Book of Pledges

Discussion of the Constituent Elements

The basis for this chapter is the Almighty’s words:

“And if you find no scribe, then let there be a pledge taken and delivered” (Q 2:283).

The inquiry here covers three areas: the constituent elements, the conditions, and the rulings. The constituent elements concern five matters: the pledger, the pledged property, the pledgee, the obligation secured by the pledge, and the form of the pledge contract.

First Element: the Pledger

There is no disagreement that the pledger must be legally competent, not under interdiction, and among those capable of settling debts. According to Mālik, a guardian may pledge the property of the person under his care when that is the prudent course and necessity requires it.

Al-Shāfiʿī maintains that the guardian may pledge whenever an obvious benefit exists. Mālik further allows the contracted slave (mukātab) and the slave permitted to trade (maʾdhūn) to pledge.

Sahnūn states: if the creditor takes a pledge for capital he has advanced by way of salam, the pledge is invalid; this is likewise the view of al-Shāfiʿī.

Mālik and al-Shāfiʿī agree that a bankrupt person may not validly pledge his property, whereas Abū Ḥanīfah allows it.

Mālik’s statements differ regarding one whose entire estate is encumbered by debt: is his pledge binding? The well-known opinion is that it is valid, provided bankruptcy has not formally occurred. The dispute ultimately turns on whether a bankrupt is deemed legally interdicted. Anyone qualified to be a pledger is, by the same token, qualified to be a pledgee.

Second Element: the Pledged Property

The Shāfiʿīs hold that a valid pledge must meet three conditions:

1. The object must be a tangible item, for a debt cannot serve as collateral.

2. The pledgee must be able to take lawful possession of it; hence one may not pledge something that cannot be handled, such as a copy of the Qurʾān. Mālik, however, allows a Qurʾān to be pledged on the proviso that the pledgee does not read from it; the difference mirrors that concerning its sale.

3. The item must be salable when the term falls due. Mālik permits as collateral things whose sale is presently forbidden—such as standing crops or fruit that has not ripened—but rules that they may not be sold to satisfy the debt until ripeness appears, even if the debt has matured.

Al-Shāfiʿī has two opinions on the pledging of unripe fruit; in his view it may be sold at maturity of the debt provided it is cut immediately. Abū Ḥāmid comments that the sounder opinion is that it is permissible.

Mālik further allows a pledge of fungible items that have not been individualized—such as minted dinars and dirhams. Neither Mālik nor al-Shāfiʿī requires the pledged property to be owned by the pledger; it may even be an item on loan.

All agree that delivery of the pledged article into the pledgee’s hand by the pledger is a condition of validity. They differ, however, when the pledgee’s possession originated in usurpation and the owner later consents to its remaining with him as collateral. Mālik holds that the property may be transferred from the liability of usurpation to that of pledging, so that the owner treats the usurped article as a valid pledge.