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Rights of the Pledgee

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RIGHTS OF THE PLEDGEE. As a general rule, if the use of the pledged property will not injure it, the pledgee may use the pledged property (Lawrence v. Maxwell, 53 N. Y. 19); so, if its keeping be very expensive, he may use it in a reasonable manner in order to defray such expenses. But all profits made as a result of such use must be credited upon the debt. So, where the use is necessary to preserve the pledge, as to exercise a horse, or milk a pledged cow, it is the duty of the pledgee to so use the property. (Story, Bailments, Sec. 329; Red field on Bailments, p. 527; Geron v. Geron, 15 Ala. 558.) If a pledgor defaults the pledgee may file a bill in equity to foreclose and obtain a judicial sale; or he may have a receiver appointed; or he may sell the pledge publicly and fairly without judicial process after giving reasonable notice to the pledgor to redeem. Notice to the pledgor is always required. The sale, when made, should be a public one, and the pledgor should have notice of it. Pledged securities, when paid in. whole or in part, may be applied towards the payment of the debt. So, the pledgee may sue the pledgor per-• sonally, and attach the pledged property, but such an attachment is construed to work a waiver of his pledge lien. (Drake on Attachments, 54o; Schouler, Bail ments, Sec. 19o.) The pledgor ratifies a sale by the pledgee, by accept ing the surplus proceeds. (Hamilton v. State Bank, 22 Ia. 306.) Articles held in pawn or pledge cannot be retained for any other debt or claim than that for which the goods were pledged, unless the agreement was that they should secure such other debts.

pledged and pledgor