B. How Ownerships, Distinct at the Beginning, are Justly Transferred

102. About the second article [n.78] I say that the transfer of things can be either as to ownership (namely so that things pass from the ownership of one to the ownership of another), or as to use or right of use while yet ownership remains with the same man (and justice or injustice in transfer of use have rules of different form from just transfer of ownership). This transfer of ownership, therefore, can happen either by public or princely authority, or by the authority of the law, or by the private authority of the owner himself who is in immediate possession.

1. First Conclusion

103. About the first transfer [n.102] let this be the first conclusion in this article, that transfer of ownership by authority of just law is just.

104. The proof is that, if a just law could have justly determined the first ownerships, and the authority of the law or the prince is not lesser (which I hold here to be the same after the division of ownerships as before), therefore can ownership be for the same reason and the same effect justly transferred after it has been appropriated to someone.

105. And from this I say that prescription in fixed property, and long use in movable property, is just transfer.

106. The proof is from Gregory IX, Decretals, with glosses, II tit.26 ch.5, ‘On Prescriptions’, ‘To the Vigilant’, gloss on ‘Others’ Property’.“Others say, which seems truer, that he who possesses another’s fixed property by prescription is no longer bound to give it back, because it would not now be another’s but his own, and he possesses it justly.” ²²

107. There is proof also through reason, in two ways:

First as follows: justly can that be established by the legislator which is necessary for the peaceful conversation of the subjects; but the ownership of something neglected, as it is neglected in prescription and long use, must be transferred to the occupier of it for the peaceful conversation of the citizens; because if ownership were not transferred to this occupier but were to remain with the former one, who treats the thing as abandoned then, after a time however long, there would be lawsuits undying, for, after a time however long, he who neglected the thing or his heir would ask for the neglected thing back, however long occupied by some other or others; and the lawsuits would be such that it would be impossible to cut them off, because impossible even to get sufficient proof; and from such perpetual lawsuits would arise disputes and perhaps feuds between the litigants, and thus the whole peace of the republic would be overthrown.

108. The second reason is that the legislator can punish justly by law a transgressor whose transgression turns to the detriment of the republic - and if he can punish with a bodily penalty, much more so with a monetary penalty, and do this by applying it to the treasury. Therefore he can, for equal reason, punish him with this sort of penalty and do so by applying what he is punished in to someone who is, in this regard, a minister of the law. But he who is for so long a time negligent about his own property transgresses in such a way that his transgression is to the detriment of the republic, because it is an impediment to peace. Therefore, as the law can justly apply the neglected thing to the treasury, so can it, for greater peace, transfer it to him, as to someone serving as minister of the law, who is for so long a time in occupation of it.

109. And from this is plain how one should understand the presumption of right and from right against which no proof is admitted, namely because someone thus negligent of his own property treats it as abandoned. For even if this not be true in fact, yet the legislator did punish him as if he had treated it for abandoned; because he is in some respect like one who treats it as abandoned, and that respect, wherein he is like someone who abandons it, justly requires a like penalty.

110. This also appears probable by the fact that, if anyone at all be able to transfer his ownership to another, the whole community can transfer to anyone the ownership of anyone from the community (because I am supposing that in the factual reality of a community the consent of everyone is included). Therefore, the community, which possesses this consent as having been in a way already offered to it (by the fact that everyone has consented to the just laws that need to be passed by the community or the prince), can transfer, through a just law, anyone’s ownership [of property] to anyone.

2. Second Conclusion

111. Secondly, transfer can be done by act of a private person possessing ownership immediately over a thing [n.102]. And this can be either through an act purely liberal or through an act liberal in a certain respect. The first is when the transferrer expects no return; the second is when he does expect for what he transfers something to be returned to him.

112. About the first let there be this conclusion, which is the second of this article [n.103]: the owner of a thing who is not prohibited by law, or by a superior on whose will he depend in giving or transferring or donating, can donate his property to another willing to receive it.

113. The proof of this is that, because he was owner by an act of his own will, therefore by will he can cease to be owner; and there is someone else willing to receive it, therefore can he start to be owner. And no superior cause prohibits the first from ceasing to be and the second from starting to be owner. Therefore, by this donation, a transfer of ownership truly and justly takes place.

114. From this is plain what is required for a just donation: that there is liberal transferring on the part of the giver, and will of receiving on the part of him to whom the donation is made, and freedom on the part of both (of the former’s giving, of the latter’s receiving), and that by no superior law is the former or the latter prohibited, nor prohibited by act of another on whom in this transfer they may depend.

115. On account of defect of the second [sc. willing receiver] no one can give money to a Friar Minor, because he does not will to be an owner. On account of defect of the first [sc. free transfer by the giver] a monk cannot give without permission of the abbot, nor the son of the family without the will of the parent or parents, nor even a cleric in some case without the will, or at least against the will, of the Lord Pope, as is contained in Boniface VIII, Book Six of the Decretals, III tit.20 ch.1, ‘On Censuses’, ‘Roman’, for the observance of which chapter Gregory X set down a penalty, the chapter about which penalty is today in ibid. ch.2 (‘It demands’), namely that clerics making visits do not receive little gifts from those visited, and if they do, they are obliged to restore double - or let them not be absolved of the curse they ipso facto incur, as is said, Innocent IV, ibid. ch.1.

116. Now to this corresponds, in the case of transfer of use, liberal accommodation.A term that in the legal context means ‘bailment’, which is a relationship where the owner transfers to another the physical possession of personal property for a time, but retains ownership. ²³ And in order to be just it has similar laws, because it requires free will in him who accommodates, and it requires in him who receives that he has a will to receive the thing accommodated for his use, and that there is no will of law or prince standing in the way of the accommodation.

117. There is another transfer that is not purely liberal but where the transferrer expects an equivalence for that which he transfers, and it is properly called a ‘contract’, because the wills of the parties are there drawn together;‘Contract’ comes from the Latin contraho which literally means to draw (‘traho’) together (‘con’). ²⁴ for the former is drawn to transfer to the latter by the gain he expects from the latter, or that he expects to be transferred to himself.

118. Of this sort of contracts, wherein ownerships are transferred, some are transfers of a useful thing immediately for a useful thing, as wine for grain and the like, and it is called an interchange of things, ‘I give so that you give’ or ‘I give if you give’. Some transfers are of a useful thing for coin or conversely; for because it was difficult to exchange things for use immediately, therefore a medium was invented through which such exchange might be facilitated, which is called ‘coin’, and the exchange of coin for a useful thing is called ‘buying’, and the converse is called ‘selling’. But some transfer is of coin for coin and is called giving a loan, or accepting a loan. There are therefore six contracts in which ownership is transferred.

119. To these contracts correspond some contracts where the use, or the right of using, is transferred while ownership is retained. For to exchange of things corresponds mutual or interchanging accommodation, to buying corresponds leasing and to selling corresponds renting out. To the accepting of a loan there does not properly correspond anything in the transfer of the use of a thing.

3. Third Conclusion

120. As to the first transfer, namely exchange of things [n.118], let the conclusion be this (which is the third conclusion of this article): that the owners of things justly exchange them if they preserve, without fraud, the equality of worth in the things exchanged according to right reason - meaning here the conditions for a just giving expounded above [nn.114-115].

121. Explanation of the other conditions that are proper to just exchange [n.120]: As to what is first added, ‘without fraud’, it excludes fraud in substance, and quantity, and quality: in substance, so that brass is not exchanged for gold, nor water for wine; in quantity, namely so that whether quantity is measured by weight or some other measure, namely by a rod or something of the sort as to length or some bodily measure, as namely a sixteenth [of a peck], a peck, or the like, whether in the case of liquid or of dry goods - so that the just weight and, universally, the just measure be kept. Similarly in the case of quality, so that what is received from the other exchanger as pure wine not be exchanged for sour wine. And all these things are proved in Gregory IX, Decretals V tit.36 ch.9, ‘On Injuries and Damage Given’, ‘If by your fault’, “He who gives occasion for a loss, seems to have given a loss.”

122. But he who defrauds in substance him who thinks that, in making the exchange, he is receiving a different substance, or in quantity him who thinks he is receiving a different amount, or in quality him who thinks he is receiving a different quality, gives occasion for loss, because the other would not make the exchange if he did not think he was receiving a different substance, quantity, and quality; therefore he seems, not only according to the book on Refutations [Scotus, Refutations, q.39 nn.5-6, q.40 nn.13-16; Aristotle, Sophistical Refutations 4.166b10-14], but by presumption of law and in truth, to have given a loss.

123. There follows in the rule [n.120; inferred from Ethics 5.8.1133b18] that ‘the equality of worth is to be preserved’, which is proved by Augustine On the Trinity XIII ch.3 n.6, “To want to buy cheaply and to sell dearly is truly a vice.” And I understand this about a cheap and dear thing as concerns use, because often what is in itself a nobler thing in natural being is of less value and less useful for men’s use and, for this reason, less precious, according to Augustine, City of God XI ch.16, “Bread is better in a home than a mouse,” although however a living thing is simply nobler than a non-living thing in being of nature.

124. And for this reason there is added [to the rule, n.120] ‘in accord with right reason’ - namely reason that pays attention to the nature of the thing in relation to the human use for which exchange takes placde.

125. Now this ‘equality in accord with right reason’ [nn.123-124] does not consist in what is indivisible, as a certain doctor says [Henry of Ghent], who was moved by this, that justice keeps only the mean of the thing but the other virtues only the mean of reason; for this is false, as was made clear in Ord. III d.8 nn.58-62 [there citing Henry of Ghent].

126. On the contrary, in this mean, which justice in exchange has regard to, there is considerable latitude, and within this latitude (without reaching the indivisible point of equivalence of thing with thing, because, as far as this is concerned, it would be almost impossible for exchangers to reach it), justice is done to whatever degree it may, as to the extremes, be done.

127. Now what this latitude is, and how far it extends, is sometimes made known by positive law, sometimes by custom. For the law rescinds a contract where a contracting party is deceived above the mean of the just price; however if injustice below that mean appear on the other side, corresponding restitution should be made.

128. But sometimes it is left to the contracting parties themselves so that, after weighing their mutual necessity, they may reckon they are mutually giving and receiving the equivalent on this side and on that; for it is hard for there to be contracts among men where the contracting parties do not intend to return to themselves mutually something of the indivisible injustice, so that, to this extent, some giving away is concomitant to every contract. And if this is the way of people exchanging, which is founded as it were on this remark of the law of nature, ‘Do that unto others which you want to be done to you’ [Matthew 7.12, Luke 6.31; equivalent negative formulation in Tobit 4.16], it is probable enough that when they are mutually content, they wish to make return to themselves mutually, if in any respect they fail of the requisite justice.

129. There is an altogether like conclusion [sc. like the third conclusion, n.120] about justice in buying and selling [n.118], because it is as necessary to consider the coin there on one side as to consider here the thing exchanged.

130. I add that in both these contracts it is licit for the exchanger or seller to weigh his own loss, but not to weigh the gain of the buyer himself, or of the one he is exchanging with - I say this in the case of selling or exchanging at a dearer price.

131. And I understand it as follows: if someone is in great need of his own property and is induced, with great insistence by another, to sell it or exchange it for something else, since he could keep himself without loss and since by this selling or exchanging he suffers a great loss, he can sell it at a higher price than if he were otherwise selling or exchanging it without such a loss.

132. But if the buyer obtain a great advantage from the thing sold or exchanged, it cannot be sold or exchanged [sc. by me] at a higher price because a greater advantage will follow from the thing when sold to him. For neither is my property, because of his greater consequent advantage, more expensive in itself, nor is it better for me, and so it should not bring me a greater price. But it is otherwise when I suffer a loss, because then the thing is more expensive for me, though not in itself.

133. With these contracts, as was said [n.119], agree mutual accommodation, and leasing, and renting out. And justice must in like manner be kept as to the conditions already set down [n.114], considering it in respect of use there as in respect of ownership here.

4. Fourth Conclusion

134. About the last type of contract, namely the giving of a loan [n.118], let the fourth conclusion of this article be as follows: for justly contracting a loan, it is necessary to keep equality in number and weight simply (with the exception of certain cases that will spoken of at the end [nn.144-150]). The reason for this is assigned by some [Thomas Aquinas, ST IIa IIae q.78 a.2 ad 2, Richard of Middleton, Sent. IV d.15 princ.5 q.5] as follows, that the use of money is its consumption, therefore he who yields it as a loan consumes it.Richard: “Now the reason why nothing beyond the principal can be demanded for a loan but can be for something rented, is that a loan is of things whose principal use cannot be handed over without the thing itself, because the use of them is the using up of them...as is plain of money, which was principally invented for this purpose, that it be expended in the buying of other things; for this reason, when such sorts of thing are handed over to others, ownership of them is transferred to the latter.” ²⁵

135. Against this is objection made through ‘On the signification of words’, and it is today in [Boniface VIII], Sixth Book of Decretals V tit.12 ch.3, that the use of certain things is perpetually separated from ownership.The argument of Richard, and Aquinas, is that lending money is different from renting a house, say, because a house can be used without being used up, so that the owner of the house can retain ownership of it while selling the use of it (as by renting it). Consequently, after the rental period is over, the owner gets the house back and keeps the rent in addition. The same cannot be said of money because to use money is to use it up and so to possess it at the same time. There is no difference between use and possession that would allow charging ‘rent’ for the ‘use’ of the money. One gets back everything one lent when one gets the same amount of money back, and to get back extra for ‘use’ is ‘usury’ and wrong, because it amounts to selling the same thing twice. Scotus’ response is to deny, relying on Boniface VIII, that the use and ownership of money necessarily go together, or to deny the validity of the inference: money is used up in being used, therefore possession cannot be separated from use. However, as he explains in nn.136-137, usury is still wrong. For either (n.136) to loan money is to give possession, so that to get the loan back is to get possession back, and to get something extra back for ‘use’ as well would be to suppose one still somehow owned the money while it was being used when precisely one did not. Usury is wrong, therefore, because one sells what one no longer owns. Or (n.137) one can suppose that the lender still owns the money but that the gain that comes from the use of it comes from the borrower’s industry and not from the lender’s, so that the lender has no claim to the fruits of that use, or to extra payment because of it. ²⁶

136. It is possible, then, to assign the following reason, that in the giving of a loan ownership is transferred; for this is what the words indicate ‘I give you what is mine as loan’; therefore he who allows it as a loan does not remain owner of the loaned money, and consequently if he receives for the money something beyond the principal, he receives something for what is not his, or he sells what is not his.

137. The other reason is: let it be that the money remained his, yet the money does not of its own nature have any fruit, as some other things have that germinate from themselves; but only from someone’s industry, namely the user’s, does any fruit come. Now the industry of the user is not the industry of him who allowed the money; therefore, when he receives fruit from the money, he wishes to have the fruit of someone else’s industry, which however that other did not give him by the fact that from that other he accepted a loan exchange. And this is the reason why, by contrast, the fruit of pledges that do germinate is computed in the principal.

138. Excepted in this matter of loaning are two cases in general: for sometimes one can licitly receive more than the capital by agreement, sometimes not by agreement.

139. The first [by agreement] in three ways:

Namely by reason of conventional penalty, though however it may not be done for the fraud of usury. For example: suppose you need my money for trading, but I allow it to you up to a certain day, adding a conditional penalty that if you do not pay it on such and such a day (because I will otherwise be greatly harmed) you will pay afterwards so much more. This added penalty is licit, because it is licit for me to keep myself from damage by thus forewarning him with whom I contract. Now the sign that it is not for fraud of usury is this manifest one: when a merchant more want the money to be paid to him on a predetermined day than on the day after with added penalty; and by contrast it is for the fraud of usury when he wants the day to be missed rather than the money on that day to be paid.

The second is by reason of interest; for a debtor from whose non-payment the creditor is notably harmed, is held by justice to satisfy the creditor with interest. And although this creditor could not have an action in the external forum against the other, because for example pacts have perhaps not been entered into or have changed, yet in the forum of conscience the debtor is bound for interest beyond the principal.

The third condition is when both, namely the capital and what is superfluous, are put under uncertainty. This is proved from Gregory IX Decretals V tit. 19 ch.19, ‘On Usury’,“By reason of this doubt [sc. about greater and lesser valuation] is he also excused who sells bread, grain, wine oil, or other merchandise so as to receive for the same, within a certain time limit, more than they then are worth -provided, however, that at the time of the contract he had not been about to sell them.” ²⁷ and also by reason, using the argument from similarity, because just as uncertainty is an excuse there, so is it also here.

140. Also is [receiving more than the capital] licit without any agreement [n.138], because the mind alone without any verbal agreement, or other equivalent sign showing to the debtor that the lender would not lend without hope of gain, does not, when receiving more than the principal, make the lender to have what is another’s without agreement, and therefore he is not bound to restitution.

141. One needs also to understand that money has some useful use from its own nature, as for looking at or for decoration or for displaying possibility, as if one were rich, and for this end can it be rented like a horse or something rentable; and for this use can, while ownership is retained, money be received. And then is it in its totality a contract for renting or hiring (and not borrowing or lending), and a weight numerically the same should be returned, unless perhaps something equal in weight and value satisfy the renter.

142. These aforesaid rules show what is just and what unjust in exchanges immediately made, that is, when each exchanger at once gives or receives that for which he exchanges.

5. Two Other Conclusions or Rules

143. But when an exchanger does not receive immediately that for which he does the exchanging, but reception of this sort is deferred, the question is what is right or of law?

I reply: besides the aforesaid rules [nn.139-142] pertaining to the just and unjust in individual contracts for present time, I add here these two rules: the first is that the exchanger not exchange or sell time, because time is not his; second, that he not put himself in surety of making a gain, and him with whom he exchanges in surety of making a loss (I mean by ‘in surety of’, always or for the most part).

144. From these rules [n.143] are plain many particular cases; for example, let the feast of the Lord’s Nativity [December 25] be called a, and the feast of St. John the Baptist [June 24] be called b. A given exchanger hands over his property to another at a. Either he was going to sell it then, or was not but at b:

145. If so [sc. at a], either he determines the price then according as the time is running at a, and he does an act then of mercy, because he is supplying then the need of his neighbor (before he is bound to supply it), namely when waiting until b for payment of it. Or he determines a price greater than is just at a, and then he is a usurer, because he is, against the first rule, selling time [n.143]; this is proved from Gregory IX, Decretals V tit.19 ch.10, ‘On Usury’.

146. But if he was not going to sell now but at another time when it would seem that, according to the run of time, he could make more gain - either, therefore, he sets down a fixed price then, or he does not but leaves certitude about the price to depend on something in the future.

147. If in the first way [n.146], then if he lays down a price according to what the thing is now worth, there is no doubt but that he does a great mercy. If, however, he lays down a price greater than it is now worth, but not so immoderate a price but that at the time of payment the thing sold would likely sometimes be worth more sometimes less, he is, by reason of the doubt, excused, because he is doing nothing against the aforesaid rule [sc. the rule not to sell time, n.143]. This is proved from ibid. ch.19 [see n.139 fn. 26]. -And if objection be made against this from what is said there [ibid.: “provided that at the time of the contract he had not been about to sell them”], I reply: what is contained there is a useful warning, not a necessary precept.

148. But if he abandon determination of a price dependent on the future value of the thing, then either for the determinate time of the payment, or for another time when it is not as a rule customary for the thing to have a greater value than when he gave that thing of his - and then he does an act of mercy, for example: “I allow it to you at as great a price as it will be worth at b, or at some time before b,” although however the thing will be commonly accustomed to be dearer at b than at any preceding time.

149. But if he want the price to be determined for some indeterminate time, so that, in this way, he put himself for the most part in surety of gain and the other in loss, as for example ‘I want you to pay me as much for it as it will be worth at any time up to b when it sells more dearly’, it is usury, because he sets himself up or his party for the most part for gain, and him with whom he contracts for the most part for loss; and then he has for himself what happens for the most part, and against himself what happens for the least part.

150. And another injustice is there as well, because on some determinate day and not at some vague particular time must he set out his property for sale, and it might at that time happen that it would be sold less dear than in a day between a and b that was dearer; and consequently, in such a pact he makes himself certain of a gain further than human industry could attain.

151. These then are the stated rules about the just and unjust in any selling and lending for the time now or in the future - and saying this about household [‘economic’] exchange, which is when the exchanger intends to accept the thing for which he does the exchange, because he buys it not to trade it but to use it.

6. Two Final Conclusions or Conditions

152. What follows concerns business exchange, where the exchanger intends to trade with the thing he acquires, because he bought it not to use it but to sell it, and this at a dearer price; and this business exchange is called pecuniary or lucrative.

153. On this question I add, beyond the rules above set down, two things as to what is just [nn.154-156] and what unjust [n.157]: the first is that such exchange is useful for the republic; the second is that such an exchanger, in proportion to his diligence and prudence and risks in exchanging, may receive a corresponding reward.

154. The exposition of the first condition is that it is useful for the republic to have those who keep things for sale, so that these things can be readily found by the needy wanting to buy them. At a level beyond too, it is useful for the republic to have those who import necessary things that the country does not abound in, and yet the use of them is useful there and necessary. From this it follows that the merchant, who imports a thing from the country where it abounds to another country where it is deficient, or who keeps the thing he has bought so that it may be readily found for sale by him who wants to buy it, is performing an act useful for the republic. This as to the exposition of the first condition.

155. The second condition follows, that everyone who serves the republic in an honest work should live from his labor (‘honest’, I said, because of prostitutes and others who live dishonestly); but he who imports things or keeps them is honestly and usefully serving the republic; therefore, it is necessary for him to live from his labor. - And not this only, but everyone can justly sell his industry and care. He who transports things from country to country needs considerable industry in order to consider what things a country abounds in and needs; therefore, he can, beyond necessary sustenance for himself and his family, justly receive for this deputed necessity a wage corresponding to his industry. And beyond this, third, he can justly receive something corresponding to his perils; for from the fact that he transports things at his peril, if he is a transporter, or guards at his peril, if he is a guarder, he can, because of this sort of danger, unconcernedly receive something corresponding, and especially if sometimes, without his fault, he suffers loss in such service of the community (for example: a merchant when transporting sometimes loses a ship weighed down with the greatest goods; and another merchant, from a chance fire, loses the most precious things he is guarding for the republic).

156. In confirmation of all this is that a merchant can, if a legislator from the republic is not present, take for himself, without extortion, as much as a just and good legislator ought to repay a minister of the republic. But if there were a good legislator in a poor country, he ought to hire for a considerable wage such sort of merchants, so that they may import necessary things and conserve them after they have been imported; and not only should he find necessary sustenance for them and their family, but also compensate their industry, peril, and skill. Therefore, they can do this themselves as well when selling.

157. From these two conditions, required in just business, it is plain how some are blamable in doing business, as namely those who neither transport nor conserve nor improve things for sale by their industry. Nor is any other simple person made certain of the value of the thing to be sold. But he [the blamable business dealer] only buys so as at once to sell without any of these required conditions. He would need to be exterminated or banished from the republic. And he is called in Gallic a ‘regratier’ (‘regrater’ or ‘huckster’), because he prevents direct exchange between those willing to buy or exchange in economic manner, and consequently he makes anything that is sellable or useful more expensive for the buyer and cheaper for the seller than it should be, and thus he inflicts a loss on both sides.