Conferences on the Virtues
By Fr. Bruno Cocuzzi, ocd
Number 64
Subsidiary or Accessory
Contracts …
These are
contracts, which essentially support a principal Contract, to which they are
added, as a means of securing their fulfillment. The three most common ones are Surety, Pledge and Mortgage
Contracts. The latter two are
somewhat related because they involve collateral, as we will see when we treat
of them specifically.
As you all
know, in a Contract of Surety one or more persons, or a Bonding
Company, agree to take upon themselves the obligation of satisfying the
debt of another, principal debtor, in the event he should default.
These contracts
can be gratuitous, but ordinarily the principal debtor pays the guarantor(s)
to assume the responsibility of paying in the event of his default. The cost to the principal debtor depends
upon the degree of risk involved and the amount due under the principal
contract. But even if there is no
substantial risk or inconvenience involved, the mere fact of assuming a potential
debt, even one that may never materialize, is considered to be of monetary
value.
As is evident,
these kinds of contracts cannot exist all by themselves. Therefore
1. For
the contract of surety to exist, the principal contract must be valid and
binding upon the principal debtor.
Also, when the latter’s obligation is satisfied, the contract of Surety
ceases to exist.
2. The
guarantor’s obligation cannot exceed that of the principal debtor’s.
3. In
some instances, depending upon how the contract of surety is written, the
guarantor’s potential obligation becomes a reality only after a judicial
determination that the principal debtor is in default and unable to satisfy the
debt.
In
others, his obligation becomes a reality by the very fact that an installment
payment is overdue.
Not everyone,
clearly, can be the guarantor in a Contract of Surety. Only those who enjoy the free
administration of sufficient resources can in justice assume that
responsibility.
The laws of
some countries take the obligation of a guarantor so seriously that it can be
passed along to his heirs. These same
laws also might give the guarantor the right to recover at some later time from
a principal, defaulting debtor the amount he had to pay to fulfill the
principal contract.
A Pledge
Contract is one in which the debtor surrenders to the Creditor (or to
someone else) in escrow an object of sufficient value to secure
the payment of a debt.
A variation of
this would be for one party of a contract to surrender in escrow an amount of
money to a third party in order to secure his performance of contract in favor
of the other party.
In this kind of
contract, the debtor remains the owner of the object or money
surrendered while it is in the possession of the creditor or another person.
Justice
requires that the debtor surrender a suitable object as a pledge, that he
provides the necessary funds to maintain it, and to refrain from asking for its
return until the debt for which it is collateral has been paid.
Justice
requires of the creditor (or the one holding the object in escrow) to take good
care of the pledge and to pay for any damages to it due to his own negligence.
Should the
pledged object be such that it “bears fruit” or earns income, these are to be
applied to diminish the debt outstanding.
Neither should
the holder of the pledge make use of it without the express consent of the
debtor.
Finally, the
holder of the pledge cannot sell the pledge in order to pay off the remainder
of the debt until it is morally certain that the debtor cannot comply with the
terms of the contract for which it is collateral.
In those
instances where the sale brings in more than the amount of the outstanding
debt, the amount over and above belongs to the debtor.
Of all three
accessory or subsidiary contracts, all of us are most familiar with the Mortgage
Contract. It too, as we said above,
involves the giving of property as collateral to secure a debt.
What
distinguishes this contract from the Pledge Contract is that the pledge is
surrendered to the possession and custody of another, while remaining the
property of the debtor, whereas in a Mortgage Contract, the property remains in
the possession and control of the debtor, but title to the property is
deeded to the creditor.
Mortgage
contracts generally are accessory to and support a contract of sale of real
property, automobiles, industrial or commercial equipment, and can be made with
the seller himself, or with the financial institution which has loaned the
purchase money to the buyer.
There are two
privileges which devolve upon the holder of a mortgage (mortagee) in the
event of the mortagor’s inability to make further installment payments in
liquidation of the purchase money borrowed:
1. A
Right of Preference over the other creditors of the insolvent debtor,
including the holder(s) of subsequent second (or third) mortgages.
2. A
Right of Prosecution, by means of which the mortagee may pursue possession and
control of the collateral in the event it, has fallen into the hands of someone
other than the mortgagor.
Mortgage
contracts are extinguished, as you know,
1. Upon
payment of the principal debt;
2. Upon
renouncement (writing off) of the debt by the mortgagee, and by
3. Prescription. As you recall, this means following the
lapse of the statutory time to foreclose upon the mortgage.
As
we said in regard to the pledge contract, the mortgagee cannot [foreclose and]
sell the collateral without the moral certainty that the mortgagor will not or
cannot satisfy the mortgage contract.
The process of
foreclosure and subsequent sale is governed, as you know, by civil law. Again, in the event the proceeds of the sale
of the mortgaged property exceed the unpaid debt, justice requires that the
surplus must be paid to the defaulting mortgagor.
With the end of
the material on contracts, we have also come to the end of the very long
section on Commutative Justice.
And so we begin the Fourth Part of the Treatise on the Cardinal Virtue
of Justice, entitled
Distributive
Justice…
Distributive
Justice is that Moral Virtue by means of which Society, in and through its
presiders and others holding lawful authority, distributes burdens and benefits
among the members or citizens of the society, according to the necessity, the
suitability, or the merits of each one.
Thus it differs
from Commutative Justice in several ways:
1. It
resides in the Society (though vested in authority figures), whereas
Commutative Justice resides in the private citizen.
2. It
necessarily is directed toward the many, i.e., the entire citizenry,
even when a benefit or burden is assigned to one person or a few persons,
whereas Commutative Justice is directed toward the specific individual parties
to whom something is owed in strict justice (as opposed to necessity,
suitability or merit).
3. What
are distributed are things that belong to the community as a whole,
even though they may become vested for a time in individual members.
This section
will treat
First,
of judgment in general, because it is the primary act by which
the virtue is exercised, and of the sin (injustice) opposed to it, acceptance
of persons.
Second,
of justice and injustice in the distribution of benefits.
Third,
of the distribution of burdens, that is to say, of taxes and military
service.
Fourth,
of public judicial process, which is subdivided into (a) judges, (b) accusers,
accused and witnesses and (c) lawyers (advocates).
Concerning
Judgment…
Judgment is the
act proper to a judge in his official capacity. It is the formal act of
the virtue of distributive justice because every distribution supposes an
authoritative determination concerning the goods of the society, which are to
be portioned out among the citizenry in proportion (a) to their rights
and worthiness or (b) in proportion to their need to be safeguarded in their
rights and their property.
The word judgment
has several meanings, my author reminds us, in so far as it is derived from the
Latin ius dicens or, stating the right (law). Thus it pertains to a public person designated by the highest
authority in the society to decide what is right or lawful according to the
prescriptions of the governing laws.
Primarily,
then, a judgment is the solemn and public definition and determination of what
is right and just by a duly authorized judge.
Secondarily, it
means an internal act of the intellect coming to a conclusion concerning
justice or the want thereof in the life, the goods, the rights and the morals
of other persons.
In the widest
sense, it means the act of the intellect by which it comes to a conclusion or
determination concerning any matter, speculative or practical, based upon the
relevant data submitted to it.
For a judgment
to be an act of the virtue of Justice, it does not suffice that human reason
come up with a conclusion based upon relevant data presented to it. That is because the virtue of justice, being
a moral virtue requires the intervention and/or participation of the
Will (the rational appetite), whose proper object is GOODNESS. In the realm of justice, the GOODNESS is the
equality or the due proportion between what is done or said concerning a
person, and the worthiness or the merits of that person. Thus, only when the person judging does so
out of an affection for a relish for that just equality and due
proportion, can his judgment be an act of the virtue of justice.
The three
conditions for a lawful judgment, therefore are
1. It
must proceed from a habitual inclination toward the right and just in human
relationships.
2. It
must proceed from one who has authority over the individuals involved, and
3. It
must proceed from reason guided by logic and prudence.
A couple of
observations:
In judgments
concerning the conduct of persons, doubts are to be resolved or
interpreted in favor of the subjects involved.
This is to be done not only negatively, by abstaining from reaching a
conclusion, but also positively, by choosing to decide that the person in
question is not guilty of wrongdoing, since everyone has a right to a
good reputation unless there is clear and sufficient evidence to the contrary.
Judgments are
to be made ordinarily according to the written laws of the Society or
Community. After all, it is the laws
that define what is right and just in human relationships and in human conduct
vis-à-vis the entire society.
We say ordinarily
because above the written law (Human Positive Law) there is the Natural Law and
Divine Positive Law. And should these
latter be silent, there is always the Law of Charity. But to decide without convincing evidence that a particular human
positive law contradicts those higher laws would be exceedingly rash, and would
be of grave detriment to the common good.
Acceptance
of Persons…
This term comes
to us directly out of Sacred Scripture, and is presented as a sin opposed to
distributive justice. Just recently, in
the first readings at weekday Mass taken from St. James, we have an example of
this acceptance of persons.
It is so called
because it does not take into account the true motives for a just distribution
of benefits and burdens, which are needs, worthiness, capacity and merit, but
extraneous and irrelevant circumstances.
The benefits or
good which are the matter for Distributive Justice are: public offices, honors, entitlements and the
like; and the burdens are taxes of all kinds, forced public service, penalties
and the like.
Examples of
extraneous, irrelevant circumstances would be such things as a person’s power
and influence (usually based upon wealth and connections), blood relationships,
friendship, members of the same club or fraternity, to reward a generous
campaign contributor, etc.
Of course, it
can happen that someone among the categories of persons just mentioned is
the one most suited to receive the benefit in question.
The obverse
side is to impose disproportionate burdens upon individuals also based upon
irrelevant motives. One example of this
is found in inner cities, whose inhabitants are denied the public services
enjoyed by affluent sectors of a metropolis.
The true motives, need and equity, are disregarded in favor of the
irrelevant motive called political clout.
Besides being a
sin against distributive justice in and of itself, acceptance of persons can
also, by happenstance, be a sin against legal justice by damaging the common
good. Such would be the case when
public offices are given to incapable or corrupt individuals, or when goods and
resources set aside to benefit the poor are diverted to the benefit of
individuals who do not qualify under the entitlement programs.
By its very
nature, the sin of acceptance of persons is a grave one because distributive
justice is a more eminent virtue than commutative justice, and is closer to
legal justice in its capacity to contribute to the common good. But, of course, it admits of parvity of
matter, and thus can be a slight or venial sin in many instances.
* * * * * * * * *
MISSION STATEMENT: This web site was created for the purpose of completing the work of Fr. Bruno Cocuzzi, O.C.D These conferences may be reproduced for private use only. Publication of this material is forbidden without permission of the Father Provincial for the Discalced Carmelites, Holy Hill, 1525 Carmel Rd., Hubertus, WI 53033-9770.