Is possession (Qabd) of the mortgaged property valid if it is stipulated to be in the hands of a mutually agreed-upon third party chosen by both contracting parties?
General Chapter
Al-Mughni
Book of Pledges (Collateral)
Primary text
Possession is valid when both parties to the mortgage stipulate that the collateral be held by a trustworthy man agreed upon by them both. This third party acts as an agent (Wakeel) for the mortgagee regarding the taking of possession. This view is held by a group of jurists including 'Ata, 'Amr ibn Dinar, al-Thawri, Ibn al-Mubarak, al-Shafi'i, Ishaq, Abu Thawr, and the Ahl al-Ra'y (Hanafi school). This is because agency is permissible in contracts involving possession, similar to other forms of taking possession in commercial dealings.
Supporting text
Al-Hakam, al-Harith al-'Ukhli, Qatadah, and Ibn Abi Layla held that possession is not established in this manner, reasoning that possession is integral to the contract and thus must be tied directly to one of the contracting parties, similar to offer and acceptance (Ijab and Qabul).