Is it valid to take an item under guarantee (like a usurped item, a loan for use, or an item received under a void sale) as collateral (Rahn)?
General Chapter
Al-Mughni
Book of Pledges (Collateral)
Primary text
The act of taking an item under guarantee as collateral is valid, and the original liability (guarantee/ضمان) is lifted. This position is held by Malik and Abu Hanifa. The evidence supporting this lies in the fact that the possessor is now permitted to retain the item as collateral, and no new act of aggression has occurred from him. This situation is analogous to a scenario where the owner takes possession of the item and then immediately returns it as collateral, or if the owner absolves the possessor of the guarantee liability.
Supporting text
Al-Shafi'i holds that the original guarantee does not cease, and the ruling of the collateral (Rahn) is established upon the item. He argues that there is no conflict between the two states, citing that if the possessor commits an act of transgression concerning the pledged item, he becomes liable under the guarantee of usurpation (Ghasb), yet the item remains collateral. Therefore, its initial state should also allow both conditions. He maintains that the basis for guarantee (like usurpation or borrowing for use) has been superseded by the rightful possession as collateral, but the ruling does not follow the cessation of the cause.