Pledge
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Pledge, or Pawn, in law a bailment of personal property as a security for some debt or engagement (Story on Bailments, 286).
The term is also used to denote the property which constitutes the security. Pledge is the pignus of Roman law, from which most of the modern law on the subject is derived. It differs from hypothec and from the more usual kind of mortgage in that the pledge is in the possession of the pledgee; it also differs from mortgage in being confined to personal property. A mortgage of personal property in most cases takes the name and form of a bill of sale.
The chief difference between Roman and English law is that certain things, e.g. wearing 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 Scotland as to pledge generally agrees with that of England, as does also that of the United States. The main difference is that in Scotland and in Louisiana a pledge cannot be sold unless with judicial authority. In some of the American states the common 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.
A pledge is also a term used for a new member of a fraternity.