Functions of Licence to Sell: Modalities of Sale

It is thought unlikely for the early Republic that there was a pledge enforceable by sale, because in those days the Roman economy was too underdeveloped to allow for recourse by means of a public auction.^[633] ^{^[634] From a later period (160-150 bc), however, we have Cato's De agricultura recommending that farmers sell olive oil, wine, and grain at auction and containing templates for such sales (the so-called leges venditionis).}

The TabulaePompeianae Sulpiciorum show that, in any case, a well-organized practice of public auctioning did exist in the first century ad, through which effective recourse could be taken against the charged objects?³² In the first century ad the pledged property would in the event of default still be forfeited to the creditor. The ownership thus acquired by the creditor would enable him to sell the pledged property at auction (or otherwise). Given the popularity of auctions for selling property, also other than by way of execution, the right of pledge effectively had become a pledge enforceable by sale. A licence to sell could then have added value, where it was used to specify the modalities of sale. In TPSulp 79 one of the functions of the licence to sell may very well have been to enable the creditor to sell the pledged goods immediately upon the debtor's failure to repay the loan on the agreed date, without the need to observe a period of thirty days. In addition, in other respects a contractual licence to sell could be used to specify the modalities of an execution sale, such as the place and conditions of the auction.

The public auction practice in the first century ad

Auctions were actually a frequently utilized method of sale in Rome, both ‘voluntary' as well as ‘involuntary' (execution) auctions.^[635] In the Sulpicii archive we find quite a large number of documents relating to the auction of charged assets (slaves, cloth, and immovable property).^[636] It may very well be the case that by the first century ad, public auction had already become the normal method of realizing real security (pignus as well as fiducia), particularly in the case of goods for which a liquid market existed (agricultural produce, slaves, real estate, and cattle).

The relatively large number of auction announcements found in the archive of the Sulpicii is an indication that creditors often chose to order a public auction for objects pledged or transferred by way offiducia cum creditore. This gave maximum publicity to execution sales, so that more potential buyers were reached, which would generally result in higher proceeds?^[637] These auction proceeds would normally reflect the market value of the collateral: where a surplus/deficit clause had been agreed (as in TPSulp 79) this could also benefit debtors.^[638] Selling at auction would also entail that a wide diversity of assets could be sold effectively, even where the secured creditor did not have particular knowledge of the market for the type of assets concerned.^[639] ^{^[640] We also know that there were many bankers in the Roman empire specializing in providing credit to bidders at auction (argentarii).^13S The Sulpicii may have belonged to this category, which would mean that enforcing security by way of auction would be familiar to them?³⁹ TPSulp 82 demonstrates, according to Camodeca, that the Sulpicii provided credit at auctions?⁴⁰ This is a receipt of the proceeds of a sale at an auction organized by C. Sulpicius Cinnamus, who, as such, typically acted as a banker who was professionally involved with auctions?'¹¹ Proscriptio and denuntiatio in the Sulpicii archive
In the Sulpicii archive there are two groups of documents, all drawn up in the same format, relating to the auction of res mancipi which had been manci- pated by way offiducia cum creditore. The same template has obviously been used for all of these documents (although there are minor differences) and they are evidence of a well-settled standardized practice.^[641] ^{^[642] ^[643] These testationes all record that a notice had been fixed to a column in the Sextian Portico of Augustus, stating that charged slaves or real estate would come up for sale on a certain date.}
The auctions themselves always took place on the forum before the Caesonian Chaldicium in Puteoli on market days (nundinae): Thursdays between 8 a.m. and 9 a.mTh³ The creditor on whose instruction the charged assets were auctioned apparently considered it important that it could later be proven that these announcements had taken place. In the archive of the Sulpicii there is one document (a diptych/testatio) evidencing the proscriptio of the auction of pledged goodsTh4
TPSulp 83 (scriptura interior)
Ti(berio) Claudio C[aesare Aug(usto) V]
L(ucio) [A]ntistio Carminio Vetere co(n)s(ulibus)
VIII idus Sept(embres).
Putiolis in porticu Aug(usti) Sextiana
in parastatica libellus f«i»xus fuit, in quo scriptum erat id quod infra scriptum est:
Purpuras laconicas reliquas,
quas L(ucius) Marius Agathemer C(aio) Sulpicio Cinnamo pignori dedisse dicitur,
venib(unt) V idus Sept(embres) primas
Under the consuls Tiberius Claudius Caesar, for the fifth time, and Lucius Antistius Carmius Vetus
on the eighth day before the Ides of September (6 September 51)
At Puteoli in the Sextian Portico of Augustus,
there has been fixed to a column a notice in which was written
what appears below:
The residual Laconian purple, which Lucius Marius Agathemer is said to have given as pledge to Gaius Sulpicius Cinnamus, will come up for sale on the fifth day before the next Ides of September (9 September 51)^[644]
The fact that the announcements of auctions were so well documented are a strong indication that non-observance of the procedure could have legal consequences for the creditor.^[645] ^{^[646] ^[647] ^[648] The interval between proscriptio and auction is always thirty days,¹'¹⁷ which is the same term that is applicable to the proscriptio in collective execution proceedings.¹™ It may very well be that the execution of assets charged by way offiducia cum creditore or pignus was governed by the same customary rules as would apply to a general execution. The thirty- day term gave the debtor the opportunity to check whether the conditions for maximizing the proceeds of the sale were satisfied and possibly allowing more time to come to an arrangement with the creditor.}
Legal basis of duty to announce execution sale
Custom may have demanded the observance of certain formalities for the execution of charged assets, which guaranteed that the highest possible price would be realized and on the best possible terms?⁵⁰ These formalities were the announcement (proscriptio) of the sale to the ‘spender crowd', accompanied by a notification (denuntiatio) of the intended sale to the debtor. It is not inconceivable that at the time of the Sulpicii, creditors were under a legal duty to observe these formalities. For an early witness of a proscriptio of the sale of pledged goods, see Servius in Ulp. D. 47.10.15.32, where he notes that someone who publicly announces that he will sell someone's property (‘pignus proscripserit venditurus’) as if given in pledge, shall be liable for defamation with the actio iniurianim.'⁵' The lex portorii provinciae Asiae imposes a grace period of thirty days, which appears to presuppose that here also proscriptio and denuntiatio were required. This tax creditor would only then be free to sell the forfeited property as the owner and then retain the proceeds?⁵² For pignus there are several imperial constitutions in which the creditor's duties in respect of proscriptio and denuntiatio are said to derive from the bona fides:^³ proscriptio and denuntiatio together constitute the solemniter vendere of Alexander Severus's constitution of 225 ad on the execution of charged property.^[649] ^{^[650] ^[651] ^[652] But these constitutions are from a much later period. At the time of the Sulpicii the formula of the debtor's actio pigneraticia (directa) would not yet have contained the words ex fide bona.^[653] There are, however, jurists' opinions which, relatively early, assume a duty of care for the creditor in the exercise of his right of sale. Thus, in Pomp. D. 13.7.6 pr. Atilicinus assumes that a creditor was under a legal duty of care, which entailed that sometimes he was obliged to sell.}
Although this view is rejected by Pomponius, it shows that it is not inconceivable that already in the first century ad a creditor did have a duty of care, which also entailed that he was legally bound to announce a sale of pledged property.^[654] TPSulp 79: ‘time is of the essence' and other modalities of sale
The function of the licence to sell in TPSulp 79 may very well have been to avoid the observance of a thirty-day term for the announcement of an execution sale.15⁷ The loan agreement between the Sulpicii bank and Lucius Marius lucundus (TPSulp 53), which was secured by TPSulp 79, says nothing about when the borrowed sum must be repaid. However, because TPSulp 53 is dated 13 March 40 and TPSulp 79 provides that the lender shall have the right to sell the pledged goods if the borrower has not repaid the loan on 15 May 40, we know that the term of the loan was two months. The secured loan transaction between the Sulpicii and lucundus was entered into in mid-March, that is more than two months before the first ships of the grain fleet from Alexandria would arrive in Puteoli at the beginning of June.^[655] If lucundus failed to repay the loan on the agreed date, there might still be time for the Sulpicii bank to sell the grain at a good price before the Alexandrian grain fleet arrived and prices would drop.^[656] ^{^[657] ^[658] Time was of the essence. In Scaev. D. 46.1.63, it was agreed that the creditor would have the right to sell the pledged jewellery within a certain time if the loan were not repaid on first demand. The purpose of this clause may have been a waiver of the creditor's duty to notify the debtor of an intended execution sale and to announce the auction thirty days in advance. The purpose of the licence to sell in TPSulp 79 may have been exactly the same.}
In TPSulp 79 a function of the licence to sell may, therefore, very well have been to enable the creditor to sell the pledged goods immediately upon the debtor's failure to repay the loan on the agreed date, without the need to observe a period of thirty days.
A contractual licence to sell would also have added value if it was used to specify other modalities of sale. For instance, Pomp. D. 13.7.8.3 concerns a secured loan for three years, which was repayable in three annual instalments. The lender was granted a right of pledge ‘subject to a pact that I shall have power to sell if the money is not paid, each part on its proper day'?⁶⁰ The purpose of this licence to sell is to leave no doubt that if the debtor failed to pay the first or second instalment, the creditor was already authorized to sell. These clauses were all for the benefit of creditors. There must, however, also have been debtors with substantial bargaining power. Another text by Pomponius (D. 13.7.5) discusses a pactum de vendendo, providing that sale by the creditor shall only take place subject to certain conditions (e.g., price, and location). In the Formula Baetica the creditor was expressly given the liberty to sell only some of the slaves who had been charged. The pledge agreement between Gaius Sulpicius Cinnamus and Lucius Marius Agathemer, which gave rise to the auction of ‘residual Laconian purple' (‘purpuras laconicas reliquas’), may have contained a similar clause.¹'¹ The only specification of the manner of sale itself in TPSulp 79 is that it shall take place (literally translated) ‘by an auctioneer subject to the condition' (‘sub [p]raecone de condicione). This means that, in any case, the creditor was authorized to sell at auction, subject to one or more auctioning conditions whose content have not been transmitted. This could be a reference to conditions governing the sale of pledges at auction generally, it may also have concerned the terms of payment of the purchase price.^[659] ^{^[660] 5.6}}

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Source: Verhagen Hendrik L.. Security and Credit in Roman Law: The Historical Evolution of Pignus and Hypotheca. Oxford University Press,2022. — 448 p.. 2022

Functions of Licence to Sell: Modalities of Sale

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