Next topics in Wolff’s natural right are jus pignoris and jus hypothecae. The basic idea behind both is the same: a debtor pledges something for the creditor as a surety of the debt. In other words, if the debtor will not pay the debt at agreed time, the creditor has a right (jus) to sell the pledged thing to cover the remaining debt. In case of jus pignoris, the pledged thing is literally handed to the possession of the creditor - think of a pawnshop - while in jus hypothecae, the pledged thing is not and perhaps even cannot be transferred to the possession of the creditor - a good example is a mortgage loan, where the debtor uses their home as a security for a loan. In case of jus hypothecae, the pledged thing can also be something that does not yet exist, such as fruits of the next season.
The main point in both jus pignoris and jus hypothecae is then the creditor’s right to sell the surety, unless the debt is paid on time. Wolff notes that this is a conditional right, and if the creditor tries to sell the surety before the debt was due, the creditor loses completely the right to sell the surety. Furthermore, he notes, the pledged thing should be sold for a fair price, and if the money received from the sale exceeds the debt, hyperocha or the excess is to be handed to the debtor. Then again, if the money received is less than the debt, Wolff adds, the debtor is to provide the rest in some other manner.
If no one is willing to buy the pledged thing or if all buyers offer inadequate payments, Wolff continues, the creditor can also take the pledged thing itself as a payment of the debt. Then again, the creditor need not do this. In the latter case, if the debtor has no other way to pay the debt, the creditor should just wait for finding a suitable buyer. Then again, Wolff concludes, at some indefinite point the creditor just has to accept the ownership of the thing as a payment.
Pledging something does not change its ownership, Wolff reminds the reader. Hence, the debtor has the right to sell or otherwise transfer the ownership of the pledged thing to someone else. If the debtor does that, this does not infringe upon the creditor’s right to sell the thing, if the debt is not paid. Similarly, the creditor has the right to transfer the jus pignoris or hypothecae to someone else, for instance, by simply handing a pawned item to someone else’s possession. The creditor can also pledge the thing pledged to them to someone else, as a security for their own debt. In this case, Wolff notes, the debt of the original creditor should not be more valuable than the debt of the original debtor.
A person can pledge only such things as they own, Wolff explains, but they can pledge things as securities for debts that belong to someone else. If someone pledges a thing that does not belong to them, without the consent of the owner, the creditor does not gain any rights to it and has to restitute it to the owner. Then again, if the owner does deliver the pledged thing or otherwise consents, the pledge becomes valid. Furthermore, Wolff notes, a thing belonging to someone else can be conditionally pledged: “if it becomes mine”.
The creditor is obligated to take care of the pledged thing in their possession, Wolff notes. If something happens to the thing due to the creditor’s fault, they must repay any damages to the owner of the pledged thing. Indeed, Wolff adds, the debtor has no obligation to even pay the debt, if the pledged thing is damaged so gravely that it cannot be sold for the debt. Then again, if the damage happens, although the creditor has been diligent in taking care of it, they owe nothing to the debtor.
The care of the creditor for the pledged thing extends even to paying the necessary expenses for its maintenance. If the creditor has been forced to pay such expenses, the debtor is obligated to repay them to the creditor. Then again, creditor has no right to make any unnecessary investments to the pledged thing without the consent of its owner, even if these investments were useful.
The creditor is usually not allowed to use the pledged thing or to take advantage of its products: such an action constitutes then a theft. Then again, Wolff notes, in the so-called antichretic pact such a right is explicitly conferred to the creditor as a substitute for usuries. Even then, the use of the thing and the profit gained from it should not be more valuable than the usuries would be. Furthermore, Wolff points out, antichretic pact cannot be made concerning things that deteriorate when used.
If debt in question is somehow resolved, Wolff notes, whether by the debtor or someone else paying it or by the creditor annulling the debt, the respective jus pignoris or hypothecae is also cancelled. Yet, jus pignoris or hypothecae can also be cancelled, even if the debt remains in force, for instance, if a pawnbroker gives the pawned item back to its owner. Another way to cancel jus pignoris or hypothecae without canceling the debt occurs when the pledged thing is destroyed or lost. Wolff also notes that the last clause doesn’t necessarily hold when it comes to houses, because a right to a house extends to its very foundations, which still remain, even if house is destroyed.
