Definition of the problem

It must be noted that the essence and nature of securities are being examined exclusively for future use in the definition of the essence and nature of forms of money such as banknotes and coins with nominal value.

In Russia’s working legislation, there is no simple definition of the concepts of «money» and «securities». Neither is there a precise indication of which rights — proprietary or contractual — must be applied in relation to them. Although Article 128 of the CC RF states that «goods including money and securities belong to objects of civil rights…», several instances where this norm is contradicted are to be found in the texts of the CC RF and other laws.

Here are a few examples.

1. In the comments on Article 128 of the CC RF it is written that «goods are material objects of the outside world»²⁶. From this comment it follows that so-called non-cash money and uncertificated securities, defined in Article 149 of the CC RF, which do not exist in material form, for precisely this reason cannot be goods. However, on the other hand, Article 128 of the CC RF makes no difference between paper securities and non-documentary ones, putting both in the category of goods, which is incorrect.

2. Paragraph 3, Article 302 of the CC RF denies the possibility of using replevin in relation to bearer money and securities: «Bearer money and securities may not be obtained on demand from a conscientious acquirer.» But according to the law any right of ownership is protected by replevin. It turns out that one of the most important actions in rem does not apply to money and bearer securities, which forces one to doubt the correctness of their being attributed to the category of goods.

3. Paragraph 2, Article 144 of the CC RF states: «The absence of obligatory/binding properties of a security or the disparity of a security with form established for it implies its worthlessness». But how can an object be worthless? This concept is only applied to an obligation/ liability.

4. In paragraph 2 of Article 147 of the CC RF it is claimed that «refusal to fulfil an obligation, a certified security, with regard to a lack of grounds to the obligation or to its invalidity, is not allowed». This is a direct indication of the contractual, and not proprietary, nature of a security.

5. In Article 816 of the CC RF it is written that «in cases that are provided for by a law or other legal acts, a loan agreement can be concluded by means of the issue and sale of bonds.» This indicates the contractual, and not proprietary, nature of a security.

6. If a security is an entity (according to Article 128 of the CC RF), and a share is a security (according to Article 143 of the CC RF), then a share is an entity. However, Article 48 of the CC RF defines the relationship of participants to the property of an economic society as contractual.

7. If a bill (B) is a security (according to Article 143 of the CC RF) and a bill is an obligation (according to the Convention on a uniform law on derivative and simple shares and Article 815 of the CC RF), then some securities are obligations, which contradicts Article 128 of the CC RF, which classifies securities as entities.

As the rules of an international agreement take priority over the rules of an internal agreement (paragraph 4, Article 15 of the Constitution of the Russian Federation, Article 815 of the CC RF), Article 128 of the CC RF contradicts the legislation in terms of attributing promissory notes, like securities, to entities.

Accepting the logical evidence, it can be established (B — bill, S — security) that:

	i.e. a bill belongs to the set of obligations (source — Convention on a uniform law on derivative and simple shares);
	i.e. a bill belongs to the set of securities; consequently,
	i.e. the set of obligations and the set of securities overlap; consequently, by induction
	i.e. there are some securities that belong in the set of obligations and
	i.e. there are some obligations which belong in the set of securities (are obligations/liabilities).
However, based on Article 128 of the CC RF:
	i.e. any security is an entity.
Then from the fact that
and
it follows that:
	i.e. there are some obligations that belong to the set of entities, which contradicts the following:
	i.e. any obligation does not belong in the set of entities (see (3)). Then we see that (4) contradicts (9), and in conflict (4) is higher than (9). Therefore, assertion (9) is false.

8. Knowing that non-cash money is a liability, and not an entity, we reach the logical verdict that:

• ownership is only a proprietary category;
• for a loan (Article 807 of the CC RF), money is transferred into the ownership of the debtor;

  __by deduction__

  Article 807 of the CC RF (loan) regulates only the loan of goods (not liabilities);

  non-cash money is not an entity (but a liability);

  __by deduction__

  Article 807 of the CC RF (loan) does not regulate relations with non-cash money

  and

• ownership is only a proprietary category;

  for commercial credit (Article 823 of the CC RF), money is transferred into the ownership of another party;

  ___by deduction___

  Article 823 of the CC RF (commercial credit) regulates only the commercial credit of an entity;

  Article 823 of the CC RF (commercial credit) does not regulate commercial credit of non-cash money.

9. Why is a loan agreement (contract) an obligation, whereas bonds are an entity? After all, they express practically the same content and differ only in form.

10. Having traced the history of the development of literal contracts (receipts), we can see that the development of circulation transformed them into promissory notes. But in Roman law, literal contracts were related to contractual law, while the CC RF applies property law to promissory notes (like a type of security).

So which laws and actions can we use in relation to securities? If the answer is proprietary, that means that there is a right of ownership for securities and personal actions can be applied to them. But if securities are recognised as an obligation, then property law and personal actions for securities are not suitable, but rather receivables and actions characteristic of liabilities are applicable.