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Theoretically, the extent to which the eighteenth-century Portuguese legal system was able to enforce loan contracts should be evident from the duration of the court proceedings and the execution of the collateral that secured the loans. Yet, data from a newly assembled data set that includes the contracts established by the Lisbon Misericórdia—the major lay brotherhood in Portugal and a leading creditor in the city—as well as 990 lawsuits from its private court of law (exclusive jurisdiction) have a different story to tell about the complex mechanisms behind the lending activities of the institution. Notwithstanding the reasonably rapid resolution of its cases and its routinely successful execution of collateral, the Misericórdia’s law court was powerless to solve the problem of default or to safeguard lenders’ property rights. The membership of creditors and debtors in the Misericórdia tended to undermine cooperation rather than enhance it, challenging the assumption that cohesive groups hold high levels of social capital.

Debt Litigation and the Performance of Law Courts in Eighteenth-Century Portugal