Roman Law: Contracts, Mutuals, and Payment

Posted on Nov 14, 2024 in Law & Jurisprudence

Mutuum

Mutuum is a real contract, unilateral, and based on a right in personam. In this contract, a person called the borrower receives from another person called the lender a certain amount of money or fungible things and is obliged to repay the same amount or things of the same kind and quality.

• It is a real contract because it is perfected by the delivery of the thing.
• It is unilateral because it only creates obligations for one party, the borrower, who is obligated to return the amount or things received once the contract’s term has expired. The socio-economic function of mutuum is to be a consumer loan.
• The law was strict because it protected the lender by:
  • The actio certae creditae pecuniae when a quantity of money was delivered.
  • The condictio triticaria when consumables were delivered. It appears that the historical origin of mutuum was the borrowing of money.

Personal Items

• The lender is the person who provides the money or consumables.
• The borrower is the person who receives the loan.

To produce the transfer of ownership of such property, it is necessary that the lender has both capacity and the power of disposition.

The Macedonian senate forbade the granting of mutuum to a filiusfamilias, so they were not obliged to return what they had been given in mutuum, even after the death of the paterfamilias. It seems that the senate’s intention was to protect the paterfamilias because, according to tradition, there was a filiusfamilias called Macedo who killed his pater to inherit and pay the debts he had contracted.

Although the senate outlawed mutuum for the filiusfamilias, if he paid what was borrowed, he could not claim it back on the grounds of undue payment, and that payment would be considered the extinguishment of a natural obligation.

Real Elements

These are the expendable money or things. The ownership of these things passes to the borrower with the delivery. The essential element of mutuum is the delivery of the goods or money.

Another element is the mutual agreement of the parties, an agreement that aims for the return of what was delivered.

Effects

As mutuum involves the transfer of ownership of money or fungible things, it creates an obligation for the borrower to repay an equal amount of the same kind and quality as that received. In other words, the delivery is determined by the amount required. Mutuum is a gratuitous contract, meaning that interest cannot be charged.

Payment: Concept and Requirements

Concept

Payment or performance is the natural way to extinguish an obligation by providing what was promised or owed.

In obligations whose object is:

• a dare: compliance is called solutio or payment. The object can be determinate or indeterminate.
• a facere: compliance is called satisfactio. The object is always indeterminate, although the outcome is determined in advance.

The terms solutio and satisfactio eventually came to be used interchangeably.

Requirements

Regarding Individuals

a) Who can make the payment:

Normally the debtor, but a third party can also make the payment, even against the debtor’s will. However, there were certain obligations that, by their nature, could only be personally fulfilled by the debtor.

b) To whom payment is made:

• Legal representative: tutor
• Voluntary representative: procurator
• Other persons expressly designated to receive payment:

1. The solutionis causa adiectus arose from a stipulatio made between the debtor and the creditor for that purpose. The debtor could choose to make payment to the creditor or the adiectus, being released from the obligation in either case. The adiectus could only receive the payment but had no right to demand it.

2. The adstipulator was in charge of carrying out a stipulatio with the debtor on behalf of the creditor, with the debtor committing to fulfill the same benefit owed to the creditor with him.

Unlike the adiectus, the adstipulator could demand payment from the debtor because the creditor gave him an express or implied mandate by allowing him to claim the payment through the actio mandati.

Regarding the Place of Payment

• If previously agreed upon, the debtor had to make the payment at the agreed-upon place.
• If nothing had been agreed upon, the payment was made at the debtor’s home.
• If the object of the obligation was a property: the place of performance was where the property was located.
• If the thing was movable, the place of performance would be where the thing was located when the obligation was created, unless the debtor had moved it to harm the creditor. The debtor could make a public deposit of the movable property with an authority after offering it to the creditor.

Regarding Time

• If a deadline had been set for the fulfillment of the obligation, the debtor had to fulfill it within that period, and could even validly do so before the deadline.
• If no deadline had been established, the creditor could demand performance at any time, but first had to formally demand it from the debtor through an interpellatio.

Regarding the Subject of Payment

• The debtor had to satisfy the exact performance due and no other; this is called datio in solutum. A discussion arose between the two classical schools of jurisprudence regarding how the obligation was extinguished by datio in solutum:
  • The Sabinians argued that once the datio was made, the obligation was extinguished ipso iure.
  • The Proculians argued that the datio in solutum produced the discharge of the obligation by way of exception, meaning that if the debtor was sued, he could oppose the exceptio doli.

In this case, the Sabinian thesis prevailed.

• The debtor had to make full payment. The creditor could not be compelled to receive part of the benefit.
• There were some debtors who had the beneficium competentiae, meaning they could only be convicted up to the limit of their assets.
• Solvator ut minus pactum (“agreement to be paid less”) was an agreement between the heirs of the debtor and the creditors of the deceased. The purpose was to avoid being burdened with the inheritance debt; the heir would not accept the inheritance, and thus the creditors had to resort to a longer and more complicated execution process.
• The issue of imputation of payments (allocation) arises when the debtor has multiple debts to the same creditor.
  • In this case, if the debtor wishes, they can choose which debts they want to extinguish.
  • If the debtor does not specify, the creditor decides.
  • If neither party makes a determination, special rules apply that protect the debtor, and these rules are:
    • Payments are attributed to interest rather than principal.
    • To a due credit before a pending one.
    • To the oldest credit rather than the most recent.
    • To the most burdensome.
    • It may happen that the payment is applied proportionally to the payment of all debts.