Forfeiture in the Second Century ad

From the second century ad we have some Digest texts, with a Hellenistic background, from which it can be derived that in this period forfeiture was still the default rule. Moreover, in the western part of the Roman empire it continued to be possible to agree, whether or not in the form of a conditional sale or datio in solutum, that in the event of default, ownership of the pledged object would transfer to the creditor.^³ One cannot entirely exclude the pos­sibility that in this period the creditor would, in the absence of a pactum de vendendo or lex commissoria, merely have a right of retention.

Iav. D. 47.2.74: against forfeiture (I)?

From Julian's teacher Iavolenus there is an opinion in which this jurist says that when the creditor sells the pledged property without an agreement to sell, he shall be liable to the debtor with the actio furti.

D. 47.2.74. Iavolenus libro quinto decimo ex Cassio. Si is, qui pignori rem accepit, cum de vendendo pignore nihil convenisset, vendidit, aut ante, quam dies venditionis veniret pecunia non soluta, id fecit: furti se obligat.

If he, who has accepted a thing as pledge, when nothing has been agreed about the sale of the pledge, sells, or, the money remaining unpaid, does so before the time of sale, he then makes himself liable for theft.

The first part of this opinion, if authentic, is difficult to reconcile with the hypothesis that still, in the second century ad, and also in the absence of a lex commissoria, the creditor became the owner of the pledged property and as such would have acquired a power of sale.^{[661] [662] [663] [664] [665] [666] [667] For how can an owner be liable for the theft of his own property?1''5 Not much later, Pomponius says in D. 13.7.5 that a sale by the creditor only constitutes a furtum when the parties have agreed that no sale shall take place?'' How can this difference be explained? lav. D. 47.2.74 could represent a transitory stage in which pignus was no longer a forfeiture pledge and the creditor would have needed either a lex commissoria or a pactum de vendendo in order to take recourse against the pledged property.1'7 Perhaps it is in this transitory stage that, where neither forfeiture nor sale had been expressly agreed, the creditor merely had a right of retention. This transitory stage, if it existed at all, must have been relatively short, for it follows from Pomp. D. 13.7.5 that without an express contractual selling restriction, the creditor was impliedly authorized to sell the property?'8}

Iav. D. 47.2.74 could possibly also be read as saying that also in the absence of a pactum de vendendo, the creditor could sell the pledged property by way of execution, but only after first having notified the debtor?'⁹ From the late classical period there is a text from Ulpian which says that when there is an agreement precluding the creditor from selling the pledged property, the selling creditor is not liable (for theft) ‘where the debtor has been given three warnings to pay and has failed to respond?⁷⁰ This part of the fragment has been suspected of being an interpolation.

Pomp. D. 13.7.6 pr.: against forfeiture (II)?

There is an opinion by Pomponius which is regarded in modern literature (Noordraven) as evidence against the existence of a forfeiture pledge in clas­sical law. Lenel and many other authors following in his footsteps hold the view that this text relates to fiducia.^[670] The first sentence of this text can prob­ably be attributed to Sabinus, which would make Lenel's interpretation consistent with the assumption that in the time of Sabinus (first century ad) res mancipi normally served as collateral security by way of a fiducia cum creditore.^[671] By contrast, Noordraven takes the view that it here entails a pig­nus fragment. After all, in fiducia, the creditor, as owner, already had the power to dispose and, therefore, the licence to sell would not have been made in his interest, especially not if there was a surplus valueTh^[672] The following will show that I do not consider this argument to be valid. It might nonetheless be appropriate to say that Pomponius's opinion, in substance, applies to both fiducia and pignus.¹⁷⁶

D. 13.7.6 pr. Pomponius libro trigensimo quinto ad Sabinum. Quamvis convenerit, ut fundum pigneraticium tibi vendere liceret, nihilo magis cogendus es vendere, licet solvendo non sit is qui pignus dederit, quia tua causa id caveatur. Sed Atilicinus ex causa cogendum creditorem esse ad venden­dum dicit: quid enim si multo minus sit quod debeatur et hodie pluris venire possit pignus quam postea? Melius autem est dici eum, qui dederit pignus, posse vendere et accepta pecunia solvere id quod debeatur, ita tamen, ut creditor necessitatem habeat ostendere rem pigneratam, si mobilis sit, prius idonea cautela a debitore pro indemnitate ei praestanda.

Even though there is an agreement that you may sell an estate which has been pledged, that does not make it any more possible to compel you to sell, even if the grantor of the pledge is insolvent. For the term is inserted in your own interest. Yet Atilicinus says that on special facts the creditor can be com­pelled to a sale. For what if the debt is much less, and the pledge can now be sold for more than later on? It is better to say that he who granted the pledge can sell and use the money he gets to pay off the debt to the extent that the creditor should be compelled to display the thing if it is movable, subject to the debtor's first giving good security for indemnifying him. For making the creditor sell against this will is quite inhuman.

Pomponius shares (what presumably is) Sabinus's opinion that a licence to sell does not entail an obligation to sell, not even where the debtor is insolvent. Atilicinus, on the other hand, holds the view that in certain circumstances an obligation to sell does exist, for example, if the value of the pledged property is much higher than the amount of the debt, and it can be sold for more now than in the future. In this case, too, Pomponius still does not want to assume an obligation to sell but believes it to be a better solution that in the case that the surplus value is at risk of turning into an undervalue (for which the debtor would be liable), the creditor should co-operate in a sale by the debtor. The creditor is hereby held to show the pledged (movable) property to poten­tial buyers. The debtor is then, however, obliged to provide alternative security in case he fails to use the sale proceeds for repaying his debt to the creditor.^[673], ^[674]

On the basis of a combination of three premises, Noordraven infers from D. 13.7.6 pr. that, in the absence of a licence to sell, the creditor merely had a right of retention. These premises are:

1.

2. A licence to sell is according to Pomponius intended to benefit the creditor.

3. A licence to sell would not benefit the creditor if, in the absence of such licence, the pledged property would be forfeited to him.

In case charged property with surplus value would be forfeited, the creditor would gain: a claim worth d would then be substituted with an object worth v (with v > d).i⁸⁰ Where, on the other hand, the creditor would exercise his licence to sell, as a result of the surplus/deficit clause he would only get d. In other words, under a licence to sell the creditor would be worse off (d) than under a forfeiture pledge (v). In case of a sale, the creditor would miss out on the opportunity to pocket the surplus proceeds, so that the licence to sell would not benefit him. This means, according to Noordraven, that the text assumes that in the absence of a licence to sell, the property is not transferred to the creditor by way of forfeiture. For only then would the creditor benefit from the licence to sell: he would get d rather than nothing at all. Therefore only the possibility of a right of retention remains.'8' This conclusion is wrong, because one assumption on which it based is wrong: the assumption that the exercise of the licence to sell must benefit the creditor. Sabinus meant when he referred to 'quia tua causa id caveatur no more than that a licence to sell does not entail an obligation to sell, precisely because the creditor has made this clause in his own interest. What he does not express or imply is that exercising this power always leads or must lead to a beneficial outcome for the creditor. This is for the creditor himself to assess at the time of accepting the pledge, and for the future to tell when the property is sold.

Neither Sabinus nor Pomponius have expressed direct views as to what the legal consequence was when the creditor chose not to exercise the licence to sell—retention or forfeiture.

179 Variables v, d, and s are all positive values. The (simple) arithmetic is mine.

180 v = d + s, because s = v - d.

181 Noordraven 1999: 22-4. See now also Perani 2021: 176-8. Other analyses of Pomp. D. 13.7.6 pr., which are more consistent with my own interpretation, can be found in Hofstetter 1999: 226-32 and Krämer 2007: 186-8. See also Kaser 1982: 77.

Pomponius's opinion were on fiducia cum creditore, which is a distinct possi­bility, then the same problem would arise. For this problem Pauli Sententiae 2.13.3 offers a solution: (i) the debtor sells the object to a third party; (ii) the debtor pays the creditor from the purchase price; (iii) the creditor reconveys (by way of mancipatio) the object to the debtor; and (iv) the debtor manci­pates the object to the third party/buyer. It can certainly not be ruled out that Pomponius had this construction in mind, either for fiducia or for pignus (with traditiones rather than mancipationes). The most plausible interpret­ation in the light of the foregoing is that the creditor need not accept that in case of default the object of security is permanently forfeited to him, without the possibility of holding the debtor liable for a deficit (reliquum). If there were an undervalue at the time of default, the creditor could then proceed to sell: a deficit in the proceeds of the execution was therewith established and the creditor could recover the deficit from the other goods of the debtor.^{[675] [676] [677]} This was the aim of the vendere liceret clauseTh³

Pledge as lien

What would have been the creditor's position in the absence of a pactum de vendendo or a lex commissoria in the second century ad? A hypothetical alternative to the forfeiture pledge would be a pledge that gives the creditor a mere right of retention, combined with a preferential right in respect of the distribution of the proceeds of the execution. According to Kaser, this hypo­thesis is refuted by the reality under Roman enforcement law: in the venditio bonorum (which was the prevailing method of collective execution in the sec­ond century ad) there was no room for a preferential ranking of the pledge creditor.18⁴ In some cases, however, the creditor with a pledge-lien could have had a de facto preference, in particular where there was a substantial surplus value in the pledged goods. It would then be economically sensible for the bonorum emptor to pay the pledge creditor the amount of the secured debt, so that the pledged goods could be included in the venditio bonorum. In D. 13.7.8.1, Pomponius deals with a case where a number of slaves were pledged and the creditor had sold some at given prices and expressly undertaken to be liable for their eviction. Pomponius holds that even when the secured debt could be satisfied from the proceeds of the sale, the creditor could detain the other slaves until the debtor had undertaken to indemnify him against his liability under his promise against eviction. This shows that a right of retention was regarded as a pressure tool by the Roman jurists (although only where the right of pledge itself had ceased to exist).^{[678] [679] [680] [681] [682] [683] When a pactum antichreticum had been agreed, the creditor would also be entitled to apply the (civil or natural) fruits of the pledged property for amortisation of principal and payment of interest.186 From a later period, we have an example of antichretic rights which would only accrue to the creditor on default.^7 The value of the fruits gathered by the creditor would then be deducted from the secured debt.^}

Therefore, it is not inconceivable that a pledge-lien could have worked in certain cases where the parties failed to agree a pactum de vendendo or a lex commissoria. Such a pledge-lien would not, however, have complied with one of the main prerequisites for an effective law of real security. It would not have enabled a secured creditor to take immediate recourse outside (often long- winded) collective execution proceedings.18⁹ Moreover, an antichretic pledge would also not have benefited the creditor in cases where the pledged goods could not be used without consuming them (e.g. foodstuffs in TPSulp 51 and 52), or did not produce fruits which could reduce the amount due under the loan or serve as interest (e.g., precious metals). The only viable alternative to a forfeiture pledge would be a pledge enforceable by sale, also where no express licence to sell had been agreedTh"

Forfeiture in the Eastern empire

In the eastern provinces of the Roman empire, forfeiture continued to be common in the second century ad, as two opinions by the jurist Q. Cervidius Scaevola illustrate. 191 In D. 32.101 pr., Scaevola discusses a case where someone left a number of plots of land (praedia) situated in Syria to his native town. In a codicil, he referred to ‘all the places which I possess in Syria with all the cattle, slaves, fruits, stores, and equipment that are in them' (original in Greek). The question was raised whether this legacy also covered plots of land which had been pledged to the testator. Scaevola's answer was that that would not be the case, ‘provided that they had not been included in his patrimony, which generally happens when the debtor fails to pay'.^{[684] [685] [686] Therefore, pledged property which had forfeited to the creditor would be part of the legacy. This can hardly be interpreted otherwise than that—at least in second-century ad Syria—forfeiture of pledged property was still common.}

In another opinion by Scaevola (D. 18.1.81 pr.), Titius had borrowed money against interest. In order to secure the loan, he had pledged plots of land (prae­dia) and requested Lucius to stand as surety (fideiussor). Titius promised Lucius that he would ‘liberate' him within three years, presumably by repaying the secured debt or offering alternative security to the lender. It was also agreed between Titius and Lucius that if Titius failed to liberate him, and Lucius would have to pay the secured debt to the lender, the pledged assets should then be considered to have been sold to Lucius (‘empta haberet...praedia’). According to Scaevola, a valid conditional sale agreement exists, unless the parties actually intended to establish a pledge in favour of Lucius. Such a pledge would have been a forfeiture pledge, possibly of Greek-Hellenistic originTh³ The conditional sale is treated here as an alternative to pledge: upon the debtor's failure to discharge the surety, the latter would become the owner of the land formerly pledged to the creditor, pursuant to either a conditional sale or a forfeiture pledge. The continu­ing existence of the forfeiture pledge is confirmed in jurists' opinions (Scaevola) rendered as a matter of Roman lawTh⁴ These opinions are rendered in a Hellenistic context, but they could be an indication that also in the Roman West forfeiture continued to be the rule where no licence to sell had been agreed.

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