7 – Book of Pledges (rahn)

A pledge comes into force through offer and acceptance and is perfected by delivery. When the mortgagee takes possession of the pledged property—under his control, cleared out, and set apart—the contract becomes binding. Until that possession occurs, the pledger remains free: he may deliver the article or withdraw the pledge. Once it is delivered and received, the item passes into the mortgagee’s liability.

A pledge is valid only for a debt that is itself secured, and it secures whichever amount is lower, its own value or the amount of the debt. Thus, if the pledge is destroyed while in the mortgagee’s hand and its value equals the debt, the mortgagee is deemed to have been paid in full. If its value is greater, the excess is a trust he must return. If its value is less, that amount is deducted from the debt and the mortgagee may pursue the remainder.

It is impermissible to pledge an undivided share, fruit still hanging on date-palms without the palms, crops standing in the soil without the land, or the land or palm-trees while excluding their produce. A pledge is likewise invalid when the underlying debt is a trust item such as deposits, muḍāraba funds, or partnership assets.

A pledge may be taken for the capital advanced in a salam sale, the price in a currency-exchange (ṣarf) contract, or the goods purchased on salam. If the pledged item perishes during the very session in which the ṣarf or salam contract is concluded, the mortgagee is regarded as having received his entire due.

If the parties agree to place the pledge with an impartial custodian, this is permissible, and neither the mortgagee nor the pledger may remove it from that custodian’s hand. Should it perish while with the custodian, the loss is borne by the mortgagee.

It is lawful to pledge silver dirhams, gold dinars, and commodities sold by measure or weight. If such items are pledged against a debt of the same kind and then perish, an equivalent amount is written off the debt, even when the two parties differ as to quality or minting.

When a man is owed a debt, accepts from the debtor coins equal to that debt, spends them, and later discovers that they were counterfeit, he has no further claim according to Abū Ḥanīfah. Abū Yūsuf and Muḥammad maintain that he must return an equal quantity of the counterfeit coins and may still demand sound ones in their place.

Whoever pledges two slaves for one thousand