If, then, the contract be entered into, with these limitations implied, it imposes no obligation upon the debtor to make good, out of means that he may acquire after the contract shall have expired, any short comings, that were occasioned, not by his fault, neglect, or bad faith, but by causes, which fixed a limitation upon his original liability, and of whose effects the creditor of course took the risk.7
3. Time is a material element of the contract. All the legal obligations of the contract, of necessity, come to maturity at the time agreed upon for its fulfilment; else the whole of the debt would not be due at that time. At the maturity of its legal obligations, it is plain that the contract can attach only to the property then in the hands of the debtor—for there is nothing else for it to attach to. And it is plain that it can attach to nothing acquired by the debtor subsequently—because to allow it to do so, would be to extend the obligations of the contract beyond the time to which they were originally limited. It would be equivalent to creating a new contract, for a new period of time. Or it would be equivalent to saying that the obligations of the contract had not come to maturity at the time agreed upon for its fulfilment.
But further. Although the preceding considerations are sufficient to prove that a debt has no legal obligation beyond the means of the debtor at the time the debt becomes due, they, nevertheless, do not convey a full and clear idea of the true nature and obligation of the contract of debt. And this leads to another proposition, as follows:
4. A contract of debt is a mere contract of bailment, differing, in no essential element of the contract, from other contracts of bailment.8
That it is so, is easily shown. Thus a promise to pay money, for “value,” that has been “received,” is evidently a mere promise to deliver money, which has been sold and paid for; because the “value,” that has been “received” by the debtor, is nothing else than the equivalent, or price, paid by the creditor, for the money which the debtor promises to deliver, or pay to him.
The right of property, in this money, that is to be delivered to the creditor, (or in a quantum of value, in the hands of the debtor, sufficient to purchase the money,) obviously passes to its purchaser, the creditor, at the time he thus buys, and pays for it; and not, as is generally supposed, at the time it is finally delivered, or paid to him; for it is absurd to say that when a man has bought and paid for a thing, he does not, from that time, own it, merely because it is not delivered to him at that time. A promise to deliver, or pay money, especially when coupled with an acknowledgment that the equivalent, or price of the money promised, has been “received,” is as good evidence that the right of property in the money, (or in an amount of value sufficient to purchase the money,) has already passed to the purchaser, as is a delivery itself.
The obligation of debt, then, on the part of the seller of the money, arises simply from the fact that the money, (or an amount of value sufficient to purchase the money,) which he has thus sold, and received his pay for, and the right of property in which has already passed to the purchaser, is, by agreement, to remain, for a time, in his, (the seller’s,) hands, for his use. And the sum of his obligations, as a debtor, is, not, at all events, to preserve and deliver, but to use due diligence to preserve, and, (at the time agreed upon,) to deliver to the purchaser, the money, or value, which he has thus sold to him.
A debtor, then, is a mere seller of value, (generally measured by money,) which he is to deliver to the purchaser at a time subsequent to the sale. And a creditor is a mere purchaser of value, that is to be delivered to him, (generally in the shape of money,) at a time subsequent to his purchase of it.
But the material point to be regarded, is, that the right of property, in the money, (or in the amount of value to be measured by money,) which is thus bought and sold, passes to its purchaser, by the sale, and, of necessity, at the time of the sale, and not at the time of final delivery, as is generally supposed.
The common error on this point, viz., that the right of property, in the value thus purchased and paid for by the creditor, does not pass to him until the final delivery of it to him in the shape of money, (or in whatever other shape it may be agreed to be delivered,) is the source of all our erroneous notions of the nature and obligations of debt; for if the right of property, in the value purchased by the creditor, passes to him at the time of the purchase, then the seller, or debtor, from that time until the time agreed on for its delivery, holds the value, thus sold, merely as the bailee of the purchaser, or creditor; and his obligations are only similar to the obligations of bailees in other cases. The value itself is at the risk of the purchaser, (or creditor,) from the time of the sale, unless it be lost through some fault, or culpable neglect, on the part of the seller, (or debtor.) The seller, (or debtor,) is only bound to due fidelity and diligence in the preservation of the value, and not for its absolute preservation. If it perish in his hands, or be lost out of his hands, without any fault or culpable neglect on his part, he is not answerable. The loss falls on the purchaser, and real owner, whose bailee he (the debtor) is from the time of the sale.
The contract of debt, therefore, presupposes a prior contract of sale, to wit, a sale, by the debtor to the creditor, of the money or value, which the debtor is to hold, for a time, as the bailee of the creditor, or purchaser.
It is important to be borne in mind, that this contract of sale, which, in point of law, precedes, although in point of time it is simultaneous with the contract of bailment, is, in reality, a sale, not of the specific money promised, but of a certain quantum of value, out of the debtor’s whole property, to wit, a quantum of value sufficient to produce or purchase the amount of money promised; and which is to be converted into money by the time agreed on for the delivery.
This double contract of sale and bailment of necessity implies that the debtor has property in his hands, both for the sale and bailment to attach to—otherwise there would be no validity in either contract.9 No contract, either of sale, or bailment, is of any validity, unless there be property for the contract to attach to, at the time it is made. It is in the nature of things impossible that a man can make a contract, either of bailment or sale, that can bind property, or convey any right to property, unless he have property, at the time, for the contract to attach to. All contracts of debt, therefore, whether morally void, or not, are legally void, unless the debtor have property, at the time, for the contract to attach to, and bind.10
A contract of debt, then, in order to be valid, must attach to such property as the debtor has at the time of the contract—because there is nothing else for it to attach to, and it must attach to something, or be utterly invalid. Its validity, as a legal contract, depends upon its attaching to something, at that time; and, of consequence, it has no validity beyond the property to which it then attaches, (and such as may become indistinguishably mixed with it prior to its delivery;) its validity lives only in the life of the property to which it attaches; and when the property, to which it attaches, is exhausted, its validity, as a contract, is exhausted. The obligation of the contract is fulfilled, when all the property, to which it attaches, and which it binds, is delivered to the creditor.
This contract of bailment, or debt, differs from other contracts of bailment, in no important particular, unless in these, viz.:
1. That the bailment is of a quantum of value—to wit, enough to purchase the amount of money promised—existing in a form not designated by the contract, instead of a bailment of a specific thing. But this is obviously a difference of form merely, and not of principle.
2. That it is always of a quantum of value, that has just been sold by the debtor to the creditor. Indeed the bailment is one of the conditions of the sale. The debtor sells the value to the creditor, with a proviso that he (the debtor)