A
pledge (also
pawn) is a
bailmentBailment describes a legal relationship in common law where physical possession of personal property is transferred from one person to another person who subsequently holds possession of the property.-General:...
or deposit of
personal propertyPersonal property, roughly speaking, is private property that is moveable, as opposed to real property or real estate. In the common law systems personal property may also be called chattels or personalty. In the civil law systems personal property is often called movable property or movables - any...
to a
creditorA creditor is a party that has a claim to the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property or service to the second party under the assumption that the second party will return an equivalent property or...
to secure repayment for some
debtDebt is that which is owed; usually referencing assets owed, but the term can also cover moral obligations and other interactions not requiring money. In the case of assets, debt is a means of using future purchasing power in the present before a summation has been earned...
or engagement., The term is also used to denote the
propertyProperty is any physical or intangible entity that is owned by a person or jointly by a group of persons. Depending on the nature of the property, an owner of property has the right to consume, sell, rent, mortgage, transfer, exchange or destroy his or her property, and/or to exclude others from...
which constitutes the security.
Pledge is the
pignus of
Roman lawThe term Roman law denotes the legal system of ancient Rome, and the legal developments which occurred before the seventh century AD — when the Roman–Byzantine state adopted Greek as the official lingua franca. The development of Roman law comprises more than a thousand years of jurisprudence —...
, from which most of the modern
lawLaw is a system of rules, usually enforced through a set of institutions. It shapes politics, economics and society in numerous ways and serves as a primary social mediator of relations between people. Contract law regulates everything from buying a bus ticket to trading on derivatives markets...
on the subject is derived. It differs from
hypothecationGenerally, a hypothecation is a contract which pledges or creates a lien on collateral to secure a debt, where possession of the collateral is not given to the creditor...
and from the more usual
mortgageA mortgage is the transfer of an interest in property to a lender as a security for a debt - usually a loan of money. While a mortgage in itself is not a debt, it is the lender's security for a debt...
in that the pledge is in the possession of the pledgee; it also differs from mortgage in being confined to
personal propertyPersonal property, roughly speaking, is private property that is moveable, as opposed to real property or real estate. In the common law systems personal property may also be called chattels or personalty. In the civil law systems personal property is often called movable property or movables - any...
(rather than
real propertyIn the common law, real property refers to one of the two main classes of property, the other being personal property. Real property generally encompasses land, land improvements resulting from human effort including buildings and machinery sited on land, and various property rights over the...
).
A
pledge (also
pawn) is a
bailmentBailment describes a legal relationship in common law where physical possession of personal property is transferred from one person to another person who subsequently holds possession of the property.-General:...
or deposit of
personal propertyPersonal property, roughly speaking, is private property that is moveable, as opposed to real property or real estate. In the common law systems personal property may also be called chattels or personalty. In the civil law systems personal property is often called movable property or movables - any...
to a
creditorA creditor is a party that has a claim to the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property or service to the second party under the assumption that the second party will return an equivalent property or...
to secure repayment for some
debtDebt is that which is owed; usually referencing assets owed, but the term can also cover moral obligations and other interactions not requiring money. In the case of assets, debt is a means of using future purchasing power in the present before a summation has been earned...
or engagement., The term is also used to denote the
propertyProperty is any physical or intangible entity that is owned by a person or jointly by a group of persons. Depending on the nature of the property, an owner of property has the right to consume, sell, rent, mortgage, transfer, exchange or destroy his or her property, and/or to exclude others from...
which constitutes the security.
Pledge is the
pignus of
Roman lawThe term Roman law denotes the legal system of ancient Rome, and the legal developments which occurred before the seventh century AD — when the Roman–Byzantine state adopted Greek as the official lingua franca. The development of Roman law comprises more than a thousand years of jurisprudence —...
, from which most of the modern
lawLaw is a system of rules, usually enforced through a set of institutions. It shapes politics, economics and society in numerous ways and serves as a primary social mediator of relations between people. Contract law regulates everything from buying a bus ticket to trading on derivatives markets...
on the subject is derived. It differs from
hypothecationGenerally, a hypothecation is a contract which pledges or creates a lien on collateral to secure a debt, where possession of the collateral is not given to the creditor...
and from the more usual
mortgageA mortgage is the transfer of an interest in property to a lender as a security for a debt - usually a loan of money. While a mortgage in itself is not a debt, it is the lender's security for a debt...
in that the pledge is in the possession of the pledgee; it also differs from mortgage in being confined to
personal propertyPersonal property, roughly speaking, is private property that is moveable, as opposed to real property or real estate. In the common law systems personal property may also be called chattels or personalty. In the civil law systems personal property is often called movable property or movables - any...
(rather than
real propertyIn the common law, real property refers to one of the two main classes of property, the other being personal property. Real property generally encompasses land, land improvements resulting from human effort including buildings and machinery sited on land, and various property rights over the...
). A
mortgageA mortgage is the transfer of an interest in property to a lender as a security for a debt - usually a loan of money. While a mortgage in itself is not a debt, it is the lender's security for a debt...
of personal property in most cases takes the name and form of a
bill of saleA bill of sale is a legal document made by a 'seller' to a purchaser, reporting that on a specific date, at a specific locality, and for a particular sum of money or other "value received", the seller sold to the purchaser a specific item of personal, or parcel of real, property of which he had...
.
The chief difference between Roman and English law is that certain things (e.g. apparel, furniture and instruments of tillage) could not be pledged in Roman law, while there is no such restriction in English law. In the case of a pledge, a special property passes to the pledgee, sufficient to enable him to maintain an action against a wrongdoer, but the general property, that is the property subject to the pledge, remains in the pledgor.
As the pledge is for the benefit of both parties, the pledgee is bound to exercise only ordinary care over the pledge. The pledgee has the right of selling the pledge if the pledgor make default in payment at the stipulated time. No right is acquired by the wrongful sale of a pledge except in the case of property passing by delivery, such as money or negotiable securities. In the case of a wrongful sale by a pledgee, the pledgor cannot recover the value of the pledge without a tender of the amount due.
The law of
ScotlandScotland is a country that is part of the United Kingdom. Occupying the northern third of the island of Great Britain, it shares a border with England to the south and is bounded by the North Sea to the east, the Atlantic Ocean to the north and west, and the North Channel and Irish Sea to the...
and the
United StatesThe United States of America is a federal constitutional republic comprising fifty states and a federal district...
generally agrees with that of England as to pledges. The main difference is that in Scotland and in
LouisianaThe State of Louisiana is a state located in the southern region of the United States of America. Its capital is Baton Rouge and largest city is New Orleans. Louisiana is the only state divided into parishes, which are local governments equivalent to counties...
a pledge cannot be sold unless with judicial authority. In some of the
U.S. stateA U.S. state is any one of 50 federated states of the United States of America that share sovereignty with the federal government . Because of this shared sovereignty, an American is a citizen both of the federal entity and of his or her state of domicile...
s the
common lawCommon law is law developed by judges through decisions of courts and similar tribunals , rather than through legislative statutes or executive action, and to corresponding legal systems that rely on precedential case law....
as it existed apart from the Factors Acts is still followed; in others the factor has more or less restricted power to give a title by pledge.