3. What became of the hypothec in Germanic law? Here we come into the complicated learning about rents. The difference in principle and in history between an interest-bearing debt for which a res in the debtor's possession is security, and a periodical payment to be obtained from the proceeds of a given res, has been the theme of many competing theories. The problem is a much more difficult one in French than in Germanic law, for the canonical prohibition of interest developed in the former region many varieties of rents formed for the express purpose of lending money on interest. The exact process, however, by which the ordinary specific hypothec of the Middle Ages developed into its modern varieties does not have a necessary bearing on its origin as a species of wed. It is enough to note here that both Newmann and Heusler agree on a theory which is entirely consistent with the originally contingent purpose and specific limitation of the hypothec.[1] When the charging of a rent upon one's land became, for economic reasons (Heusler, I, 335), a popular practice,—in Germany, say in the 1200's—the expedient which the farmer-landlords (as above described) commonly resorted to, the hypothec, became soon equally popular; the rent from one piece was secured by another piece of land, contingently on default in the rent; and soon the rent-grantor merely gave a general hypothec on all his property ("liegenden und fahrenden," "in dorf und in hus, in feld und in stadt"); still later, the rent issues out of all his property, without discrimination between the parts primarily and subsidiarily liable; and finally turns into a mere personal liability of the rent-grantor with a res-incumbrance indistinguishable from an ordinary general hypothec. Thus comes about an ultimate generic type of collateral security with all the complexity of its modern varieties.
[To be continued]
Northwestern University Law School, Chicago.
