The Contract of Pawn

in 1742, to redeem India Stock pledged in 1708, because the suit would never have been brought if the stock had not increased in value, an accident which could not have been foreseen when the pledge was made. The true rule seems to be that where it is clear that the pawnee has continued to hold the pawn as a pledge, the right to redeem remains (a). But a mortgage of stock or chattels gives the mortgagee the right absolutely to dispose of the property comprised in the security (b), and as a mortgagee of reversionary interests in personalty may obtain a decree for foreclosure (c), the ordinary presumption in favour of the pawnor's right to redeem may be rebutted by circumstances which render the exercise of that right inequitable, or by his suffering so long a time to elapse without asserting his right to redeem, that he may be reasonably supposed to have abandoned the pawn to the pawnee. Whether there has been such an abandonment, must depend upon the circumstances of each case (d). But such a presumption may arise in pawn transactions (e), and such presumption would be strengthened by the fact that if inflexibly excluded in favour of the pawnor, it would involve a corresponding right in the pawnee to sue for his debt, and for an indefinite amount of accruing interest. And though a pawnee is sometimes said to be a trustee for the pawnor, especially of the surplus produce of a sale of the pawn, he is not a trustee in the same sense as a trustee created by express declaration, but only to the extent of his

(a) Story On Bailments, sec. 362, citing 1 Domat, B. 3, tit. 7, sec. 3, art. 9; Pothier, Pand., lib. 20, tit. 6, sec. 5, l. 37, 40.

(b) Tucker v. Wilson, 2 Peere Wms., 261.

(d) Re Bowron & Co., exp. Baily, L.R., 5 Eq., 428; 3 Ch. A., 592; 37 L.J., 255, 670 Ch.

(e) Story On Bailments, sec. 365; Gage v. Bulkeley, Ridg. Ca., temp. Hard. wicke, 278; Lockwood v. Ewer, 2 Atk., 303; Matthews On Presumptive Evidence, 188, 331.

obligation to perform his agreement with the pawnor (a), unless indeed the power of sale were improperly exercised, not to obtain payment of the debt, but as an indirect means of getting the property into the mortgagee's [or pawnee's] hands, in which case it would seem that the Statute would be no bar (6).

Even in the case of an express trust, against which the Statute does not run (c), lapse of time may operate as a bar by affording evidence of acquiescence and release (d).

It is clear, however, that if the pawnee has tortiously converted the pawn to his own use, the pawnor's right to sue for that as for any other tort will be affected by the Statutes of Limitations (e), which would begin to run, not from the act of conversion, but (in pawn or other bailment) from the demand and refusal of re-delivery to him, because the bailee cannot better his position by having improperly parted with the possession of the thing bailed (ƒ). And as a pawn in the hands of the pawnee is at once reduced into possession by a pawnor who tenders what is due upon it, the pawnee is thenceforward unable to give title to a purchaser from him, though a mortgagee, by reason of his legal title to the subject matter, may make a sale valid to transfer the property to a purchaser for value and without notice, even after his debt has been paid (g).

(a) Per Lord Westbury in Knox v. Gye, L.R. 5, H.L., 656, 42 L.J., 234; in which (Hatherley, L.C., dissentiente) the term trustee was held applicable to a partner only to the extent above indicated.

(b) Robertson v. Norris, 1 Giff., 421; Darby & Bosanquet On Limitation, 184. (c) Obee v. Bishop, 1 D.G.F. & J., 137; 29 L.J., 148 Ch.; Brittlebank v. Godwin, L.R., 5 Eq., 545, 377 L.J., 377 Ch., 16 W.R., 696; Mutlow v. Bigg, L.R., 18 Eq., 246.

(d) Jones v. Higgins, L.R., 2 Eq., 538; 35 L.J., 322 Ch.; 14 L.T., N.S., 45; 14 W.R., 448.

(e) Gage v. Bulkeley, Ridg. Ca., temp. Hardwicke, 278.

(f) Wilkinson v. Verity, L.R. 6, C.P. 206, 40 L.J., 141 C.P.; 24 L.T., N.S., 32; 19 W.R., 604.

(9) Dicker v. Angerstein, L.R., 3 Ch. D., 600; 45 L.J., 754, Ch. D. ; 24 W.R.,844.

The Pawnbrokers' Act, 1872 (a), has grafted an exception upon the pawnor's Common Law right of property in an unredeemed pawn. Pledges made on advances not exceeding 10s. become the absolute property of the Pawnbroker, if not redeemed within the statutory period of one year and seven days (b). The Act contains sundry regulations as to the redemption and sale of the pawn, which will be noted hereafter. But it does not otherwise affect the pawnor's ownership.

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CHAPTER VII.

во

OF THE PAWNEE'S PROPERTY IN THE PAWN.

"It is a doctrine universally applicable to bailments, that a special qualified property is thereby transferred from the bailor to the bailee, together with the possession. It is not an absolute property, because of the latter's contract for restitution, but a qualified property, in virtue whereof every bailee may maintain an action against any stranger or third person for damage to, or conversion of, the thing bailed" (a). In some passages of his treatise on Bailments, Mr. Justice Story inclines towards a more limited view of the bailee's interest, describing him as "a mere depositary, having no property in, but only a bare custody of, the subject of the bailment" (b). But the context states that "there is no doubt that in certain kinds of bailment, the bailee has a special property " (c), and that the more restricted definition of the pawnee's interest is applicable only to one who receives goods upon what has been called "a mere naked bailment for the use of the bailor," as when jewels were deposited for safe custody only upon a bailment determinable at the bailor's pleasure (d), and not to a pawnee who "has a property in the pawn, and not the custody only (e), for the pawn is a securing to him that he shall be paid his debt” (ƒ). Hence, before special pleading had been abolished by modern legislation, the property in goods stolen from a mere custodian might be laid either in the bailor or

(a) 2 Bl. Com., 453.

(b) Treatise on Bailments, secs. 93 to 95. (c) Secs. 93, 336, 352.
(d) Hartop v. Hoare, 3 Atk., 44; 1 Wils., 8, 9; 2 Str., 1187.
(e) Southcote's Case, 4 Coke, 84.

(f) Coggs v. Bernard, Ld. Raym., 909; 2 Smith's L.C., 7th edit., 188.

bailee, but a pledge must be described as belonging to the pawnee only, because of his special property therein (a). Again, a mere depositary may sue for the wrongful taking of goods entrusted to him (b), but he is a trustee for his depositor for any damages he may recover, while a pawnee who recovers such damages will be entitled to retain the fruits of his verdict till his claim on the pawn is satisfied, and will be answerable to the pawnor for the excess only (c). Before the Judicature Act, he could avail himself of remedies not open to the pawnor, for having a qualified property in the pawn, and also its actual possession, he might sue a wrong-doer in trover or trespass (d), which the pawnor could not do except by treating the pawnee as his agent (e), or by availing himself of some act on the part of the pawnee sufficiently wrongful to determine the bailment, and re-vest the property in the pawnor (ƒ).

The pawnee's special property includes the increments of the pawn, as well as the pawn itself. Thus the pledge of a flock will include the natural growth of the flock. Grege pignori obligato, quæ postea nascuntur, tenentur (g). But this right is confined to the natural increase of the identical sheep pledged. It does not extend to others added. to the flock by purchase subsequent to the pledge (h).

As "the pawn is a securing to the pawnee that he shall be paid his debt, and to compel the pawnor to repay

(a) 1 Hale's Pleas of the Crown, 513.

(b) Armory v. Delamirie, 1 Stra., 504; 1 Smith's L.C., 7th ed., 357;

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The Contract of Pawn: As it Exists at Common Law, and as Modified by the ...