PLEDGE is a thing bailed (delivered for a temporary purpose [Beitat&vr]) as a security to the bailee for the performance of some engagement on the part of the bailor. When the pledge is for a debt, more especially where it is given to secure a loan at interest, it is com monly called a pawn. [PawNsitottsu.] 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, be 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 latter 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 carefully as he does his own, however negligent he may he. Different writers on the law of bailments refer the contract of pledge to each of these divisions.
The pledgee is bound to return the pledge and its increments, if any, upon being requested so to do, after the performance 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 be is responsible for all losses and accidents which happen after he has done anything 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 : 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 extinguished by the performance of the engagement for which the pledge was given, or by satisfying the engagement in any other manner, either in fact or by operation of law, as by the acceptance of a higher security without an express stipula tion that the pledge shall continue.
If the engagement, to protect which the pledge is given, be not performed withiu the stipulated time, the pledgee may sell, upon giving due notice to the pledger. If no time be stipulated, the pledgee may give notice that he requires a prompt fulfilment of the engage ment, 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 Took to it in the first instance.
Though the pledgee may sell, he cannot appropriate the pledge to himself upon the default of the pled,gor ; nor is he at liberty to use it without the permission of the owner, expressed or clearly implied. Such an implication arises where the article is of a nature to be bene fited by or to require being used, in which latter case the use is not only justifiable but indispensable to the discharge of the duty of the pledgee. (Story's Commentaries on Law of Bailment.') As to the power of an agent to pledge, see AGENT ; and FACTOR.