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Template:M intro repack merger of debt: Difference between revisions
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Template:M intro repack merger of debt (view source)
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''No''. | ''No''. | ||
A [[debt]] is a contract between two parties; issuer and holder. It has no independent existence of them. It has no [[legal personality]]. If a holder transfers the note constituting its debt to another, the existing debt is not “transferred” with the note, as such: rather, ''one'' contract of indebtedness is extinguished and ''another'' is made. The same applies for [[novation|novations]]. That the creation and extinction process is beyond the debtor’s influence is neither here nor there. It was the debtor’s idea: it threw open its doors to the world — one at a time, to be sure — and may not complain now if, until the time for redemption arrives, its debts serially wink and sparkle in and out of existence amongst that unknown horde.<ref> | A [[debt]] is a contract between two parties; issuer and holder. It has no independent existence of them. It has no [[legal personality]]. If a holder transfers the note constituting its debt to another, the existing debt is not “transferred” with the note, as such: rather, ''one'' contract of indebtedness is extinguished and ''another'' is made. The same applies for [[novation|novations]]. That the creation and extinction process is beyond the debtor’s influence is neither here nor there. It was the debtor’s idea: it threw open its doors to the world — one at a time, to be sure — and may not complain now if, until the time for redemption arrives, its debts serially wink and sparkle in and out of existence amongst that unknown horde.<ref>Section 87(2) of the [[Bills of Exchange Act 1882]] addresses this by deeming liability for the debt to arise only at the point the note is presented for payment. So, in this conception, there is no ongoing [[debt]] between issue and redemption. We do not think that jibes awfully well with modern ideas about [[financial reporting]], so the less said about it the better.</ref> | ||
Now there is this American doctrine of “merger” which is something like transubstantiation: that the intangible contract of indebtedness that logically precedes the issuance of a deed “merges” the obligations into the instrument’s physical form, somehow animating and giving the debt continuity independent of its holder — but that seems like a classic piece of [[nonsense on stilts|stiltery]] from our American cousins, and in any case we are not clear that it necessarily changes anything. | Now there is this American doctrine of “merger” which is something like transubstantiation: that the intangible contract of indebtedness that logically precedes the issuance of a deed “merges” the obligations into the instrument’s physical form, somehow animating and giving the debt continuity independent of its holder — but that seems like a classic piece of [[nonsense on stilts|stiltery]] from our American cousins, and in any case we are not clear that it necessarily changes anything. | ||