Учебный год 22-23 / W_W_BUCKLAND_AND_ARNOLD_D_McNAIR_ROMAN_LA

The Roman reform reduced the creditor's right to a mere security for the payment of a debt, and the equitable view of the position of a mortgagee, who is owner at law, was long ago expressed in the same terms. 'The principal right of the mortgagee is to the money, and his right to the land is only a security for the money/1 So, Justinian defines pignus as a transfer to the creditor for the better securing of his debt.2 The further development of the two systems has followed similar lines; each system having looked after the debtor's interests to an extent which to some observers has seemed unfair to the creditor and in the long run disadvantageous to debtors too. It has been said that the mortgagee in possession is the most unenviable of creatures, so closely are his actions scrutinised. There was at least as great severity in Roman law. Unless there was an agreement that he might take proceeds in lieu of interest, the creditor might draw no benefit from the property, and any receipts from it were set off against the debt, so that if his debtor was solvent or the security was sufficient he had no inducement to see that the land was used to advantage. He had, however, to take the greatest care of the property, and was liable if it was stolen from him, even, it may be, where it was stolen without any fault of his,3 and he was bound to account for any fruits, not only which he had received, but also which he would have received if he had been careful.4 His power of sale, itself of gradual growth, was hedged round with increasing statutory restrictions.5 The agreement for foreclosure {lex commissoria) was forbidden by Constantine, having already been largely superseded by legislation which, apart from agreement, allowed foreclosure, but only after attempted sale and considerable delay.6 Under Justinian the protection of the debtor was

carried still further: if the creditor wished to realise his security it would normally be several years before he could feel secure that the debtor was finally barred.1

Although we had at common law no such institution as hypothec,2 the old mortgage by conveyance of the fee simple, and, still more, the modern mortgage by long term of years, had come to resemble it very closely. Not only does the mortgagee very seldom enter into possession of the land, but the conveyance or demise had become largely fictitious. In any case the charge by way of legal mortgage, which may exist since 1925—and seems to be much commoner in practice than the mortgage by long term of years—is in substance pure hypothec; though technically it is rather awkwardly tied up with the mortgage by long term. Hypothec also offers interesting analogies with our law of lien, especially as further developed in equity. An ordinary special hypothec corresponds closely to an equitable lien, though where it is created by express agreement there is nothing of the trust about it, so that there can be no question of its being defeated by sale to a buyer without notice. It is good against everyone but a prior chargee, subject in later law to the requirement of registration. Hypothecs arising by act of law were numerous, and though like equitable liens they did not depend on actual possession, they were in their range more akin to common law liens. But most of our common law liens not only rest on physical possession: they do not really give a possessory right. If the possession is lost, there is normally an end of the right, and there is in general, apart from statute, no power of sale. Even the landlord's right to distrain is lost if the goods leave the land, unless removed clandestinely, fraudulently, and after the rent became due, and even then

1 C. 8. 33. 3.

2 For the letter of hypothecation used by bankers, and the doubtful security it affords, see Gutteridge, Law of Bankers9 Commercial Credits, 3rd ed. pp. 141-150.

There were, however, cases of true lien in the Roman law, cases of ius retentionisy with no right of sale, e.g. the right of a bonafide possessor to hold the property till certain expenses were made good to him,1 which, as we have seen,2 does not exist in our law. In early Roman law even a pledgee had no more than this right and the same was probably true till earlier classical law for a depositee or borrower, in respect of any claims they might have. The carrier and innkeeper do not seem to have had any such right. In fact the law was much more concerned with protecting the customer against them than with looking after their interests. But it is probable, indeed there is evidence, that, for services of these kinds, payment was commonly required in advance.3

The ordinary subject-matter of pledge or lien is, of course, a chattel, something the property of the debtor, but in both systems of law it is possible to pledge other things than what one 'owns*. Thus, in both systems there may be pledge of an interest less than ownership or of a debt.4

In both cases there may be sub-pledge or repledge, i.e. pledge of a pledge. In our law this seems clearly to be pledge of the creditor's interest :5 in Rome it seems to be regarded as a second pledge of the thing itself under implied powers, but it is clear that such a pledge fails when the principal debt is satisfied.6

In both systems the pledge is a security for the debt, and must therefore end if the debt is in any way satisfied. But a debt has not necessarily ceased to exist because it has become irrecoverable. It is clear that in Roman law the pledge was not affected by the mere fact that the debt was

1 Inst. 2. 1. 30; D. 41. 1. 7. 1 etc.

2P. 125, ante,

3D. 19. 2. 15. 6; cf. h.t. 19. 6.

4D. 20. 1. n . 2; h.t. 20.

5Donald'v. Suckling (1866), L.R. 1 Q.B. 585.

6D. 13. 7. 40. 2; 20. 1. 13. 2.

had an apparent right to pledge. As to charges created by law there are also exceptions. The explanation usually given of the common innkeeper's lien upon goods brought to his inn by a guest as his own is that he cannot ordinarily refuse to accept goods tendered to him in the course of his calling. The position of the common carrier is similar.1

Many points are common to both the Roman law and ours. 'Once a mortgage, always a mortgage/ If the agreement is essentially for security, no collateral terms can destroy the debtor's right of redemption. Moreover, where a mortgagee put up a nominee to buy the thing for him, this was no sale and the right to redeem still existed.2 And there was the same difficulty, to be decided on the facts, in determining whether the transaction was intended to create a security, or was essentially nothing more than a sale with special conditions.3

The creditor has the power, under certain conditions, of selling the pledged property. What was his position if the title proved defective ? This was the subject of dispute and legislation. The rule laid down by Ulpian is that apart from fraud, which covered knowledge of the defect, the creditor selling under his powers was not liable for any defect in title.4 This was the solution reached by the common law, at any rate in the case of sale by a pawnbroker,5 whatever the position may be since the Sale of Goods Act.

Exception was taken by Roman law to penal stipulations raising the rate of interest if the money was not punctually paid, but the rule laid down was that such a stipulation might be valid as to interest accruing after the default, but not for the earlier time.6 The evasion which has satisfied our Courts does not seem to have occurred to the Romans.?

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Both systems admit of a floating charge, a charge on the property of the concern present or future, subject to the right of the debtor to go on dealing with it, even to the extent of disposing of it in the ordinary way of business as if the charge did not exist. English equity recognises this right, but almost entirely in a very narrow field, i.e. in the case of the property of limited companies, but in Roman law, though not commercially more important, it was operative in a wider field. A charge on after-acquired assets might be created between any persons for any debt,1 or might arise by operation of law without express agreement in the case of certain privileged creditors, e.g. the Fiscus.2 There was, however, nothing floating about this: when the goods were acquired it was an ordinary hypothec. But there was a rule, stated as it seems only by Scaevola, and thus possibly rather late, that if a man pledged his business this included his stock-in-trade (merx) and that the pledge did not follow what was sold but covered what was added, so long as it was part of the merx$ This is similar to our floating charge.4

The intention to include future acquisitions in a general contractual hypothec needed express statement, till Justinian, who provided that this term was to be understood in all such future conventions.5 This is, in fact, treating the merx as a universitas, just as grex and peculium are so treated for some purposes,6 but it carries the conception further than do the texts referring to these. The institution seems to have worked badly in France, since the Code Civil adopts a rule established during the Revolution

1D. 20. 4. n. pr.; D. 20. 4. 11. 3, etc.

2D. 49. 14. 28; C. 4. 46. 1; 10. 1. 1, etc. Such tacit general hypothecs played a great part in family law, e.g., a wife had one over her husband's

4 Within certain limits substituted chattels may be comprised within a security bill of sale (Bills of Sale Act (1878) Amendment Act, 1882, s. 6 (2) and Schedule; Seedv. Bradley, [1894] 1 Q.B. 319), but it is not a floating charge. 5 c. 8. 16. 9. 1. 6 D. 6. 1. 3. pr.; D. 31. 65. pr.

forbidding agreements for the hypothecation of future acquisitions,1 though more recent legislation has authorised them in a narrow field.2 The institution does not appear in the modern German law.

As to the circumstances of the sale of the property by the creditor, the debtor was rather better treated than he is in our law. The creditor's position was somewhat more like that of the tenant for life selling under the Settled Land Act, 1925. He must give notice to the debtor, and in selling must have regard to his interests, rules resulting naturally from the bonaefideinature of the contract of pignuSy under which the sale takes place.3 He must pay over any surplus, with interest, if he had used it, or failed to pay it on demand,4 and, as the sale was in his own interest, he was personally liable to the debtor for this surplus, and therefore could not put him off by assigning his rights against the buyer.5 Moreover, as the creditor was not the legal owner, the buyer was not absolutely secure. If the sale was made when, e.g., the debt faas not yet due, it was simply void, and in any case if the buyer was party to any circumstances of the sale which were unfair to the debtor, damages could be recovered from him if the creditor's estate was insufficient.6

Property cannot be pledged to two people independently, but so soon as hypothec appeared it became possible to create second charges, and these appear fairly early. Till rather late in the classical age the second charge seems to have been conditional on discharge of the first, but from the middle of the second century a later chargee had nominally all the powers of a pledgee, subject to the rights of earlier chargees.? This meant in practice that he could not sell with a clear title. This led to a system under which,

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by advancing the money to pay off the first chargee (sue- cessio in locum) or actually paying him (ius offerendae pecu- mae)y a later chargee could stand in the shoes of the earlier. He could thuv, acquire the means of giving a clear title to a buyer. But it did not improve the position of any earlier advance of his as against a mesne incumbrancer: there was no question of tacking. Difficult questions of priority arose, which we need not discuss beyond pointing out that in the fifth century Leo established a system of registration giving priority (apart from some privileged hypothecs) to that first registered, but, unfortunately, spoilt the rule by giving the same priority to a hypothec made before three witnesses.

It may be said in conclusion that the rule 'redeem up and foreclose down' is represented in Roman law fairly closely by the rule that any incumbrancer could sell and thereby destroy all rights of a later incumbrancer except in any surplus in the price, subject to certain statutory delays.1 A subsequent incumbrancer could prevent this only by redeeming the earlier, and conversely he could not himself take any steps toward foreclosure so long as there were prior incumbrancers unredeemed.2

11. SURETYSHIP

It is a remarkable but unmistakable fact that the Romans preferred personal security, surety, to real security, pledge. In later law this is not surprising for, owing to the existence of many tacit hypothecs with artificial priority, pledge was rather uncertain. As has been said, a man with a first charge might wake up in the morning to find that it had become a second charge.3 But this does not explain the fact; the preference is much older than these artificial priorities; it is especially marked in early law.4 It is prim-