1Papinianus, Questions, Book XXVI. A creditor received certain lands by way of pledge, and afterwards another creditor lent the same debtor money, and entered into an agreement by which the entire property of the debtor was pledged; then the first one made the latter execute a similar obligation with reference to all his property to secure either another, or the same contract. Before the second creditor was paid, the first one sold the other property on the ground of its having been pledged, without having any right to do so; and on this account a personal action would not lie against the debtor in favor of the creditor, nor could an equitable action be granted him to recover his pledges. Nor could he properly be sued in an action of theft, with reference to the personal effects, because the creditor, in instituting proceedings, acted in his own behalf, being mistaken with respect to the order which should be observed in the sale of the article; especially as the other creditor did not lose, by theft, the possession of property which was never in his hands. The second creditor cannot institute proceedings for production, because the first is not in possession, and did not act fraudulently in order to avoid being in possession. It follows, then, that the second creditor must sue those in possession of the property.

2The Same, Opinions, Book II. Where a surety was sued, he obtained an order of court to hold the land hypothecated to the creditor, by the right of purchase. A second creditor who had subsequently made a contract with reference to the same pledge, will, nevertheless, have the privilege of tendering the money which the surety had paid, together with the interest which, in the meantime, had accrued; for a sale of this kind, which is concluded for the purpose of transferring the possession of property pledged, is usually made on account of the requirements of the law.

3The Same, Opinions, Book III. Where the first creditor sells the pledge in compliance with the terms of the agreement, it is settled that the second creditor has no right to tender the money. 1Where, however, the debtor sells a pledge without consulting his creditors, and pays the price of the same to the first creditor, the second creditor can offer to the purchaser the amount paid to the first, together with the interest which has accrued in the meantime; for it makes no difference whether the debtor sells the property pledged, or pledges it a second time.

4The Same, Opinions, Book XI. Where the time for the payment of the money is prolonged by consent, it is held to have been agreed that the power to sell the pledge shall not be exercised before the time has elapsed.

5Marcianus, On the Hypothecary Formula. Where a second creditor, having paid the claim of the first, is subrogated to him, he can lawfully sell the pledge on account of the money which he has paid and lent. 1Ad Dig. 20,5,5,1Windscheid: Lehrbuch des Pandektenrechts, 7. Aufl. 1891, Bd. I, § 248, Note 27.Where a second creditor, or a surety, having paid the debt, receives the pledges given for the same, the debtor can properly tender him the amount paid, even though the pledges are held under the title of purchase.

6Ad Dig. 20,5,6Windscheid: Lehrbuch des Pandektenrechts, 7. Aufl. 1891, Bd. I, § 248, Note 27.Modestinus, Rules, Book VIII. Where a second creditor purchases a pledge from the first, he is understood not to have paid him the money for the purpose of acquiring the ownership of the same, but to hold the property in pledge for his own benefit; and therefore the money can be tendered to him by the debtor.

7Marcianus, On the Hypothecary Formula. Where a creditor sells a pledge, or land which has been hypothecated, under the condition that he shall have a right to refund the money and recover the pledge; can he do this if the debtor is ready to pay the money? Julianus states in the Eleventh Book of the Digest that the pledge, indeed, seems to have been regularly sold, but that the debtor can bring suit against the creditor to compel him to assign to him any rights of action which he may have. What Julianus says with reference to a pledge also applies to hypothecation. 1Ad Dig. 20,5,7,1Windscheid: Lehrbuch des Pandektenrechts, 7. Aufl. 1891, Bd. I, § 117, Note 6.It must be considered whether, where property hypothecated is sold, the debtor should be permitted to recover it by paying the money to the purchaser. If, in fact, it was sold under the condition that the purchase should be rescinded, if the money is refunded by the debtor within a certain time, and it is paid within that time, he can recover the hypothecated property. But if the time has elapsed, and this matter has not been arranged by agreement, the sale cannot be rescinded, unless the debtor is under twenty-five years of age, or is a ward, or is absent on public business, or some other cause exists on account of which relief is granted by the Edict. 2Ad Dig. 20,5,7,2Windscheid: Lehrbuch des Pandektenrechts, 7. Aufl. 1891, Bd. I, § 172a, Note 8.The question is asked, where an agreement has been exacted by the creditor that the debtor shall not be permitted to sell property which has been hypothecated or pledged, what the law is, and whether an agreement of this kind is void having been made contrary to law, and therefore the property can be sold. It is certain that the parties must abide by such an agreement, and that a sale made in violation of it will be void.

8Modestinus, Rules, Book IV. The creditor has a right to sell any of the pledges on which he has a claim that he pleases, in order to obtain what is due to him.

9Paulus, Questions, Book III. The question arose whether the debtor would be released where the creditor could not obtain the price of the pledge from the purchaser. I think that if the creditor was in no way to blame, the debtor would still remain liable; because a sale does not necessarily release the debtor, unless the purchase-money was received. 1Moreover, Pomponius says in the Second Book of Extracts that, where pledges are given it is customary to add, namely, that when a pledge is sold and the price does not satisfy the claim, the debtor must make up the deficiency, is superfluous; because this takes effect by operation of law, and therefore should not be added.

10The Same, Opinions, Book VI. Although a person who purchases property subject to the condition of the pledge cannot have recourse to the vendor in case he is deprived of it by a better title; still, the creditor who sold the land should not be heard, if he attempts to institute proceedings on some other ground with reference to the same property.

11Scævola, Opinions, Book I. An arbitrator appointed for the partition of an estate, in the division of the property belonging to the same assigned certain claims, as a whole, which were due separately by debtors to the estate. The question arose, whether, if the debtors did not pay, each of the heirs could sell the property pledged in order to obtain the entire price. I answered that he could.

12Tryphoninus, Disputations, Book VIII. It was stated in a Rescript by the Emperor, in reply to an application made by Papinianus, that a creditor could purchase a pledge from his debtor, because it still belongs to the debtor. 1Ad Dig. 20,5,12,1Windscheid: Lehrbuch des Pandektenrechts, 7. Aufl. 1891, Bd. II, § 422, Note 4.Where property belonging to another has been pledged, and the creditor sells it, let us see whether the price received by the creditor will release the debtor from liability to a personal action on the ground of money loaned. And, indeed, it might be answered that is true if the sale was made on condition that no obligation would be incurred in case of eviction, because the price paid under such circumstances would certainly rather benefit the debtor, and also be a source of profit to the creditor, where this arises out of any contract made, or obligation assumed by the debtor; the debtor will, however, be released only so far as the creditor is concerned, but he will still be liable to the owner of the property where the pledge has not yet been lost through eviction, or he will be liable to the purchaser, after eviction, in an equitable action to prevent his profiting by the loss of another. If, for instance, a creditor, while proceeding against a possessor of the property pledged, deprives him of a greater amount of the crops than he is entitled to, he should receive them by way of satisfaction of what is owing to him. And where, on account of an unjust judicial decision, a creditor has deprived the owner of property which did not belong to the debtor, under the pretense that it was encumbered to him; and the question was asked whether; if the claim was paid it should be restored to the debtor, our Scævola held that it should be restored. If, however, the creditor who sold the property did not do so in a way that he would be absolutely sure of keeping the price, but would be compelled to return it under certain circumstances, I think that, in the meantime, nothing can be recovered from his debtor, but that his release would remain in abeyance. But if the creditor is sued in an action on sale and must indemnify the purchaser, he can recover the amount of the debt from the debtor, because it is evident that he was not released.

13Paulus, Decrees, Book I. A creditor who, availing himself of his privilege, sells a pledge, is obliged to assign his rights; and if he is in possession of a pledge he must certainly transfer it.

14Scævola, Digest, Book VI. Arbitrators appointed for the partition of an estate among heirs, having divided the property of the same, assigned certain claims in bulk to the heirs individually, which were due to several heirs to the estate. The question arose; where the share of a debtor which had been assigned to an heir was not paid, whether the said heir could sell the pledge given by the debtor, in order that the price might be credited on the total amount of the claim. I answered that he could do so.