Y. 491; 13 111. 465.
7. Sale. If the pledgeor fail to pay the debt, the pledgee may sell the pledge. For merly a decree of court was necessary to make the sale valid, and under the civil law it is still se in many continental countries. It is safer in a large pledge to proceed by bill in equity to foreclose ; but this course is ordi narily too expensive. A demand of payment, however, must be made before sale ; and if the pledgee mentions no time of sale he may demand at once, and may sell in a reason able time after demand. Glanville, lib. x. c. 6 ; 5 Bligh, s. 136 ; 9 Mod. 275 ; 2 Johns. Ch. N. 11. 100 ; 1 Sandf. N. Y. 351 ; 8 111. 423 ; 4 Den. N. Y. 227 ; 3 Tex. 119 : 1 Browne, Penn. 176 ; 22 Pick. Mass. 40 ; 2 N. Y. 443. The pledge must be sold at public auction, and, if it be divisible, only enough must be sold to pay the debt. In general, also, the pledgee must not buy the pledge when put up at auction. He must not bid bona fide and bring up the price of the pa-vvn. Still, tbe purchase of the pledgee is probably not void per se, but voidable at the election of the pledgeor ; and the latter may ratify the pur chase by receiving the surplus over the debt, or avoid it by refusing to do so. The pledgee may charge the pledge with expenses right. fully incurred, as the costs of sale, etc. If the pledge when sold bond fide does not bring enough to pay the debt, the pledgee has still left a good claim against the pledgeor for the balance.
S. In those states where strict foreclosure is allowed, an absolute transfer of title is made to a mortgagee, and hence there is never any inquiry into the matter of surplus after sale, because there is no right to reclaim, But in such states the mortgage law does not apply to pawns ; for in pawns the surplus over the amount of debt after sale must be given back to the pledgeor. This last is also the law of mortgages in some states ; but still, everywhere, pawns and mortgages of personal property are separate in law. In order to authorize any sale of a pledge with out judicial proceedings, not only personal notice of the intent to redeem must be given, but also of the time, place, and manner of the intended sale. 12 Barb. N. Y. 103 ; 4
Den. N. Y. 226 ; 14 N. Y. 392.
9. Negotiable paper. The law of pledge applies, probably, to promissory notes on de mand, held in pledge. But it does not apply, in general, to other promissory notes and commercial paper pledged as collateral se curity. The holder of negotiable paper, even though it be accommodation paper may pledge it for an antecedent debt, th'e rule governing pledges not being applicable to commercial property of this description. 3 Penn. St. 381; .13 Mass. 105 ; 3 Cal. 151; 5 id. 260. But in New York it has been held that pledgees of negotiable paper have no right to sell it, but must wait until its ma turity aud then collect it. 3 Du. N. Y. 660 • 16 N. Y. 392. See, also, upon the law of pledges in mercantile property, 28 N. H. 561 ; 26 Vt. 686 ; 13 B. Monr. Ky. 432 ; 1 Stockt. Ch. N. J. 667 ; 17 Barb. N. Y. 492 ; 5 Du. N. Y. 29 ; 14 Ala. N. S. 65 ; 10 Md 373 ; 1 N. Y. Leg. Ohs. 25 ; 5 Tex. 318.
In most states, a pledgee cannot sell his pledge unless it be negotiable paper. And hence any pledgee who has stock put into his hands cannot sell it or operate with it as his own. If he do sell it, the pledgeor can recover of him the highest price the stock has reached at any time previous to ad judication. 2 Caines, Cas. N. Y. 200 ; 5 Johns. N. Y. 260 ; 1 Sandf. N. Y. 351 ; 4 id. 74 ; 2 N. Y. 443 ; 3 Hill, N. Y. 593 ; 7 id. 497. A pledgeor may bring trover upon the sale of a pledge, or upon a tortious repledging of it.
10. Other debts. A pledge cannot, in general, be held for any other debt than that which it was given to secure, except on the special agreement and consent of the parties. 7 East, 224 . 6 Term, 238 ; 2 Ves. Ch. 372 ; 6 id. 226 ; 7' Port. Ala. 466 ; 15 Mass. 389 ; 2 Leigh, Va. 493 ; 14 Barb. N. Y. 536. The civil law and Scotch law are other wise. 2 Bell, Comm. 22.