From Conditional to Unconditional Pledge

More than any other variant of the Roman right of pledge, the multiple pledge shows how institutional elements inherited from the past can potentially hamper the adaptation of law to its economic environmentTh The initial impossibility of creating several charges over the same property is an example of path dependence.2³ It may be a relic of the archaic conception of the credit­or's interest as a form of ownership?⁴ When it was recognized (perhaps already by Julian) that subsequent rights of pledge could be granted condi­tionally, the original position that multiple pledges could not simultaneously exist over the same property was still upheld: the coming into existence of the second pledge was contingent upon the termination of the first pledge, so that the same property was never encumbered with more than one pledge at the same time.

Julian on the conditional second pledge

In the construction envisaged in Gai. D. 20.1.15.2, the pledge agreement with the second creditor (C2) is entered into conditionally, subject to the condition that the first right of pledge shall have terminated upon discharge of the secured debt owed to the first creditor (C1).²⁶ When that condition material­izes, the second right of pledge will come into existence automatically, with­out any further act of the debtor and the second creditor (C2) being necessary. Accordingly, C2 shall then have a right of pledge on the pledged object itself.

D. 20.4.9.3. Africanus libro octavo quaestionum. Titia praedium alienum Titio pignori dedit, post Maevio: deinde domina eius pignoris facta marito suo in dotem aestimatum dedit. si Titio soluta sit pecunia, non ideo magis Maevii pignus convalescere placebat. tunc enim priore dimisso sequentis confirmatur pignus, cum res in bonis debitoris inveniatur: in proposito autem maritus emptoris loco est: atque ideo, quia neque tunc cum Maevio obligaretur neque cum Titio solveretur in bonis mulieris fuerit, nullum tem­pus inveniri, quo pignus Maevii convalescere possit. haec tamen ita, si bona fide in dotem aestimatum praedium maritus accepit, id est si ignoravit Maevio obligatum esse.

Titia pledged land which was not hers to Titius, then to Maevius. Later she became the owner and gave her land to her husband as a dowry at valuation.

26 See also Marci. D. 20.4.12.8.

27 In the text ‘placebat’, translated in Watson as ‘Julian took the view'. Much has been written on this difficult and controversial text. The most convincing interpretation is that of Potjewijd (1998: 97-103), which I largely follow.

He (Julian) took the view that payment to Titius would not improve the position of Maevius's pledge. The extinction of a prior pledge confirms a later only when the assets are in the debtor's patrimony. In the case put, the husband is like a purchaser. Hence, as the assets were not part of the woman's estate when she gave Maevius a pledge nor when she paid Titius, there was no intermediate point of time at which the pledge to Maevius could become effective. This is the case only if the husband accepted the dowry at valuation in good faith, not knowing it was pledged to Maevius.

Titia had pledged the same piece of land twice, first to Titius (C1) and then to Maevius (C2). At the time she granted these pledges, she did not yet own the land. Later, Titia did acquire ownership of the land, perhaps through inherit­ance, and conveyed it to her husband as a dowry. It was held by Julian and Africanus that Maevius could not invoke his (second) pledge against the hus­band, after Titius's (first) pledge was extinguished through discharge. The text strongly suggests that the (second) pledge to Maevius was conditionally granted. For why else would the question be asked whether discharge of Titius would ‘improve' Maevius's pledge? The conditional granting of the second pledge is described as ‘the extinction of a prior pledge confirms a later pledge’. This is what normally happens when a second pledge is conditionally granted.

It follows from Julian's position that if the pledged land had already been in bonis of Titia at the time of granting the conditional pledge to Maevius, it could have been invoked against the husband, also where Titius had been dis­charged after the husband's acquisition of the land.^[827] For Julian says that the pledged property should be in bonis of the debtor either when the pledge is granted or when the condition materializes. This makes the conditional right of pledge granted to a lower-ranking secured creditor a pretty strong one. Where it is (conditionally) granted by a debtor who owns the pledged prop­erty at the time of granting, the second creditor's conditional right will mature into an unconditional right of pledge if and when the condition materializes (i.e., the first pledge is discharged), even if the debtor at that time no longer owns the property. In respect of conditional grantings of rights of pledge the Roman jurists show a tendency to protect the pledge creditor against dispos­itions made in the period between the conditional grant and the materialization of the condition?⁹ This protection was, however, not limitless: if the debtor owned the pledged property neither at the time of the conditional grant nor at the time the condition materialized, the creditor with a conditional second pledge would not be protected.