Assume a merchant pledges one ornament to secure debts owed to two creditors, and in another credit sale promises to pledge a different ornament. For the first asset, payment to one lender does not release the other lender’s right to retain the whole item.
For the second transaction, refusal to deliver named collateral gives the seller a choice, subject to immediate payment or equivalent replacement security. An already-delivered pledged item must then be kept within authorized custody; unilateral deposit with an outsider is a third, separate problem.
Distinguishing retention, collateral conditions and safekeeping authorization avoids transferring a rule from one issue to another.
Opening interactive controls...
Integrating the three rights in one case
Kitab al-Rahn: Two Pledgees, Conditional Security and Custody
Assume a merchant pledges one ornament to secure debts owed to two creditors, and in another credit sale promises to pledge a different ornament. For the first asset, payment to one lender does not release the other lender’s right to retain the whole item.
For the second transaction, refusal to deliver named collateral gives the seller a choice, subject to immediate payment or equivalent replacement security. An already-delivered pledged item must then be kept within authorized custody; unilateral deposit with an outsider is a third, separate problem.
Distinguishing retention, collateral conditions and safekeeping authorization avoids transferring a rule from one issue to another.