Complete Works. Lysander Spooner
imply an authority to the debtor to traffic with the property or value to which the contract attaches. And, if this be the fact, then the rights of the creditor, or bailor, follow this value, and cling to it, in every form that it may pass through, in the hands of the debtor, from the time the contract is made, until it is finally delivered, or repaid to him, (the creditor,) in the shape of money.
If it have now been shown that the true relation subsisting between debtor and creditor is merely the relation of bailee and bailor; that a debtor is merely one who has sold value to another, and retains the possession and use of it for a time after the sale; and that the legal obligation of the debtor to pay money, and the legal purport of his promise to pay money, for value that he has received, are merely an obligation and promise to deliver money, which he has sold and received his pay for, and the right of property in which has already passed to the creditor, it follows that the creditor’s right, acquired by his contract, attaches to nothing except to such property as actually existed in the hands of the debtor for the contract to attach to, at the time the contract was made, and to such other value as may have become indistinguishably mixed with it, between that time and the time agreed upon for its delivery or payment. And from these several propositions it also follows, that at the time a debt becomes due, a creditor has no claims, by virtue of his contract, upon anything except what remains of the property that he purchased by his contract, and upon such other value or property as may have become indistinguishably mixed with it, (unless the debtor have been guilty of some fault or culpable neglect in the use or custody of it, whereby it has been diminished or lost.)
The utmost extent, therefore, of the creditor’s claim, (when the debtor has been guilty of no fault, neglect, or bad faith, in the custody or use of the property loaned to him,) is to the property actually existing in the hands of the debtor at the time the debt becomes due. He has a prima facie claim to the whole of this,22 if it be necessary for the satisfaction of his debt. But if it be insufficient for the satisfaction of his debt—that is, if his purchase have been diminished in value or amount, while in the custody of the debtor, (without any fault or culpable neglect on the part of the debtor,)—he, the creditor, must bear the loss. The contract is extinct, fulfilled, on the delivery of whatever remains of the property originally bailed to the debator. And if the whole of the value bailed have been lost, without the fault of the debtor, the loss falls on the creditor.
There is no escape from this conclusion but by denying that the contract attached to anything at the time it was made. And such a denial, instead of proving that the debt was obligatory beyond the debtor’s means of payment, would only be equivalent to a denial that it ever had any legal validity at all. In order to maintain the validity of the contract, we must maintain that it attached to something—that is, that it conveyed to the creditor a proprietory right to some value existing in the hands of the debtor at the time the contract was entered into. And if the contract had any validity—that is, if it attached to anything—at the time it was entered into, its validity lived only in the life of the value, or property to which it attached; and when that value expired, or became extinct, the contract, or, in other words, all the rights which the creditor acquired by virtue of his contract, necessarily expired with it.
Taking it for granted that it has now been shown that a debtor is, in law, the mere bailee of his creditor, it may be important to repeat the statement of the principle, by which this bailment operates as a lien upon the whole property of the debtor, even though his property be many times greater than the debt. The principle is this. Suppose the debt to be one hundred dollars; and the whole amount of property, in the hands of the debtor, to be one thousand dollars. The contract attaches to and binds so much value, or property, in the hands of the debtor, as will bring one hundred dollars. But the contract does not designate the particular form, in which the value, or property, to which it attaches, exists. It, therefore, attaches to it in every form, as it exists in the hands of the debtor; simply because it cannot be shown that it attaches to that which exists in one form, any more than to that which exists in another form. Any portion, therefore, of the debtor’s property, or the whole of it, if it should be necessary, is liable to be taken for the satisfaction of the debt; and this liability of the whole makes the debt a lien upon the whole. It is on this principle that a mortgage on land, for but a tenth part of the actual value of the land, is a lien upon the whole.
A promissory note, or other personal debt, where there is no designation of the particular articles of property, to which the contract attaches, is, in fact, a sale of all the property the debtor has in his hands, subject to his right of cancelling the sale by paying the amount of the debt in money, just as a mortgage is a sale of the land mortgaged, subject to the right of the debtor to cancel the sale by paying in money the amount for which the mortgage is given.
In other words, a contract of debt, without any designation of the specific property to which the contract attaches, is a contract by which the debtor pledges his whole property for the delivery, or payment of the amount sold out of it to the creditor, viz., the amount of the debt. Such a pledge gives the creditor a special, or conditional ownership of the whole property pledged; and the debtor thenceforth holds the whole property as the bailee of that portion of its value, which actually belongs to the creditor, and is merged in the value of his, (the debtor’s) whole property.
If the point be now established, that a debt is a lien upon the whole property of the debtor; and if the debtor is the mere bailee of the amount of value sold and belonging to the creditor, it becomes necessary to show on what grounds it is, that the debtor has the right to appropriate, for his subsistence, any portion of the property on which his creditor holds a lien. Where a debtor has mortgaged land to his creditor, he, (the debtor,) has no right to sell any portion of that land, not even to provide himself with food. Why is it different in the case of the lien created by a personal debt, upon the whole property of the debtor? The reason is, that there is an implied permission, given by the creditor to the debtor, to appropriate enough of the property in his hands for his subsistence—subject to the condition that the debtor shall apply his care and labor to the increase and preservation of that property. This permission is to be implied from the following facts:
1. It is a self-evident fact that the debtor and his family must live; and being a self-evident fact, it must have been taken for granted by the creditor as a part of the contract—because all self-evident facts having any bearing on the contracts, are taken for granted in all lawful contracts.
2. If the debtor and his family must live, it is self-evident that they must derive their subsistence, either by selling their labor for wages, (independently of any property in their hands;) or by bestowing their care and labor upon the property in their hands, and taking their subsistence out of it, and its proceeds.
Now it is evident that the contract does not contemplate that the debtor is to sell his labor for wages to the neglect or disuse of the property loaned to him; for the only reasonable motive that can be supposed for the loan, is, that the debtor may use the capital loaned, that is, that he may bestow his labor upon it. And if he bestow his labor upon it, it follows that he must meanwhile take his subsistence out of it—because, while bestowing his labor upon it, he cannot be selling his labor for wages, and of consequence cannot derive his subsistence in any other way than from the property in his hands. And as the creditor’s lien extends to all the property in his hands, it follows that the debtor must take his subsistence out of that to which the lien attaches—simply because there is no other property in his hands for him to take it out of.
In all this there is a strong analogy to the case of a lien on land—for there the debtor takes the produce of the land for his subsistence; which is hardly distinguishable in fact, and is not distinguishable in principle, from taking the land itself—inasmuch as the crops exhaust the fertility, and consume the value of the land.
3. The contract evidently supposes that the debtor, while laboring, is to have enough of the fruit of his labor for his subsistence, (because a man cannot labor without a subsistence;) that his labor is to be bestowed upon the capital on which the creditor has a lien; and, of course, that the value of his labor is to become incorporated indistinguishably with that of the capital. It follows that it must have been understood, both by debtor and creditor, as a self-evident matter, that the debtor,