TUTORSHIP AND AGENCY

Tutors can be usefully analysed as agents working on behalf of pupils, since they were responsible for managing pupils’ property in such a way as to protect their long-term interests, and enforcing their obligations as agents was a thorny problem for the Roman legal authorities.

The tutorship of orphans was an institution basic to Roman society.^[530] In Roman law, fatherless children, up to the age of fourteen for boys and twelve for girls, were subject to the supervision of tutors, tutores. Tutors might be named by the father in his will (tutores testmentarii), gain this position because of their agnatic relationship with the child (tutors by law, or tutores legitimi), or, in the event that no candidates for these two categories were available, be appointed by a magistrate (tutores dativi). The tutor was responsible for managing the property of the ward, or pupil, as well as for providing for the pupil’s support including education, food, clothing, and housing, and other expenses associated with the pupil’s social class and resources, such as slaves and, for a female pupil, a dowry. For understanding agency relationships in the Roman economy, the most important duty for the tutor was his management of the pupil’s finances. In this area of the law, the overriding concern of the legal authorities was to protect the resources of a vital and vulnerable social class against any threat to the loss of their property, and so they imposed stringent rules on the tutors who were responsible for administering the pupils’ property. Surely one motivation for these rules was to protect the resources of a class of people who in the future would be called upon to hold municipal offices and perform liturgical duties for their home towns. Many of the same rules imposed on the property belonging to pupils also affected the property of minors, fatherless men under the age of twenty-five, who were also considered vulnerable to ill-considered financial decisions, in particular, the restrictions on alienating land, to be discussed below.^[531]

The major problem that exists in all agency relationships, the asymmetries of information between principal and agent, was especially acute in tutorship.

In agency relationships, the agent commonly has greater knowledge of the business he is conducting than the principal, and so is in a position to engage in opportunistic behaviour at the principal’s expense. In theory, the tutor as agent had complete power over the pupil’s property. The tutor purchased property for the pupil, managed his or her income, lent the pupil’s money out at interest, and spent money on the pupil’s behalf. An unscrupulous tutor was in the position to take advantage of his responsibilities and use the pupil’s property for his own purposes, or, in the worst-case scenario, steal from it. The question is whether Roman law developed adequate oversight mechanisms to protect the interests of the pupil.

Monitoring agents was a basic problem in commercial relationships in the Roman world, and in this sector of the economy, Roman society developed a combination of formal legal institutions and social values to maintain a workable system of agency. The greater integration of Roman commercial markets in the Mediterranean world would not have been possible without adequate means of enforcing contracts between trading partners, as well as mechanisms by which Roman property owners could exercise reasonable oversight over their employees or agents in far-flung locations.^[532] Any solution to this problem involved aligning the interests of business agents with those of the property owner by providing the former group with incentives to work productively for their principals, while also reserving for the principal the means to sanction an unsatisfactory agent. The Romans approached this problem by relying on social dependants, slaves or freedmen, as agents. The use of social dependants as agents finds its origin, to a large extent, in the institutions of a society largely dependent on the ownership and employment of slaves.^[533] The familia provided a ready-made structure around which to organise business activities, just as it did in the Empire to organise the bureaucracy of the Roman government, as represented by the familia Caesaris.^[534] A slave operating with a peculium became an independent businessman in his own right.

As a kind of ‘residual claimant’, the slave had many of the same incentives as an owner of the business, so it would be in his interest to operate the business properly, since, unless there was some catastrophic falling out with his owner, he could be confident of retaining the profits that he generated. The agent also would take on much of the responsibility of running the business, including the monitoring of employees, many of whom were also slaves, and in many circumstances it seems clear that agents could act quite independently of their employers. This pattern of organising business was common in many areas of the Roman economy, not just in the business affairs of the wealthiest Romans, but also in much more modest levels of production and commerce, and its advantages are well known. By using slaves operating with a peculium as business managers, Roman property owners were in a position to provide specialised training to certain highly skilled individuals while also being more assured of reaping the benefit of their investment in human capital. Such a pattern of training and employing social dependants was an essential feature in many types of commercial activity in the Roman world; Gunnar Fülle’s detailed analysis of the Arretine ceramic industry indicates how this system worked in the training of highly skilled artisans producing products of considerable commercial importance.^[535]

To the extent that this system of employing social dependants as agents solved problems of monitoring, it did so by making the agent as independent from the principal as possible, and limiting the involvement of the principal in the slave (or freed) agent’s activities. This limitation finds an expression in the remedies that Roman law created to allow people doing business with slave agents to sue their owners to enforce obligations. Originally in Roman law, a property owner would assume no liability for obligations assumed by third parties. In the third or second centuries BCE, however, a series of six remedies was introduced, later called the actiones adiecticiae qualitatis.^[536] These remedies afforded some protection to people engaging in contracts with agents representing principals, such as sons in power or slaves who disposed over peculia with which they operated their businesses.

Through these actions, the praetor granted people who were owed money by agents or who had otherwise entered into contractual relationships a way to recover their losses by suing the principal, the pater familias or the slave-owner. In many cases, the liability of the principal was limited to a slave agent’s peculium, or the agent, functioning as an institor, had to have the principal’s permission to obligate the latter party (although it seems that this permission was commonly assumed). Certainly it would be an oversimplification to see these legal remedies as directly serving the needs of a society in which commercial life was highly decentralised, with agents working mostly independently with funds provided by a principal, whose chief interest in the activities of his agent was simply to be paid some return on the money he invested in him. In complex commercial undertakings, no matter what the strict requirements of the law were, property owners would have every incentive to make good on the obligations entered into by their agents, since failing to do so would impede their ability to do business in the future.

The control that the property owner exercised over a slave or freedman working as an agent would give him considerable leverage to protect against the agent’s opportunistic behaviour, but the sanctions that the owner could impose, such as revoking a promise of freedom, removing financial support from a freedman, or even returning a freedman to slavery, would probably only work as a last resort. They would not allow the property owner to recover losses, and they would effectively tend to end any cooperation

between the principal and agent. Crucially important for enforcement, as Henrik Mouritsen argues, in his recent study of the role that freedmen played in Roman society, was an ideology that praised slaves and freedman for virtues such as probitas and fides.^[537] This ideology emphasised the freedman’s continuing loyalty. The freedman lived in accordance with a substantially different code of virtue from that of a freeborn citizen.

The ideology that Mouritsen analyses seems designed to enforce trust precisely in those situations in which it was very difficult for a patron or principal to exercise any kind of meaningful control over an agent, because of the asymmetries of information involved.

Monitoring tutors

Tutorship as a system of agency posed perhaps even more complicated problems of enforcement, because the relationship between the tutor and pupil represented an extreme in the asymmetries of information between an agent and a principal. Certainly avenues existed to enforce the removal of a tutor who was suspected of malfeasance while managing the affairs of a pupil. The actio suspecti tutoris provided a procedure for sanctioning a tutor appointed in the will. This action, which could be brought by anyone, was a criminal procedure.^[538] A testamentary tutor who was found to have acted in a fraudulent manner would be removed from his post and replaced by another, and at the same time would be declared infamis (see below). Tutors by law were subject to the actio rationibus distrahendis; if they were found to have acted fraudulently, they were subject to a double penalty of the property taken. This measure was apparently available only after the end of the tutorship, however. A further protection consisted in the requirement that tutors provide a stipulation that the property of the pupil would be secure, as well as offering sureties to support this undertaking. The provision of sureties was demanded of tutors by law and those appointed by magistrates, but not of tutors appointed in the will or by high-ranking magistrates such as the consuls, since in these circumstances the reputation of the tutor was deemed to be beyond reproach. Notwithstanding the occasional legal intervention when a tutor was suspected of malfeasance, the pupil’s main opportunity to recover from a tutor for mismanagement was to sue him in the actio tutelae, a remedy that was only available after the tutor’s service was over.

Bringing this action against the tutor after the fact, however, might be cold comfort for the pupil whose property had been raided, if the tutor had become insolvent. To protect against this possibility, Roman law made cotutors all liable in full for whatever losses the pupil suffered. Certainly the vigilance of close connections of orphaned children, especially the mother, could be crucial in monitoring the actions of tutors, but the asymmetries of information remained.

The Roman legal authorities seem to have been well aware of the vulnerable position of pupils, and accordingly they developed rules that sought to protect the pupil’s interests by carefully defining the tutor’s responsibilities in managing the property and also circumscribing the tutor’s freedom of action. Tutors had a positive responsibility to invest the pupil’s money appropriately so as to provide a stable income. They could not allow the pupil’s money to lie idle, and they could be required to pay interest for the period in which they failed to invest the pupil’s funds. Whenever possible, the tutor was to use these funds to purchase land. Previously, I have argued that the responsibilities that the Roman legal authorities imposed on tutors in administering the property of pupils stemmed from a cautious approach to financial decision-making characteristic of upper-class Romans.^[539] From this perspective, land was privileged over all other forms of investment, and the tutor could be interpreted as fulfilling his responsibilities by purchasing land and leasing it out. In the understanding of the Roman jurists, it would not be difficult to determine whether the tutor had acted prudently in managing the pupil’s property when he took this step, since the price of the land was a function of the rent that it provided. Tutors of course could be liable when they purchased unsuitable land through fraud, but otherwise they were liable only for broad negligence in purchasing land (D.26.7.7 2-3) (Ulpian. 35 ad Ed.). Only when it was not possible to purchase land - say, when insufficient funds were available - was the tutor expected to lend the pupil’s money out at interest; such loans could presumably cover a wide range of purposes, from consumer loans to investment in businesses. In enforcing such loans, the tutor was expected to display the same care and energy with the pupil’s money as he would with his own.

The important point is that the law imposed restrictions on the tutor that in some cases could have sacrificed income for the pupil, but these restrictions provided clear guidelines for the tutor, and also mitigated the effects on the finances of pupils as a class that might be caused by incompetent or unenergetic management on the part of the tutor. Thus the tutor was discouraged from alienating any land that the pupil might own. One could imagine circumstances in which this might be financially advantageous for the pupil, say, when selling property in an inconvenient location to purchase something more easily managed might actually reduce costs for the pupil. In some circumstances, mortgaging land to undertake a potentially lucrative business venture might provide profits to the pupil unavailable through his or her landed property. None of this was legally permissible, and the Roman legal authorities’ preference for caution reached its fullest expression with legislation enacted by the emperor Septimius Severus in 195, the so-called Oratio Severi (D.27.9.1) (Ulpian. 35 ad Ed.). This law made it unlawful for the tutor to sell, mortgage, or otherwise alienate the pupil’s land, except to pay off debts; its provisions were also applied to curators managing the property of minors.^[540] Even to sell property to pay off a debt, tutors had to gain permission from the provincial governor. The basic premise behind this legislation is that land represented the best assurance of long-term financial security, and so protecting pupils against any possible threat to their continued ownership of land was the best means to look after their interests.

The Roman government would apply this conception of land as a form of economic security in other areas of the law, especially in late Antiquity. Thus the late imperial government was concerned to maintain the resources of a group vital for local office holding and the performance of liturgies, and so it discouraged the alienation of land by members of town councils across the empire.^[541] To ensure the continued provision of ships to serve the annona at Rome and Constantinople, it linked the ownership of land with the duty to invest in cargo ships. In effect, the government designated the lands belonging to the shipowners as security for their continued investment in shipping.^[542] As the ownership of ships serving the annona, like other key professions, became hereditary, the duty to invest in ships came to be imposed as a kind of lien on certain lands.

Penalties for tutors

Tutors served as agents responsible for managing a considerable portion of the private property in the Roman Empire. To understand the economic implications of this service, it will be helpful to consider it from the perspective of a contractual relationship with their pupils, although Roman law did not define tutorship in this way. There are two significant aspects of contract law that are important for understanding the role of the tutor as agent, the notion of ‘default rules’ in a contract, and the penalties imposed for breach of contract.

In any system of contract law, a key element in defining the property rights of the parties involved the enforcement of default rules. Default rules serve to fill in ‘gaps’ in the contract, that is, contingencies that the parties could not take the time to negotiate at the outset of their relationship, either because they were unforeseen or because it would simply be too costly to negotiate all possible ones.^[543] Modern courts, at least in the US, tend to impose default rules that are termed ‘majoritarian’ or ‘market-mimicking’, in that they would represent the preference of what most contracting parties would have negotiated had they taken the time to do so, and not what the individual people in the contract might have preferred. The other type of default rule would be ‘tailored’ toward the preferences of the parties involved in the contract under dispute. As we will see, the Roman legal authorities tended to follow majoritarian default rules, which offer the advantage that the courts are spared the often difficult task of figuring out the intentions of the parties. At the same time, the treatment of contracts in courts will be predictable, so parties will have a baseline against which to negotiate before a dispute ever ends in court. In the Roman consensual contract, sale, lease, partnership, and mandate, the default rules depended on the good faith of both parties, which in turn revolved around the common meaning of the terms that might be part of a contract.^[544]

From the perspective of tutorship as an agency contract, Roman law ruled out any deviation from a ‘majoritarian’ default rule, imposing the same stringent set of rules on all tutors. Before the promulgation of the Severan legislation that imposed severe restrictions on tutors, the legal validity of transactions involving the property of pupils would have been subject to a great deal of uncertainty. The law protected the pupil against the tutor’s mismanagement of his or her property, but the relief often came only after the completion of the tutorship, when the former pupil could sue the tutor to recover any losses that his faulty management of the pupil’s property might have caused. With the promulgation of the Severan legislation that imposed severe restrictions on tutors in managing pupils’ property, the rules became more clear-cut for both people entering into financial relationships with tutors, and for the tutors themselves. To address the interests of the former group, for someone seeking to purchase property belonging to a pupil or to lend money against the security of the pupil’s property, the rules surrounding such a transaction became transparent and predictable. The requirement to obtain the approval of the provincial governor before entering into a contract involving the pupil’s real property would provide a strong disincentive for people to make unauthorised purchases of pupil’s property, since such contracts could not be enforced in court and would be subject to being rescinded. Likewise, the same rule would deter tutors from entering into such contracts. At the same time, the strict rules imposed on tutors would provide them with some protection, since they could follow a prescribed set of norms in managing their pupils’ property and avoid civil and criminal liability. Thus a tutor would be interpreted as having fulfilled his duty if he maintained his pupil’s agricultural property and leased it out for a conventional rent, one that represented a commonly accepted return on the property’s nominal value (see above).^[545] When the tutor loaned the pupil’s money at interest, he would be protected from liability if he showed that he demonstrated the same diligence in enforcing these loans as he did with loans of his own money.^[546] The tutor would not be liable simply because the loan turned out badly. The carefully crafted and stringent ‘default’ rules limited the tutor’s discretion in managing the pupil’s property and so helped to overcome some of the disadvantages arising from the asymmetries of information inherent in the tutor’s service.

From the perspective of an agency contract, another important issue concerns the penalties that might be imposed on the tutor if he failed in his fiduciary obligations toward the pupil. The restrictions on the tutor’s scope of action provided one means of protecting the pupil’s interests, but the difficulty of monitoring the tutor remained, since generally the full scope of the tutor’s actions could only be known after his service was over, at the actio tutelae (see above). In this type of lawsuit, Roman law did require the tutor to compensate the pupil for any losses from his property resulting from negligence. In so doing, Roman law made the tutor liable to something akin to ‘expectation damages’ in modern contract law.^[547] Expectation damages provide greater compensation to a party to a contract that has been breeched than ‘reliance’ or ‘restitution’ damages. Restitution damages compensate the party suffering a breach for only what he has provided to the party who has breached the contract. With reliance damages, the party suffering the breach is better protected, since he is owed any investment that he has made in connection with the contract whereas expectation damages restore lost profits.^[548] This degree of liability corresponds to that of the tutor toward the pupil, since the tutor was not only required to restore any property lost to the pupil through his negligence, but also to pay interest if he failed to enforce loans of the pupil’s money or otherwise failed to collect money owed to the pupil. The tutor was generally expected to display the same standard of care with the pupil’s property as with his own. But this degree of liability could only provide the pupil with meaningful protection if the tutor had sufficient property. As we have seen, Roman law addressed this issue by requiring certain tutors to provide sureties for their performance, and magistrates who appointed insolvent tutors could themselves be held liable for losses resulting from the tutor’s failure.^[549]

Perhaps the penalty resulting from an unfavourable judgment in the actio tutelae that provided the strongest deterrence against the tutor’s malfeasance was infamia. Since tutorship was one of several legal relationships involving bona fides, or good faith, an adverse judgment involved infamia, which meant that the tutor, as infamis, was removed from Rome’s ‘community of honor’, or ‘meritocracy of virtue’, to use the formulation of Thomas McGinn. Being infamis barred a person from many aspects of Roman social and political life involving honour. At first, the tutor would incur infamia only for deliberate misconduct, or dolus, but this sanction was extended to cover broad negligence on the part of the tutor.^[550] The penalty of infamia, which did nothing to restore the pupil’s property, functioned to some degree like the penalties that could be imposed on freedmen who failed in their role as agents for Roman property owners, such as being forced back into slavery, or even being cut off from the patron’s financial and social support. Infamia was a severe penalty that in theory induced tutors, as members of Rome’s elite classes, to act in accordance with norms essential to the orderly functioning of society, but not fully enforceable by the courts. From another perspective, the severe penalty of infamia could be viewed as comparable to penalty clauses in contracts. These clauses tend to overcompensate one side for breach of contract, but they are included to induce both parties’ compliance with the agreement. In the law of tutorship, the issue was not compliance with a contract, but deterring fraud (and negligence), which can be hard to detect until it is too late. From a theoretical perspective, when violations are difficult to detect, severe penalties, imposed in rare cases, can be an effective means of enforcement.^[551]

The expectations about the tutor’s duties as an agent for the pupil and the penalties for his failing to meet them imposed considerable costs on society. As mentioned previously, given likely ancient life expectancies, a very substantial portion of the empire’s private property was under the management of tutors or curators. The restrictions on alienating pupils’ land, like the late imperial restrictions on land belonging to decurions and ship owners, certainly must have imposed significant limits on the market for agricultural land. To the extent that pupils or minors could not alienate land, even when it was in their interest to do so, this must have discouraged potentially profitable commercial ventures, while also distorting the market for agricultural land by creating an artificial scarcity.^[552] But to protect themselves against liability in an actio tutelae, it seems logical that many tutors would have exercised extreme caution in managing the pupil’s property, say, by purchasing land but taking no steps to invest the pupil’s money in improving it to gain a larger return, or avoiding risk at all costs when lending the pupil’s money out at interest.

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Source: Plessis P.J. du. (ed.). New Frontiers: Law and Society in the Roman World. Edinburgh University Press,2013. — 256 p.. 2013

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