consent of a ward should not be considered unless he has given it by the authority of his guardian, who was present, or unless the guardian himself consented; provided the judge thinks that any advantage will be gained, or the claim be satisfied, by the sale of the property.

(1) Let us see if a general agent, or a slave who has the management of his master's affairs, to whom payment can be made and who has been appointed for that purpose, can consent. It must be held that his consent is not sufficient, unless he has been expressly authorized to act.

(2) Again, where an agreement is made with the agent of the debtor that certain property should not be encumbered, it must be held that the debtor can avail himself of an exception on the ground of fraud. But when an agreement of this kind is made with his slave, he can plead an exception based upon the agreement itself.

(3) If it should be agreed between the parties that half of the undivided property pledged shall be alienated, and the property involved is certain, it can be said that proceedings must be instituted with reference to the remaining portion in the beginning, and that an exception cannot be interposed to prevent it.

(4) It must be held that where anyone hypothecates his undivided share of property held in common, and a division of the same is made with his joint-owner, not merely that portion which falls to him who gave it in pledge is encumbered, but half of the share of each joint-owner is subject to the lien.

8. Marcianus, On the Hypothecary Formula.

Just as property, as well as its usufruct, ceases to exist, so also is the right of pledge or hypothecation extinguished for the same reason.

(1) A creditor can agree that the property encumbered shall no longer be subject to pledge or hypothecation, and, therefore, if this agreement was made with the heir, it will also benefit him to whom the estate is delivered under the terms of the Trebellian Decree of the Senate.

(2) Where the agent of the debtor enters into an agreement of this kind with reference to his property, I do not think it can be doubted that the agreement will prejudice the creditor. And, also, if an agent, acting in his own behalf, appears for the creditor, and makes a contract, he will render the hypothecary action void to such an extent that I think it can be rightly held that, in this instance, the exception will prejudice the case of the principal.

(3) If it should be agreed between the parties that the undivided half of the property in question should cease to be liable by way of pledge, and any portion whatever of the land referred to should be claimed in an action against any possessor whomsoever, suit can only be brought for half of the same.

(4) Where several joint-owners of one piece of property pledge their undivided shares in the same, and the creditor agrees with one of them that his share shall not be hypothecated, and he afterwards brings suit for it, even if he with whom he made the agreement is in possession of the entire undivided tract of land, because the creditor made an agreement with reference to a portion of the same, he cannot be excluded from proceeding against the whole of it.

(5) Let us consider whether a son under paternal control or a slave who has the free management of his peculium can make an agreement with a debtor that property pledged shall be released, which property they received as being specially hypothecated. Or, since they cannot give away their peculium, are they also prohibited from agreeing that property pledged to them shall not be released? It must be held that they can make such an agreement, provided they received a consideration for doing so, just as if they had sold the property pledged.

(6) If the land which was encumbered is sold with the consent of the creditor, the latter cannot honestly claim that it is still liable for the debt, if the sale is effected; for if it is not concluded, the creditor will not be deprived of his rights, merely because he gave his consent that the property should be sold.

(7) It is superfluous to inquire whether a tract of land specially hypothecated was sold with the consent of the creditor, if the debtor had possession of the property at the time; unless it might happen that the debtor sold it with the permission of the creditor, and then afterwards redeemed it in good faith from the purchaser, or someone else to whom the property had passed by the right of succession; even if the debtor himself should have become the heir of the purchaser. Still, if the money was not paid, a suspicion of bad faith will arise, which will extend to the present time, so that the creditor will have a right to interpose a reply on the ground of fraud.

(8) Let us examine the following case. If Titius, who was a debtor, should sell property which was pledged to Maevius, with the consent of his creditor, or to someone else from whom Maevius purchased it, and afterwards Maevius should become the heir of Titius, and the creditor should proceed to collect the debt from him, what is the law? It would be unjust for the purchaser to be deprived of the property by the creditor, as he obtained it, not by the right of succession, but in another way. It can, however, be said that as Titius was guilty of bad faith in the matter, by preventing the creditor from collecting the money from the possessor, it is very unjust that he should be made game of in this manner.

(9) If, however, the land in the possession of Maevius should be encumbered by him to anyone whose claim had not yet been satisfied, an exception can then be properly interposed on the ground that the property was not sold with the consent of the creditor; for although the debtor was guilty of bad faith in not making payment, still, the second creditor, who received the property in pledge, should be preferred.

(10) It is the safer plan, however, where a debtor requests his creditor to permit him to sell the pledge in order that he may the more readily pay him, to compel the prospective purchaser to give an undertaking to pay the creditor the price of the property sold, to the amount of the debt.

(11) We should understand the term "sale," in a general sense, so that if the creditor permits the debtor to bequeath the property pledged, what he has granted may be valid; and this must be understood in such a way that if the legacy should be rejected, the pledge will still remain in force.

(12) Where a debtor sells property, but has not yet delivered it, shall the creditor be prevented from bringing an action on the ground that the property still forms part of the possessions of the debtor; or, indeed, since he is liable to an action on purchase, is the right to the pledge extinguished? The latter is the better opinion. But what if the vendor has not received the price, and the purchaser is not ready to pay it? In this instance the same can be said.

(13) If, however, the creditor permitted the property to be sold, but the debtor gave it away; will he be barred by an exception? Or is this rather a question of fact, he having consented that the property should be sold, in order that the price having been paid, the transaction would be an advantage to him? In this instance, his consent should not prejudice him. But, if he gave the property by way of dowry, he will very properly be held to have sold it on account of the burdens of matrimony. On the other hand, if the creditor permitted him to give away the property, and the debtor sells it, the creditor will be barred from prosecuting his claim; unless it may be said that he permitted a gift to be made because the party to whom the property was given was a friend of the creditor.

(14) If the creditor gave his consent for the property to be sold for ten aurei, and the debtor should sell it for fifteen, it must be held that the creditor is not prevented from prosecuting his claim. On the other hand, there is no question that he sold it legally, if he obtained more by the transaction than the creditor permitted him to sell it for.

(15) The creditor will not be held to have given his consent if the debtor should sell the property with his knowledge; as he only suffered him to do so because he was aware that his right to the pledge would be preserved under all circumstances. If, however, he signed the bill of sale, he will be held to have given his consent, unless it is perfectly evident that he was deceived. This rule should also be observed where he gave his consent without signing any document.

(16) Where permission to sell was granted the debtor, and his heir sold the property, a question of fact may arise as to what was the intention of the creditor. It must be said that the sale was properly made, for these subtleties are not considered by the courts.

(17) Where a debtor having obtained permission to sell the property pledged ceases to be in possession of the same, and a new possessor sells it, will the right to the pledge continue to exist, just as if the creditor had personally given permission to the debtor? This is the better opinion, for if the creditor had given permission to the new possessor to sell the property, and had not given it to the debtor by whom it was hypothecated to him, it must be held that he will be barred by an exception.

(18) If, however, the creditor should consent for the property to be sold within a year, or within two years, and it should be sold after that time; the creditor will not be deprived of his right to the pledge.

(19) Where a creditor has availed himself of the hypothecary action, and has recovered damages from the possessor, and afterwards claims the debt from the debtor; I think that he can be barred by an exception on the ground of fraud.

9. Modestinus, Opinions, Book IV.

Titius pledged a tract of land to Sempronius, and afterwards pledged it to Gaius Seius; and then Titius sold the identical land to the said Sempronius and Gaius Seius in its entirety, to each of whom he had formerly pledged it as a whole. I ask whether the right of pledge was extinguished through the sale having taken place, or if, on this account, only title by purchase remains in both creditors? Modestinus answered that, by the right of purchase, the ownership vests in the parties mentioned; since, according to the facts stated, both of them had consented to the sale, but that they would not have the right of action on pledge against one another.

(1) Titius loaned money to Seius on a pledge of land, the said land having been previously encumbered to the State; the second creditor paid the money due to the State, but Maevius appeared and asserted that the land had been mortgaged to him before it had been encumbered to the State. It was, however, ascertained that Maevius had been present and had signed the undertaking executed by Seius to the government, by which instrument Seius guaranteed that the land was not encumbered to anyone else. I ask whether any action with reference to the property can be brought by Maevius. Modestinus answered that he could, by no means, retain any right to the pledge in question, after he had consented to the above mentioned transaction.

10. Paulus, Questions, Book III.

A debtor sold a pledge with the consent of his creditor, and afterwards it was agreed between him and the purchaser that the sale should be rescinded. The right to the pledge remained unimpaired with the creditor, for just as the former rights were restored to the debtor, so also were they restored to the creditor. For the creditor did not absolutely release his claim to the pledge, but only to the extent that the purchaser should retain the property, and not return it to the vendor. Therefore, if in the course of judicial proceedings, the vendor should be discharged, or if judgment should be rendered against him to the amount of the purchaser's interest, because he did not deliver the property, it must be held that the right of the creditor to the pledge will remain unimpaired; for this may happen even where the property was not sold with the consent of the creditor.

(1) Where, also, a creditor sells a pledge, and the sale is rescinded, or the slave which was the object of it is returned as unsound, the ownership reverts to the debtor. The same rule applies in all cases in which permission is given to sell property belonging to another, for the parties do not receive their rights from the hands of the purchaser, merely because they have transferred the ownership, but the property returns to its former condition, when the sale is rescinded.

11. The Same, Opinions, Book IV.

Lucius Titius was indebted to his wife, Gaia Seia, for money loaned on a pledge, or on land which was hypothecated; and, together with his wife, he gave the same land by way of dowry to Sempronius, who was about to marry Seia Septitia, their daughter. Lucius Titius, having died, his daughter, Septitia, declined to accept the estate of her father, and I ask whether her mother could claim the property which was hypothecated to her? Paulus answered that Gaia Seia was held to have released the obligation of the pledged land which she had consented that her husband should give as dowry to their daughter, when the said property was given in behalf of the said daughter, but that the personal liability continued to exist; the action, however, could not be granted against her who had refused to accept her father's estate.

12. The Same, Opinions, Book V.

Paulus gave it as his opinion that where Sempronius, a first creditor, consented that the debtor should encumber the same property pledged to him to a third creditor, he is held to have released his right to the pledge, but that the third creditor was not subrogated to him, and therefore the position of the second creditor was improved. The same rule should be observed where the Government lends money as a third creditor.

(1) Where anyone prosecutes his claim to property by the right of pledge, it is usual for him to be barred from an action for the recovery of the property pledged, where the possessor makes him a tender of the amount of his claim; for no inquiry should be made with reference to the title of the possessor, when the right of the plaintiff is extinguished by the release of the pledge.

13. Tryphoninus, Disputations, Book VIII.

Where a debtor, after the oath has been tendered by his creditor, swears that he should not be obliged to pay, the pledge is released, because this proceeding has the same effect as if the debtor had been discharged from liability in court, for if he has been discharged by the judge, even though this was done unjustly, the pledge will, nevertheless, be released.

14. Labeo, Later Epitomes by Javolenus, Book V.

Where it is agreed upon between you and your tenant that whatever property he brings upon your land shall be considered pledged until the rent is paid to you, or you are satisfied in some other way, and you then accept a surety from the tenant for the payment of the rent, I think that you are satisfied, and therefore that the personal property brought on your land by the tenant ceases to be encumbered.

15. Scaevola, Digest, Book VI.

The estate of a first creditor who had received certain land by way of security, and those of a second one to whom also some of the land had been mortgaged, passed by inheritance to the same person. The debtor offered to pay to the said heir the amount which he had borrowed from the second creditor. The opinion was given that he should be compelled to accept the money, his right to the pledge under the first contract remaining unimpaired.