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security, debt, mortgage, bailment, pledgee and ment

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PLEDGE. A bailment of personal prop erty as security for some debt or engage ment.

The word is also applied to the res or personal property forming the subject-mat ter of the bailment. Pawn, was synonymous with pledge at common law, but modern usage tends to restrict these words to the bailment of tangible chattels for money ad vanced, and has introduced the term col lateral security, or simply collateral, to des ignate the subject-matter of a pledge given as security for an engagement other than a simple borrowing of money, and particularly when the subject-matter consists of incor poreal chattels such as stocks, bonds, or choses in action.

A pledge or pawn (Lat. pignus), accord ing to Story, is a bailment of personal prop erty as security for some debt or engage ment. Story, Bailm. § 286, which see for the less comprehensive definitions of Sir Wm. Jones, Lord Holt, Pothier, etc. Domat broadly defines it as an appropriation of the thing given for the security of an engage ment. But the term is commonly used as Sir Wm. Jones defines it : to wit, as a bail ment of goods by a debtor to his creditor, to be kept till the debt is discharged. Jones, Bailm. 117; 2 Ld. Raym. 909; Pothier, De Naut. art. prelim. 1; Code Civ. 2071; Domat b. 3, tit. 1, § 1; La. Civ. Code 3100; Doak v. Bank, 28 N. C. 309. The pledgee secures his debt by the bailment, and the pledgor ob tains credit or other advantage. See 1 Pars. Contr. A legal obligation, made by the deposit with the pledgee of personalty as security for a debt or other engagement, with an im plied power of sale on default, the pledgor retaining the general ownership, subject to the lien of the pledgee. Tennent v. Ins. Co., 133 Mo. App. 345, 112 S. W. 754.

In Louisiana there are two kinds of pledges: the pawn and the antichresis. The former relates to movable securities, and the latter to immovables. If a, creditor have not a right to.. enter on the land and reap the fruits, the security is not an antichresis; Hagan v. Sompeyrac, 3 La. 157. A pledge of

negotiable paper is not valid against third parties without transfer from debtor to cred itor; Charbonnet v. Toledano, 2 La. 387; Casey v. Cavaroc, 96 U. S. 467, 24 L. Ed. 779; Casey v. Schneider, 96 U. S. 496, 24 L. Ed. 790.

Pledge is distinguished from be cause the essential feature of pledge is transfer of possession, while the essential feature of mortgage is transfer of title only; Casey v. Cavaroc, 96 U. S. 467, 24 L. Ed. 779 (see MORTGAGE). The same distinction ex ists at the civil law between pignus and potheca; Story, Bailm. § 286, In modern transactions title is often transferred under a pledge, but this arises from the nature of the collateral security, and is not a necessity of the relation. In a mortgage, at common law, the property on non-payment of the debt passes wholly to the mortgagee. In a pledge, the property is sold, and only so much of the proceeds as will pay his debt passes to the pledgee. A mortgage is a conditional con veyance of property, which becomes absolute unless redeemed at a specified time. A pledge is not strictly a conveyance at all, nor need any day, Of redemption be appointed for it. A mortgagee can sell and deliver the thing mortgaged, subject only to the right of redemption. A pledgee cannot sell and de liver the thing pledged until the debt is due and payment denied (though he can assign his contract, and with it the collat eral security, or pledge).

Whether a particular contract be held a pledge or a mortgage is often a question of importance, and the courts hold it to be whichever seems best to effectuate the in tention of the parties without regard to the language employed; Langdon v. Buell, 9 Wend. (N. Y.) 80; Newton v. Van Dusen, 47 Minn. 437, 50 N. W. 820; Jensen v. Bowles, 8 S. D. 570, 67 N. W. 627; leaning, however, to pledge rather than mortgage as ordinarily more favorable to the debtor; Luckett v. Townsend, 3 Tex. 119, 49 Am. Dec. 723; Clark v. Henry, 2 Cow. ("N. Y.) 324.

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