In later Babylonian times by the free use of a house
has a house in pledge. To him it is rent-free until the loan is repaid. Hence the common phrase “rent is nought, interest is nought.” There was then no reckoning made one against the other.[691] The creditor might not, however, care to take the pledge in perpetuity against interest of a loan, never repaid. Usually a date was fixed for repayment, at which time the debtor was bound to take back his pledge. Thus a house might be pledged definitely for three years.[692]
Relations between profits and interest
A reckoning might also be made, to check off profit against interest. Thus D pledges a field to L, but on condition that, if in any year the crop is less than will meet the interest due, he shall pay the difference; but if, on the other hand, it be worth more, he shall take the balance.[693]
Second mortgages barred
The value of the pledge might, however, be such that it would outweigh both loan and interest. At any rate, it should be as valuable as the loan. Hence it could not be used as a further pledge to another. There is often a guarantee that the pledge given has not been already pledged, that no other creditor has a lien upon it.
The creditor's responsibility
In these cases the creditor enters into possession of the pledge and enjoyment of it. He has some responsibilities towards it. He cannot destroy it, or waste it. As a rule, he assumed full liability for all cases for wear and tear. He also fed and clothed a slave pledged to him. Now and then we find the debtor responsible for clothing the slave pledged by him.[694] It is not essential, however, to the idea of pledge that it should come into the possession of the creditor, only it is hypothecated to him. This practice was very common in later Babylonian times.[695]
Pledges often anticipated and readily transferable
Such pledges give an eventual possession. Something like a reversion occurs in the pledge of a share not yet divided.[696] [pg 266] Thus a sum was borrowed on the understanding that if not returned by the proper time, a slave shall be handed over as an antichretic pledge.[697] The man who gives a pledge may not be in actual possession of it, but pledges it on the understanding that he will hand it over as soon as it becomes his. Thus B bought a slave and her two young children for sixty-five shekels, but before they were handed over, he pledged them for fifty-five shekels. Nine months later he sold them for sixty shekels.[698]