In order to acquire the right of property in the pledge, the pledgee must bar the pledgor's right of redemption by a decree of foreclosure (g). A pledgee of goods (like every bailee) has a right of property against all strangers, and may sustain an action in his own name against any one who may damage or purloin them (h), and if the pledge be stolen he may prosecute the thief (i); and the property in the goods should be laid in the indictment, as in the pledgee. Delivery essential to the validity of a pledge. There can be no valid pledge of goods without delivery (k), actual or constructive (l). If there be no such delivery, and the goods remain in the possession of the pledgor, the pledgee will have no better hold and void which provided that the thing pledged should pass to the creditor without sale or appraisement, or that the debtor should forfeit his right of redemption if he failed to pay at the proper time. Cod. lib. 8, tit. 35, 1. 3. This law of Constantine, prohibiting such contracts, has been imported into the law of France (Poth. Nantissement, 18), and into the modern law of continental Europe. The creditor cannot stipulate that if he is not paid at the time appointed, the thing pledged shall become his own property, for such an agreement would be contra bonos mores; for the pledge is given to the creditor only as a security for the debt, and not to enable him to profit by the indigence of his debtor. Domat, liv. 3, tit. 1, s. 3, 11. (g) Wayne v. Hanham, 9 Hare, 62, 20 L. J. Ch. 530. (h) 21 Hen. 7, 14 b. 15 a.; Rooth v. Wilson, 1 B. & Ald. 59; Croft v. Alison, 4 B. & Ald. 590. (i) Vin. Abr. Tit. Pawn. (k) Vin. Abr. tit. Pawn. A. (7) By the Roman law, the right might be created by the mere agreement of the parties, without any handing over or tradition of the thing pledged to the creditor. Cod. lib. 8, tit. 17, lex 2. upon them for his lien than the other creditors of the pledgor and if the pledgor dispose of the goods, the pledgee will lose his security. : Constructive delivery. Where the goods are capable of an actual delivery there ought to be such delivery; but if they cannot be delivered at the time of the contract, it will be sufficient if the pledgee have the documents of title to the goods delivered to him in order to reduce them into possession (m). And so, in a recent case it was held, that in order to complete the pledge it is not necessary that the goods should actually pass from the hands of the pledgor to the pledgee; the delivery may be complete by handing over the symbols of the goods, as the bill of lading (n), or the wharfinger's certificate. And, according to the civil law, the delivery of the key of a place where the goods are deposited is a sufficient delivery of possession (o). And it has been held in our own Courts that the delivery of the keys of a warehouse is a delivery of the goods that are in it (p). But in a recent case, Willes, J. observed, that he should have liked to have considered the case of handing over the key of a warehouse, and whether that would or would not be a sufficient symbolical delivery, and whether that could be defeated by subsequently forging or (m) Ryall v. Rolle, 1 Atk. 176. (n) Meyerstein v. Barber and others, 36 L. J. C. P. 48, and affirmed on appeal, same vol. 289; L. R. 2 C. P. 38 and 661. (0) Dig. 41, tit. 1, lex 9. (p) Per Burnett J., in Ryall v. Rolle, 1 Atk. 171. abusing another key that would open the warehouse, for the purpose of deceiving a second lender of money, into advancing upon the supposed security (q). But the question did not arise upon the case then before the Court. A valid delivery may also be constituted by handing over the pledge to a clerk or servant of the pawnee; and though the pledge be immediately afterwards returned to the pawnor, with a licence to use it, the validity of the pledge is not thereby destroyed (r). And where the intention of the parties is clear, the delivery of part of the goods constituting the pledge will be construed as a delivery of the whole.--The plaintiff being indebted to one Bowers, entered into an agreement in writing with him, whereby a horse, van, cart, and two sets of harness, the property of the plaintiff, were pledged to Bowers as a security for the debt the agreement contained an acknowledgment that Bowers had received the several chattels into his possession; the cart and one set of harness were not, however, delivered, but, by arrangement, left in the possession of the plaintiff. Shortly afterwards Bowers became insolvent, whereupon the plaintiff took back all the chattels into his own possession; but upon Bowers being made a bankrupt, his assignees seized the chattels, the subject of the pledge, and sold them for the benefit of the creditors. In an action of trover by the plaintiff against the assignees, it was held that the acknowledgment in the agreement of the delivery of the whole of the chattels to the pawnee, coupled with (q) Meyerstein v. Barber and others, supra L. J. p. 57. the actual delivery of part, constituted a constructive. and valid delivery of the whole (s). General rights and obligations between pawnor "and pawnee. A pawnee, as already stated, has a special property in the pawn, for it is a securing to him that he shall be repaid his debt, and to compel the pawnor to pay him (†). If the pawnor make default in payment at the stipulated time, the pawnee has a right to sell the pledge, and this he may do of his own accord, without any previous application to a court of equity, or he may sue the pawnor for his debt, retaining the pawn; for it is a mere collateral security. If he think proper to sell, the surplus of the produce, after satisfying the debt, belongs to the pawnor; while, on the other hand, if the pawn sell for less than the amount of the debt, the deficiency continues chargeable upon the pawnor. From all this it will be seen that a pawn differs, on the one hand, from a lien, which conveys no right to sell whatever, but only a right to detain until the debt in respect of which the lien was created has been satisfied; and, on the other hand, from a mortgage, which conveys the entire property in the thing mortgaged to the mortgagee conditionally, so that where the condition is broken the property remains absolutely in the mortgagee; whereas a pawn never conveys the general pro (s) Martin v. Reid, 31 L. J. C. P. 126; 11 C. B. N. S. 730; and see Langton and another v. Waring and others, 18 C. B. N. S. 315. (1) Coggs v. Bernard, 2 Lord Raym. 917. perty to the pawnee, but only a special property in the thing pawned; and the effect of a default in payment of the debt by the pawnor is not to vest the entire property of the thing pledged in the pawnee, but to give him a power to dispose of it, accounting for the surplus; which power if he neglect to use, the general property of the thing pawned continues in the pawnor, who has a right at any time to redeem it (u). As to the custody and care of pledges. Besides the duty imposed upon the pawnee of carefully keeping the pawn, he is bound to return it, and the "increments" thereof (if any) as soon as the debt is discharged. This duty, by the common law, is extinguished if the pledge be lost by casualty or other unavoidable accident, or if it perish through its own intrinsic defects, without the default or negligence of the pawnee; and the rule is the same if the pawn be lost by robbery, and even by theft, if the pawnee exercised reasonable diligence in his care of keeping it. The same rule will be found in the civil law (x), and in the law of Continental Europe. (u) Ibid. 1 Smith L. C. 201 (6th ed.). (x) According to the Roman law, it was sufficient if the creditor employed his utmost diligence in keeping the thing pledged; if, notwithstanding such care, it was lost by some accident, the creditor was not accountable for it, and he was not prohibited from suing for his debt. Ins. lib. 3, tit. 14, s. 4. Pothier says, "The Pawnee was bound to bestow that care which a careful man bestows upon his own property. He was responsible for light, but not the lightest neglect; de levi culpa, and not de levissima culpa." Poth. Traité du Contrat de Nantissement, Nos. 32, 36. |