Pledges and Pawn
PLEDGE OR PAWN
DEFINATION :
The bailment of goods as security for payment of a debt or performance of a promise is called Pledge or Pawn. The bailor in this case is called the. Pledgor or, the pawnor. The bailee is called the Pledgee or the Pawnee.-Sec. 172.
DIFFERENCE BETWEEN PLEDGE AND BAILMENT
Pledge is a particular kind of bailment. The difference between Pledge and other kinds of bailment lies in the purpose or objective of the transaction. The purpose of a pledge is to provide security for a debt or the performance of a promise. In other kinds of bailment there are other purposes for example, repair, safe-custody etc. The pledgor and the pledgee have certain special rights and duties. PLEDGE | BAILMENT | * PURPOSEThe goods are delivered to provide a security of a loan or for the performance of promise. * RIGHTSThe pledgee has the right of a sale of the pledged goodson default after giving a notice to the pledgor. * USE OF GOODSThe pledgee has no right of using the goods pledged e.g. A placed 50 kg gold to NationalBank. Bank cannot use that goods or sell to anyone. | The goods are delivered for a purpose other than the above two i.e. For repair and safe custody etc. The bailee has no right of sale. He can retain the goods or sue for the dues. There is no such restriction, if the nature of transaction so requires. |
When can a non-owner make a valid Pledge?
The owner of goods can always make a valid-pledge. In the following cases, one who is not, an owner can make I valid pledge.
1. Mercantile Agent
A mercantile agent, who is, with the consent of the owner, in possession of the goods or of the documents of title to goods, can make a valid pledge of the goods while acting in the ordinary course of business of a mercantile agent. Such a pledge will be valid even if the agent had no authority to pledge, provided that the Pawnee acts in good faith and has not at the time of the pledge any
DEFINATION :
The bailment of goods as security for payment of a debt or performance of a promise is called Pledge or Pawn. The bailor in this case is called the. Pledgor or, the pawnor. The bailee is called the Pledgee or the Pawnee.-Sec. 172.
DIFFERENCE BETWEEN PLEDGE AND BAILMENT
Pledge is a particular kind of bailment. The difference between Pledge and other kinds of bailment lies in the purpose or objective of the transaction. The purpose of a pledge is to provide security for a debt or the performance of a promise. In other kinds of bailment there are other purposes for example, repair, safe-custody etc. The pledgor and the pledgee have certain special rights and duties. PLEDGE | BAILMENT | * PURPOSEThe goods are delivered to provide a security of a loan or for the performance of promise. * RIGHTSThe pledgee has the right of a sale of the pledged goodson default after giving a notice to the pledgor. * USE OF GOODSThe pledgee has no right of using the goods pledged e.g. A placed 50 kg gold to NationalBank. Bank cannot use that goods or sell to anyone. | The goods are delivered for a purpose other than the above two i.e. For repair and safe custody etc. The bailee has no right of sale. He can retain the goods or sue for the dues. There is no such restriction, if the nature of transaction so requires. |
When can a non-owner make a valid Pledge?
The owner of goods can always make a valid-pledge. In the following cases, one who is not, an owner can make I valid pledge.
1. Mercantile Agent
A mercantile agent, who is, with the consent of the owner, in possession of the goods or of the documents of title to goods, can make a valid pledge of the goods while acting in the ordinary course of business of a mercantile agent. Such a pledge will be valid even if the agent had no authority to pledge, provided that the Pawnee acts in good faith and has not at the time of the pledge any