PLEDGE is a thing bailed (delivered for a temporary purpose) as a security to the bailee (receiver), for the performance of some engagement on the part of the bailor (the deliverer). When the pledge is for a debt, more especially where it is given to secure a loan at interest, it is commonly called a pawn. [PAWN BROKER.] In bailments the degree of care required from the bailee varies according to circumstances. When the bailment is for the sole benefit of the bailee, he is bound to use the greatest care, and is excused by nothing but unavoidable accident or irresistible force. When the bailment is for the mutual benefit of bailor and bailee, the bailee is bound to take the same care of the thing bailed as a prudent man usually does of his own. When the bailment is for the sole benefit of the bailor, it is sufficient if the bailee keep the goods bailed as care fully as he does his own, however neg ligent he may be. Different writers on the law of bailments refer the contract of pledge to each of these divisions. Perhaps the conflicting opinions may, to a certain extent, be reconciled by dis timpishing between the different objects which the pledge is intended to secure, and the engagements which it is intended to protect. First, the pledge is some times, though rarely, given for the sole benefit of the pledgee, as where, after a contract is completely made, one party gives to the other a pledge for its per formance. Secondly, which is the ordinary case, the pledge may be for the mutual benefit of bailor and bailee, as in the case of a loan of goods on hire, or of money at interest, accompanied by a pawn, in which case the pawn gives security to the bailee and purchases credit for the bailor. Thirdly, the pledge may be given for the purpose of obtaining a gratuitous loan of goods or of money, or of procuring some other advantage to the bailor only. It would appear that in the first of these three cases the bailee would be liable for the consequences of slight negligence ; in the second, for the consequence of the want of ordinary care ; and in the third, for gross negligence only.
The pledgee is bound to return the pledge and its increments, if any, upon being requested so to do, after the per formance of the engagement. This duty
is extinguished if the pledge has ceased to exist by some cause for which the pledgee is not answerable. But he is responsible for all losses and accidents which happen after he has done any thing inconsistent with his duty as pledgee, or has refused to do his duty. When the full amount of the debt or duty therefore is tendered and refused, and the pledge is detained, the pledge is at the sole risk of the pledgee : it is so if the pledgee misuse the pledge. In every case where the pledge has sustained injury from the wrongful act or default of the pledgee, the owner may recover damages to the amount of the injury, in an action on the case. By the act of pledging, the pledger impliedly warrants that the property is his own, and such as he can rightfully pledge.
The contract of pledge may be ex tinguished by the performance of the engagement for which the pledge was Fiven, or by satisfying the engagement in any other manner, either in fact or by operation of law, as by the acceptance of a hi*her security without an express stipulation that the pledge shall continue.
If the engagement, to protect which the pledge is given, be not performed within the stipulated time, the pledgee may sell, upon giving clue notice to the pledger. If no time be stipulated, the pledgee may give notice that he requires a prompt fulfilment of the engagement, upon non-compliance with which he may sell.
The possession of the pledge does not affect the right of the pledgee to enforce performance of the engagement, unless there be a special agreement, by which he has engaged to resort to the pledge only or to look to it in the first instance.
Though the pledgee may sell, he can not appropriate the pledge to himself upon the default of the pledgor; nor is he at liberty to use it without the per mission of the owner, expressed or clearly implied. Such an implication arises where the article is of a nature to be benefited by or to require being used, in which latter case the use is not only justifiable, but indispensable to the dis charge of the duty of the pledgee. (Commentaries out Law of Bailment, by Storey.) As to the power of an agent to pledge, see FActon ; and as to the making land a security for debt, see MORTGAGE.