Gage (finance)

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In medieval finance, a gage or gage of land was a usufructory pledge of real property. The gage came in two forms:

the dead gage (Scots deid wad, French mort-gage, German Zinssatzung); or
the living gage (Welsh prid, Fr vif-gage, G Totsatzung).
When a feudal tenant or landlord needed liquid resources, they could pledge their estate in land, as collateral, for a money loan. Since the gaged collateral was typically a piece of real property which generated revenue (e.g. a farm which produced crops, a mill which processed food, a pasture that provided milk or wool, etc.), the lender-gagee received the rents and profits of the land. Under the terms of a living gage, these rents and profits reduced the amount the borrower-gagor owed, while under a dead gage they did not. This meant that if the property was prosperous enough, or the loan small enough, a property in living gage could pay off the debt itself; in other words, it was self-redeeming. On the other hand, with a dead gage, the property's rents and profits did not go toward satisfying the principal, but instead constituted interest on the loan, which made it a form of usury. As a result, dead gages were denounced as immoral/illegal among Catholic theologians.

https://en.wikipedia.org/wiki/Gage_(finance)

JOURNAL ARTICLE:

The Gage of Land in Medieval England. II
Harold D. Hazeltine
Harvard Law Review
Vol. 18, No. 1 (Nov., 1904), pp. 36-50
Published by: The Harvard Law Review Association
DOI: 10.2307/1323791
Stable URL: http://www.jstor.org/stable/1323791
Page Count: 15
Topics: Debtors, Tenants, Statutory law, Creditors, Asset forfeiture, Heirs, Debt, Chattel, Arrearage, Loan defaults

http://www.jstor.org/stable/1323791